<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 28, 1998 COMMISSION FILE NUMBER 1-11802
[Graphic omitted]
WORLD COLOR PRESS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 37-1167902
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
THE MILL, 340 PEMBERWICK ROAD 06831
GREENWICH, CONNECTICUT (Zip Code)
(Address of principal executive offices)
203-532-4200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] No [ ]
At August 7, 1998, 38,487,053 shares of the registrant's common stock, $.01 par
value, were outstanding.
===============================================================================
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<TABLE>
<CAPTION>
WORLD COLOR PRESS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 28, 1998
INDEX
- -------------------------------------------------------------------------------
Page
----
PART I. FINANCIAL INFORMATION
<S> <C>
Condensed Consolidated Balance Sheets as of June 28, 1998
and December 28, 1997...........................................3
Condensed Consolidated Statements of Operations for the Three
and Six Months Ended June 28, 1998 and June 29, 1997............4
Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 28, 1998 and June 29, 1997...........................5
Notes to Condensed Consolidated Financial Statements.............6 - 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................8 - 11
PART II. OTHER INFORMATION.........................................12 - 13
</TABLE>
-2-
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<TABLE>
<CAPTION>
WORLD COLOR PRESS, INC.
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 28, 1998 AND DECEMBER 28, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
JUNE 28, DECEMBER 28,
ASSETS 1998 1997
(Unaudited) (Note)
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 10,312 $ 37,676
Accounts receivable - net 196,513 166,747
Inventories 265,245 204,889
Deferred income taxes 25,215 31,297
Other 41,154 33,625
---------- ----------
Total current assets 538,439 474,234
Property, plant and equipment, at cost 1,650,900 1,495,333
Accumulated depreciation and amortization (672,245) (638,138)
---------- ----------
Property, plant and equipment - net 978,655 857,195
Goodwill - net 660,006 535,416
Other 75,780 66,726
---------- ----------
TOTAL ASSETS $2,252,880 $1,933,571
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 280,937 $ 296,512
Current maturities of long-term debt 38,027 8,970
---------- ----------
Total current liabilities 318,964 305,482
Long-term debt 1,095,056 810,143
Deferred income taxes 102,883 100,045
Other long-term liabilities 116,601 118,132
---------- ----------
Total liabilities 1,633,504 1,333,802
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value - shares
authorized, 100,000,000 at June 28, 1998
and December 28, 1997; shares outstanding,
38,487,053 at June 28, 1998 and 38,353,853
at December 28, 1997 385 384
Additional paid-in capital 714,417 711,292
Accumulated deficit (92,777) (111,907)
Unamortized restricted stock compensation (2,649) -
---------- ----------
Total stockholders' equity 619,376 599,769
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,252,880 $1,933,571
========== ==========
</TABLE>
Note: Derived from audited financial statements.
See notes to condensed consolidated financial statements.
-3-
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<TABLE>
<CAPTION>
WORLD COLOR PRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 28, 1998 AND JUNE 29, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
THREE MONTHS SIX MONTHS
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 546,503 $ 425,647 $1,096,910 $883,998
Cost of sales 452,292 349,595 915,126 732,631
--------- --------- ---------- --------
Gross profit 94,211 76,052 181,784 151,367
Selling, general and
administrative expenses 55,166 44,260 106,593 87,852
--------- --------- ---------- ---------
Operating income 39,045 31,792 75,191 63,515
Interest expense and
securitization fees 22,341 20,447 42,491 40,268
--------- --------- ---------- ---------
Income before income taxes 16,704 11,345 32,700 23,247
Income tax provision 6,932 4,765 13,570 9,764
--------- --------- ---------- ---------
Net income $ 9,772 $ 6,580 $ 19,130 $ 13,483
========= ========= ========== ========
Net income per common share
- basic $ 0.25 $ 0.19 $ 0.50 $ 0.40
Net income per common share
- diluted $ 0.25 $ 0.19 $ 0.49 $ 0.39
</TABLE>
See notes to condensed consolidated financial statements.
-4-
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<TABLE>
<CAPTION>
WORLD COLOR PRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 28, 1998 AND JUNE 29, 1997
(IN THOUSANDS)
- -------------------------------------------------------------------------------
SIX MONTHS
1998 1997
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 19,130 $ 13,483
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Depreciation and amortization 69,191 66,372
Deferred income tax provision 4,675 3,487
Changes in operating assets and liabilities:
Accounts receivable - net 16,343 20,449
Inventories (47,443) (10,819)
Accounts payable and accrued expenses (63,442) (48,230)
Other assets and liabilities - net (26,959) (39,736)
-------- --------
Net cash (used in) provided by
operating activities (28,505) 5,006
-------- --------
INVESTING ACTIVITIES:
Additions to property, plant and equipment - net(117,454) (55,645)
Acquisitions of businesses, net of cash acquired(190,095)(154,975)
-------- --------
Net cash used in investing activities (307,549)(210,620)
-------- --------
FINANCING ACTIVITIES:
Net borrowings on debt 308,690 194,815
-------- --------
Net cash provided by financing activities 308,690 194,815
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (27,364) (10,799)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 37,676 33,182
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,312 $ 22,383
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
-5-
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WORLD COLOR PRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying condensed consolidated interim financial statements have
been prepared by World Color Press, Inc. (along with its subsidiaries, the
"Company") pursuant to the rules and regulations of the Securities and
Exchange Commission and reflect normal and recurring adjustments, which are,
in the opinion of the Company, considered necessary for a fair presentation.
As permitted by these regulations, these statements do not include all
information required by generally accepted accounting principles to be
included in an annual set of financial statements, however, the Company
believes that the disclosures made are adequate to make the information
presented not misleading. It is suggested that these condensed consolidated
financial statements be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's latest Annual
Report on Form 10-K.
During the six month period ended June 28, 1998, the Company acquired
certain businesses whose contributions were not significant to the Company's
results of operations for the periods presented, nor are they expected to
have a material effect on the Company's results on a continuing basis.
2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
JUNE 28, DECEMBER 28,
1998 1997
<S> <C> <C>
Work-in-process $ 123,883 $ 111,326
Raw materials 141,362 93,563
--------- ---------
Total $ 265,245 $ 204,889
========= =========
</TABLE>
3. NET INCOME PER COMMON SHARE
The following represents the weighted average common and common equivalent
shares utilized to calculate net income per common share - basic and
diluted:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 38,397,053 33,744,531 38,375,118 33,744,531
Common equivalent shares 1,092,796 812,847 1,055,247 771,603
---------- ---------- ---------- ----------
Weighted average common
and common equivalent
shares outstanding 39,489,849 34,557,378 39,430,365 34,516,134
========== ========== ========== ==========
Antidilutive options 25,000 375,000 25,000 729,000
</TABLE>
-6-
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WORLD COLOR PRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
Antidilutive options were not included in the computations of net income per
common share - diluted because the exercise price of the options was greater
than the average market price of the common shares. Common shares and
interest incurred from convertible debt securities were also omitted from
the three and six month periods ended June 28, 1998 diluted calculation
since the effect was antidilutive.
4. RESTRICTED STOCK PLAN
In May 1998, the Company implemented a restricted stock plan whereby, upon
the approval of the Compensation Committee of the Board of Directors, certain
key employees are granted restricted stock. The stock vests ratably over five
years and is contingent upon employment. The market value of the stock at
the time of grant is recorded as unamortized restricted stock compensation
in stockholders' equity and is amortized to expense over the five-year
vesting period. Concurrent with the implementation of the restricted stock
plan, the Company issued 90,000 restricted shares of common stock with a fair
value of $2,706.
5. SUBSEQUENT EVENT
In July 1998, the Company entered into an agreement for the sale and
leaseback of certain printing equipment. In connection with the agreement,
the Company received approximately $55,000 of proceeds in July 1998, and
anticipates receiving approximately $25,000 during the fourth quarter of
1998. The lease, which expires in July 2010, will be classified as an
operating lease.
-7-
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<PAGE>
WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
GENERAL
In the first four months of 1998, the Company acquired four businesses serving
customers in the commercial, direct mail and book markets for an aggregate
purchase price of approximately $200,000. These companies, which have been
included in results of operations since the respective acquisition dates, have
not had a material effect on the Company's results of operations, nor are they
expected to on a continuing basis. These acquisitions have been accounted for
as purchases and will hereinafter be referred to as the "1998 Acquisitions."
In January 1997, the Company purchased Rand McNally Book Services Group ("Book
Services"), an operating unit of Rand McNally, for approximately $155,000. Book
Services is the third largest producer of hardcover books in the United States
and provides manufacturing and other value-added services to book club, trade,
professional, educational, reference and mail-order publishers. In addition,
the Company acquired another business in the third quarter of 1997 (the "1997
Acquisition") whose contribution was not significant to the Company's results of
operations for the periods presented, nor is it expected to have a material
effect on the Company's results on a continuing basis.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 28, 1998 VERSUS THREE MONTHS ENDED JUNE 29, 1997
Net sales increased $120,856 or 28.4% to $546,503 in 1998 from $425,647 in 1997.
The increase was due to the inclusion of sales from the 1997 and 1998
Acquisitions and higher paper prices and volume, as well as improved base
business performance.
Gross profit increased $18,159 or 23.9% to $94,211 in 1998 from $76,052 in 1997.
The gross profit margin decreased to 17.2% from 17.9% in 1997 due to increased
sales resulting from higher paper prices and volume, slightly offset by the
benefits of certain cost reduction initiatives and other synergies resulting
from the combination of acquisitions and increased plant utilization.
Selling, general and administrative expenses increased $10,906 or 24.6% to
$55,166 in 1998 from $44,260 in 1997. The increase was primarily attributable
to the 1997 and 1998 Acquisitions, including the related additional amortization
expense for goodwill.
Interest expense and securitization fees increased $1,894 or 9.3% to $22,341 in
1998 from $20,447 in 1997. The increase was attributable to higher average
borrowings incurred to fund acquisitions, capital expenditures and working
capital requirements, offset by a lower average cost of funds. The 1998 amount
includes $2,960 of fees resulting from the securitization of accounts receivable
("Asset Securitization") entered into in the second half of 1997.
The effective tax rate, primarily composed of the combined federal and state
statutory rates, was 41.5% for the second quarter of 1998 compared to 42% for
the comparable period in 1997.
-8-
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WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 28, 1998 VERSUS SIX MONTHS ENDED JUNE 29, 1997
Net sales increased $212,912 or 24.1% to $1,096,910 in 1998 from $883,998 in
1997. The increase was due to the inclusion of sales from the 1997 and 1998
Acquisitions and higher paper prices and volume, as well as improved base
business performance.
Gross profit increased $30,417 or 20.1% to $181,784 in 1998 from $151,367 in
1997. The gross profit margin decreased to 16.6% from 17.1% in 1997 due to
increased sales resulting from higher paper prices and volume, slightly offset
by the benefits of certain cost reduction initiatives and other synergies
resulting from the combination of acquisitions and increased plant utilization.
Selling, general and administrative expenses increased $18,741 or 21.3% to
$106,593 in 1998 from $87,852 in 1997. The increase was attributable to the
1997 and 1998 Acquisitions, including the related additional amortization
expense for goodwill.
Interest expense and securitization fees increased $2,223 or 5.5% to $42,491 in
1998 from $40,268 in 1997. The increase was attributable to higher average
borrowings incurred to fund acquisitions as well as capital expenditures and
working capital requirements, offset by a lower average cost of funds. The 1998
amount includes $6,032 of fees resulting from the Asset Securitization entered
into in the second half of 1997.
The effective tax rate, primarily composed of the combined federal and state
statutory rates, was 41.5% for the first six months of 1998 compared to 42% for
the comparable period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its liquidity and capital investment needs with
internally generated funds and external borrowings. Net income plus depreciation
and amortization and deferred income taxes was $92,996 and $83,342 for the six
months ended June 28, 1998 and June 29, 1997, respectively. The Company's
outstanding indebtedness less cash increased $341,334 from December 28, 1997 to
June 28, 1998 due primarily to borrowings incurred to fund acquisitions and
capital expenditures. Working capital was $219,475 at June 28, 1998 and
$238,801 at June 29, 1997. The decrease of $19,326 or 8.1% was primarily due to
the effect of the Asset Securitization, offset by the 1997 and 1998 Acquisitions
and an increase in inventory levels. In accordance with the Company's ongoing
program to maintain modern, efficient plants and increase productivity, the
Company anticipates that 1998 capital expenditures will be approximately 4 - 5%
of net sales.
The Company's capital expenditures and acquisitions have been funded in part by
borrowings under the Company's Second Amended and Restated Credit Agreement
dated as of June 6, 1996, (as amended, the "Credit Agreement"), which provides
for aggregate total commitments of $920,000, comprised of $95,000 in term loan
commitments, $250,000 of revolving loan commitments and $575,000 in acquisition
term loan commitments. The Credit Agreement provides for varying semi-annual
reductions, and borrowings bear interest at rates that fluctuate with the prime
rate and the Eurodollar rate. As of June 28, 1998, the Company had unutilized
commitments of $137,578 under its Credit Agreement.
-9-
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WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
In July 1998, the Company entered into an agreement for the sale and leaseback
of certain printing equipment. In connection with the agreement, the Company
received approximately $55,000 of proceeds in July 1998, and anticipates
receiving approximately $25,000 during the fourth quarter of 1998. The
lease, which expires in July 2010, will be classified as an operating lease.
Concentrations of credit risk with respect to accounts receivable are limited
due to the Company's diverse operations and large customer base. As of June 28,
1998, the Company had no significant concentrations of credit risk.
In order to reduce the exposure on its variable rate indebtedness, the Company
has entered into interest rate cap agreements with a notional value of $500,000,
expiring in the third quarter of 1998. The impact of these agreements on the
consolidated financial statements was not material for the periods presented.
While the Company is exposed to credit loss in the event of nonperformance by
the counterparties of these agreements, management believes that the possibility
of incurring such a loss is remote due to the creditworthiness of the
counterparties. The Company does not hold or issue any derivative financial
instruments for trading purposes.
The Company believes that its liquidity, capital resources and cash flows are
sufficient to fund planned capital expenditures, working capital requirements
and interest and principal payments for the foreseeable future.
The Company has evaluated the potential impact of the situation commonly
referred to as the "Year 2000 Issue." The Year 2000 Issue, which affects most
corporations, concerns the inability of information systems, primarily computer
software programs, to properly recognize and process date sensitive information
relating to the year 2000 and beyond. During the past several years, the
Company has taken actions to prepare its systems for the year 2000. As a
result, the majority of the Company's financial systems, as well as certain
other significant information systems, are currently year 2000 compliant. While
the Company will continue to evaluate its systems, it has determined, based upon
the available information, that additional costs associated with the Year 2000
Issue will not have a material adverse effect upon its operating results or
financial condition.
In March 1998, the American Institute of Certified Public Accountants("AICPA")
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." This SOP requires certain
costs related to computer software developed or obtained for internal use to be
expensed or capitalized depending on the stage of development and the nature of
the costs. The Company expects to adopt this SOP in the first quarter of fiscal
year 1999. The Company does not expect the adoption of SOP 98-1 to have a
material effect on its consolidated financial statements.
-10-
<PAGE>
<PAGE>
WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities," which requires costs of start-up activities and organization costs
to be expensed as incurred. The Company expects to adopt this SOP in the first
quarter of fiscal year 1999. The Company is currently evaluating the impact
SOP 98-5 may have on its operating results and financial condition.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement requires companies to
recognize all derivatives as either assets or liabilities and measure those
instruments at fair value. Gains or losses resulting from changes in the values
of those derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. The Company plans to
adopt this statement in the first quarter of fiscal year 2000. The Company does
not expect the adoption of SFAS No. 133 to have a material impact on its
consolidated financial statements.
SEASONALITY
Results of operations for this interim period are not necessarily indicative of
results for the full year. The Company's operations are seasonal. Historically,
approximately two-thirds of its operating income has been generated in the
second half of the fiscal year, primarily due to the higher number of magazine
pages, new product launches and back-to-school and holiday catalog promotions.
-11-
<PAGE>
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WORLD COLOR PRESS, INC.
