Form of Director Stock Option Agreement

Exhibit 10.1
STOCK OPTION AGREEMENT


This Stock Option Agreement (this "Agreement") dated as of ____________ is made by and between World Color Press, Inc., a Delaware corporation ("WCP"), and _________________, an individual with a residence at___________________________. WCP and the Optionholder are sometimes herein referred to collectively as the "Parties."


RECITALS


A. The Optionholder is a member of the Board of Directors (the "Board") of WCP.


B. WCP has established the 1998 Senior Management Stock Option Plan of World Color Press, Inc. (the "Option Plan"), and, pursuant to the Option Plan, WCP wishes to afford the Optionholder the opportunity to purchase shares of its common stock, par value $.01 per share (the "Common Stock"). The term "Options" as used in this Agreement shall include all Options granted to the Optionholder pursuant to this Agreement. Upon exercise of Options granted hereunder in accordance with the terms hereof and issuance of Common Stock upon such exercise the Optionholder will become the holder of "Option Shares."


C. The Compensation Committee (the "Committee") of the Board of Directors of WCP (the "Board") has determined that it would be to the advantage and best interest of WCP and its stockholders to grant the Options provided for herein to the Optionholder as an inducement to continue to perform services for the Company (as hereinafter defined) and as an incentive for increased efforts during such service, and has advised WCP thereof and instructed the undersigned officer to issue said Options. For the purposes of this Agreement, the "Company" shall mean WCP, together with its subsidiaries.


D. This Agreement is one of several agreements ("Other Stock Option Agreements") which have been, or which in the future will be, entered into between WCP and other holders of Options granted pursuant to the Option Plan (collectively, the "Other Optionholders").


AGREEMENTS


1. GRANT OF OPTIONS. In consideration of the Optionholder's agreement to provide services to the Company and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, WCP irrevocably grants to the Optionholder on the date hereof and effective as of ___________ (the "Grant Date") an aggregate of _____ Options, each to purchase initially one share of Common Stock (shares issuable upon exercise of the Options are collectively referred to herein as the "Option Shares"), upon the terms and conditions set forth in this Agreement. This Agreement and the grant of the Options herein are subject to all of the terms and provisions of the Option Plan attached hereto as Exhibit A (which terms and provisions are incorporated herein by reference and are expressly made part of this Agreement). In the event of any conflict between the provisions of this Agreement and the Option Plan, the terms of the Option Plan shall govern. All capitalized terms used herein without definition and defined in the Option Plan have the meanings ascribed to such terms in the Option Plan. The Options granted hereby are designated non-qualified stock options (and not "Incentive Options" under Section 422 of the Internal Revenue Code ("Code")) and are nontransferable except as otherwise expressly set forth in the Option Plan.


2. EXERCISE PRICE. The purchase price of the Option Shares upon exercise of any of the Options (the "Exercise Price" or "Option Price Per Share") shall initially be ______ per share, without commission or other charge.


3. EXERCISABILITY. (a) The Options shall become exercisable as follows:


Date Options Become Exercisable Exercisable Percentage
of Options - ------------------------------ ---------------------- From Grant Date until the earlier of 0% the date of the Company's __________ annual meeting and the first anniversary of the Grant Date (the "Vesting Date") On and after the Vesting Date 100%


(b) Notwithstanding the foregoing, 100% of the Options shall become exercisable (but only to the extent such Option has not otherwise then terminated or become unexercisable) immediately prior to the occurrence of a Change of Control (as herein defined); provided, however, that as a condition subsequent to the acceleration of the exercisability of the Option pursuant to this paragraph, the Change of Control shall be consummated. In the event the contemplated Change of Control is not consummated, the acceleration of exercisability and the exercise, if any, of the Option shall be void ab initio.


(c) Notwithstanding the foregoing, all Options that are not exercisable at the time of the cessation of the Optionholder's position as a member of the Board for any reason other than by reason of the Optionholder's death or Permanent Disability (each as hereinafter defined) shall be automatically and immediately canceled without any payment or other action by the Company. In the event of and upon the cessation of the Optionholder's position as a member of the Board because of the Optionholder's death or Permanent Disability, all of the Optionholder's Options granted hereunder shall immediately become exercisable.


