8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 28, 2008 (May 22, 2008)

ACG HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-97090-01	62-1395968
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

100 Winners Circle, Brentwood, Tennessee	37027
(Address of Principal Executive Office)	(Zip Code)

Registrant’s Telephone Number, Including Area Code (615) 377-0377

(Former name or former address, if changed since last report.)

AMERICAN COLOR GRAPHICS, INC.

(Exact name of registrant as specified in its charter)

New York	33-97090	16-1003976
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

100 Winners Circle, Brentwood, Tennessee	37027
(Address of Principal Executive Office)	(Zip Code)

Registrant’s Telephone Number, Including Area Code (615) 377-0377

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

     On May 22, 2008, ACG Holdings, Inc., a Delaware corporation ( “ACG”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Vertis, Inc. (“Vertis”), Vertis Holdings, Inc., the parent of Vertis (“Vertis Holdings”), and Victory Merger Sub, LLC, a wholly owned subsidiary of Vertis (“Victory Merger Sub”). Under the terms of the Merger Agreement, Victory Merger Sub will be merged with and into ACG, with ACG surviving the merger (the “Merger”) as a wholly owned subsidiary of Vertis.

     Consummation of the Merger is subject to the satisfaction of customary closing conditions and the receipt of necessary approvals. The Merger is subject to the restructuring of the parties’ outstanding indebtedness pursuant to the proposed chapter 11 plans of the parties referred to below.

     Pursuant to the Merger, each outstanding share of common stock, par value $0.01 per share, of ACG (the “ACG Common Stock”) will receive from Vertis an amount in cash equal to: (a) 0.0005 multiplied by (b) the reorganized equity value of Vertis Holdings to be set forth in the disclosure statement for the solicitation of votes for the chapter 11 plans referred to below, divided by (c) the total number of shares of ACG Common Stock outstanding immediately prior to the closing of the Merger.

     A copy of the Merger Agreement is attached as Exhibit 2.1 to this Current Report on Form 8-K. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement.

     The Merger Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about ACG or Vertis. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing such matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of ACG or Vertis or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement and the subsequent information may or may not be fully reflected in ACG’s public disclosures.

     On May 22, 2008, ACG and American Color Graphics, Inc., a New York corporation (“Graphics”), entered into a Restructuring and Lock-Up Agreement (the “Restructuring Agreement”) with certain holders of the 10% Senior Second Secured Notes due 2010 (the “Graphics Notes”) and of Vertis’ 9.75% Senior Secured Second Lien Notes due 2009 (the “Second Lien Notes”), 10.875% Senior Notes due 2009 (the “Senior Notes”), and 13.5% Senior Subordinated Notes due 2009 (the “Senior Subordinated Notes”, and together with the Second

Lien Notes and the Senior Subordinated Notes, the “Vertis Notes”) (the Vertis Notes and the Graphics Notes are collectively referred to as the “Notes”). Pursuant to the Restructuring Agreement, certain holders of the Notes have agreed to restructure the Notes (the “Transactions”). The Transactions will be implemented through a solicitation of votes for pre-packaged plans of reorganization of ACG and Graphics and Vertis Holdings, Vertis and certain other subsidiaries of Vertis Holdings, respectively, pursuant to Regulation D under the Securities Act of 1933, as amended, and Sections 1125, 1126 and 1145 of the Bankruptcy Code. Vertis Holdings, Vertis and such other subsidiaries of Vertis Holdings, on the one hand, and ACG and Graphics, on the other hand, intend to commence voluntary reorganization cases under chapter 11 of the Bankruptcy Code to effect the Transactions through pre-packaged chapter 11 plans of reorganization on the terms set forth in the term sheet attached as Exhibit A to the Restructuring Agreement. The holders of more than two-thirds of the outstanding principal amount of each of the Second Lien Notes, the Senior Notes, and the Senior Subordinated Notes and holders of a majority of the outstanding principal amount of the Graphics Notes agreed to vote in favor of the chapter 11 plans, subject to the terms and conditions of the Restructuring Agreement and certain other agreements. This Current Report on Form 8-K does not constitute an offer to purchase any securities or a solicitation of an offer to sell any securities.

     Pursuant to the Restructuring Agreement, (a) the holders of the $350 million of Second Lien Notes will receive new second lien notes of Vertis in the same principal amount as their existing notes, (b) the holders of the $350 million of Senior Notes will received $107 million of new senior notes of Vertis and 57.04% of the new common stock of Vertis Holdings, (c) the holders of the $293.5 million of Senior Subordinated Notes will receive $27 million of new senior notes of Vertis, 10% of the new common stock of Vertis Holdings and warrants to acquire 11.5% of the new common stock of Vertis Holdings, at an implied strike price equivalent to the principal amount of, plus accrued interest on, the Senior Notes, (d) the holders of the existing common stock of Vertis Holdings will have their shares cancelled and receive no distribution, (e) the holders of the $280 million of Graphics Notes will receive $66 million of the new senior notes of Vertis and 32.96% of the new common stock of Vertis Holdings, and (f) the holders of the $15.2 million of Graphics’ Senior Second Secured Notes Due 2008 will be cancelled without consideration.

     A copy of the press release announcing the execution of the Merger Agreement and the Restructuring Agreement is attached as Exhibit 99.1 to this Current Report on Form 8-K. Copies of the Merger Agreement and the Restructuring Agreement are attached as Exhibit 2.1 and 2.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. By filing this Current Report on Form 8-K and furnishing this information, ACG makes no admission as to the materiality of any information in this report.

Forward-Looking Statements

     This Current Report on Form 8-K may contain forward-looking statements. The words “believes, “anticipates, “expects, “estimates, “plans, “intends”, and similar expressions are intended to identify forward-looking statements. All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected results. Factors that may cause these differences include fluctuations in the cost of raw materials ACG uses, changes in the advertising, marketing and information services markets, the financial condition of our customers, actions by ACG’s competitors, changes in the legal or regulatory environment, general economic and business conditions in the U.S. and other countries, and changes in interest and foreign currency exchange rates.