PART II. OTHER INFORMATION
- -------------------------------------------------------------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on May 6, 1998. The
stockholders of the Company voted:
(a) to elect nine directors to serve for the ensuing year. A total of 34,252,797
and 4,102,056 shares were voted and unvoted, respectively. The following table
sets forth certain information with respect to such election:
<TABLE>
<CAPTION>
Shares
Withholding
Nominee Shares Voted For Authority
------- ---------------- -----------
<S> <C> <C>
Gerald S. Armstrong 34,155,756 97,041
Robert G. Burton 34,103,913 148,884
Patrice M. Daniels 34,153,716 99,081
Mark J. Griffin 34,155,856 96,941
Henry R. Kravis 34,101,119 151,678
Alexander Navab, Jr. 34,101,823 150,974
Marc L. Reisch 34,103,893 148,904
George R. Roberts 34,101,566 151,231
Scott M. Stuart 34,101,806 150,991
</TABLE>
(b)and, to adopt the 1998 Stock Option Plan. A total of 33,007,097 and 5,347,756
shares were voted and unvoted, respectively. The following table sets forth
certain information with respect to such election:
<TABLE>
<CAPTION>
Shares Shares
Shares Voted For Voted Against Abstained
---------------- ------------- ---------
<S> <C> <C> <C>
27,636,116 5,311,080 59,901
</TABLE>
No other matters were submitted for stockholder vote.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibits required in accordance with Item 601 of Regulation S-K are
incorporated by reference herein as filed with registrant's Annual Report
on Form 10-K for the fiscal year ended December 28, 1997, dated March 27,
1998.
In addition, the Company has filed herewith the following exhibits:
10.1 The World Color Press, Inc. Third Amended and Restated Supplemental
Retirement Plan as of May 11, 1998.
10.2 The Restricted Stock Plan of World Color Press.
10.3 Form of World Color Press Restricted Stock Agreement.
-12-
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<PAGE>
WORLD COLOR PRESS, INC.
PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
10.4 Fifth Amendment to Second Amended and Restated Credit Agreement
dated as of June 4, 1998, by and among World Color Press, Inc.,
the Lenders party to the Second Amended and Restated Credit
Agreement, as amended, Bankers Trust Company, as Administrative
Agent, and the Guarantors listed on the signature pages.
10.5 1998 Stock Option Plan of World Color Press, Inc.
27.0 Financial Data Schedule for the period ended June 28, 1998 (filed in
electronic form only).
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarterly period ended June
28, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORLD COLOR PRESS, INC.
Date: August 10, 1998 By: /s/ MICHAEL D. HELFAND
----------------------
Michael D. Helfand
Executive Vice President, Chief Financial
Officer
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 28, 1998 AND THE CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 28, 1998 OF
WORLD COLOR PRESS, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-27-1998
<PERIOD-END> JUN-28-1998
<CASH> 10,312
<SECURITIES> 0
<RECEIVABLES> 196,513
<ALLOWANCES> 0
<INVENTORY> 265,245
<CURRENT-ASSETS> 538,439
<PP&E> 1,650,900
<DEPRECIATION> 672,245
<TOTAL-ASSETS> 2,252,880
<CURRENT-LIABILITIES> 318,964
<BONDS> 1,095,056
0
0
<COMMON> 385
<OTHER-SE> 618,991
<TOTAL-LIABILITY-AND-EQUITY> 2,252,880
<SALES> 1,096,910
<TOTAL-REVENUES> 1,096,910
<CGS> 915,126
<TOTAL-COSTS> 915,126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42,491
<INCOME-PRETAX> 32,700
<INCOME-TAX> 13,570
<INCOME-CONTINUING> 19,130
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,130
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.49
</TABLE>
<PAGE>
Exhibit 10.1
THE WORLD COLOR PRESS, INC.
THIRD AMENDED AND RESTATED
SUPPLEMENTAL RETIREMENT PLAN
World Color Press, Inc., a Delaware corporation, adopted The World Color
Press, Inc. Supplemental Retirement Plan (the "Plan") on June 14, 1995,
effective April 1, 1995 (the "Effective Date"), for the benefit of Robert G.
Burton. The Plan was subsequently amended and restated in July, 1996 and July,
1997. In order to amend the Plan in certain respects, the Company hereby adopts
this World Color Press, Inc. Third Amended and Restated Supplemental Retirement
Plan, effective as of May 1, 1998.
The Plan is maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees,
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(l) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE I
DEFINITIONS
SECTION 1.1. GENERAL.
Whenever the following terms are used in the Plan with the first letter
capitalized, they shall have the meaning specified below unless the context
clearly indicates to the contrary.
SECTION 1.2. ACTUARIAL EQUIVALENT
"Actuarial Equivalent" shall mean the equivalent of a given Benefit or a
given amount payable in another manner or by other means, determined by or under
the direction of the Administrator in accordance with actuarial principles,
methods and assumptions which are found to be appropriate by the Enrolled
Actuary, acting independently of the Administrator or the Company and in the
exercise of his or her sole professional judgment. Such principles, methods and
assumptions, however, shall be reasonable in the aggregate and shall constitute
the Enrolled Actuary's best estimate of anticipated experience under the Plan.
Such assumptions shall include at any time, those assumptions then in effect
under the Qualified Plan.
SECTION 1.3. ADMINISTRATOR
"Administrator" shall mean the Company, acting through its Board or the
Committee. The Company shall have all duties and responsibilities imposed by
ERISA, except as specifically assigned to, delegated to or reserved to the Board
and the Committee under the Plan.
SECTION 1.4. BENEFICIARY
"Beneficiary" shall mean the person or trust properly designated as the
Participant's primary beneficiary in the manner provided in the Qualified Plan;
provided that if no such
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primary beneficiary is designated under the Qualified
Plan, "Beneficiary" shall mean the person or trust so designated by the
Participant for purposes of this Plan.
SECTION 1.5. BENEFIT
"Benefit" of the Participant shall mean the benefit payable pursuant to
Section 3.1 or 3.2.
SECTION 1.6. BENEFIT COMMENCEMENT DATE
"Benefit Commencement Date" is defined in Section 4.1.
SECTION 1.7. BOARD
"Board" shall mean the Board of Directors of the Company. The Board may
delegate any power or duty otherwise allocated to the Administrator to any other
person or persons, including the Committee.
SECTION 1.8. CAUSE
"Cause" for termination of the Participant's employment with the Company
shall mean his conviction of a felony involving moral turpitude and the
exhaustion of all appeals therefrom, or gross dereliction of duties as
determined by the Board and confirmed in an opinion of outside counsel which
dereliction is not cured after specific written notice thereof and reasonable
opportunity to cure.
SECTION 1.9. CHANGE IN CONTROL
"Change in Control" shall mean that as a group, KKR, KKR Affiliates, and
any other person or entity directly or indirectly controlled by KKR or KKR
Affiliates, in the aggregate, shall cease to be the beneficial owners of at
least ten percent (10%) of the equity interests of the Company having ordinary
voting power in the election of directors of the Company AND such entities
collectively shall not have designated at least one-third of the then current
directors of the Company. For purposes of this definition, "control" shall have
the meaning given such term under Rule 405 of the Securities Act of 1933, as
amended.
SECTION 1.10. CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
SECTION 1.11. COMMITTEE
"Committee" shall mean the Compensation Committee of the Board of Directors
of World Color Press, Inc.
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SECTION 1.12. COMPANY; COMPANY AFFILIATE
(a) "Company" shall mean World Color Press, Inc. and any successor company
which continues the Plan under Section 6.3.
(b) "Company Affiliate" shall mean any employer which, at the time of
reference, was, with the Company, a member of a controlled group of corporations
or trades or businesses under common control, or a member of an affiliated
service group, as determined under regulations issued by the Secretary under
Code Sections 414(b), (c), (m) and 415(h) and any other entity required to be
aggregated with the Company pursuant to regulations issued under Code Section
414(o).
SECTION 1.13. DISABILITY
"Disability" of the Participant shall mean his inability to discharge his
assigned duties on a substantially full-time basis for a continuous period of
not less than 180 days as a result of mental or physical disability, as
determined by the Administrator.
SECTION 1.14. EMPLOYER-DERIVED BENEFIT
"Employer-Derived Benefit" of the Participant for a period of time shall
mean the sum of his "Marching Contributions" and "Nonelective Contributions"
(including "Qualified Matching Contributions" and "Qualified Nonelective
Contributions"), as such terms are defined in the World Color Press 401(k)
Savings and Investment Plan, for such period, plus any earnings thereon for all
periods.
SECTION 1.15. ENROLLED ACTUARY
"Enrolled Actuary" shall mean the person enrolled by the Joint Board for
the Enrollment of Actuaries established under subtitle C of title III of ERISA
who has been engaged by the Administrator on behalf of the Participant to make
and render all necessary actuarial determinations, statements, opinions,
assumptions, reports and valuations under the Plan as required by law or
requested by the Administrator.
SECTION 1.16. ERISA
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to tine.
SECTION 1.17. GOOD REASON
"Good Reason" for termination of the Participant's employment with the
Company shall mean
(a) his voluntary termination of his employment with the Company
within 90 days following a Change in Control of the Company; or
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(b) his voluntary termination of his employment with the Company
following (i) the Company's diminishment of his duties or assignment to him
of duties inconsistent with his position, (ii) a material and adverse
change in his conditions of employment, or (iii) a reduction in his
compensation disproportionate to that of Company's senior executives
generally.
SECTION 1.18. JOINT ANNUITY PAYMENT
"Joint Annuity Payment" is defined in Section 3.1(c).
SECTION 1.19. KKR; KKR AFFILIATE
(a) "KKR" shall mean Kohlberg Kravis Roberts & Co., L.P., a New York
limited partnership.
(b) "KKR Affiliate" shall mean any other person or entity directly or
indirectly controlling, controlled by or under common control with KKR. For
purposes of this definition, "control" shall have the meaning given such term
under Rule 405 of the Securities Act of 1933, as amended.
SECTION 1.20. PARTICIPANT
"Participant" shall mean Robert G. Burton.
SECTION 1.21. PLAN
"Plan" shall mean The World Color Press. Inc. Supplemental Retirement
Plan.
SECTION 1.22. PLAN YEAR
"Plan Year" shall be the taxable year of the Company (presently ending on
the last Sunday in December); provided however, that the first Plan Year shall
be the period from the Effective Date through December 31, 1995.
SECTION 1.23. QUALIFIED BENEFIT
"Qualified Benefit" of the Participant shall mean the payment payable under
the Qualified Plan at the times and over the applicable periods specified in
Article IV thereof.
SECTION 1.24. QUALIFIED PLAN
"Qualified Plan" shall mean the World Color Press, Inc. Employee Retirement
Plan, as in effect on the date hereof and as may be amended form time to time.
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SECTION 1.25. SEPARATION FROM THE SERVICE
(a) "Separation from the Service" of the Participant shall mean his
Disability, retirement, or resignation from or discharge by the Company or a
Company Affiliate or his death, but not his transfer among the Company and
Company Affiliates.
(b) A leave of absence or sick leave authorized by the Company or a
Company Affiliate in accordance with established policies or a vacation period
shall not constitute a Separation from the Service; provided, however, that
failure to return to work upon expiration of any leave of absence, sick leave or
vacation, other than a sick leave that leads to a Disability, shall be
considered a resignation effective as of the commencement of any such leave of
absence, sick leave or vacation.
SECTION 1.26. SERP
"SERP" shall mean the World Color Press, Inc. Supplemental Executive
Retirement Plan.
SECTION 1.27. SERP BENEFIT
"SERP Benefit" shall mean the payment payable under the SERP at the times
and over the applicable periods specified in Article IV thereof.
SECTION 1.28. SINGLE ANNUITY PAYMENT
"Single Annuity Payment" is defined in Section 3.1(b).
SECTION 1.29. TRUST
"Trust" shall mean the trust maintained under the Trust Agreement.
SECTION 1.30. TRUST AGREEMENT
"Trust Agreement" shall mean that certain Trust under the World Color
Press, Inc. Supplemental Retirement Plan as it may be amended from time to time,
providing for the investment and administration of the Trust Fund. By this
reference, the Trust Agreement is incorporated herein.
SECTION 1.31. TRUST FUND
"Trust Fund" shall mean the fund established under the Trust Agreement from
which any amounts payable under the Plan are to be paid.
SECTION 1.32. VESTED BENEFIT
"Vested Benefit" of the Participant on a given date shall mean the Benefit
determined under Section 3.1 or 3.2, as applicable, to the extent such Benefit
is then Vested.
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ARTICLE II
FUNDING OF BENEFITS
SECTION 2.1. SOURCE OF BENEFITS
(a) The Plan shall be unfunded for purposes of ERISA and the Code; however
the Company shall contribute to the Trust;
(i) for each Plan Year beginning with the Plan Year ending
December 31, 1995, such amount as the Enrolled Actuary determines to be
necessary to contribute for such Plan Year to fund fully by the fifth
anniversary of the Effective Date, on a straight line basis, the Benefit
specified in Section 3.1(a)(i) commencing on April 1, 2000 with a Single
Annuity Payment of $750,000; and
(ii) for each Plan Year beginning with the Plan Year ending
December 31, 1997, such additional amount as the Enrolled Actuary
determines to be necessary to contribute for such Plan Year so that such
amount together with the amount contributed under paragraph (i) is
sufficient to fund fully by April 1, 2002, on a straight line basis, the
Benefit specified in Section 3.1(a)(i) commencing on April 1, 2000 with a
Single Annuity Payment of $1,000,000.
(b) Upon a Change in Control, the Company shall contribute to the Trust
such amount, if any, as the Enrolled Actuary determines to be necessary to fund
fully the Participant's Benefit.
SECTION 2.2. TIMING OF CONTRIBUTIONS
The Company shall make the contributions described in Section 2.1(a) for a
Plan Year no later than 10 days after the end of the Plan Year for which such
contribution relates, and shall make the contributions described in Section
2.1(b) no later than 10 days after the effective date of a Change in Control.
SECTION 2.3. INVESTMENT OF TRUST
The Company may direct the investment of assets in the Trust Fund, but
shall do so prudently in accordance with the objectives of the Plan.
ARTICLE III
BENEFITS
SECTION 3.1. DETERMINATION OF RETIREMENT BENEFIT
(a) Subject to Section 3.3, in the event of the Participant's Separation
from the Service for any reason other than death or Disability, the Benefit
hereunder shall be a single lump sum payment equal to the greater of (i) or (ii)
below, unless the Participant shall elect an alternative form specified in
(iii), (iv), (v), or (vi) below, pursuant to Section 4.3:
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(i) LUMP SUM I. The lump sum Actuarial Equivalent of an annuity for
the life of the Participant beginning on the Benefit Commencement Date with
annual payments equal to the excess of
(A) the Single Annuity Payment per year over
(B) the sum of
(1) the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2) the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP, and
(3) the Actuarial Equivalent of any Employer-Derived
Benefit for the period of Participant's participation in the
Plan, or
(ii) LUMP SUM II. The lump sum Actuarial Equivalent of a joint and
survivor annuity consisting of payments to the Participant commencing on
the Benefit Commencement Date and continuing until his death, with the
provision that if his Beneficiary survives him, the Beneficiary shall
receive annuity payments in the same amount until the Beneficiary's death,
and such annual payments shall equal the excess of
(A) the Joint Annuity Payment per year over
(B) the sum of
(1) the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2) the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP, and
(3) the Actuarial Equivalent of any Employer-Derived
Benefit for the Participant's period of participation in the
Plan.
Pursuant to Section 4.3, the Participant may elect, in lieu of the benefit
described in (i) or (ii) above, any of the following alternative forms of
benefit:
(iii) TEN YEAR INSTALLMENT DISTRIBUTION. A series of ten (10)
annual distributions to the Participant or his Beneficiary, commencing on
the Benefit Commencement Date, with the total Benefit first being converted
to a deemed account balance equal to the lump sum Actuarial Equivalence
described in (i) or (ii) above, and the amount of each annual installment
being equal to the then current value of such deemed account balance (after
subtracting any prior distributions) multiplied by a fraction, the
numerator of which shall be one and the denominator of which shall be the
number of installments remaining to be paid. Payment to the Participant's
Beneficiary shall be made only in the event of the Participant's death
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prior to the distribution of the entire account balance. The balance of
the Participant's account during such payout period shall be credited with
earnings at a rate equal to the earnings rate under the Qualified Plan.
(iv) DEFERRED LUMP SUM DISTRIBUTION. A single lump sum payment
equal to the amount specified in (i) or (ii) above, the payment of which is
deferred until the first week of the calendar year next following the
calendar year of the Participant's Separation from the Service (or, if
later, the date specified in Section 4.1). Payment to the Participant's
Beneficiary shall be made only in the event of the Participant's death
prior to the distribution of the Participant's Benefit hereunder. During
the delay period, the Participant's deemed account balance (as described in
paragraph (iii) above) shall be credited with earnings using the same
measure as used in paragraph (iii) above.
(v) SINGLE LIFE ANNUITY. An annuity for the life of the Participant
beginning on the Benefit Commencement Date with annual payments equal to
the excess of
(A) the Single Annuity Payment per year over
(B) the sum of
(1)the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified plan,
(2)the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP, and
(3)the Actuarial Equivalent of any Employer-Derived Benefit
for the Participant's period of participation in the Plan.