(d) For purposes of this Agreement, the Optionholder shall be deemed to have a "Permanent Disability" if he or she is unable to engage in the activities required as a Director by reason of any medically determined physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as reasonably determined by the Board in good faith and in its discretion.


4. MANNER OF EXERCISE


(a) PARTIAL EXERCISE. An exercisable Option may be exercised at any time prior to the time when the Option becomes unexercisable under Section 10; provided that each exercise shall be for not less than ___ Option Shares and shall be for whole Option Shares only.


(b) MANNER OF EXERCISE. An exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company or his or her office:


(i) A written notice complying with the applicable rules established
by the Committee stating that the Option is exercised. The Optionholder or
other person then entitled and authorized to exercise the Option shall sign
the notice;


(ii) Such representations and documents as the Committee, in its
discretion, deems necessary, appropriate or advisable to effect compliance
with all applicable provisions of the Securities Act of 1933, as amended
(the "Act"), and any other federal or state securities laws, rules or
regulations. The Committee may, in its 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 notices to transfer agents and
registrars;


(iii) In the event that the Option shall be exercised by any
person or persons other than the Optionholder, appropriate proof of the
right of such person or persons to exercise the Option; and


(iv) Full payment (by certified or bank check or by wire transfer of
immediately available funds) to the Secretary of the Company for the Option
Shares with respect to which Options are exercised and any applicable
withholding taxes. In its discretion, however, the Committee may (A) allow
a delay in payment up to thirty (30) days from the date the Option is
exercised; (B) allow payment, in whole or in part, through the delivery of
shares of Common Stock owned by the Optionholder (including, subject to
Section 4(c), Option Shares issuable upon such exercise), duly endorsed for
transfer to WCP, having an Aggregate Market Value (as hereinafter defined)
on the date of delivery equal to the aggregate Exercise Price of the
Options; (C) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration;
(D) 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 (E) allow payment
through any combination of the consideration provided in the foregoing
subparagraphs (B), (C) and (D). In the case of a promissory note, the
Committee may also prescribe the form of such note and the security to be
given for such note. No Option may 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.


(c) CERTAIN TIMING REQUIREMENTS. At the discretion of the Committee, shares of Common Stock issuable to the Optionholder upon exercise of the Option may be used to satisfy the Option Exercise Price or the tax withholding consequences of such exercise.


(d) RIGHTS AS STOCKHOLDERS. The holders of Options shall not be, nor have any of the rights or privileges of, stockholders of WCP in respect of any shares purchasable upon the exercise of any Option unless and until certificates representing such shares have been issued by the Company to such holders.


(e) CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. WCP may postpone the time of delivery of the certificates for Option Shares for such additional time as WCP shall deem necessary or desirable to enable it to comply with the listing requirements of any securities exchange with which the Common Stock may be listed or the requirements of the Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any rules and regulations of the Securities and Exchange Commission promulgated thereunder, or the requirements of applicable state laws relating to the authorization, issuance or sale of securities.


5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE OPTIONHOLDER


(a) (1) The Optionholder hereby represents and warrants that he or she is acquiring the Options and any Option Shares issued upon exercise thereof for investment for his or her own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof. The Optionholder acknowledges and affirms Section 7.1 of the Option Plan.


(2) The Optionholder acknowledges and agrees that no Option or interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionholder 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 5 shall prevent transfers by will, by the applicable laws of descent and distribution or, with the consent of the Committee, the transfer of Options by gift made in compliance with the federal securities laws to a family member of the Optionholder or a family trust or for other estate planning purposes.


(3) The Optionholder further agrees and acknowledges that he or she will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (any such act being referred to herein as a "transfer") any Option Shares unless such transfer complies with Section 6 of this Agreement and such transfer is pursuant to (i) an effective registration statement under the Act and the rules and regulations thereunder and in compliance with any applicable state securities or "blue sky" laws, or (ii) (A) an opinion of counsel to the Optionholder (which counsel shall be reasonably acceptable to WCP) furnished to WCP and satisfactory in form and substance to WCP that no such registration is required because of the availability of an exemption from registration under the Act and (B) if the Optionholder is a citizen or resident of any country other than the United States, or the Optionholder desires to effect any transfer in any such country, counsel for the Optionholder (which counsel shall be reasonably satisfactory to WCP) shall have furnished WCP with an opinion or other advice satisfactory in form and substance to WCP to the effect that such transfer will comply with the securities laws of such jurisdiction.