     Certain additional factors could affect the outcome of the matters described in this Current Report on Form 8-K. These factors include, but are not limited to, (a) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (b) the outcome of any legal proceedings that may be instituted against ACG and others following announcement of the Merger Agreement, (c) the failure to satisfy other conditions to completion of the Merger, (d) the failure of Vertis to obtain the financing necessary to consummate the Merger and the failure to consummate the refinancing of certain outstanding indebtedness of Vertis and ACG, (e) risks that the proposed transactions disrupt current plans and operations and the potential difficulties in employee retention as a result of the Merger, (f) the ability to recognize the benefits of the Merger, including any synergies that may result from the Merger, and (g) the amount of the costs, fees, expenses and charges related to the Merger and the actual terms of certain financings that will be obtained for the Merger. Many of the factors that will determine the outcome of the subject matter of this press release are beyond ACG’s ability to control or predict. ACG undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

     Additional information regarding these risk factors and uncertainties is detailed from time to time in ACG’s filings with the SEC, including but not limited to our most recent Forms 10-K/A and 10-Q, available for viewing on our website at www.americancolor.com.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

2.1		Agreement and Plan of Merger, dated as of May 22, 2008, among Vertis Holdings, Inc., Vertis, Inc., Victory Merger Sub, LLC, and ACG Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Vertis, Inc. dated May 22, 2008).
2.2		Restructuring and Lock-Up Agreement dated as of May 22, 2008, among ACG Holdings, Inc., American Color Graphics, Inc., and the other parties signatory thereto (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of Vertis, Inc. dated May 22, 2008).
10.2	(b)	Second Amendment to Employment Agreement dated as of May 22, 2008, between American Color Graphics, Inc. and Stephen M. Dyott.
10.4	(c)	Third Amendment to Employment Agreement dated as of May 22, 2008, between American Color Graphics, Inc. and Patrick W. Kellick.
10.6	(c)	Third Amendment to Employment Agreement dated as of May 22, 2008, between American Color Graphics, Inc. and Kathleen A. DeKam.
99.1		Press release dated May 22, 2008 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Vertis, Inc. dated May 22, 2008).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

ACG HOLDINGS, INC. AMERICAN COLOR GRAPHICS, INC.
By:	/s/ Patrick W. Kellick
	Patrick W. Kellick
	EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER

Dated: May 28, 2008

INDEX TO EXHIBITS

Exhibit No.			Description
	2.1		Agreement and Plan of Merger, dated as of May 22, 2008, among Vertis Holdings, Inc., Vertis, Inc., Victory Merger Sub, LLC, and ACG Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Vertis, Inc. dated May 22, 2008).
	2.2		Restructuring and Lock-Up Agreement dated as of May 22, 2008, among ACG Holdings, Inc., American Color Graphics, Inc., and the other parties signatory thereto (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of Vertis, Inc. dated May 22, 2008).
	10.2	(b)	Second Amendment to Employment Agreement dated as of May 22, 2008, between American Color Graphics, Inc. and Stephen M. Dyott.
	10.4	(c)	Third Amendment to Employment Agreement dated as of May 22, 2008, between American Color Graphics, Inc. and Patrick W. Kellick.
	10.6	(c)	Third Amendment to Employment Agreement dated as of May 22, 2008, between American Color Graphics, Inc. and Kathleen A. DeKam.
	99.1		Press release dated May 22, 2008 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Vertis, Inc. dated May 22, 2008).

EX-10.2.B

EXHIBIT 10.2(b)

     SECOND AMENDMENT TO EMPLOYMENT AGREEMENT dated as of May 22, 2008, between AMERICAN COLOR GRAPHICS, INC., a New York corporation (“ACG”), and STEPHEN M. DYOTT (the “Executive”).

     WHEREAS, ACG Holdings, Inc. (“Holdings”) has entered into an Agreement and Plan of Merger dated as of the date hereof, by and among Vertis Holdings, Inc., Vertis, Inc. (“Vertis”), Victory Merger Sub, LLC, and Holdings (the “Merger Agreement”), pursuant to which Holdings shall become a wholly owned subsidiary of Vertis, Inc. upon the closing of the transactions contemplated thereunder (“Closing”);

     WHEREAS, the parties hereto desire that the Executive continue his employment pursuant to the terms and conditions of that certain Employment Agreement dated as of April 19, 2007, between ACG and the Executive, as amended as of October 3, 2007, and as further amended herein (the “Employment Agreement”), through a transition period that ends 90 days after Closing and that the Executive’s cash severance arrangement thereunder be terminated and liquidated in connection with Closing; and

     WHEREAS, Section 11.8 of the Employment Agreement allows ACG to reform any provision therein to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and other Treasury guidance promulgated under such Code Section (“Section 409A”);

     NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the Employment Agreement, effective as of and contingent upon Closing, as follows:

1. Section 2.1 of the Employment Agreement is amended in its entirety as follows:

2.1. General. The Company hereby employs the Executive, and the Executive agrees to serve, as Special Advisor to the Chairman and CEO of Vertis of the Company, upon the terms and conditions contained herein. The Executive shall have all the responsibilities and powers normally associated with such office. The Executive shall perform such other duties and services for the Company, commensurate with the Executive’s position, as may be reasonably designated from time to time by the Company. The Executive agrees to serve the Company faithfully and to the best of his ability under the direction of the Board. The Executive’s principal employment locations shall be Brentwood, TN and Ridgefield, CT, subject to reasonable travel to fulfill the duties of Executive’s position.

2. Section 2.3 of the Employment Agreement is amended in its entirety as follows:

2.3. Term of Employment.

2.3.1 Transition Period. Unless earlier terminated pursuant to this Agreement or extended by mutual agreement of the parties in writing, the Executive’s employment hereunder shall terminate automatically 90 days after Closing, and the period of employment through such date is hereinafter referred to as the “Employment Term”.

2.3.2 Post-Transition Period Employment. The parties acknowledge that during the 90-day period immediately following Closing (the “Transition Period”) they will consider the possibility of the Executive’s employment continuing beyond the Transition Period under terms and conditions mutually agreeable to the parties and memorialized in a successor employment agreement, if at all, by no later than the 90th day after Closing; it being understood that neither party is obligated to enter into any such successor employment agreement.

3. Section 3.1 of the Employment Agreement is amended in its entirety as follows:

3.1 Base Salary. For services performed during the Transition Period, the Executive shall be entitled to receive (a) a base salary at a rate of $575,000 per annum, payable in arrears in equal installments not less frequently than biweekly in accordance with the Company’s payroll practices, and (b) use of two automobiles of at least the same type and model as the automobiles currently being provided to the Executive by the Company on terms no less favorable to the Executive than as in effect on the date hereof (collectively, the “Base Salary”).

4. Section 3.3 of the Employment Agreement is amended in its entirety as follows:

3.3 Bonus. Executive shall not participate in any performance bonus arrangement of the Company during the Transition Period.