(vi) JOINT AND SURVIVOR ANNUITY. A joint and survivor annuity
consisting of payments to the Participant commencing on the Benefit
Commencement Date and continuing until his death, with the provision that
if his Beneficiary survives him the Beneficiary shall receive annuity
payments in the same amount until the Beneficiary's death, and such annual
payments shall equal the excess of
(A) the Joint Annuity Payment per year over
(B) the sum of
(1)the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2)the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP, and
(3)the Actuarial Equivalent of any Employer-Derived Benefit
for the Participant's period of participation in the Plan.
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(b) Subject to Section 3.3(b), the Single Annuity Payment shall be
$750,000; provided, however, that if the Participant's Separation from the
Service occurs on or after April 1, 2002 or if his Benefit becomes Vested prior
to such date pursuant to Section 3.3(a)(i), (ii) or (iii), the Single Annuity
Payment shall be $1,000,000.
(c) Subject to Section 3.3(b), the Joint Annuity Payment shall be
$577,000; provided, however, that if the Participant's Separation from the
Service occurs on or after April 1, 2002 or if his Benefit becomes Vested prior
to such date pursuant to Section 3.3(a)(i), (ii) or (iii), the Joint Annuity
Payment shall be $777,000.
(d) Notwithstanding anything to the contrary in this Section 3.1,
however, if the Benefit hereunder, along with any other payments to the
Participant, would be subject to the excise tax on excess parachute payments set
forth in Code Section 4999, then the amount of the Benefit shall be decreased to
the largest amount which would avoid such tax, but only if, on an after-tax
basis, such decrease would cause the Participant to receive the greatest amount
possible with respect to the Benefit after consideration of applicable excise
and income taxes.
SECTION 3.2. DEATH BENEFIT; DISABILITY BENEFIT
(a) In the event of the Participant's Separation from the Service by
reason of his death, the Benefit hereunder shall consist of a single lump sum
equal to the Actuarial Equivalent of a life annuity payable to the Participant's
Beneficiary commencing on the Benefit Commencement Date and continuing until his
or her death with annual payments equal to the excess of
(i) $1,000,000 per year over
(ii) the sum of
(A) the Actuarial Equivalent of any Qualified Benefit to which
the Participant is entitled under the Qualified Plan,
(B) the Actuarial Equivalent of any SERP Benefit to which the
Participant is entitled under the SERP, and
(C) the Actuarial Equivalent of any Employer-Derived Benefit for
the Participant's period of participation in the Plan.
(b) In the event of the Participant's Separation from the Service by
reason of his Disability, the Benefit hereunder shall be a single lump sum
payment equal to the greater of (i) or (ii) below, unless the Participant shall
elect an alternative form specified in (iii), (iv), (v), or (vi) below, pursuant
to Section 4.3:
(i) LUMP SUM I. The lump sum Actuarial Equivalent of an annuity for
the life of the Participant beginning on the Benefit Commencement Date with
annual payments equal to the excess of
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(A) $1,000,000 per year over
(B) the sum of
(1) the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2) the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP,
(3) the Actuarial Equivalent of any Employer-Derived
Benefit for his period of participation in the Plan, and
(4) the amount of payments to which the Participant is
entitled for such year pursuant to any long-term disability plan
maintained by the Company, or
(ii) LUMP SUM II. The lump sum Actuarial Equivalent of a joint and
survivor annuity consisting of payments to the Participant commencing on
the Benefit Commencement Date and continuing until his death, with the
provision that if his Beneficiary survives him, the Beneficiary shall
receive annuity payments in the same amount until the Beneficiary's death,
and such annual payments shall equal the excess of
(A) $777,000 per year over
(B) the sum of
(1) the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2) the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP,
(3) the Actuarial Equivalent of any Employer-Derived
Benefit for the Participant's period of participation in the
Plan, and
(4) the amount of payments to which the Participant is
entitled for such year pursuant to any long-term disability plan
maintained by the Company.
Pursuant to Section 4.3, the Participant may elect, in lieu of the
benefit described in (i) or (ii) above, any of the following alternative
forms of benefit:
(iii) TEN YEAR INSTALLMENT DISTRIBUTION. A series of ten (10)
annual distributions to the Participant or his Beneficiary, commencing on
the Benefit Commencement Date, with the total Benefit first being converted
to a deemed account balance equal to the lump sum Actuarial Equivalence
described in (i) or (ii) above, and
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the amount of each annual installment
being equal to the then current value of such deemed account balance (after
subtracting any prior distributions) multiplied by a fraction, the
numerator of which shall be one and the denominator of which shall be the
number of installments remaining to be paid. Payment to the Participant's
Beneficiary shall be made only in the event of the Participant's death
prior to the distribution of the entire account balance. The balance of
the Participant's account during such payout period shall be credited with
earnings at a rate equal to the earnings rate under the Qualified Plan.
(iv) DEFERRED LUMP SUM DISTRIBUTION. A single lump sum payment equal
to the amount specified in (i) or (ii) above, the payment of which is
deferred until the first week of the calendar year next following the
calendar year of the Participant's Separation from the Service. Payment to
the Participant's Beneficiary shall be made only in the event of the
Participant's death prior to the distribution of the Participant's Benefit
hereunder. During the delay period, the Participant's deemed account
balance (as described in paragraph (iii) above), shall be credited with
earnings using the same measure as used in paragraph (iii) above.
(v) SINGLE LIFE ANNUITY. An annuity for the life of the Participant
beginning on the Benefit Commencement Date with annual payments equal to
the excess of
(A) $1,000,000 per year over
(B) the sum of
(1) the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2) the Actuarial Equivalent of any SERP Benefit to which
the Participant is entitled under the SERP,
(3) the Actuarial Equivalent of any Employer-Derived
Benefit for his period of participation in the Plan, and
(4) the amount of payments to which the Participant is
entitled for such year pursuant to any long-term disability plan
maintained by the Company.
(vi) JOINT AND SURVIVOR ANNUITY. A joint and survivor annuity
consisting of payments to the Participant commencing on the Benefit
Commencement Date and continuing until his death, with the provision that
if his Beneficiary survives him, the Beneficiary shall receive annuity
payments in the same amount until the Beneficiary's death, and such annual
payments shall equal the excess of
(A) $777,000 per year over
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(B) the sum of
(1) the Actuarial Equivalent of any Qualified Benefit to
which the Participant is entitled under the Qualified Plan,
(2) the Actuarial Equivalent of any SERP benefit to which
the Participant is entitled under the SERP,
(3) the Actuarial Equivalent of any Employer-Derived
Benefit for the Participant's period of participation in the
Plan, and
(4) the amount of payments to which the Participant is
entitled for such year pursuant to any long-term disability plan
maintained by the Company.
SECTION 3.3. VESTING AND FORFEITURE
(a) The Participant's Benefit shall be 100% Vested on the earliest to
occur of
(i) his involuntary termination without Cause,
(ii) his termination for Good Reason,
(iii) if he is then an employee of the Company, a Change in
Control of the Company,
(iv) his Separation from the Service by reason of his death or
Disability, or
(v) if he is then an employee of the Company, the fifth anniversary
of the Effective Date;
and, except as otherwise provided in this subsection 3.3, the Participant's
Benefit shall not be Vested at all.
(b) If prior to April 1, 2000 the Participant shall incur a Separation
from the Service other than by reason of his death, Disability, an involuntary
termination without Cause or a termination for Good Reason, and the
Participant's Benefit shall not otherwise have Vested pursuant to subsection
(a), the Participant's Benefit hereunder shall be forfeited in its entirety as
of the date of such Separation from the Service.
SECTION 3.4. HEALTH COVERAGE
(a) Upon the Participant's Separation from the Service and until the
earlier of the Participant's death or his spouse's eligibility for Medicare
coverage, the Company shall provide to the Participant and his spouse, in any
manner selected by the Company in its discretion, health insurance coverage and
benefits substantially equivalent to the coverage and benefits provided under
the Company's non-union retiree health benefit plan (the "Retiree Plan") and the
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Supplemental Executive Health Plan (the "SEHP"), each as in effect on the
Effective Date, with the result that the net after-tax effect to the Participant
and his spouse is no less favorable than the net after-tax effect to the
Participant and his spouse of participating in the Retiree Plan and the SEHP.
(b) During such period of time as the Participant or his spouse shall be
eligible for Medicare coverage, the Company shall provide to the Participant or
his spouse, or both of them, as the case may be, insured Medicare supplementary
coverage with the extent of such coverage to be as provided in Standard Plan J
of the National Association of Insurance Commissioners ("NAIC") or in the NAIC
Standard Plan hereinafter adopted which provides for the most extensive benefit
coverage at any such time. If, with the full cooperation of the Participant and
his spouse, the Company is unable to secure such Medicare supplementary
coverage, this subsection (b) shall not apply and the Participant and/or his
spouse shall remain subject to subsection (a).
(c) Upon the death of the Participant, the Company shall provide
Participant's surviving spouse, for a period of 90 days, the coverage and
benefits specified in subsections (a) and/or (b), as applicable. Upon the
expiration of such 90-day period, the Company shall permit such spouse to elect
to continue such coverage and benefits for a period of three years, provided
that such spouse shall pay or reimburse the Company for the costs of such
coverage at the rates that would be applicable to such spouse for "continuation
coverage" as set forth at Code Section 4980B and the regulations thereunder.
(d) The health insurance coverage and benefits to be provided hereunder
shall be offset by, and such coverage and benefits shall be coordinated with,
any health insurance coverage and benefits provided to the Participant and/or
his spouse by any other employer of the Participant or his spouse.
ARTICLE IV
PAYMENT OF BENEFITS
SECTION 4.1. COMMENCEMENT OF BENEFIT
The Benefit Commencement Date for payment of any Vested Benefit to be made
under Section 3.1 shall be any date within 60 days following the Participant's
Separation from the Service; provided, however, that in the event of the
Participant's Separation from the Service prior to April 1, 2000 not as a result
of his involuntary termination without Cause or his termination for Good Reason,
the Benefit Commencement Date shall be any date within 60 days following the
later of the Participant's Separation from the Service or the fifth Anniversary
of the Effective Date. The Benefit Commencement Date for payment of any Vested
Benefit to be made under Section 3.2 shall be any date within 60 days following
the date of the Participant's Separation from the Service.
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SECTION 4.2. FORFEITURES
The Participant's Benefit shall be forfeited upon his Separation from the
Service to the extent it has not become Vested, either previously or by reason
of such Separation.
SECTION 4.3. FORM OF PAYMENT
(a) GENERAL. The form of payment of any Vested Benefit payable pursuant
to Section 3.1 or 3.2 shall be as specified therein.
(b) CHANGE OF ELECTION. The Participant may elect, at least one year
before any distribution is to be made or would commence pursuant to this Article
IV, to change the optional form of distribution that he previously was entitled
to under either Section 3.1(a) or 3.2(b), or previously elected pursuant to this
Section 4.3, provided that he elects one of the distribution options specified
in Section 3.1(a) or 3.2(b) hereof, and provided further that any election which
results in an acceleration of a distribution requires prior Committee consent.
The Participant may change his elections hereunder from time to time, pursuant
to the immediately preceding sentence, provided, however, that any election
under this Section 4.3 to change a distribution which is made within one year of
a distribution event shall be null and void. No election change shall be
permitted under Section 3.2(a).
ARTICLE V
ADMINISTRATIVE PROVISIONS
SECTION 5.1. ADMINISTRATOR'S DUTIES AND POWERS
(a) The Administrator shall conduct the general administration of the Plan
in accordance with the Plan and shall have all the necessary power and authority
to carry out that function. Among its necessary powers and duties are the
following:
(i) To delegate all or part of its function as Administrator to
others and to revoke any such delegation.
(ii) To determine questions of vesting of the Participant and his
entitlement to benefits, subject to the provisions of Section 5.8.
(iii) To select and engage attorneys, accountants, actuaries,
appraisers, brokers, consultants, administrators, physicians or other
persons to render service or advice with regard to any responsibility the
Administrator or the Board has under the Plan, or otherwise, to designate
such persons to carry out fiduciary responsibilities under the Plan, and
(with the Committee, the Company, the Board and the Company's officers and
employees) to rely upon the advice, opinions or valuations of any such
persons, to the extent permitted by law, being fully protected in acting or
relying thereon in good faith.
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(iv) To interpret the Plan for purpose of the administration and
application of the Plan in a manner not inconsistent with the Plan or
applicable law and to amend or revoke any such interpretation.
(v) To conduct claims procedures as provided in Section 3.8.
(b) Every finding, decision, and determination made by the Administrator
shall, to the full extent permitted by law, be final and binding upon all
parties, except to the extent found by a court of competent jurisdiction to
constitute an abuse of discretion.
SECTION 5.2. LIMITATIONS UPON POWERS
The Plan shall be uniformly and consistently administered, interpreted and
applied. The Plan shall be administered, interpreted and applied fairly and
equitably and in accordance with the specified purposes of the Plan.
SECTION 5.3. FINAL EFFECT OF ADMINISTRATOR ACTION
Except as provided in Section 5.8, all actions taken and all determinations
made by the Administrator in good faith shall be final and binding upon the
Participant and each other person interested in the Plan.
SECTION 5.4. MAJORITY RULE
The Committee shall act, with respect to the Plan, by a majority of its
members in office; provided, however, that the Committee may appoint one of its
members or a delegate to act on behalf of the Committee on matters arising in
the daily administration of the Plan or on specific matters.
SECTION 5.5. FINAL EFFECT OF ADMINISTRATOR ACTION
(a) The Company shall pay or reimburse each of the Company's officers,
directors, Committee members or employees who are fiduciaries with respect to
the Plan for all expenses incurred by such persons in, and shall indemnify and
hold them harmless from, all claims, liability and costs (including reasonable
attorneys' fees) arising out of, resulting from or relating to, the good faith
performance of their fiduciary duties and functions.
(i) The Company may obtain and provide for any such person, or all of
them, at the Company's expense, liability insurance against liabilities
imposed on him by law.
SECTION 5.6. RECORDKEEPING
(a) The Administrator shall maintain suitable records (in reasonable
detail) as follows:
(i) Records of the Participant's individual Benefit.
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(ii) Records which show the operations of the Plan during each Plan
Year.
(iii) Records of the Administrator's deliberations and decisions.
(b) The Administrator shall appoint a secretary, and, at its discretion,
an assistant secretary, to keep the record of proceedings, to transmit its
decisions, instructions, consents or directions to any interested party, to
execute and file, on behalf of the Committee, such documents, reports or other
matters as may be necessary or appropriate to perform ministerial acts.
(c) The Administrator shall not be required to maintain any records or
accounts which duplicate any records or accounts maintained by the Company.
SECTION 5.7. INSPECTION OF RECORDS
Copies of the Plan and records of the Participant's Benefit shall be open
to inspection by the Participant or his duly authorized representatives at the
office of the Administrator upon reasonable notice and at any reasonable
business hour.
SECTION 5.8. CLAIMS PROCEDURE
The claims procedures hereunder shall be in accordance with the claims
procedures set forth in the Qualified Plan; provided that for purposes of the
claims procedure under this Plan, the review official described in the Qualified
Plan shall be the Chief Financial Officer of the Company.
SECTION 5.9. CONFLICTING CLAIMS
The procedures for the resolution of conflicting claims by the Committee
shall be in accordance with the procedures set forth in the applicable section
of the Qualified Plan.
SECTION 5.10. SERVICE OF PROCESS
The Secretary of the Company is hereby designated as agent of the Plan for
the service of legal process.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. TERMINATION OF THE PLAN
The Plan may be amended or terminated by the Board at any time, provided
that no such amendment may be made to Articles II, III, IV or this Section 6.1
without the consent of the Participant, and provided further that if the Plan is
terminated before the Participant has received full payment of his Benefit,
whether before or after the effective date of such termination, the Company
shall contribute to the Trust all amounts, if any, as the Enrolled Actuary
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determines to be necessary to fund fully the Participant's Benefit calculated as
if the Participant's Separation from the Service occurs on the fifth anniversary
of the Effective Date.
SECTION 6.2. LIMITATION ON RIGHTS OF PARTICIPANT
Nothing contained in the Plan shall give the Participant the right to be
retained in the service of a Company or to interfere with or restrict the right
of the Company, which is hereby expressly reserved, to discharge or retire the
Participant, except as provided by law, at any time without notice and with or
without Cause.
SECTION 6.3. PLAN BINDING IN EVENT OF CONSOLIDATION OR MERGER, ETC.
(a) This Plan shall not be terminated by the voluntary or involuntary
dissolution of the Company or by any merger or consolidation where the Company
is not the surviving corporation, or upon any transfer of all or substantially
all of the Company's assets, or any other Change in Control. The Company shall
require any purchaser, assign, surviving corporation or successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Participant,
expressly to assume and agree to perform this Plan in the same manner and to the
same extent the Company would be required to perform if no such succession had
taken place. This Plan shall be binding upon and inure to the benefit of the
Company and any purchaser, assign, surviving corporation or successor to the
Company, including without limitation, any persons acquiring directly or
indirectly all or substantially all of the business and/or assets of the Company
whether by purchase, merger, consolidation, reorganization, transfer of all or
substantially all of the business or assets of the Company, or otherwise (and
such purchaser, assign, surviving corporation or successor shall thereafter be
deemed the "Company" for the purposes of this Plan), but this Plan shall not
otherwise be assignable, transferable or delegable by the Company.
(b) This Plan shall inure to the benefit of and be enforceable by the
Participant's personal or legal representatives, executors, administrators,
successors, heirs, distributees and/or legatees.
SECTION 6.4. ASSIGNMENTS, ETC. PROHIBITED
Except for the withholding of any tax under the laws of the United States
or any state or locality, no part of the Participant's Benefit hereunder shall
be liable for the debts, contracts or engagements of the Participant, his
beneficiaries or successors in interest, or be taken in execution by levy,
attachment or garnishment or by any other legal or equitable proceeding prior to
distribution, nor shall any such person have any rights to alienate, anticipate,
commute, pledge, encumber or assign any Benefits or payments hereunder in any
manner whatsoever.
SECTION 6.5. ERRORS AND MISSTATEMENTS
In the event of any misstatement or omission of fact by the Participant to
the Administrator or any clerical error resulting in payment of benefits in an
incorrect amount, the
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Administrator shall promptly cause the amount of future
payments to be corrected upon discovery of the facts and shall cause the Company
to pay the Participant any underpayment in cash in a lump sum or to recoup any
overpayment from future payments to the Participant in such amounts as the
Administrator shall direct or to proceed against the Participant for recovery of
any such overpayment.
SECTION 6.6. GOVERNING LAW
This Plan shall be construed, administered and governed in all respects
under and by applicable federal laws and, where state law is applicable, the
laws of the State of New York.
SECTION 6.7. PRONOUNS AND PLURALITY
The masculine pronoun shall include the feminine pronoun, and the singular
the plural where the context so indicates.
SECTION 6.8. TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
SECTION 6.9. REFERENCES
Unless the context clearly indicates to the contrary, a reference to a
statute, regulation or document shall be construed as referring to any
subsequently enacted, adopted or executed statute, regulation or document.
[signature page follows]
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its officers duly authorized on this 11th day of May, 1998, but to be
effective as of May 1, 1998.
WORLD COLOR PRESS, INC.
By: /s/ Jennifer Adams
-------------------------------
Its: Vice Chairman
-------------------------------
By: /s/ Michael D. Helfand
-------------------------------
Its: Executive Vice President
-------------------------------
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Exhibit 10.2
THE RESTRICTED STOCK PLAN
OF
WORLD COLOR PRESS
World Color Press, Inc., a Delaware corporation, has adopted
The Restricted Stock Plan of World Color Press (the "Plan"),
effective May 28, 1998, for the benefit of its eligible
employees.
The purposes of the Plan are as follows:
(1) To provide an additional incentive for key Employees
(as such term is defined below) to further the growth,
development and financial success of the Company by personally
benefiting through the ownership of Company stock.
(2) To enable the Company to obtain and retain the services
of key Employees considered essential to the long range success
of the Company by offering them an opportunity to own stock in
the Company.
ARTICLE I.
DEFINITIONS
1.1. GENERAL. Wherever the following terms are used in the
Plan they shall have the meanings specified below, unless the
context clearly indicates otherwise.
1.2. AWARD. "Award" shall mean an award of Restricted Stock
granted under the Plan.
1.3. AWARD AGREEMENT. "Award Agreement" shall mean a
written agreement executed by an authorized officer of the
Company and the Holder which shall contain such terms and
conditions with respect to an Award as the Committee shall
determine, consistent with the Plan.
1.4. AWARD LIMIT. "Award Limit" shall mean 40,000 shares of
Common Stock, as adjusted pursuant to Section 6.3 of the Plan.
1.5. BOARD. "Board" shall mean the Board of Directors of
the Company.
1.6. CHANGE IN CONTROL. A "Change in Control" shall be
deemed to have taken place if (i) any person, corporation, or
other entity or group, including any "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, other
than any employee benefit plan then maintained by the Company,
becomes the beneficial owner of shares of the Company having 30
percent or more of the total number of votes that may be cast for
the election of Directors of the Company; (ii) as the result of,
or in connection with, any contested election for the Board of
Directors of the Company, or any tender of exchange offer, merger
or other business combination or sale of assets, or any
combination of the foregoing (a "Transaction"), the persons who
were Directors of the Company before the Transaction shall cease
to constitute a majority of the Board of Directors of the Company
or any successor to the Company or its assets, or (iii) at any
time (a) the Company shall consolidate with, or merge with, any
other Person and the
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Company shall not be the continuing or
surviving corporation, (b) any Person shall consolidate with, or
merge with the Company, and the Company shall be the continuing
or surviving corporation and in connection therewith, all or part
of the outstanding Company stock shall be changed into or
exchanged for stock or other securities of any other Person or
cash or any other property, (c) the Company shall be a party to a
statutory share exchange with any other Person after which the
Company is a subsidiary of any other Person, or (d) the Company
shall sell or otherwise transfer 50% or more of the assets or
earning power of the Company and its subsidiaries (taken as a
whole) to any Person or Persons. For purposes hereof, "PERSON"
shall have the meaning ascribed to such term in Section 3(a)(9)
of the Securities Exchange Act of 1934 and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d).
1.7. CODE. "Code" shall mean the Internal Revenue Code of
1986, as amended.
1.8. COMMITTEE. "Committee" shall mean the Compensation
Committee of the Board, or another committee or subcommittee of
the Board, appointed as provided in Section 5.1, unless the Board
has assumed the authority for administration of the Plan
generally as provided in Section 5.2.
1.9. COMMON STOCK. "Common Stock" shall mean the common
stock of the Company, par value $0.01 per share, and any equity
security of the Company issued or authorized to be issued in the
future, but excluding any preferred stock and any warrants,
options or other rights to purchase Common Stock.
1.10. COMPANY. "Company" shall mean World Color Press,
Inc., a Delaware corporation.
1.11. CORPORATE TRANSACTION. "Corporate Transaction"
shall mean any of the following stockholder-approved transactions
to which the Company is a party:
(i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the
principal purpose of which is to change the State in which
the Company is incorporated, form a holding company or
effect a similar reorganization as to form whereupon the
Plan and all Awards are assumed by the successor entity;
(ii) the sale, transfer, exchange or other disposition
of all or substantially all of the assets of the Company, in
complete liquidation or dissolution of the Company in a
transaction not covered by the exceptions to clause (a),
above; or
(iii) any reverse merger in which the Company is
the surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power
of the Company's outstanding securities are transferred or
issued to a person or persons different from those who held
such securities immediately prior to such merger.
1.12. DIRECTOR. "Director" shall mean a member of the
Board.
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1.13. EMPLOYEE. "Employee" shall mean any officer or
other employee (as defined in accordance with Section 3401(c) of
the Code) of the Company, or of any corporation which is a
Subsidiary.
1.14. EXCHANGE ACT. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.15. FAIR MARKET VALUE. "Fair Market Value" of a share
of Common Stock as of a given date shall be (i) the closing price
of a share of Common Stock on the principal exchange on which
shares of Common Stock are then trading, if any (or as reported
on any composite index which includes such principal exchange),
on the trading day previous to such date, or if shares were not
traded on the trading day previous to such date, then on the next
preceding date on which a trade occurred, or (ii) if Common Stock
is not traded on an exchange but is quoted on NASDAQ or a
successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the
trading day previous to such date as reported by NASDAQ or such
successor quotation system; or (iii) if Common Stock is not
publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the Fair Market Value of a share of
Common Stock as established by the Committee acting in good
faith.
1.16. HOLDER. "Holder" shall mean a person who has been
granted an Award.
1.17. INDEPENDENT DIRECTOR. "Independent Director"
shall mean a member of the Board who is not an Employee of the
Company.
1.18. PERMITTED TRANSFEREE. "Permitted Transferee"
shall mean (i) one or more of the following family members of a
Holder: spouse, former spouse, child, whether natural or adopted,
any other lineal descendant of the Holder, (ii) a trust,
partnership or other entity established and existing for the sole
benefit of, or under the sole control of, one or more of the
above family members of the Holder, and (iii) any other
transferee specifically approved by the Committee after taking
into account any state or federal tax or securities laws
applicable to Awards.
1.19. PLAN. "Plan" shall mean The Restricted Stock Plan
of World Color Press, Inc.
1.20. QDRO. "QDRO" shall mean a qualified domestic
relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules
thereunder.
1.21. RESTRICTED STOCK. "Restricted Stock" shall mean
Common Stock awarded under Article IV of the Plan.
1.22. RESTRICTED STOCKHOLDER. "Restricted Stockholder"
shall mean an Employee granted an award of Restricted Stock under
Article VII of the Plan.
1.23. RULE 16B-3. "Rule 16b-3" shall mean that certain
Rule 16b-3 under the Exchange Act, as such Rule may be amended
from time to time,
1.24. SECURITIES ACT. "Securities Act" shall mean the
Securities Act of 1933, as amended.
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1.25. SUBSIDIARY. "Subsidiary" shall mean any
corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing
fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.
1.26. TERMINATION OF EMPLOYMENT. "Termination of
Employment" shall mean the time when the employee-employer
relationship between a Holder and the Company or any Subsidiary
is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (i) a
termination where there is a simultaneous reemployment or
continuing employment of the Holder by the Company or any
Subsidiary, (ii) at the discretion of the Committee, a
termination which results in a temporary short-term severance of
the employee-employer relationship, and (iii) at the discretion
of the Committee, a termination which is followed by the
simultaneous establishment of a consulting relationship by the
Company or a Subsidiary with the former employee. The Committee,
acting in good faith, shall determine the effect of all matters
and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a
Termination of Employment resulted from a discharge for good
cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. SHARES SUBJECT TO PLAN.
(a) The shares of stock subject to Awards shall be Common
Stock. The aggregate number of such shares which may be issued
upon any such Awards under the Plan shall not exceed one hundred
and fifteen thousand (115,000). The shares of Common Stock
issuable upon Awards may be either previously authorized but
unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to
Awards, granted under the Plan to any individual in any calendar
year shall not exceed the Award Limit.
2.2. ADD-BACK OF COMMON STOCK. Any shares subject to Awards
which are adjusted pursuant to Section 6.3 and become exercisable
with respect to shares of stock of another corporation shall be
considered canceled and may again be awarded hereunder, subject
to the limitations of Section 2.1. Shares of Common Stock which
are delivered by the Holder or withheld by the Company, in
payment of the tax withholding thereon may again be awarded
hereunder, subject to the limitations of Section 2.1. If any
share of Restricted Stock is forfeited by the Holder, such share
may again be awarded hereunder, subject to the limitations of
Section 2.1.
ARTICLE III.
GRANTING OF AWARDS
3.1. AWARD AGREEMENT. Each Award shall be evidenced by an
Award Agreement in a form and containing provisions to be
established from time to time by the Committee.
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3.2. CONSIDERATION. In consideration of the granting of an
Award under the Plan, the Holder shall agree, in the Award
Agreement, to remain in the employ of the Company or any
Subsidiary for a period of at least one year (or such shorter
period as may be fixed in the Award Agreement or by action of the
Committee following grant of the Award) after the Award is
granted. This Section 3.2 shall not apply after a Change in
Control.
3.3. AT-WILL EMPLOYMENT. Nothing in the Plan or in any
Award Agreement hereunder shall confer upon any Holder any right
to continue in the employ of the Company or any Subsidiary or
shall interfere with or restrict in any way the rights of the
Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided
otherwise in a written employment agreement between the Holder
and the Company and any Subsidiary.
ARTICLE IV.
AWARD OF RESTRICTED STOCK
4.1. ELIGIBILITY. Subject to the Award Limit, Restricted
Stock may be awarded to any Employee who the Committee determines
is a key Employee.
4.2. AWARD OF RESTRICTED STOCK.
(a) The Committee may from time to time, in its sole
discretion:
(i) Determine which Employees are key Employees and
select from among the key Employees (including Employees who
have previously received other Awards under the Plan) such
of them as in its opinion should be granted Restricted
Stock; and
(ii) Determine the purchase price, if any, and the
other terms and conditions applicable to such Restricted
Stock, consistent with the Plan.
(iii) The Committee shall establish the purchase
price, if any, and form of payment for Restricted Stock;
PROVIDED, HOWEVER, that such purchase price shall be no less
than the par value of the Common Stock to be purchased,
unless otherwise permitted by applicable state law. In all
cases, legal consideration shall be required for each
issuance of Restricted Stock.
(iv) Upon the selection of a key Employee to be granted
Restricted Stock, the Committee shall instruct the Secretary
of the Company to issue such Restricted Stock and may impose
such conditions on the issuance of such Restricted Stock as
it deems appropriate.
4.3. RIGHTS AS STOCKHOLDERS. Subject to Section 4.4, upon
delivery of the shares of Restricted Stock to the escrow holder
pursuant to Section 4.5, the Restricted Stockholder shall have,
unless otherwise provided by the Committee, all the rights of a
stockholder with respect to said shares, subject to the
restrictions in his Award Agreement, including the right to
receive all dividends and other distributions paid or made with
respect to the shares; PROVIDED, HOWEVER, that in the due
discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions
set forth in Section 4.4.
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4.4. RESTRICTION. All shares of Restricted Stock issued
under the Plan (including any shares received by holders thereof
with respect to shares of Restricted Stock as a result of stock
dividends, stock splits or any other form of recapitalization)
shall, in the terms of each individual Award Agreement, be
subject to such restrictions as the Committee shall provide,
which restrictions may include, without limitation, restrictions
concerning voting rights and transferability and restrictions
based on duration of employment with the Company; PROVIDED,
HOWEVER, that, upon a Change in Control at a time when the Holder
is still an Employee, all restrictions shall lapse and such
Common Stock shall become freely transferable. Except as
provided above, the minimum period of restriction shall be three
(3) years, which period of restriction would permit the removal
of restrictions on no more than one-third (1/3) of the Restricted
Stock at the end of the first year following the grant date, and
the removal of the restrictions on an additional one-third (1/3)
at the end of each subsequent year. Except as provided above, no
restrictions may be removed from Restricted Stock during the
first year following the grant date. The foregoing limitations
notwithstanding, the Committee in its sole discretion may reduce
or remove the restrictions with respect to Restricted Stock upon
assumption of, or in substitution for, restricted stock of a
company with which the Company participates in an acquisition,
separation, or similar corporate transaction. Unvested
Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire. Except as provided above,
a Restricted Stockholder's rights in unvested Restricted Stock
shall lapse and his unvested Restricted Stock shall be forfeited
back to the Company immediately upon his Termination of
Employment with the Company; PROVIDED, HOWEVER, that if the
Restricted Stockholder paid any consideration for the Restricted
Stock upon its issuance, then the Company shall reimburse him for
the same upon said Termination of Employment.
4.5. ESCROW. With respect to each share of unvested
Restricted Stock, the Secretary of the Company or such other
escrow holder as the Committee may appoint shall retain physical
custody of the certificate representing such share until the
restrictions imposed under the Award Agreement with respect to
such share expire or shall have been removed, whereupon the
certificate representing such share shall be delivered to the
Holder; PROVIDED; HOWEVER, that if other shares of still unvested
Restricted Stock are also represented by the same stock
certificate, then such certificate shall be retired and new
certificates representing the vested and unvested portions of the
Award shall be issued in place of the existing certificate. The
certificate representing the vested Common Stock shall be
delivered to the Holder and the certificate representing the
shares of still unvested Restricted Stock shall be retained by
the escrow holder.
4.6. LEGEND. In order to enforce the restrictions imposed
upon shares of unvested Restricted Stock granted hereunder, the
Committee shall cause a legend or legends to be placed on
certificates representing all shares of Restricted Stock that are
still subject to restrictions under Award Agreements, which
legend or legends shall make appropriate reference to the
conditions imposed thereby.
4.7. SECTION 83(B) ELECTION. If a Restricted Stockholder
makes an election under Section 83(b) of the Code, or any
successor section thereto, to be taxed with respect to the
Restricted Stock as of the date of transfer of the Restricted
Stock rather than as of the date or dates upon which the
Restricted Stockholder would otherwise be taxable under Section
83(a) of the Code, the Restricted Stockholder shall deliver a
copy of such election to the Company immediately after filing
such election with the Internal Revenue Service.
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ARTICLE V.
ADMINISTRATION
5.1. COMMITTEE. The Committee (or another committee or a
subcommittee of the Board assuming the functions of the Committee
under the Plan) shall consist solely of two or more Independent
Directors appointed by and holding office at the pleasure of the
Board, each of whom is a "non-employee director" as defined by
Rule 16b-3. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at
any time by delivering written notice to the Board. Vacancies in
the Committee may be filled by the Board.