5. Section 5.1 of the Employment Agreement is amended in its entirety as follows:

5.1. Payments; Benefits.

5.1.1 Payments. At Closing, the Company shall pay to the Executive all earned but unpaid vacation pay and all unpaid Base Salary accrued through Closing. In addition, effective at Closing, the Company irrevocably terminates and liquidates, pursuant to Treas. Reg. § 1.409A-3(j)(4)(ix)(B), the Company’s cash severance obligation to the Executive under Section 5.1 of the Employment Agreement as in effect immediately prior to Closing, which cash severance obligation the Company acknowledges constitutes deferred compensation under a plan described in Treas. Reg. § 1.409A-1(c)(2)(i)(I). Such termination and liquidation shall be effectuated through the payment by the Company to the Executive of a retention bonus payment for services rendered during the Transition Period of $2,764,154 (the “Retention Bonus Payment”), (a) 50% of which will be payable at Closing

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and (b) 50% of which will be payable, subject only to the provisions of Sections 5.3 and 5.4, on the earlier of (i) the 90th day after Closing or (ii) the termination of the Executive’s employment by the Company or resignation by the Executive with Good Reason. The Company represents and warrants that the Closing will result in a “change of control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5).

5.1.2 Termination; Resignation.

     (a) Subject to the provisions of Sections 5.3 and 5.4, if the Executive’s employment is terminated automatically under Section 2.3, or if, prior to the expiration of the Transition Period, the Executive’s employment is terminated by the Company or the Executive resigns, the Company shall pay to the Executive in cash any unpaid amounts of the Executive’s Base Salary for periods prior to the date of termination or resignation. Any such amount shall be paid in a lump sum within five business days after the date of termination or resignation.

     (b) Subject to the provisions of Sections 5.3 and 5.4, if the Executive’s employment is terminated automatically under Section 2.3, or if, prior to the expiration of the Transition Period, the Executive’s employment is terminated by the Company or the Executive resigns with Good Reason, the Executive shall be entitled to the following continued benefits during the Severance Period:

          (i) Medical, dental, vision, and prescription drug coverage for the Executive and his eligible dependents (as defined in the applicable plan), if elected by the Executive or eligible dependents under COBRA. Coverage will be provided initially as COBRA continuation coverage from the date of termination through the end of the applicable COBRA coverage period. The COBRA coverage will be provided under Company group health plans for as long as the Company maintains the group health plans. Upon termination of the Company’s plans, the COBRA coverage will be provided under group health plans maintained by Vertis, Inc. or an affiliate (“Vertis”). If the applicable COBRA coverage period ends before the expiration of the Severance Period, the Executive may elect to continue coverage during the remainder of the Severance Period for Executive and his eligible dependents by seeking coverage under an individual insurance policy acceptable to Vertis. If the Executive demonstrates to Vertis that he is unable to obtain an individual insurance policy with coverage that is substantially equivalent to the coverage under the Company or Vertis plans, then Executive and his eligible dependents may continue coverage under the Vertis group health plan for the remainder of the Severance Period. During the Severance Period, Executive shall pay the same premium contribution rate for coverage that is paid by active Company senior executives while coverage is provided under the Company’s group health plans, and active Vertis senior executives while coverage is provided under Vertis’ plans or individual insurance policies. The Executive shall be responsible for payment of his portion of the premiums. If Executive obtains individual insurance coverage as described above, the Company will provide prompt reimbursement of the Company portion

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of the premium only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive. The Executive and his dependents will not have the right to further continued coverage upon expiration or termination of the Severance Period, except if and as provided under COBRA and the Executive shall be responsible for payment of 102% of the applicable premium (within the meaning of Code section 4980B(f)) for such COBRA coverage, calculated at applicable plan rates for similarly situated COBRA qualified beneficiaries, for any such continued COBRA coverage that remains in effect after expiration or termination of the Severance Period.

          (ii) Life insurance and accidental death and dismemberment insurance coverage for the Executive. The Executive’s coverage under the Company plans may be converted to an individual policy covering the Executive upon his termination of employment, if elected by the Executive and subject to any rules, requirements or limitations set forth in the group insurance policy. The Executive may elect to obtain an individual policy that is not a conversion policy, but only if the cost of new coverage is less than or equal to the cost of the conversion policy. The individual policy shall have the same coverage levels as under the Company plans (generally, a benefit equal to the lesser of two times annual compensation or $500,000). The Executive shall be fully responsible for arranging coverage under the individual policy and paying the applicable premiums. The Company will promptly reimburse Executive for the premium payments only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive.

          (iii) Long-term disability insurance coverage for the Executive. The Executive’s coverage under the applicable group long-term disability plan may be converted to an individual policy covering the Executive upon his termination of employment, if elected by the Executive and subject to any rules, requirements or limitations set forth in the group insurance policy. The individual policy shall have the same coverage levels as under the Company plan (generally monthly income replacement coverage of the lesser of 66.67% of monthly earnings or $15,000 per month). The Executive may elect to obtain an individual policy that is not a conversion policy, but only if the cost of new coverage is less than or equal to the cost of the conversion policy. The Executive shall be responsible for arranging coverage under the individual policy and paying the applicable premiums. The Company will promptly reimburse Executive for the applicable premium payments only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive. The provision of benefits shall be subject to all applicable plan document terms.

          (iv) Continued eligibility for coverage and benefits under an employee assistance program and tuition assistance program maintained by the

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Company or Vertis with the costs therefor paid by the Company during the Severance Period.

     (c) Except as determined in accordance with the terms of the employee benefit plans or programs of the Company or such parent or as set forth in Section 5.1, the Executive shall have no further right to receive any other compensation or benefits after such termination or resignation.

     (d) All payments and reimbursements hereunder shall be subject to applicable withholding and payroll taxes.

     (e) Anything to the contrary notwithstanding, if the Executive’s employment is terminated automatically under Section 2.3, such termination shall be deemed a termination by the Company without Cause prior to the expiration of the Transition Period.

5.1.3 Date of Termination. The date of termination of employment shall be the date specified in a written notice of termination to the Executive, which date shall not be prior to the date of such notice.

5.1.4. Release. If the Executive’s employment is terminated by the Company or the Executive resigns with Good Reason, the Company shall release the Executive from liability for any and all acts or omissions of the Executive except for the Executive’s gross negligence or willful misconduct.

6. Section 5.3 of the Employment Agreement is amended in its entirety as follows:

5.3 Conditions Applicable to Portion of Retention Bonus Payment and the Severance Period. If, during the Transition Period, the Executive materially breaches the Executive’s obligations under Section 8 or resigns without Good Reason, the Company may, upon written notice to the Executive, terminate its obligation to make the payment referred to in clause (b) of Section 5.1.1. If, during the Transition Period or at any time during the Severance Period, the Executive materially breaches the Executive’s obligations under Section 8 or resigns without Good Reason, the Company may, upon written notice to the Executive, terminate the Severance Period and cease to provide any further benefits described in Section 5.1.2. Anything herein to the contrary notwithstanding, the Company’s obligation to make any payment (other than the payments required to be made at Closing) or provide any benefits (after the end of the Transition Period) described in Section 5.1 shall be subject to the Executive’s execution of the Company’s standard form release of claims prior to the scheduled date of payment.

7. Section 5.4 of the Employment Agreement is amended in its entirety as follows:

5.4 Death. In the event of the Executive’s death during the Transition Period, any unpaid balance of the Retention Bonus Payment shall be paid to the Executive’s estate when such amount would otherwise have been paid to the

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Executive and the Executive’s spouse and eligible dependents (if any) shall continue to receive the health, vision, dental, and prescription drug coverage for the remainder of the applicable Severance Period.

8. Clauses (e) and (g) of Section 5.6 (Good Reason) of the Employment Agreement are hereby deleted. Clause (b) of Section 5.6 of the Employment Agreement shall be deemed to refer to the responsibilities and title referred to in Section 1 hereof.

9. All references in Section 8.1 (Non-Solicitation) of the Employment Agreement to “the Company” shall be deemed to be references to “Vertis and its subsidiaries”.

10. All references in Section 11.9 (Nondisparagement) of the Employment Agreement to “the Company” shall be deemed to be references to “Vertis and its subsidiaries”. Section 11.9 of the Employment Agreement is also amended by inserting the phrase “customer or vendors” after the word “stockholders”.

11. Section 11.8 of the Employment Agreement is amended in its entirety as follows:

11.8. Section 409A. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations and Treasury guidance promulgated thereunder. If the Company determines in good faith that any provision of this Agreement would cause the Executive to incur an additional tax, penalty or interest under Section 409A of the Code, the Company and the Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the Executive, as specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (a) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (b) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (c) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

12. Section 11.11 of the Employment Agreement is amended by adding the following new definitions to the end thereof:

“Closing” has the meaning set forth in the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger dated as of the date hereof, by and among Vertis Holdings, Inc., Vertis, Inc. (“Vertis”), Victory Merger Sub, LLC, and ACG Holdings, Inc.

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13. The rights (but not the obligations) of ACG hereunder shall not be assignable, except to Vertis. Nothing in this agreement is intended to confer upon Vertis or any of its affiliates any rights, benefits or remedies of any nature whatsoever by reason of this agreement.

14. The obligations of ACG under the Employment Agreement are not subject to any conditions except as expressly provided herein. ACG shall have no right of setoff or recoupment with respect to any of its obligations under the Employment Agreement.

15. Section 8.3 of the Employment Agreement is amended by changing the reference to Section 5.1.1(a) therein to Section 5.1.

16. The definition of “Competitor” in Section 11.11 of the Employment Agreement is amended in its entirety as follows:

     “Competitor” means any Person that (a) prints retail advertising inserts or provides premedia services for printing and (b) unless the Executive irrevocably receives all the payments and benefits referred to in Section 5.1, has annual combined retail advertising insert printing and premedia revenues for the most recently ended annual reporting period in excess of $250 million.

In all other respects, the Employment Agreement is hereby ratified and confirmed.

(Signatures begin on the next page.)

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     IN WITNESS WHEREOF, ACG has caused this Amendment to be duly executed and the Executive has hereunto set his hand, effective as of and contingent upon Closing.

AMERICAN COLOR GRAPHICS, INC.
By:	/s/ Patrick W. Kellick
	Name:	Patrick W. Kellick
	Title:	Executive Vice President, Chief Financial Officer and Secretary

EXECUTIVE
/s/ Stephen M. Dyott
Name:	Stephen M. Dyott

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EX-10.4.C

EXHIBIT 10.4(c)

     THIRD AMENDMENT TO EMPLOYMENT AGREEMENT dated as of May 22, 2008, between AMERICAN COLOR GRAPHICS, INC., a New York corporation (“ACG”), and PATRICK W. KELLICK (the “Executive”).

     WHEREAS, ACG Holdings, Inc. (“Holdings”) has entered into an Agreement and Plan of Merger dated as of the date hereof, by and among Vertis Holdings, Inc., Vertis, Inc. (“Vertis”), Victory Merger Sub, LLC, and Holdings (the “Merger Agreement”), pursuant to which Holdings shall become a wholly owned subsidiary of Vertis, Inc. upon the closing of the transactions contemplated thereunder (“Closing”);

     WHEREAS, the parties hereto desire that the Executive continue his employment pursuant to the terms and conditions of that certain Employment Agreement dated as of April 19, 2007, between ACG and the Executive, as amended as of August 24, 2007, and October 3, 2007, and as further amended herein (the “Employment Agreement”), through a transition period that ends 90 days after Closing and that the Executive’s cash severance arrangement thereunder be terminated and liquidated in connection with Closing; and

     WHEREAS, Section 11.8 of the Employment Agreement allows ACG to reform any provision therein to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and other Treasury guidance promulgated under such Code Section (“Section 409A”);

     NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the Employment Agreement, effective as of and contingent upon Closing, as follows:

1. Section 2.1 of the Employment Agreement is amended in its entirety as follows:

2.1. General. The Company hereby employs the Executive, and the Executive agrees to serve, as Executive Vice President — Finance of the Company, upon the terms and conditions contained herein, and shall report to the Chief Financial Officer of Vertis. The Executive shall have all the responsibilities and powers normally associated with such office. The Executive shall perform such other duties and services for the Company, commensurate with the Executive’s position, as may be reasonably designated from time to time by the Company. The Executive agrees to serve the Company faithfully and to the best of his ability under the direction of the Board. The Executive’s principal employment location shall be Brentwood, TN, subject to reasonable travel to fulfill the duties of Executive’s position.

2. Section 2.3 of the Employment Agreement is amended in its entirety as follows:

2.3. Term of Employment.

2.3.1 Transition Period. Unless earlier terminated pursuant to this Agreement or extended by mutual agreement of the parties in writing, the Executive’s employment hereunder shall terminate automatically 90 days after Closing, and the period of employment through such date is hereinafter referred to as the “Employment Term”.

2.3.2 Post-Transition Period Employment. The parties acknowledge that during the 90-day period immediately following Closing (the “Transition Period”) they will consider the possibility of the Executive’s employment continuing beyond the Transition Period under terms and conditions mutually agreeable to the parties and memorialized in a successor employment agreement, if at all, by no later than the 90th day after Closing; it being understood that neither party is obligated to enter into any such successor employment agreement.