5.2. DUTIES AND POWERS OF COMMITTEE. It shall be the duty
of the Committee to conduct the general administration of the
Plan in accordance with its provisions. The Committee shall have
the power to interpret the Plan and the agreements pursuant to
which Awards are granted or awarded, and to adopt such rules for
the administration, interpretation, and application of the Plan
as are consistent therewith and to interpret, amend or revoke any
such rules. Any such grant or award under the Plan need not be
the same with respect to each Holder. The Board may at any time
and from time to time exercise any and all rights and duties of
the Committee under the Plan except with respect to matters which
under Rule 16b-3, or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the
Committee. At all times the Committee shall be required to act
reasonably and in good faith.
5.3. MAJORITY RULE; UNANIMOUS WRITTEN CONSENT. The
Committee shall act by a majority of its members in attendance at
a meeting at which a quorum is present or by a memorandum or
other written instrument signed by all members of the Committee.
5.4. COMPENSATION: PROFESSIONAL ASSISTANCE; GOOD FAITH
ACTIONS. The Committee may, with the approval of the Board,
employ attorneys, consultants, accountants, appraisers, brokers,
or other persons. The Committee, the Company and the Company's
officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committee
or the Board in good faith shall be final and binding upon all
Holders, the Company and all other interested persons. No
members of the Committee or Board shall be personally liable for
any action, determination or interpretation made in good faith
with respect to the Plan or Awards, and all members of the
Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.
ARTICLE VI.
MISCELLANEOUS PROVISIONS
6.1. NOT TRANSFERABLE.
(a) No share of Restricted Stock awarded under the Plan may
be sold, pledged, assigned or transferred in any manner other
than by will or the laws of descent and distribution or, subject
to the consent of the Committee, pursuant to a QDRO, unless and
until such share has been issued and all restrictions applicable
to such share has lapsed. No Restricted Stock or interest or
right therein shall be liable for the debts, contracts or
engagements of the Holder or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation,
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pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the
preceding sentence.
(b) Notwithstanding the foregoing provisions of this
Section 6.1, the Committee, in its sole discretion, may determine
to permit a Holder to transfer an Award to a Permitted
Transferee, subject to the following terms and conditions: (a) An
Award transferred to a Permitted Transferee shall not be
assignable or transferable by the Permitted Transferee other than
by will or the laws of descent and distribution; (b) Any Award
which is transferred to a Permitted Transferee shall continue to
be subject to all the terms and conditions of the Award as
applicable to the original Holder (other than the ability to
further transfer the Award); (c) The Holder and the Permitted
Transferee shall execute any and all documents requested by the
Committee, including, without limitation documents to (i) confirm
the status of the transferee as a Permitted Transferee, (ii)
satisfy any requirements for an exemption for the transfer under
applicable federal and state securities laws and (iii) evidence
the transfer.
6.2. AMENDMENT. SUSPENSION OR TERMINATION OF THE PLAN.
Except as otherwise provided in this Section 6.2, the Plan may be
wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board or the
Committee. No amendment, suspension or termination of the Plan
shall, without the consent of the Holder alter or impair any
rights or obligations under any Award theretofore granted or
awarded, unless the Award itself otherwise expressly so provides.
No Awards may be granted or awarded during any period of
suspension or after termination of the Plan.
6.3. Changes in Common Stock or Assets of the Company,
Acquisition or LIQUIDATION OF THE COMPANY, CHANGE IN
CONTROL AND OTHER CORPORATE EVENTS.
(a) Subject to the Change in Control provisions of Section
4.4, in the event that the Committee determines that any dividend
or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale,
transfer, exchange or other disposition of all or substantially
all of the assets of the Company (including, but not limited to,
a Corporate Transaction), or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or
other similar corporate transaction or event, in the Committee's
opinion, affects the Common Stock such that an adjustment is
determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to
an Award, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or
other securities or property) with respect to which Awards
may be granted (including, but not limited to, adjustments
of the limitations in Section 2.1 on the maximum number and
kind of shares which may be issued and adjustments of the
Award Limit), and
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(ii) the number and kind of shares of Common Stock (or
other securities or property) subject to outstanding Awards.
(b) Subject to the Change in Control provisions of Section
4.4, in the event of any Corporate Transaction or other
transaction or event described in Section 6.3(a) or any unusual
or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws,
regulations, or accounting principles, the Committee, in its sole
and absolute discretion, and on such terms and conditions as it
deems appropriate, either by the terms of the Award or by action
taken prior to the occurrence of such transaction or event and
either automatically or upon the Holder's request, is hereby
authorized to take any one or more of the following actions
whenever the Committee determines that such action is appropriate
in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan
or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws,
regulations or principles:
(i) To provide for either the purchase of any such
Award for an amount of cash equal to the amount that could
have been attained upon the realization of the Holder's
rights had such Award been currently fully vested or the
replacement of such Award with other rights or property
selected by the Committee in its sole discretion;
(ii) To provide that the Award cannot vest after such
event;
(iii) To provide that such Award be assumed by the
successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar awards
covering the stock of the successor or survivor corporation,
or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;
and
(iv) To make adjustments in the number and type of
shares of Common Stock (or other securities or property)
subject to outstanding Awards, and/or in the terms and
conditions of, and the criteria included in, outstanding
Awards and Awards which may be granted in the future.
(v) To provide that, for a specified period of time
prior to such event, the restrictions imposed under an Award
Agreement upon some or all shares of Restricted Stock may be
terminated, and some or all shares of such Restricted Stock
may cease to be subject to forfeiture under Section 4.4
after such event.
(c) The Committee may, in its discretion, include such
further provisions and limitations in any Award, agreement or
certificate, as it may deem equitable and in the best interests
of the Company.
(d) No adjustment or action hereunder shall be authorized
to the extent such adjustment or action would result in short-
swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Committee determines that the
Award is not to comply with such exemptive conditions. The
number of shares or Common Stock subject to any Award shall
always be rounded to the next whole number.
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6.4. TAX WITHHOLDING. The Company shall be entitled to
require payment in cash or deduction from other compensation
payable to each Holder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance,
vesting or payment of any Award. The Committee may in its
discretion and in satisfaction of the foregoing requirement allow
such Holder to elect to have the Company withhold shares of
Common Stock otherwise issuable under such Award (or allow the
return of shares of Common Stock) having a Fair Market Value
equal to the sums required to be withheld.
6.5. FORFEITURE PROVISIONS. Pursuant to its general
authority to determine the terms and conditions applicable to
Awards under the Plan, the Committee shall have the right (to the
extent consistent with the applicable exemptive conditions of
Rule 16b-3) to provide, in the terms of Awards made under the
Plan, that (i) any proceeds, gains or other economic benefit
actually or constructively received by the Holder upon any
receipt or exercise of the Award, or upon the receipt or resale
of any Common Stock underlying the Award, must be paid to the
Company, and (ii) the Award shall terminate and any unexercised
portion of the Award (whether or not vested) shall be forfeited,
if (a) a Termination of Employment occurs prior to a specified
date, or within a specified time period following receipt or
exercise of the Award, or (b) the Holder at any time, or during a
specified time period, engages in any activity in competition
with the Company, or which is inimical, contrary or harmful to
the interests of the Company, as further defined by the Committee
(or the Board, as applicable) or the Holder incurs a Termination
of Employment for cause, as determined by the Committee.
6.6. LIMITATIONS APPLICABLE TO SECTION 16 PERSONS. Except
as may be provided by the Committee, the Plan, and any Award
granted to any individual who is then subject to Section 16 of
the Exchange Act, shall be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of
the Exchange Act (including any amendment to Rule 16b-3) that are
requirements for the application of such exemptive rule. To the
extent permitted by applicable law, the Plan and Awards granted
hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.
6.7. EFFECT OF PLAN UPON OTHER COMPENSATION PLANS. The
adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary.
Nothing in the Plan shall be construed to limit the right of the
Company (i) to establish any other forms of incentives or
compensation for Employees, Directors or consultants of the
Company or any Subsidiary or (ii) to grant or assume other awards
otherwise than under the Plan in connection with any proper
corporate purpose including but not by way of limitation, the
grant of Common Stock in connection with the acquisition by
purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership,
limited liability company, firm or association.
6.8. COMPLIANCE WITH LAWS. The Plan, the granting and
vesting of Awards under the Plan and the issuance and delivery of
shares of Common Stock and the payment of money under the Plan or
under Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law
and federal margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under the Plan
shall be subject to
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such restrictions, and the person acquiring
such securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may
deem necessary or desirable to assure compliance with all
applicable legal requirements. To the extent permitted by
applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
6.9. TITLES. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or
construction of the Plan.
6.10. GOVERNING LAW. The Plan and any agreements
hereunder shall be administered, interpreted and enforced under
the internal laws of the State of Delaware without regard to
conflicts of laws thereof.
* * *
I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of World Color Press, Inc. as of May 28,
1998
Executed on this 29th day of May, 1998.
/s/ Jennifer Adams
--------------------------------
Secretary
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Exhibit 10.3
FORM OF
WORLD COLOR PRESS
RESTRICTED STOCK AGREEMENT
(ISSUED UNDER THE 1998 RESTRICTED STOCK PLAN OF WORLD COLOR PRESS)
This Restricted Stock Agreement ("Agreement") is made and entered into as
of the Date of Award indicated below by and between World Color Press, Inc., a
Delaware corporation (the "Company"), and the person named below as Holder.
WHEREAS, Holder is a key Employee of the Company and/or one or more of its
Subsidiaries; and
WHEREAS, pursuant to the 1998 Restricted Stock Plan of World Color Press
(the "Plan"), the Compensation Committee of the Board of Directors of the
Company (the "Committee") has approved the Award to Holder of shares of the
common stock, par value $0.01 per share, of the Company (the "Common Stock"), on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. AWARD; CERTAIN TERMS AND CONDITIONS. The Company hereby awards to
Holder, and Holder hereby accepts, as of the Date of Award, the number of shares
of Common Stock indicated below (the "Restricted Stock") for the purchase price
per share, if any, indicated below. The Restricted Stock shall be subject to
all of the terms and conditions set forth in this Agreement, including the
restrictions imposed pursuant to Section 2 hereof.
Holder:
Date of Award:
Number of shares of Restricted Stock:
Purchase Price per share: $
1
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<TABLE>
<CAPTION>
Vesting Schedule
------------------------ ---------------------------
No. of Shares Date Exercisable
------------------------ ---------------------------
<S> <C>
------------------------ ---------------------------
------------------------ ---------------------------
------------------------ ---------------------------
------------------------ ---------------------------
------------------------ ---------------------------
</TABLE>
Holder must be an Employee on the date the Restricted Stock would otherwise
vest pursuant to the above Vesting Schedule.
2. RESTRICTIONS. Except as provided in Section 8 hereof, unvested
Restricted Stock (i) shall not be sold, exchanged, assigned, transferred,
conveyed, gifted, or otherwise disposed of in any way at any time and (ii) shall
not be pledged, encumbered, or otherwise hypothecated in any way at any time and
shall not be subject to execution, attachment, or similar legal process. Any
attempt to sell, transfer, pledge, encumber, hypothecate, or otherwise dispose
of any unvested shares of Restricted Stock, contrary to the terms and provisions
of this Agreement and/or the Plan, shall be null and void and without legal
force or effect.
3. ACCELERATION OF VESTING. Notwithstanding anything to the contrary in
this Agreement, all then unvested Restricted Stock shall vest upon a Change in
Control of the Company (as defined in the Plan), provided Holder is still an
Employee at such time.
4. FORFEITURE OF RESTRICTED STOCK. Except as otherwise provided herein,
upon the Holder's Termination of Employment (as defined in the Plan), any
Restricted Stock that has not yet vested as of the date of any such Termination
of Employment shall be immediately forfeited and canceled. In that event, the
Company shall reimburse the Holder for any cash consideration the Holder may
have paid for such Restricted Stock, in an amount equal to the cash Purchase
Price per share previously paid.
5. PAYMENT OF WITHHOLDING TAXES.
(a) If the Company becomes obligated to withhold an amount on account of
any federal, state or local tax imposed as a result of the sale of the
Restricted Stock to Holder pursuant to this Agreement (such as in the case of a
Holder's election under Section 83(b) of the Code) or the termination of the
restrictions imposed upon the Restricted Stock hereunder, including, without
limitation, any federal, state or other income tax, or any FICA, state
disability insurance tax or other employment tax (the date upon which the
Company becomes so obligated shall be referred to herein as the "Withholding
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Date"), then Holder shall pay such amount (the "Withholding Liability") to the
Company on the Withholding Date in cash or by check payable to the Company;
provided, however, that, in the discretion of the Committee, Holder may,
pursuant to an election of Holder (a "Withholding Election"), instead pay all or
any part of the Withholding Liability by the delivery to the Company of a stock
certificate or certificates representing shares of Common Stock, duly endorsed
or accompanied by a duly executed stock powers, which delivery effectively
transfers to the Company good and valid title to such shares, free and clear of
any pledge, commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value (as defined in the Plan)
thereof on the Withholding Date), provided that the Company is not then
prohibited by law or any instrument or agreement from purchasing or acquiring
such shares of Common Stock. The Company reserves the right to require that any
shares of Common Stock delivered by the Holder in full or partial payment of the
Withholding Liability be limited to those shares already owned by Holder for at
least six (6) months.
(b) In addition, as part of such Withholding Election, and with the
consent of the Committee, the Company may withhold from the number of shares of
Common Stock otherwise to be released to the Holder upon the vesting thereof
that number of shares needed to satisfy such Withholding Liability.
(c) If the Holder's Withholding Liability is not otherwise satisfied
pursuant to (a) or (b) above, then the Company shall have the right to withhold
and deduct from any compensation or other amounts otherwise due to Holder an
amount necessary to satisfy such Withholding Liability. Furthermore, the
Company shall have the right to deduct and withhold any such applicable taxes
from, or in respect of, any dividends or other distributions paid on or in
respect of the Common Stock comprising this Restricted Stock grant. All taxes,
if any, in respect of the grant of the Restricted Stock or any other payments
hereunder shall be solely Holder's responsibility and shall be paid by Holder.
Holder will notify the Company of his or her intention to make an election under
Section 83(b) of the Code at least five (5) business days before making such
election.
(d) The Committee, in its sole discretion, may impose any additional
conditions under subsections (a), (b) and/or (c) as may be required to comply
with Section 16(b) of the Exchange Act (including any Rules promulgated
thereunder).
(e) The Committee shall have sole discretion to approve or disapprove any
Withholding Election and may adopt such rules and regulations as are consistent
with and necessary to implement the foregoing. The Committee may permit Holder
to make a Withholding Election to pay withholding taxes in excess of the minimum
amount required by law, provided that the amount of withholding taxes so paid
does not exceed the estimated total federal, state and local tax liability of
Holder attributable to such Award grant or such termination of restrictions.
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6. ESCROW.
(a) Until a share of Restricted Stock vests, (i) the record address of the
holder of record of such share shall be c/o the Secretary of the Company at the
address of the Company's principal executive office, (ii) the stock certificate
representing such share of Restricted Stock (together with any cash, property
and/or securities comprising all or any part of such Restricted Stock as
provided in Section 7 hereof, other than regular cash dividends) shall be held
in escrow in the custody of the Secretary of the Company, duly endorsed in blank
or accompanied by a duly executed stock powers, and (iii) such stock certificate
shall contain the following legend:
"The transfer and registration of transfer of the securities
represented by this certificate are subject to certain restrictions as
provided in a Restricted Stock Agreement dated as of May 28, 1998 by
and between the Corporation and Marc L. Reisch."
(b) From and after the date upon which a share of Restricted Stock vests,
the holder of record of such share shall be entitled (provided that Holder shall
have paid the Withholding Liability to the Company pursuant to Section 5 hereof)
to receive the stock certificate representing such share (together with any
cash, property and/or securities comprising all or any part of such Restricted
Stock as provided in Section 7 hereof), which stock certificate shall not
contain the legend set forth in subsection (a)(iii) above. No fractional shares
shall be issued under this Agreement. Any fractional shares to which Holder
would otherwise be entitled shall be repurchased by the Company for cash.
However, notwithstanding anything to the contrary above, if such certificate
also represents one or more shares of Restricted Stock which have not yet
vested, then the certificate shall be retired and two new certificates shall be
issued in its place -- one representing the vested shares and one representing
the still unvested shares of Restricted Stock. The certificate representing the
vested shares shall be delivered to the Holder as provided above, and the
certificate representing the still unvested shares of Restricted Stock shall be
retained by the escrow holder.