3. Section 3.1 of the Employment Agreement is amended in its entirety as follows:

3.1 Base Salary. For services performed during the Transition Period, the Executive shall be entitled to receive (a) a base salary at a rate of $350,000 per annum, payable in arrears in equal installments not less frequently than biweekly in accordance with the Company’s payroll practices, and (b) a monthly car allowance of $1,100.00 (collectively, the “Base Salary”).

4. Section 3.3 of the Employment Agreement is amended in its entirety as follows:

3.3 Bonus. Executive shall not participate in any performance bonus arrangement of the Company during the Transition Period.

5. Section 5.1 of the Employment Agreement is amended in its entirety as follows:

5.1. Payments; Benefits.

5.1.1 Payments. At Closing, the Company shall pay to the Executive all earned but unpaid vacation pay and all unpaid Base Salary accrued through Closing. In addition, effective at Closing, the Company irrevocably terminates and liquidates, pursuant to Treas. Reg. § 1.409A-3(j)(4)(ix)(B), the Company’s cash severance obligation to the Executive under Section 5.1 of the Employment Agreement as in effect immediately prior to Closing, which cash severance obligation the Company acknowledges constitutes deferred compensation under a plan described in Treas. Reg. § 1.409A-1(c)(2)(i)(I). Such termination and liquidation shall be effectuated through the payment by the Company to the Executive of a retention bonus payment for services rendered during the Transition Period of $1,188,718 (the “Retention Bonus Payment”), (a) 50% of which will be payable at Closing and (b) 50% of which will be payable, subject only to the provisions of Sections 5.3 and 5.4, on the earlier of (i) the 90th day after Closing or (ii) the termination

2

of the Executive’s employment by the Company or resignation by the Executive with Good Reason. The Company represents and warrants that the Closing will result in a “change of control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5).

5.1.2 Termination; Resignation.

     (a) Subject to the provisions of Sections 5.3 and 5.4, if the Executive’s employment is terminated automatically under Section 2.3, or if, prior to the expiration of the Transition Period, the Executive’s employment is terminated by the Company or the Executive resigns, the Company shall pay to the Executive in cash any unpaid amounts of the Executive’s Base Salary for periods prior to the date of termination or resignation. Any such amount shall be paid in a lump sum within five business days after the date of termination or resignation.

     (b) Subject to the provisions of Sections 5.3 and 5.4, if the Executive’s employment is terminated automatically under Section 2.3, or if, prior to the expiration of the Transition Period, the Executive’s employment is terminated by the Company or the Executive resigns with Good Reason, the Executive shall be entitled to the following continued benefits during the Severance Period:

          (i) Medical, dental, vision, and prescription drug coverage for the Executive and his eligible dependents (as defined in the applicable plan), if elected by the Executive or eligible dependents under COBRA. Coverage will be provided initially as COBRA continuation coverage from the date of termination through the end of the applicable COBRA coverage period. The COBRA coverage will be provided under Company group health plans for as long as the Company maintains the group health plans. Upon termination of the Company’s plans, the COBRA coverage will be provided under group health plans maintained by Vertis, Inc. or an affiliate (“Vertis”). If the applicable COBRA coverage period ends before the expiration of the Severance Period, the Executive may elect to continue coverage during the remainder of the Severance Period for Executive and his eligible dependents by seeking coverage under an individual insurance policy acceptable to Vertis. If the Executive demonstrates to Vertis that he is unable to obtain an individual insurance policy with coverage that is substantially equivalent to the coverage under the Company or Vertis plans, then Executive and his eligible dependents may continue coverage under the Vertis group health plan for the remainder of the Severance Period. During the Severance Period, Executive shall pay the same premium contribution rate for coverage that is paid by active Company senior executives while coverage is provided under the Company’s group health plans, and active Vertis senior executives while coverage is provided under Vertis’ plans or individual insurance policies. The Executive shall be responsible for payment of his portion of the premiums. If Executive obtains individual insurance coverage as described above, the Company will provide prompt reimbursement of the Company portion of the premium only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable

3

income to the Executive. The Executive and his dependents will not have the right to further continued coverage upon expiration or termination of the Severance Period, except if and as provided under COBRA and the Executive shall be responsible for payment of 102% of the applicable premium (within the meaning of Code section 4980B(f)) for such COBRA coverage, calculated at applicable plan rates for similarly situated COBRA qualified beneficiaries, for any such continued COBRA coverage that remains in effect after expiration or termination of the Severance Period.

          (ii) Life insurance and accidental death and dismemberment insurance coverage for the Executive. The Executive’s coverage under the Company plans may be converted to an individual policy covering the Executive upon his termination of employment, if elected by the Executive and subject to any rules, requirements or limitations set forth in the group insurance policy. The Executive may elect to obtain an individual policy that is not a conversion policy, but only if the cost of new coverage is less than or equal to the cost of the conversion policy. The individual policy shall have the same coverage levels as under the Company plans (generally, a benefit equal to the lesser of two times annual compensation or $500,000). The Executive shall be fully responsible for arranging coverage under the individual policy and paying the applicable premiums. The Company will promptly reimburse Executive for the premium payments only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive.

          (iii) Long-term disability insurance coverage for the Executive. The Executive’s coverage under the applicable group long-term disability plan may be converted to an individual policy covering the Executive upon his termination of employment, if elected by the Executive and subject to any rules, requirements or limitations set forth in the group insurance policy. The individual policy shall have the same coverage levels as under the Company plan (generally monthly income replacement coverage of the lesser of 66.67% of monthly earnings or $15,000 per month). The Executive may elect to obtain an individual policy that is not a conversion policy, but only if the cost of new coverage is less than or equal to the cost of the conversion policy. The Executive shall be responsible for arranging coverage under the individual policy and paying the applicable premiums. The Company will promptly reimburse Executive for the applicable premium payments only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive. The provision of benefits shall be subject to all applicable plan document terms.

          (iv) Continued eligibility for coverage and benefits under an employee assistance program and tuition assistance program maintained by the Company or Vertis with the costs therefor paid by the Company during the Severance Period.

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          (v) The Company shall pay the cost of providing the Executive with outplacement services, up to a maximum of $25,000.00, provided that such services are (A) utilized by the Executive within six months following the date of termination and (B) provided by a recognized outplacement provider. Such payment shall be made by the Company directly to the service provider promptly following the provision of such services and the presentation to the Company of documentation of the provision of such services, and in all events by no later than the first anniversary of the date of termination. Such services shall include office facilities and telephone answering services during such six-month period.

     (c) Except as determined in accordance with the terms of the employee benefit plans or programs of the Company or such parent or as set forth in Section 5.1, the Executive shall have no further right to receive any other compensation or benefits after such termination or resignation.

     (d) All payments and reimbursements hereunder shall be subject to applicable withholding and payroll taxes.

     (e) Anything to the contrary notwithstanding, if the Executive’s employment is terminated automatically under Section 2.3, such termination shall be deemed a termination by the Company without Cause prior to the expiration of the Transition Period.

5.1.3 Date of Termination. The date of termination of employment shall be the date specified in a written notice of termination to the Executive, which date shall not be prior to the date of such notice.

5.1.4. Release. If the Executive’s employment is terminated by the Company or the Executive resigns with Good Reason, the Company shall release the Executive from liability for any and all acts or omissions of the Executive except for the Executive’s gross negligence or willful misconduct.

6. Section 5.3 of the Employment Agreement is amended in its entirety as follows:

5.3 Conditions Applicable to Portion of Retention Bonus Payment and the Severance Period. If, during the Transition Period, the Executive materially breaches the Executive’s obligations under Section 8 or resigns without Good Reason, the Company may, upon written notice to the Executive, terminate its obligation to make the payment referred to in clause (b) of Section 5.1.1. If, during the Transition Period or at any time during the Severance Period, the Executive materially breaches the Executive’s obligations under Section 8 or resigns without Good Reason, the Company may, upon written notice to the Executive, terminate the Severance Period and cease to provide any further benefits described in Section 5.1.2. Anything herein to the contrary notwithstanding, the Company’s obligation to make any payment (other than the payments required to be made at Closing) or provide any benefits (after the end of the Transition Period) described in Section 5.1 shall be subject to the Executive’s

5

execution of the Company’s standard form release of claims prior to the scheduled date of payment.

7. Section 5.4 of the Employment Agreement is amended in its entirety as follows:

5.4 Death. In the event of the Executive’s death during the Transition Period, any unpaid balance of the Retention Bonus Payment shall be paid to the Executive’s estate when such amount would otherwise have been paid to the Executive and the Executive’s spouse and eligible dependents (if any) shall continue to receive the health, vision, dental, and prescription drug coverage for the remainder of the applicable Severance Period.

8. Clauses (e) and (g) of Section 5.6 (Good Reason) of the Employment Agreement are hereby deleted. Clause (b) of Section 5.6 of the Employment Agreement shall be deemed to refer to the responsibilities and title referred to in Section 1 hereof.

9. All references in Section 8.1 (Non-Solicitation) of the Employment Agreement to “the Company” shall be deemed to be references to “Vertis and its subsidiaries”.

10. All references in Section 11.9 (Nondisparagement) of the Employment Agreement to “the Company” shall be deemed to be references to “Vertis and its subsidiaries”. Section 11.9 of the Employment Agreement is also amended by inserting the phrase “customer or vendors” after the word “stockholders”.

11. Section 11.8 of the Employment Agreement is amended in its entirety as follows:

11.8. Section 409A. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations and Treasury guidance promulgated thereunder. If the Company determines in good faith that any provision of this Agreement would cause the Executive to incur an additional tax, penalty or interest under Section 409A of the Code, the Company and the Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the Executive, as specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (a) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (b) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (c) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

12. Section 11.11 of the Employment Agreement is amended by adding the following new definitions to the end thereof:

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“Closing” has the meaning set forth in the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger dated as of the date hereof, by and among Vertis Holdings, Inc., Vertis, Inc. (“Vertis”), Victory Merger Sub, LLC, and ACG Holdings, Inc.

13. The rights (but not the obligations) of ACG hereunder shall not be assignable, except to Vertis. Nothing in this agreement is intended to confer upon Vertis or any of its affiliates any rights, benefits or remedies of any nature whatsoever by reason of this agreement.

14. The obligations of ACG under the Employment Agreement are not subject to any conditions except as expressly provided herein. ACG shall have no right of setoff or recoupment with respect to any of its obligations under the Employment Agreement.

15. Section 8.3 of the Employment Agreement is amended by changing the reference to Section 5.1.1(a) therein to Section 5.1.

16. The definition of “Competitor” in Section 11.11 of the Employment Agreement is amended in its entirety as follows:

     “Competitor” means any Person that (a) prints retail advertising inserts or provides premedia services for printing and (b) unless the Executive irrevocably receives all the payments and benefits referred to in Section 5.1, has annual combined retail advertising insert printing and premedia revenues for the most recently ended annual reporting period in excess of $250 million.

In all other respects, the Employment Agreement is hereby ratified and confirmed.

(Signatures begin on the next page.)

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     IN WITNESS WHEREOF, ACG has caused this Amendment to be duly executed and the Executive has hereunto set his hand, effective as of and contingent upon Closing.

AMERICAN COLOR GRAPHICS, INC.
By:	/s/ Stephen M. Dyott
	Name:	Stephen M. Dyott
	Title:	Chairman and CEO

EXECUTIVE
/s/ Patrick W. Kellick
Name:	Patrick W. Kellick

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EX-10.6.C

EXHIBIT 10.6(c)

     THIRD AMENDMENT TO EMPLOYMENT AGREEMENT dated as of May 22, 2008, between AMERICAN COLOR GRAPHICS, INC., a New York corporation (“ACG”), and KATHLEEN A. DEKAM (the “Executive”).

     WHEREAS, ACG Holdings, Inc. (“Holdings”) has entered into an Agreement and Plan of Merger dated as of the date hereof, by and among Vertis Holdings, Inc., Vertis, Inc. (“Vertis”), Victory Merger Sub, LLC, and Holdings (the “Merger Agreement”), pursuant to which Holdings shall become a wholly owned subsidiary of Vertis, Inc. upon the closing of the transactions contemplated thereunder (“Closing”);

     WHEREAS, the parties hereto desire that the Executive continue her employment pursuant to the terms and conditions of that certain Employment Agreement dated as of April 19, 2007, between ACG and the Executive, as amended as of August 24, 2007, and October 3, 2007, and as further amended herein (the “Employment Agreement”), through a transition period that ends 90 days after Closing and that the Executive’s cash severance arrangement thereunder be terminated and liquidated in connection with Closing; and

     WHEREAS, Section 11.8 of the Employment Agreement allows ACG to reform any provision therein to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and other Treasury guidance promulgated under such Code Section (“Section 409A”);

     NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the Employment Agreement, effective as of and contingent upon Closing, as follows:

1. Section 2.1 of the Employment Agreement is amended in its entirety as follows:

2.1. General. The Company hereby employs the Executive, and the Executive agrees to serve, as President — ACG Integration of the Company, upon the terms and conditions contained herein, and shall report to the Chief Executive Officer of Vertis. The Executive shall have all the responsibilities and powers normally associated with such office. The Executive shall perform such other duties and services for the Company, commensurate with the Executive’s position, as may be reasonably designated from time to time by the Company. The Executive agrees to serve the Company faithfully and to the best of her ability under the direction of the Board. The Executive’s principal employment location shall be Brentwood, TN, subject to reasonable travel to fulfill the duties of Executive’s position.