7. VOTING; DIVIDENDS; CERTAIN CORPORATE TRANSACTIONS.
(a) Subject to the provisions of the Plan and this Agreement, the Holder
shall have all of the powers, preferences, and rights of a holder of Common
Stock with respect to the shares of Common Stock comprising this Restricted
Stock grant. Holder agrees and understands that nothing contained in this
Agreement provides, or is intended to provide, any protection against potential
future dilution of Holder's stockholder interest in the Company for any reason,
except as stated in Section 6.3 of the Plan. Any stock dividends paid in
respect of shares of unvested Restricted Stock shall be treated as additional
Restricted Stock and shall be subject to the same restrictions and other terms
and conditions that apply to the shares of unvested Restricted Stock with
respect to which such stock dividends are paid.
(b) The holder of record of any Restricted Stock shall be entitled to
exercise all voting rights with respect to such stock and to receive all regular
cash dividends paid with respect thereto. In the event that the outstanding
securities of any class then comprising the shares of Restricted Stock are
increased, decreased or exchanged for or converted into cash, property and/or a
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different number or kind of securities, or cash, property and/or securities are
distributed in respect of such outstanding securities, in either case as a
result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, spin-off, spin-out, dividend (other than a
regular cash dividend) or other distribution, stock split, reverse stock split
or the like, then, unless the Committee shall determine otherwise, the term
"Restricted Stock" shall, from and after the date of such event, include such
cash, property and/or securities so distributed in respect of the Restricted
Stock, or into or for which the shares of Restricted Stock are so increased,
decreased, exchanged or converted.
8. PERMITTED TRANSFERS. Notwithstanding anything to the contrary in this
Agreement, Holder may transfer any or all of the shares of Restricted Stock
either (i) to an alternate payee pursuant to a qualified domestic relations
order (as defined in Title I of ERISA or the Internal Revenue Code), or (ii) by
bona fide gift to a Permitted Transferee (as defined in the Plan); PROVIDED,
HOWEVER, that (x) such transferred shares of unvested Restricted Stock shall
continue to be subject to all of the terms and conditions of this Agreement as
if Holder continued to hold such shares, and the transferee of such shares
shall, in a duly executed document delivered to the Company and reasonably
satisfactory in form and substance to the Committee, consent thereto and agree
to be bound by all of the terms and conditions of this Agreement as if such
transferee were Holder, and (y) such transferee shall deliver to the Secretary
of the Company a duly executed stock powers with respect to such transferred
shares of unvested Restricted Stock, which stock powers shall be held in escrow
by the Secretary pursuant to Section 6 hereof.
9. SECURITIES LAWS. Holder represents to the Company that, unless a
registration statement under the Securities Act of 1933 is in effect as to the
Restricted Stock purchased hereunder, the Restricted Stock is being acquired for
his or her private personal investment for his or her own account with no
intention of distributing such shares to others, and that Holder has no
contract, undertaking, agreement, or arrangement with any person to sell,
transfer or otherwise distribute to such persons or to have any such person
sell, transfer, or otherwise distribute for him or her any of the Restricted
Stock or any interest therein and Holder is presently not engaged, nor does he
or she plan to engage within the presently foreseeable future, in any discussion
with any person relative to such sale, transfer, or other distribution of any of
the Restricted Stock or any interest therein. Furthermore, the resale of the
shares of Common Stock issued pursuant to this Agreement shall be subject to,
and shall comply with, any applicable requirements of federal and state
securities laws, rules, and regulations (including, without limitation, the
provisions of the Securities Act of 1933, the Exchange Act and the respective
rules and regulations promulgated thereunder) and any other law, rule, or
regulation applicable thereto, as such laws, rules, and regulations may be
amended from time to time. The Company shall not be obligated to permit the
resale of any shares of Common Stock pursuant to this Agreement if such resale
would violate any such requirements.
10. PLAN. The Restricted Stock is being sold pursuant to the Plan, as in
effect on the Date of Award, and is subject to all the terms and conditions of
the Plan, as the same may be amended from time to time, all of which terms and
provisions are made a part of and incorporated in this Agreement as if they were
expressly set forth herein; PROVIDED, HOWEVER, that no such amendment shall
deprive Holder, without his or her consent, of the Restricted Stock or of any of
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Holder's rights under this Agreement. The interpretation and construction by
the Committee of the Plan, this Agreement and such rules and regulations as may
be adopted by the Committee for the purpose of administering the Plan shall be
final and binding upon Holder. Until the Restricted Stock shall vest or be
forfeited, the Company shall, upon written request therefor, send a copy of the
Plan, in its then current form, to the holder of record of the Restricted Stock.
Any capitalized term not defined in this Agreement shall have the same meaning
as is ascribed thereto under the Plan. Holder hereby acknowledges receipt of a
true copy of the Plan and that he or she has read the Plan carefully and fully
understands its contents. In the event of a conflict between the terms of this
Agreement and the terms of the Plan, the terms of the Plan shall control.
11. EMPLOYMENT OR OTHER STATUS RIGHTS. No provision of this Agreement
shall (a) confer upon Holder any right to continue as an employee, director, or
consultant of the Company or any of its Subsidiaries, (b) affect the right of
the Company and each of its Subsidiaries (or, in the case of a director, the
stockholders thereof) to terminate the employment or other status of Holder,
with or without cause, or (c) confer upon Holder any right to participate in any
employee benefit plan or other program of the Company or any of its Subsidiaries
other than the Plan. Holder hereby acknowledges and agrees that the Company and
each of its Subsidiaries may terminate the employment of Holder at any time and
for any reason, or for no reason, unless Holder and the Company or such
Subsidiary are parties to a written employment agreement that expressly provides
otherwise.
12. GOLDEN PARACHUTE GROSS-UP. If, in the written opinion of a Big 6
accounting firm engaged by either the Company or the Holder for this purpose (at
the Company's expense), or if so alleged by the Internal Revenue Service, the
aggregate of the granting of Awards, vesting of the Restricted Stock, and/or
payment of any other benefits hereunder (collectively, the "Benefits") would
cause the payment or provision of one or more of such Benefits to constitute an
"excess parachute payment" as defined in Section 280G(b) of the Internal Revenue
Code ("Code"), then the Company will pay to the Holder an additional amount in
cash (the "Gross-Up Payment") equal to the amount necessary to cause the net
amount retained by the Holder, after deduction of any (i) excise tax on the
Benefits, (ii) federal, state or local income tax on the Gross-Up Payment, and
(iii) excise tax on the Gross-Up Payment, to be equal to the aggregate
remuneration the Holder would have received hereunder, excluding such Gross-Up
Payment (net of all federal, state and local excise and income taxes), as if
Sections 280G and 4999 of the Code (and any successor provisions thereto) had
not been enacted into law. The Gross-Up Payment provided for in this paragraph
shall be made within ten (10) days after the vesting of Holder's Restricted
Stock or provision of other Benefit causing Code Section 280G to apply, provided
however that if the amount of the Gross-Up Payment cannot be finally determined
at the time, the Company shall pay to Holder an estimate as determined in good
faith by the Company of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than the thirtieth (30th) day after the
date of said vesting or provision of other Benefits.
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13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, guardians, beneficiaries,
permitted transferees, successors, and assigns.
14. NOTICES. Any notice hereunder shall be in writing and shall be
delivered in person, or via facsimile transmission, overnight courier service,
or certified mail, return receipt requested, postage prepaid, properly addressed
to Holder or the Company, as the case may be, at the applicable address
specified below, or at such other address as Holder or the Company, as the case
may be, may designate to the other party from time to time in a notice that
satisfies the conditions of this paragraph.
Address for Holder: Address for Company:
World Color Press, Inc.
The Mill, 340
Pemberwick Road
Greenwich, Connecticut
06831
Attn: Chief Legal
Officer
15. GOVERNING LAW; ENTIRE AGREEMENT. This Agreement shall be governed by
and shall be construed in accordance with the laws of the State of Delaware,
without reference to the principles of conflict of laws thereof. This Agreement
contains the entire agreement between Holder and the Company with respect to the
subject matter contained herein, and supersedes all prior agreements or prior
understandings, whether oral or written, between such parties relating to such
subject matter.
16. SEVERABILITY. The invalidity or unenforceability of any provision 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 any provision of this Agreement 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.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the Company and Holder have duly executed this
Agreement in one or more counterparts, each of which shall be deemed an
original, as of the Date of Award.
WORLD COLOR PRESS, INC.
By:
-------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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--------------------------------------------------
Social Security Number:
----------------------
Address:
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Exhibit 10.4
WORLD COLOR PRESS, INC.
FIFTH AMENDMENT
TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment" or the "Fifth Amendment") is dated as of June 4, 1998 and
entered into by and among WORLD COLOR PRESS, INC., a Delaware corporation
("Company"), the Lenders party to the Credit Agreement referred to below on
the date hereof (the "Lenders"), and BANKERS TRUST COMPANY, as Administrative
Agent, and, for purposes of Section 6 hereof, THE SUBSIDIARIES OF COMPANY LISTED
ON THE SIGNATURE PAGES HERETO (each a "Guarantor" and collectively, the
"Guarantors"). All capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreement (as defined
below).
RECITALS
WHEREAS, Company, the Lenders, BancAmerica Securities, Inc., as
Syndication Agent, Citibank, N.A., as Documentation Agent and Bankers Trust
Company, as Administrative Agent, are parties to that certain Second Amended and
Restated Credit Agreement dated as of June 6, 1996, as amended or modified by
that certain First Amendment to Second Amended and Restated Credit Agreement
dated as of June 10, 1996, as further amended or modified by that certain
Limited Waiver, Consent and Second Amendment to Second Amended and Restated
Credit Agreement dated as of June 9, 1997, as further amended or modified by
that certain Third Amendment to Second Amended and Restated Credit Agreement
dated as of June 27, 1997, and as further amended or modified by that certain
Limited Waiver, Consent and Fourth Amendment to Second Amended and Restated
Credit Agreement dated as of September 29, 1997 (as so amended and modified, the
"CREDIT AGREEMENT").
WHEREAS, the parties hereto wish to amend and modify the Credit
Agreement and certain of the other Loan Documents to (i) allow Company to
acquire its common stock in connection with the exercise of stock options issued
as part of Company's employee stock option plans as provided herein, in an
aggregate amount not to exceed $15,000,000 for each Fiscal Year (up to a maximum
of $50,000,000 in the aggregate during the term of this Agreement), (ii) amend
and modify certain financial covenants, and (iii) make certain other amendments
as set forth below.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
<PAGE>
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SECTION 1
AMENDMENTS
1.1 AMENDMENTS TO SECTION 1: DEFINITIONS
A. The definition of "Change of Control" set forth in Subsection 1.1
of the Credit Agreement is hereby amended and restated as follows:
"'Change of Control' means such time as (i) Company becomes aware that
a 'person' or 'group' (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act of 1934, as amended) other than KKR and
its Affiliates has become, directly or indirectly, beneficially, or of
record, by way of merger, consolidation or otherwise, the owner of 30%
or more of the voting power of the voting stock of Company on a fully-
diluted basis after giving effect to the conversion and exercise of
all outstanding warrants, options and other securities of Company
(whether or not such securities are then currently convertible or
exercisable), or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors (together with any new directors whose election by the
Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of the majority of
the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors of Company then in office."
B. Clause (iii) of the definition of "Net Equity Contribution
Amount" set forth in subsection 1.1 of the Credit Agreement is amended and
restated as follows:
"(iii) $128,064,000 which constitutes the amount of net proceeds
of the Company's sale of Equity Securities consummated in
October, 1997 minus;"
C. Subsection 1.1 of the Credit Agreement is hereby amended to add
the following definition in the appropriate alphabetical order:
"Company Qualified Option" shall mean, as of any time of
determination, any option to acquire common stock of the Company (i)
for an exercise price which is less than or equal to the then current
market price for such common stock, (ii) which is issued pursuant to
an employee stock option plan to a Person who, at the time of the
issuance of such option, was an employee, officer or director of the
Company and (iii) that is then vested and exercisable."
2
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<PAGE>
1.2 AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS
A. RESTRICTED JUNIOR PAYMENTS
1. Subsection 6.5 of the Credit Agreement is hereby amended by
amending and restating (v) in its entirety as follows:
" (v) Company may declare and pay dividends in Cash on the common stock
of Company and make payments permitted pursuant to Subsection 6.5 (vi);
PROVIDED that the aggregate amount of such Restricted Junior Payments does
not exceed the sum of (a) $12,500,000 PLUS (b)(1) 25% MULTIPLIED BY the
positive Consolidated Net Income, if any, for the period (treated as a
single accounting period) from the Closing Date to the end of the most
recent completed Fiscal Quarter preceding the date of computation MINUS (2)
100% of all such dividends, distributions and payments made and funds set
apart for such purpose pursuant to this subsection 6.5 (v)(b) and
subsection 6.5(vi) during such period PLUS(c) 100% of the Net Equity
Contribution Amount, it being understood and agreed that unless Company
designates otherwise in writing delivered to Administrative Agent prior to
the date Company makes such Restricted Junior Payment, such Restricted
Junior Payment shall be allocated FIRST to any amounts available under
clause 6.5(v)(b), SECOND to amounts available under clause (a) and THEN to
amounts available under clause (c) of this subsection 6.5(v);"
2. Subsection 6.5 of the Credit Agreement is hereby further amended
by adding the following clause (vi) at the end of clause (v) therein as follows:
" (vi) Company may make Restricted Junior Payments to acquire publicly
traded common stock of Company; PROVIDED that, (a) at the time of any such
acquisition, the amount of common stock previously acquired by Company
under this clause (vi) together with the amount of common stock to be
acquired at such time, does not exceed the sum of all Company Qualified
Options then outstanding and all common stock issued by the Company after
June 1, 1998 and prior to such time upon the exercise of options that were
Company Qualified Options at the time of exercise, (b) the aggregate amount
of such Restricted Junior Payments does not exceed the sum of $15,000,000
for each Fiscal Year (up to a maximum of $50,000,000 in the aggregate
during the term of this Agreement) and (c) such Restricted Junior Payment
is permitted pursuant to subsection 6.5(v); "
3. Subsection 6.5 of the Credit Agreement is hereby further amended
by amending the final proviso therein that appears after subsection 6.5(vi) by
deleting the phrase "pursuant to subsections 6.5(i), (iii) or (v)" and
replacing it with the phrase "pursuant to subsections 6.5(i), (iii), (v) or
(vi)" therefore.
3
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<PAGE>
B. LEVERAGE RATIO
Subsection 6.6B of the Credit Agreement is hereby amended by restating the
Leverage Ratio applicable as of the last day of the second and third Fiscal
Quarters of Fiscal Year 1998 as follows:
<TABLE>
REFERENCE DATE MAXIMUM LEVERAGE RATIO
----------------------------------------------------
<S> <C>
Second Fiscal Quarter 1998 4.10:1.00
----------------------------------------------------
Third Fiscal Quarter 1998 3.90:1.00
----------------------------------------------------
</TABLE>
SECTION 2
LIMITATION OF AMENDMENTS
Without limiting the generality of the provisions of subsection 9.7 of
the Credit Agreement, the amendments set forth above shall be limited precisely
by their terms, shall not have any force or effect with respect to any other
matter except as expressly provided above, and nothing in this Amendment shall
be deemed to:
(a) constitute a waiver or modification of any other term, provision
or condition of the Credit Agreement or any other instrument or
agreement referred to therein; or
(b) prejudice any right or remedy that Administrative Agent or any
Lender may now have (except to the extent such right or remedy was
based upon existing defaults that will not exist after giving effect
to this Amendment) or may have in the future under or in connection
with the Credit Agreement or any other instrument or agreement
referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 3
CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective only upon the satisfaction of
all of the following conditions precedent on or prior to June 19, 1998 (the date
of satisfaction of such conditions being referred to herein as the "EFFECTIVE
DATE"):
4
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<PAGE>
A. On or before the Effective Date, Company and the Guarantors shall
have delivered to Administrative Agent executed copies of this Amendment.
B. On or before the Effective Date, Requisite Lenders shall have
delivered to Administrative Agent an executed original or telefacsimile of a
counterpart of this Amendment or shall have orally confirmed to Administrative
Agent that such Lender agreed to all of the terms and conditions of this
Amendment, as set forth herein.
SECTION 4
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender as of the date hereof, as of the Effective Date that the
following statements are true, correct and complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of Company.
C. NO CONFLICT. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than Liens created under any
of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals which will be obtained on or before the Effective Date
and disclosed in writing to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Company of
this Amendment and the performance by Company of the Amended Agreement do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body.
5
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<PAGE>
E. BINDING OBLIGATION. This Amendment has been duly executed and
delivered by Company and, when executed and delivered, this Amendment and the
Amended Agreement will be the legally valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENSE OF DEFAULT. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 5
MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Effective Date, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the
Credit Agreement shall mean and be a reference to the Amended
Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of Agent or any Lender under, the Credit Agreement or any of the other
Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees and
expenses as described in subsection 9.3 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
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<PAGE>
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than the
provisions of Sections 1 and 2 hereof, the effectiveness of which is governed by
Section 4 hereof) shall become effective upon the execution of a counterpart
hereof by Company, Lenders, Syndication Agent, Distribution Agent and
Administrative Agent and receipt by Company and Administrative Agent of written
or telephonic notification of such execution and authorization of delivery
thereof.