2. Section 2.3 of the Employment Agreement is amended in its entirety as follows:

2.3. Term of Employment.

2.3.1 Transition Period. Unless earlier terminated pursuant to this Agreement or extended by mutual agreement of the parties in writing, the Executive’s employment hereunder shall terminate automatically 90 days after Closing, and the period of employment through such date is hereinafter referred to as the “Employment Term”.

2.3.2 Post-Transition Period Employment. The parties acknowledge that during the 90-day period immediately following Closing (the “Transition Period”) they will consider the possibility of the Executive’s employment continuing beyond the Transition Period under terms and conditions mutually agreeable to the parties and memorialized in a successor employment agreement, if at all, by no later than the 90th day after Closing; it being understood that neither party is obligated to enter into any such successor employment agreement.

3. Section 3.1 of the Employment Agreement is amended in its entirety as follows:

3.1 Base Salary. For services performed during the Transition Period, the Executive shall be entitled to receive (a) a base salary at a rate of $350,000 per annum, payable in arrears in equal installments not less frequently than biweekly in accordance with the Company’s payroll practices, and (b) a monthly car allowance of $1,100.00 (collectively, the “Base Salary”).

4. Section 3.3 of the Employment Agreement is amended in its entirety as follows:

3.3 Bonus. Executive shall not participate in any performance bonus arrangement of the Company during the Transition Period.

5. Section 5.1 of the Employment Agreement is amended in its entirety as follows:

5.1. Payments; Benefits.

5.1.1 Payments. At Closing, the Company shall pay to the Executive all earned but unpaid vacation pay and all unpaid Base Salary accrued through Closing. In addition, effective at Closing, the Company irrevocably terminates and liquidates, pursuant to Treas. Reg. § 1.409A-3(j)(4)(ix)(B), the Company’s cash severance obligation to the Executive under Section 5.1 of the Employment Agreement as in effect immediately prior to Closing, which cash severance obligation the Company acknowledges constitutes deferred compensation under a plan described in Treas. Reg. § 1.409A-1(c)(2)(i)(I). Such termination and liquidation shall be effectuated through the payment by the Company to the Executive of a retention bonus payment for services rendered during the Transition Period of $1,180,512 (the “Retention Bonus Payment”), (a) 50% of which will be payable at Closing and (b) 50% of which will be payable, subject only to the provisions of Sections 5.3 and 5.4, on the earlier of (i) the 90th day after Closing or (ii) the termination

2

of the Executive’s employment by the Company or resignation by the Executive with Good Reason. The Company represents and warrants that the Closing will result in a “change of control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5).

5.1.2 Termination; Resignation.

     (a) Subject to the provisions of Sections 5.3 and 5.4, if the Executive’s employment is terminated automatically under Section 2.3, or if, prior to the expiration of the Transition Period, the Executive’s employment is terminated by the Company or the Executive resigns, the Company shall pay to the Executive in cash any unpaid amounts of the Executive’s Base Salary for periods prior to the date of termination or resignation. Any such amount shall be paid in a lump sum within five business days after the date of termination or resignation.

     (b) Subject to the provisions of Sections 5.3 and 5.4, if the Executive’s employment is terminated automatically under Section 2.3, or if, prior to the expiration of the Transition Period, the Executive’s employment is terminated by the Company or the Executive resigns with Good Reason, the Executive shall be entitled to the following continued benefits during the Severance Period:

          (i) Medical, dental, vision, and prescription drug coverage for the Executive and her eligible dependents (as defined in the applicable plan), if elected by the Executive or eligible dependents under COBRA. Coverage will be provided initially as COBRA continuation coverage from the date of termination through the end of the applicable COBRA coverage period. The COBRA coverage will be provided under Company group health plans for as long as the Company maintains the group health plans. Upon termination of the Company’s plans, the COBRA coverage will be provided under group health plans maintained by Vertis, Inc. or an affiliate (“Vertis”). If the applicable COBRA coverage period ends before the expiration of the Severance Period, the Executive may elect to continue coverage during the remainder of the Severance Period for Executive and her eligible dependents by seeking coverage under an individual insurance policy acceptable to Vertis. If the Executive demonstrates to Vertis that she is unable to obtain an individual insurance policy with coverage that is substantially equivalent to the coverage under the Company or Vertis plans, then Executive and her eligible dependents may continue coverage under the Vertis group health plan for the remainder of the Severance Period. During the Severance Period, Executive shall pay the same premium contribution rate for coverage that is paid by active Company senior executives while coverage is provided under the Company’s group health plans, and active Vertis senior executives while coverage is provided under Vertis’ plans or individual insurance policies. The Executive shall be responsible for payment of her portion of the premiums. If Executive obtains individual insurance coverage as described above, the Company will provide prompt reimbursement of the Company portion of the premium only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable

3

income to the Executive. The Executive and her dependents will not have the right to further continued coverage upon expiration or termination of the Severance Period, except if and as provided under COBRA and the Executive shall be responsible for payment of 102% of the applicable premium (within the meaning of Code section 4980B(f)) for such COBRA coverage, calculated at applicable plan rates for similarly situated COBRA qualified beneficiaries, for any such continued COBRA coverage that remains in effect after expiration or termination of the Severance Period.

          (ii) Life insurance and accidental death and dismemberment insurance coverage for the Executive. The Executive’s coverage under the Company plans may be converted to an individual policy covering the Executive upon her termination of employment, if elected by the Executive and subject to any rules, requirements or limitations set forth in the group insurance policy. The Executive may elect to obtain an individual policy that is not a conversion policy, but only if the cost of new coverage is less than or equal to the cost of the conversion policy. The individual policy shall have the same coverage levels as under the Company plans (generally, a benefit equal to the lesser of two times annual compensation or $500,000). The Executive shall be fully responsible for arranging coverage under the individual policy and paying the applicable premiums. The Company will promptly reimburse Executive for the premium payments only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive.