SECTION 6
ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS
Each Guarantor hereby acknowledges that it has read this Amendment and
consents to the terms thereof and further hereby confirms and agrees that,
notwithstanding the effectiveness of this Amendment, the obligations of such
Guarantor under the Guaranty and the other Loan Documents to which such
Guarantor is a party shall not be impaired or affected and the Guaranty and such
other Loan Documents are, and shall continue to be, in full force and effect and
is hereby confirmed and ratified in all respects.
[Remainder of page intentionally left blank]
7
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written
above.
WORLD COLOR PRESS, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
THE LANMAN COMPANIES, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
LANMAN LITHOTECH, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
CENTRAL FLORIDA PRESS, L.C.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
NORTHEAST GRAPHICS INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
S-1
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<PAGE>
THE WESSEL COMPANY, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
IMAGE TECHNOLOGIES, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
SHEA COMMUNICATIONS COMPANY
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
KRUEGER ACQUISITION CORPORATION
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
KRI, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
S-2
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<PAGE>
RAI, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
BCK 140 PARTNERSHIP
By: WORLD COLOR PRESS, INC.,
its General Partner
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President,
Treasurer
By: THE LANMAN COMPANIES, INC., its General
Partner
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President,
Treasurer
WORLD COLOR BOOK SERVICES, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
THE JOHNSON & HARDIN CO.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
S-3
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<PAGE>
JOHNSON & HARDIN ENTERPRISES, INC.
By: /s/ Thomas J. Quinlan
---------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
MAGNA-GRAPHIC,INC.
By: /s/ Thomas J. Quinlan
--------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
TACONIC HOLDINGS, INC.
By: /s/ Thomas J. Quinlan
--------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
CENTURY GRAPHICS CORPORATION
By: /s/ Thomas J. Quinlan
-------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
EDWIN ROAD PROPERTIES, INC.
By: /s/ Thomas J. Quinlan
------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
S-4
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<PAGE>
LA-GNIAPPE ADVERTISING, INC.
By: /s/ Thomas J. Quinlan
------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
LA-GNIAPPE INSERTS, INC.
By: /s/ Thomas J. Quinlan
------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
DB ACQUISITION CORP.
By: /s/ Thomas J. Quinlan
------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
DITTLER BROTHERS, INCORPORATED
By: /s/ Thomas J. Quinlan
------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
ACME PRINTING COMPANY, INC.
By: /s/ Thomas J. Quinlan
------------------------
Name: Thomas J. Quinlan
Title: Vice President, Treasurer
S-5
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
individually as a Lender and as Administrative
Agent and as Collateral Agent
By: /s/ Mary Jo Jolly
------------------------
Name: Mary Jo Jolly
Title: Assistant Vice President
BANK OF AMERICA NT & SA,
as a Lender
By: /s/ John W. Pocalyko
------------------------
Name: John W. Pocalyko
Title: Managing Director
CITIBANK, N.A.,
as a Lender
By: /s/ Charles Foster
---------------------------
Name: Charles Foster
Title: Attorney-In-Fact
ABN AMRO BANK, NV, NEW YORK BRANCH,
as Lender
By: ABN Amro North America, Inc.,
as Agent
By: /s/ Thomas Rogers
----------------------
Name: Thomas Rogers
Title: Vice President
By: /s/ David C. Carrington
---------------------------
Name: David C. Carrington
Title: Vice President
S-6
<PAGE>
<PAGE>
BANK OF MONTREAL,
as Lender
By: /s/ R. J. McClorey
---------------------------
Name: R. J. McClorey
Title: Director
THE BANK OF NOVA SCOTIA
as Lender
By: /s/ J. Alan Edwards
---------------------------
Name: J. Alan Edwards
Title: Authorized Signatory
BANK OF SCOTLAND,
as Lender
By: /s/ Annie Chin Tat
---------------------------
Name: Annie Chin Tat
Title: Senior Vice President
BANK OF TOKYO - MITSUBISHI TRUST
COMPANY, as Lender
By:
---------------------------
Name:
Title:
S-7
<PAGE>
<PAGE>
PARIBAS, as Lender
By: /s/ John J. McCormick, III
---------------------------
Name: John J. McCormick, III
Title: Vice President
By: /s/ Duane Helkowski
---------------------------
Name: Duane Helkowski
Title: Vice President
CIBC, INC., as Lender
By: /s/ E. L. Gordon
---------------------------
Name: E. L. Gordon
Title: Executive Director
FLEET NATIONAL BANK,
as Lender
By: /s/ Jeff Lynch
---------------------------
Name: Jeff Lynch
Title: Vice President
THE FUJI BANK, LIMITED, NEW YORK BRANCH,
as Lender
By: /s/ Teiji Teramoto
---------------------------
Name: Teiji Teramoto
Title: Vice President and Manager
S-8
<PAGE>
<PAGE>
THE INDUSTRIAL BANK OF JAPAN, LTD.,
as Lender
By: /s/ Takuya Honjo
---------------------------
Name: Takuya Honjo
Title: Senior Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
CHICAGO BRANCH, as Lender
By: /s/ Mark A. Thompson
---------------------------
Name: Mark A. Thompson
Title: Senior Vice President and
Team Leader
PNC BANK, N.A.
formerly known as PNC Bank, Kentucky, Inc.
as Lender
By: /s/ Ralph A. Phillips
---------------------------
Name: Ralph A. Phillips
Title: Vice President
THE SANWA BANK, LIMITED,
as Lender
By: /s/ Dominic J. Sorresso
---------------------------
Name: Dominic J. Sorresso
Title: Vice President
BANKBOSTON, N.A. (formerly know as The First
National Bank of Boston), as Lender
By: /s/ Julie Jalelian
---------------------------
Name: Julie Jalelian
Title: Director
S-9
<PAGE>
<PAGE>
CREDIT SUISSE FIRST BOSTON (formerly
known as Credit Suisse), as Lender
By: /s/ Joel Glodowski
---------------------------
Name: Joel Glodowski
Title: Managing Director
By: /s/ Chris T Horgan
---------------------------
Name: Chris T Horgan
Title: Vice President
THE DAI-ICHI KANGYO BANK, LTD.,
as Lender
By: /s/ Mr. Ronald C. Wolinsky
---------------------------
Name: Mr. Ronald C. Wolinsky
Title: Vice President and Group
Leader
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES,
as Lender
By: /s/ William E. Lambert
---------------------------
Name: William E. Lambert
Title: Assistant Vice President
By: /s/ Brian Haughney
---------------------------
Name: Brian Haughney
Title: Assistant Treasurer
THE SAKURA BANK, LIMITED, as Lender
By:
---------------------------
Name:
Title:
S-10
<PAGE>
<PAGE>
THE SUMITOMO BANK, LIMITED, NEW YORK
BRANCH, as Lender
By:
---------------------------
Name:
Title:
STB DELAWARE FUNDING TRUST I, as Lender
By: /s/ Donald Horgadon
---------------------------
Name: Donald Horgadon
Title: Assistant Vice President
THE YASUDA TRUST AND BANKING CO., LTD.,
NEW YORK BRANCH, as Lender
By:
---------------------------
Name:
Title:
THE TOKAI BANK, LTD., NEW YORK BRANCH,
as Lender
By: /s/ Shinichi Nakatani
---------------------------
Name: Shinichi Nakatani
Title: Assistant General Manager
S-11
<PAGE>
<PAGE>
MERITA BANK LTD NEW YORK BRANCH
as Lender
By: /s/ Frank Maffei
---------------------------
Name: Frank Maffei
Title: Vice President
By: /s/ Clifford Abramsky
---------------------------
Name: Clifford Abramsky
Title: Vice President
BAYERISCHE VEREINSBANK AG, NEW YORK
BRANCH, as Lender
By: /s/ Ralf Enke
---------------------------
Name: Ralf Enke
Title: Assistant Treasurer
By: /s/ Marianne Weinzinger
---------------------------
Name: Marianne Weinzinger
Title: Vice President
THE BANK OF NEW YORK,
as Lender
By: /s/ Kenneth P. Sneider, Jr.
---------------------------
Name: Kenneth P. Sneider, Jr.
Title: Vice President
FIRST UNION NATIONAL BANK,
as Lender
By: /s/ Reyno A. Giallonga, Jr.
---------------------------
Name: Reyno A. Giallonga, Jr.
Title: Senior Vice President
S-12
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<PAGE>
ERSTE DER OESTERREICHISCHEN SPARKASSEN AG,
as Lender
By: /s/ Rima Terradista
---------------------------
Name: Rima Terradista
Title: Vice President
By: /s/ John S. Runnion
---------------------------
Name: John S. Runnion
Title: First Vice President
BANK LEUMI TRUST COMPANY NEW YORK,
as Lender
By: /s/ Sami Ambar
---------------------------
Name: Sami Ambar
Title: Vice President
CREDIT AGRICOLE INDOSUEZ,
as Lender
By: /s/ Craig Welch
---------------------------
Name: Craig Welch
Title: First Vice President
By: /s/ Sarah McClintrek
---------------------------
Name: Sarah McClintrek
Title: Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lender
By:
---------------------------
Name:
Title:
S-13
<PAGE>
<PAGE>
LEHMAN COMMERCIAL PAPER INC.,
as Lender
By: /s/ Michele Swanson
---------------------------
Name: Michele Swanson
Title: Authorized Signatory
MORGAN STANLEY SENIOR FUNDING, INC.,
as Lender
By:
---------------------------
Name:
Title:
THE TOYO TRUST AND BANKING CO. LTD.,
as Lender
By: /s/ T. Mikumo
---------------------------
Name: T. Mikumo
Title: Vice President
ALLIED IRISH BANKS PLC, CAYMAN ISLANDS
BRANCH, as Lender
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
S-14
<PAGE>
<PAGE>
GULF INTERNATIONAL BANK B.S.C.,
as Lender
By: /s/ Abdel-Fattah Tahoun
---------------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice President
By: /s/ Thomas E. Fitzherbert
---------------------------
Name: Thomas E. Fitzherbert
Title: Vice President
THE MITSUI TRUST AND BANKING COMPANY,
LIMITED, as Lender
By: /s/ Margaret Holloway
---------------------------
Name: Margaret Holloway
Title: Senior Vice President and Manager
S-15
<PAGE>
Exhibit 10.5
1998 STOCK OPTION PLAN OF WORLD COLOR PRESS, INC.
On January 30, 1998 the Board of Directors of World Color Press, Inc., a
corporation organized under the laws of the State of Delaware (the "Company"),
adopted the 1998 Stock Option Plan of World Color Press, Inc. (the "Plan").
The purposes of this Plan are as follows:
1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of its employees and
consultants who have been or will be given responsibility for the management
or administration of the Company's business affairs, by assisting them to
become owners of capital stock of the Company and thus to benefit directly
from its growth, development and financial success.
2) To enable the Company to obtain and retain the services of the type
of professional, technical and managerial employees and consultants
considered essential to the long-range success of the Company by providing
and offering them an opportunity to become owners of capital stock of the
Company under options.
3) To provide for continued ownership of an equity interest in the
Company by those persons employed or formerly employed by companies which
are or were affiliated with the Company.
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
Section 1.1. BOARD
"Board" shall mean the Board of Directors of the Company.
Section 1.2. CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. COMMITTEE
"Committee" shall mean the Compensation Committee of the Board.
Section 1.4. COMPANY
"Company" shall mean World Color Press, Inc.
Section 1.5. CURRENT AFFILIATE
"Current Affiliate" shall mean any Parent, any Subsidiary of the Company,
and any company which is affiliated with the Company.
Section 1.6. DIRECTOR
"Director" shall mean a member of the Board.
Section 1.7. EMPLOYEE
"Employee" shall mean any employee (as defined in accordance with the
Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company or of any corporation which is
1
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<PAGE>
then a Parent Corporation or a Subsidiary of the Company, whether such employee
is so employed at the time this Plan is adopted or becomes so employed
subsequent to the adoption of this Plan.
Section 1.8. EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.9. INCENTIVE STOCK OPTION.
"Incentive Stock Option" shall mean an option which conforms to the
applicable provisions of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Committee.
Section 1.10. NON-QUALIFIED STOCK OPTION.
"Non-Qualified Stock Option" shall mean an Option which is not designated as
an Incentive Stock Option by the Committee.
Section 1.11. OFFICER
"Officer" shall mean an officer of the Company, as defined in Rule 16a-1(f)
under the Exchange Act, as such Rule may be amended in the future.
Section 1.12. OPTION
"Option" shall mean an option to purchase capital stock of the Company,
granted under the Plan. An Option granted under this Plan shall, as determined
by the Committee, be either a Non-Qualified Stock Option or an Incentive Stock
Option; PROVIDED, HOWEVER, that Options granted to consultants shall be Non-
Qualified Stock Options.
Section 1.13. OPTIONEE
"Optionee" shall mean an Employee or consultant to whom an Option is granted
under the Plan.
Section 1.14. PARENT CORPORATION
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
Section 1.15. PERFORMANCE OPTION
"Performance Option" shall mean an Option that at the time of its grant is
intended to satisfy the requirements for performance-based compensation as
described in Section 162(m)(4)(C) of the Code.
Section 1.16. PLAN
"Plan" shall mean this 1998 Stock Option Plan of World Color Press, Inc.
Section 1.17. RULE 16B-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended in the future.
Section 1.18. SECRETARY
"Secretary" shall mean the Secretary of the Company.
Section 1.19. SECTION 16 PERSON
"Section 16 Person" shall mean any person who at the time of determination
is subject to the provisions of Section 16 of the Exchange Act.
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<PAGE>
Section 1.20. SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.21. SUBCOMMITTEE
"Subcommittee" shall mean the subcommittee appointed as provided in Section
6.1.
Section 1.22. SUBSIDIARY
"Subsidiary" shall mean a subsidiary corporation as defined in Section
424(f) of the Code.
Section 1.23. TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company or any Current Affiliate is
terminated for any reason, with or without cause, including, without limitation,
a termination by resignation, discharge, death, permanent disability or
retirement, but excluding terminations where there is a simultaneous
reemployment by the Company or any Current Affiliate. The Committee, in its sole
discretion, shall determine the effect of all other matters and questions
relating to Termination of Employment, including, without limitation, the
question of whether a Termination of Employment resulted from a discharge for
good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment and the question of whether any
reemployment by any entity is simultaneous with termination; PROVIDED, HOWEVER,
that, with respect to Incentive Stock Options, unless otherwise determined by
the Committee in its discretion, a leave of absence, change in status from an
employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section.
Section 1.24. TERMINATION OF CONSULTANCY
"Termination of Consultancy" shall mean the time when the engagement of an
Optionee as a consultant to the Company or a Subsidiary or any Current Affiliate
is terminated for any reason, with or without cause, including, but not by way
of limitation, by resignation, discharge, death or retirement; but excluding
terminations where there is a simultaneous commencement of employment with the
Company or any Subsidiary. The Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Consultancy, including, but not by way of limitation, the question of whether a
Termination of Consultancy resulted from a discharge for good cause, and all
questions of whether a particular leave of absence constitutes a Termination of
Consultancy. Notwithstanding any other provision of this Plan, the Company or
any Subsidiary or Current Affiliate has an absolute and unrestricted right to
terminate a consultant's service at any time for any reason whatsoever, with or
without cause, except to the extent expressly provided otherwise in writing.
ARTICLE II.
SHARES SUBJECT TO PLAN
Section 2.1. SHARES SUBJECT TO PLAN
The shares of stock subject to Options shall be shares of the Company's $.01
par value Common Stock. The aggregate number of such shares which may be issued
upon exercise of Options shall not exceed 2,500,000. The maximum number of
shares which may be subject to Options granted under the Plan to any individual
in any calendar year shall not exceed 200,000, and the method of counting such
shares shall conform to any requirements applicable to performance-based
compensation under Section 162(m) of the Code.
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Section 2.2 UNEXERCISED OPTIONS
If any Option expires or is cancelled without having been fully exercised,
the number of shares subject to such Option but as to which such Option was not
exercised prior to its expiration or cancellation may again be optioned
hereunder, subject to the limitations of Section 2.1.
Section 2.3. CHANGES IN COMPANY'S SHARES
In the event that the outstanding shares of Common Stock of the Company are
hereafter changed into or exchanged for a different number or kind of shares or
other securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, stock dividend or combination of shares, appropriate adjustments shall
be made by the Committee in the number and kind of shares for the purchase of
which Options may be granted, including adjustments of the limitations in
Section 2.1 on the maximum number and kind of shares which may be issued on
exercise of Options. Notwithstanding the provisions of this Section 2.3, no
shares of Common Stock may again be optioned, granted or awarded if such action
would cause an Incentive Stock Option to fail to qualify as an incentive stock
option under Section 422 of the Code.
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1. ELIGIBILITY
Any Employee or former Employee or consultant of the Company or of any
corporation which is a Parent Corporation or a Subsidiary of the Company shall
be eligible to be granted Options, except as provided in Section 3.3.
Section 3.2. DISQUALIFICATION FOR STOCK OWNERSHIP.
No person may be granted an Incentive Stock Option under this Plan if such
person, at the time the Incentive Stock Option is granted, owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any then existing Subsidiary or parent corporation
(within the meaning of Section 422 of the Code) unless such Incentive Stock
Option conforms to the applicable provisions of Section 422 of the Code.
Section 3.3. QUALIFICATION OF INCENTIVE STOCK OPTIONS.
No Incentive Stock Option shall be granted to any person who is not an
Employee.
Section 3.4. GRANTING OF OPTIONS
(a) The Committee (the Subcommittee with respect to Section 16 Persons and
Performance Options) shall from time to time, in its sole discretion:
(i) Determine which Employees or former Employees or consultants
(including those to whom Options have been previously granted under the
Plan) should be granted Options; and
(ii) Determine the number of shares to be subject to such Options; and
(iii) Determine the terms and conditions of such Options, consistent
with the Plan; and
(iv) Subject to Section 3.3, determine whether such Options are to be
Incentive Stock Options or Non-Qualified Stock Options and whether such
Options are to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code.
(b) Upon the selection of an Employee or former Employee or consultant to be
granted an Option, the Committee (or the Subcommittee, as applicable) shall
instruct the Secretary to issue such Option and may impose such conditions on
the grant of such Option as it deems appropriate. Without limiting the
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generality of the preceding sentence, the Committee (or the Subcommittee, as
applicable) may, in its sole discretion and on such terms as it deems
appropriate, require as a condition on the grant of an Option to any such person
that he surrender for cancellation some or all of the unexercised Options which
have been previously granted to him. An Option the grant of which is conditioned
upon such surrender may have an option price lower (or higher) than the option
price of the surrendered Option, may cover the same (or a lesser or greater)
number of shares as the surrendered Option, may contain such other terms as the
Committee (or the Subcommittee, as applicable) deems appropriate and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, option period or any other term or condition of the surrendered
Option.
(c) Any Incentive Stock Option granted under this Plan may be modified by
the Committee, with the consent of the Optionee, to disqualify such option from
treatment as an "incentive stock option" under Section 422 of the Code.
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1. OPTION AGREEMENT
Each Option shall be evidenced by a written Stock Option Agreement, which
shall be executed by the Optionee and an authorized Officer of the Company and
which shall contain such terms and conditions as the Committee (or the
Subcommittee, as applicable) shall determine, consistent with the Plan. Stock
Option Agreements evidencing Incentive Stock Options shall contain such terms
and conditions as may be necessary to meet the applicable provisions of Section
422 of the Code.
Section 4.2. OPTION PRICE
(a) The price of the shares subject to each Option shall be set by the
Committee; provided, that the Subcommittee shall specify the price per share
subject to each Performance Option (which price shall not be less than the fair
market value of a share of the Company's Common Stock on the date of Option
grant) and each Option granted to a Section 16 Person; and provided, further,
that (i) in the case of Incentive Stock Options such price shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the date the
Option is granted and (ii) in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code) such price shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted.
(b) For purposes of the Plan, the fair market value of a share of the
Company's stock as of a given date shall be: (i) the closing price of a share of
the Company's stock on the principal exchange on which shares of the Company's
stock are then trading, if any, on the day previous to such date, or, if shares
were not traded on the day previous to such date, then on the next preceding
trading day during which a sale occurred; or (ii) if such stock is not traded on
an exchange but is quoted on NASDAQ or a successor quotation system, (1) the
last sales price (if the stock is then listed as a National Market Issue under
the NASD National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the stock on the
day previous to such date as reported by NASDAQ or such successor quotation
system; or (iii) if such stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the closing
bid and asked prices for the stock, on the day previous to such date, as
determined in good faith by the Committee; or (iv) if the Company's stock is not
publicly traded, the fair market value established by the Committee acting in
good faith.
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Section 4.3. COMMENCEMENT OF EXERCISABILITY
(a) Subject to the provisions of Sections 4.3(b) and 4.4 and the
requirements of Rule 16b-3(b), Options shall become exercisable at such times
and in such installments (which may be cumulative) as the Committee (or the
Subcommittee, as applicable) shall provide in the terms of each individual
Option; provided, that by a resolution adopted after an Option is granted the
Committee (or the Subcommittee, as applicable) may, on such terms and conditions
as it may determine to be appropriate and subject to Sections 4.3(b) and 4.4 and
the requirements of Rule 16b-3(b), accelerate the time at which such Option or
any portion thereof may be exercised.
(b) No portion of an Option which is unexercisable at Termination of
Employment or Termination of Consultancy shall thereafter become exercisable.
Section 4.4. EXPIRATION OF OPTIONS
(a) No Option may be exercised to any extent by anyone after the expiration
of ten years from the "Grant Date" or "Vesting Reference Date" as set forth in
the Stock Option Agreement covering such Option ("Expiration Date"), provided,
that the Committee (or the Subcommittee, as applicable) may, with respect to any
individual Option, at the time such Option is granted or at any time thereafter,
provide that the then applicable Expiration Date (whether such applicable
Expiration Date is the original Expiration Date specified in the Stock Option
Agreement covering such Option or has been extended pursuant to this proviso)
may be extended and that such individual Option may be exercised from and after
the then applicable Expiration Date to and including such later date as shall be
specified by the Committee (or the Subcommittee, as applicable) with respect to
such individual Option; provided, however, that in the case of Incentive Stock
Options, the term shall not be more than ten (10) years from the date the
Incentive Stock Option is granted, or five (5) years from such date if the
Incentive Stock Option is granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code).
(b) Subject to the provisions of Section 4.4(a), the Committee (or the
Subcommittee, as applicable) shall provide, in the terms of each individual
Option, when such Option expires and becomes unexercisable; and (without
limiting the generality of the foregoing) the Committee (or the Subcommittee, as
applicable) may provide in the terms of individual Options that said Options
expire immediately upon a Termination of Employment or Termination of
Consultancy for any reason.
(c) To the extent that the aggregate Fair Market Value of stock with respect
to which "incentive stock options" (within the meaning of Section 422 of the
Code, but without regard to Section 422(d) of the Code) are exercisable for the
first time by an Optionee during any calendar year (under the Plan and all other
incentive stock option plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted.
Section 4.5. CONSIDERATION
Nothing in this Plan or in any Stock Option Agreement hereunder shall confer
upon any Optionee any right to continue in the employ of, or as a consultant to,
the Company, any Parent Corporation, any Subsidiary of the Company, or any other
entity, or shall interfere with or restrict in any way the rights of the
Company, any Parent Corporation, any Subsidiary of the Company or any other
entity, which are hereby expressly reserved, to discharge any Optionee at any
time for any reason whatsoever, with or without cause.
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Section 4.6. ADJUSTMENTS IN OUTSTANDING OPTIONS
In the event that the outstanding shares of the stock subject to Options are
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, the Committee (or the Subcommittee, as applicable) shall
make an appropriate and equitable adjustment in the number and kind of shares as
to which all outstanding Options, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option shall be made without change in the total
price applicable to the Option or the unexercised portion of the Option (except
for any change in the aggregate price resulting from rounding-off of share
quantities or prices) and with any necessary corresponding adjustment in Option
price per share. Any such adjustment made by the Committee (or the Subcommittee,
as applicable) shall be final and binding upon all Optionees, the Company and
all other interested persons.
Section 4.7. MERGER, CONSOLIDATION, ACQUISITION, LIQUIDATION OR DISSOLUTION
Notwithstanding the provisions of Section 4.6, in its sole discretion, and
on such terms and conditions as it deems appropriate, the Committee (or the
Subcommittee, as applicable) may provide by the terms of any Option that such
Option cannot be exercised after the merger or consolidation of the Company with
or into another corporation, the acquisition by another corporation or person of
all or substantially all of the Company's assets or 80% or more of the Company's
then outstanding voting stock or the liquidation or dissolution of the Company;
and if the Committee (or the Subcommittee, as applicable) so provides, it may,
in its sole discretion and on such terms and conditions as it deems appropriate,
also provide, either by the terms of such Option or by a resolution adopted
prior to the occurrence of such merger, consolidation, acquisition, liquidation
or dissolution, that, for some period of time prior to such event, such Option
shall be exercisable as to all shares covered thereby, notwithstanding anything
to the contrary in Section 4.3(a) and/or any installment provisions of such
Option, but subject to Section 4.3(b).
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1. PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he may exercise an Option (or any
portion thereof) granted to him. After the death of the Optionee, any
exercisable portion of an Option may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Stock Option Agreement,
be exercised by his personal representative or by any person empowered to do so
under the deceased Optionee's will or under the then applicable laws of descent
and distribution.
Section 5.2. PARTIAL EXERCISE
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable under the Plan or
the applicable Stock Option Agreement, such Option or portion thereof may be
exercised in whole or in part; provided, that the Company shall not be required
to issue fractional shares and the Committee (or the Subcommittee, as
applicable) may, by the terms of the Option, require any partial exercise to be
with respect to a specified minimum number of shares.
Section 5.3. MANNER OF EXERCISE
An exercisable Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when such Option or such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement:
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(a) Notice in writing signed by the Optionee or other person then entitled
to exercise such Option or portion, stating that such Option or portion is
exercised, such notice complying with all applicable rules established by the
Committee (or the Subcommittee, as applicable); and
(b) Full payment (by certified or bank check or by wire transfer of
immediately available funds) for the shares with respect to which such Option or
portion is thereby exercised. However, the Committee (or the Subcommittee, as
applicable), in its sole discretion, may (i) allow a delay in payment up to
thirty (30) days from the date the Option is exercised; (ii) allow payment, in
whole or in part, through the delivery of shares of Common Stock owned by the
Optionee (including, subject to Section 5.4, Option Shares issuable upon such
exercise), duly endorsed for transfer to the Company with a fair market value on
the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (iii) allow payment, in whole or in part, through the
delivery of property of any kind which constitutes good and valuable
consideration; (iv) allow payment, in whole or in part, through the delivery of
a full recourse promissory note bearing interest (at no less than such rate as
shall then preclude the imputation of interest under the Code) and payable upon
such terms as may be prescribed by the Committee (or the Subcommittee, as
applicable); or (v) allow payment through any combination of the consideration
provided in the foregoing subparagraphs (ii), (iii) and (iv). In the case of a
promissory note, the Committee (or the Subcommittee, as applicable) may also
prescribe the form of such note and the security to be given for such note. The
Option may not be exercised, however, by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of credit is
prohibited by law; and
(c) The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the exercise of
the Option; and
(d) Such representations and documents as the Committee (or the
Subcommittee, as applicable), in its sole discretion, deems necessary,
appropriate or advisable to effect compliance with all applicable provisions of
the Securities Act and any other federal or state securities laws, rules or
regulations. The Committee (or the Subcommittee, as applicable) may, in its sole
discretion, also take whatever additional actions it deems necessary,
appropriate or advisable to effect such compliance including, without
limitation, placing legends on share certificates and issuing stop-transfer
orders to transfer agents and registrars; and
(e) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option
or portion thereof.
Section 5.4. CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock issuable and deliverable upon the exercise of an Option,
or any portion thereof, may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such shares
under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body,
which the Committee (or the Subcommittee, as applicable) shall, in its sole
discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee (or the Subcommittee, as
applicable) shall, in its sole discretion, determine to be necessary or
advisable; and
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(d) The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the exercise of
the Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee (or the Subcommittee, as applicable) may establish
from time to time for reasons of administrative convenience.
Section 5.5. RIGHTS AS STOCKHOLDERS
The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.
Section 5.6. TRANSFER RESTRICTIONS
The Committee (or the Subcommittee, as applicable), in its sole discretion,
may impose such restrictions on the transferability of the shares purchasable
upon the exercise of an Option as it deems appropriate. Any such other
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares. The Committee may
require the Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two years from the date of granting such Option to such Employee or (ii) one
year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
ARTICLE VI.
ADMINISTRATION
Section 6.1. COMPENSATION COMMITTEE; SUBCOMMITTEE
(a) The Compensation Committee shall consist of three or more Directors,
appointed by and holding office at the pleasure of the Board, none of whom shall
be an Employee, and at least two of whom shall be both a "non-employee director"
as defined under Rule 16b-3 and an "outside director" as described under Section
162(m) of the Code and the regulations thereunder. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee shall be filled by the Board.
(b) If any member of the Committee shall not be both a "non-employee
director" and an "outside director," there shall be a Subcommittee that will
consist of two or more Committee members, appointed by and serving office at the
pleasure of the Board, each of whom is both a "non-employee director" and an
"outside director."
Section 6.2. DUTIES AND POWERS OF COMMITTEE
It shall be the duty of the Committee and the Subcommittee to conduct the
general administration of the Plan in accordance with its provisions. The
Committee and the Subcommittee shall have the power to interpret the Plan and
the Options and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such interpretations and rules with respect to
Incentive Stock Options shall be consistent with the provisions of Section 422
of the Code. In its sole discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan,
except with respect to matters which under Rule 16b-3 or Section 162(m) of the
Code (as each may be applicable), or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the Committee (or the
Subcommittee, as applicable).
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Section 6.3. MAJORITY RULE
The Committee and the Subcommittee shall each act by a majority of its
members in office. The Committee and Subcommittee may each act either by vote at
a meeting or by a memorandum or other written instrument signed by a majority of
its members.
Section 6.4. COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS
Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
incurred by members of the Committee in connection with the administration of
the Plan shall be borne by the Company. The Committee and the Subcommittee may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Subcommittee in good faith shall be final and binding upon all
Optionees, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.
ARTICLE VII.
OTHER PROVISIONS
Section 7.1. OPTIONS NOT TRANSFERABLE
No Option or interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, that nothing in this Section 7.1 shall prevent
transfers by will, by the applicable laws of descent and distribution or, with
the consent of the Committee, the transfer of Non-Qualified Options by gift made
in compliance with the federal securities laws to a family member of the
Optionee or a family trust or for other estate planning purposes.
Section 7.2. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Board or the Committee.
However, without approval of the Company's stockholders given within 12 months
before or after the action by the Board or the Committee, no action of the Board
or the Committee may, except as provided in Section 2.3, increase any limit
imposed in Section 2.1 on the maximum number of shares which may be issued on
exercise of Options, and no action of the Board or the Committee may be taken
that would otherwise require stockholder approval as a matter of applicable law,
regulation or rule. None of the amendment, suspension or termination of the Plan
shall, without the consent of the holder of the Option, impair any rights or
obligations under any Option theretofore granted. No Option may be granted
during any period of suspension nor after termination of the Plan, and in no
event may any Option be granted under this Plan after the first to occur of the
following events:
(a) The expiration of ten years from the date the Plan is adopted by the
Board; or
(b) The expiration of ten years from the date the Plan is initially approved
by the Company's stockholders.
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Section 7.3. EFFECT OF PLAN UPON OTHER OPTION AND COMPENSATION PLANS
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary of the Company. Nothing in this Plan shall be construed to limit the
right of the Company, any Parent Corporation or any Subsidiary of the Company
(a) to establish any other forms of incentives or compensation for employees or
consultants of the Company, any Parent Corporation or any Subsidiary of the
Company or (b) to grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, without limitation, the
grant or assumption of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets of
any corporation, firm or association.
Section 7.4. TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
Section 7.5. CONFORMITY TO SECURITIES LAWS AND CODE SECTION 162(M)
The Plan is intended to conform to the extent necessary with all provisions
of the Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including,
without limitation, Rule 16b-3. Notwithstanding anything herein to the contrary,
the Plan shall be administered, and Options shall be granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and Options
granted hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations. Furthermore, notwithstanding any other
provision of this Plan, any Option intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall be subject
to any additional limitations set forth in Section 162(m) of the Code
(including, without limitation, any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the extent
necessary to conform to such requirements.
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I hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of World Color Press, Inc. as of January 30, 1998.
Executed as of this 6th day of May, 1998.
/s/ Jennifer L. Adams
-------------------------
Secretary
****
I hereby certify that the foregoing Plan was duly approved by the
stockholders of World Color Press, Inc. representing a majority of the issued
and outstanding shares of the common stock, par value, $.01 per share, of World
Color Press, Inc. entitled to vote at a meeting of stockholders, as of May 6,
1998.
Executed as of this 6th day of May, 1998.
/s/ Jennifer L. Adams
-------------------------
Secretary