          (iii) Long-term disability insurance coverage for the Executive. The Executive’s coverage under the applicable group long-term disability plan may be converted to an individual policy covering the Executive upon her termination of employment, if elected by the Executive and subject to any rules, requirements or limitations set forth in the group insurance policy. The individual policy shall have the same coverage levels as under the Company plan (generally monthly income replacement coverage of the lesser of 66.67% of monthly earnings or $15,000 per month). The Executive may elect to obtain an individual policy that is not a conversion policy, but only if the cost of new coverage is less than or equal to the cost of the conversion policy. The Executive shall be responsible for arranging coverage under the individual policy and paying the applicable premiums. The Company will promptly reimburse Executive for the applicable premium payments only upon the Company’s receipt of evidence of payment of the premium by the Executive, which reimbursement shall be treated as taxable income to the Executive. The provision of benefits shall be subject to all applicable plan document terms.

          (iv) Continued eligibility for coverage and benefits under an employee assistance program and tuition assistance program maintained by the Company or Vertis with the costs therefor paid by the Company during the Severance Period.

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          (v) The Company shall pay the cost of providing the Executive with outplacement services, up to a maximum of $25,000.00, provided that such services are (A) utilized by the Executive within six months following the date of termination and (B) provided by a recognized outplacement provider. Such payment shall be made by the Company directly to the service provider promptly following the provision of such services and the presentation to the Company of documentation of the provision of such services, and in all events by no later than the first anniversary of the date of termination. Such services shall include office facilities and telephone answering services during such six-month period.

     (c) Except as determined in accordance with the terms of the employee benefit plans or programs of the Company or such parent or as set forth in Section 5.1, the Executive shall have no further right to receive any other compensation or benefits after such termination or resignation.

     (d) All payments and reimbursements hereunder shall be subject to applicable withholding and payroll taxes.

     (e) Anything to the contrary notwithstanding, if the Executive’s employment is terminated automatically under Section 2.3, such termination shall be deemed a termination by the Company without Cause prior to the expiration of the Transition Period.

5.1.3 Date of Termination. The date of termination of employment shall be the date specified in a written notice of termination to the Executive, which date shall not be prior to the date of such notice.

5.1.4. Release. If the Executive’s employment is terminated by the Company or the Executive resigns with Good Reason, the Company shall release the Executive from liability for any and all acts or omissions of the Executive except for the Executive’s gross negligence or willful misconduct.

6. Section 5.3 of the Employment Agreement is amended in its entirety as follows:

5.3 Conditions Applicable to Portion of Retention Bonus Payment and the Severance Period. If, during the Transition Period, the Executive materially breaches the Executive’s obligations under Section 8 or resigns without Good Reason, the Company may, upon written notice to the Executive, terminate its obligation to make the payment referred to in clause (b) of Section 5.1.1. If, during the Transition Period or at any time during the Severance Period, the Executive materially breaches the Executive’s obligations under Section 8 or resigns without Good Reason, the Company may, upon written notice to the Executive, terminate the Severance Period and cease to provide any further benefits described in Section 5.1.2. Anything herein to the contrary notwithstanding, the Company’s obligation to make any payment (other than the payments required to be made at Closing) or provide any benefits (after the end of the Transition Period) described in Section 5.1 shall be subject to the Executive’s

5

execution of the Company’s standard form release of claims prior to the scheduled date of payment.

7. Section 5.4 of the Employment Agreement is amended in its entirety as follows:

5.4 Death. In the event of the Executive’s death during the Transition Period, any unpaid balance of the Retention Bonus Payment shall be paid to the Executive’s estate when such amount would otherwise have been paid to the Executive and the Executive’s spouse and eligible dependents (if any) shall continue to receive the health, vision, dental, and prescription drug coverage for the remainder of the applicable Severance Period.

8. All amounts provided to be paid pursuant to the Amended and Restated American Color Graphics, Inc. Supplemental Executive Retirement Plan, as amended, shall be paid at the time provided for in such Plan.

9. Clauses (e) and (g) of Section 5.6 (Good Reason) of the Employment Agreement are hereby deleted. Clause (b) of Section 5.6 of the Employment Agreement shall be deemed to refer to the responsibilities and title referred to in Section 1 hereof.

10. All references in Section 8.1 (Non-Solicitation) of the Employment Agreement to “the Company” shall be deemed to be references to “Vertis and its subsidiaries”.

11. All references in Section 11.9 (Nondisparagement) of the Employment Agreement to “the Company” shall be deemed to be references to “Vertis and its subsidiaries”. Section 11.9 of the Employment Agreement is also amended by inserting the phrase “customer or vendors” after the word “stockholders”.

12. Section 11.8 of the Employment Agreement is amended in its entirety as follows:

11.8. Section 409A. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations and Treasury guidance promulgated thereunder. If the Company determines in good faith that any provision of this Agreement would cause the Executive to incur an additional tax, penalty or interest under Section 409A of the Code, the Company and the Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the Executive, as specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (a) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (b) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (c) the

6

right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

13. Section 11.11 of the Employment Agreement is amended by adding the following new definitions to the end thereof:

“Closing” has the meaning set forth in the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger dated as of the date hereof, by and among Vertis Holdings, Inc., Vertis, Inc. (“Vertis”), Victory Merger Sub, LLC, and ACG Holdings, Inc.

14. The rights (but not the obligations) of ACG hereunder shall not be assignable, except to Vertis. Nothing in this agreement is intended to confer upon Vertis or any of its affiliates any rights, benefits or remedies of any nature whatsoever by reason of this agreement.

15. The obligations of ACG under the Employment Agreement are not subject to any conditions except as expressly provided herein. ACG shall have no right of setoff or recoupment with respect to any of its obligations under the Employment Agreement.

16. Section 8.3 of the Employment Agreement is amended by changing the reference to Section 5.1.1(a) therein to Section 5.1.

17. The definition of “Competitor” in Section 11.11 of the Employment Agreement is amended in its entirety as follows:

     “Competitor” means any Person that (a) prints retail advertising inserts or provides premedia services for printing and (b) unless the Executive irrevocably receives all the payments and benefits referred to in Section 5.1, has annual combined retail advertising insert printing and premedia revenues for the most recently ended annual reporting period in excess of $250 million.

In all other respects, the Employment Agreement is hereby ratified and confirmed.

(Signatures begin on the next page.)

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     IN WITNESS WHEREOF, ACG has caused this Amendment to be duly executed and the Executive has hereunto set her hand, effective as of and contingent upon Closing.

AMERICAN COLOR GRAPHICS, INC.
By:	/s/ Stephen M. Dyott
	Name:	Stephen M. Dyott
	Title:	Chairman and CEO

EXECUTIVE
/s/ Kathleen A. DeKam
Name:	Kathleen A. DeKam

8