(b) Notwithstanding the foregoing, WCP acknowledges and agrees that any of the following transfers of Option Shares are deemed to be in compliance with the Act and this Agreement and no opinion of counsel is required in connection therewith:


(i) A transfer of Option Shares made pursuant to Sections 7 or 8 of
this Agreement;


(ii) A transfer of Option Shares upon the death of the Optionholder to
his or her executors, administrators, testamentary trustees, legatees or
beneficiaries (the "Optionholder's Estate") or a transfer to the executors,
administrators, testamentary trustees, legatees or beneficiaries of a
person who has become a holder of Option Shares in accordance with the
terms of this Agreement; provided that such transfer is made expressly
subject to this Agreement and that the transferee agrees in writing to be
bound by the terms and conditions of this Agreement as if such transferee
were the Optionholder;


(iii) A transfer of Option Shares made in compliance with the
federal securities laws to a trust or custodianship the beneficiaries of
which, a partnership (general or limited) the partners of which, or a
limited liability company the members of which, may include only the
Optionholder, his or her spouse or his or her lineal descendants by blood
or adoption (the "Optionholder's Trust") or a transfer of Option Shares
made after the third anniversary of the Grant Date to such a trust,
partnership or limited liability corporation by a person who has become a
holder of such Option Shares in accordance with the terms of this
Agreement; provided that such transfer is made expressly subject to this
Agreement and that the transferee agrees in writing to be bound by the
terms and conditions of this Agreement as if such transferee were the
Optionholder; and


(iv) A pledge or hypothecation by the Optionholder or the
Optionholder's Trust of the Option Shares or his or her or its interest
therein to a bank or other financial institution (a "Pledgee") reasonably
satisfactory to WCP to secure a loan by such Pledgee to the Optionholder or
the Optionholder's Trust, as the case may be, for the purchase of the
Option Shares or the refinancing of any indebtedness incurred for the
purchase of the Option Shares; provided that (A) such Pledgee agrees in
writing to accept the Option Shares or interest therein subject to all of
the terms and conditions of this Agreement as if such Pledgee were the
Optionholder and to notify WCP upon the happening of any default or event
of default under the terms of the agreement with the Optionholder or the
Optionholder's Trust, as the case may be, relating to such pledge or
hypothecation and (B) the Optionholder or the Optionholder's Trust, as the
case may be, delivers to the Board a copy of all proposed documentation
relating to such pledge or hypothecation at least ten days before the
scheduled date of such pledge or hypothecation, and prior to such scheduled
date WCP has confirmed that such documentation is reasonably satisfactory
to it in form and substance.


(c) The certificate (or certificates) representing the Option Shares shall bear the following legend:


"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF STOCK OPTION AGREEMENT
DATED MAY 5, 1999 BETWEEN WORLD COLOR PRESS, INC. ("WCP") AND THE
OPTIONHOLDER NAMED ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF WCP). EXCEPT AS OTHERWISE PROVIDED IN SUCH
AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND IN COMPLIANCE
WITH ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS OR (B) (I) IF
WCP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE
HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN
COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE SECURITIES LAWS, AND
(II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY COUNTRY OTHER THAN
THE UNITED STATES, OR THE HOLDER DESIRES TO EFFECT ANY SUCH
TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT
SUCH TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY."


(d) The Optionholder acknowledges that he or she has been advised that (i) the issuance of the Option Shares upon exercise of the Options will not have been registered under the Act, (ii) the Option Shares must be held indefinitely and the Optionholder must continue to bear the economic risk of the investment in the Option Shares unless they are subsequently registered under the Act or an exemption from such registration is available, (iii) no assurance can be given that there will be any public market for the Option Shares, (iv) no assurance can be given that Rule 144 promulgated under the Act will be available with respect to the sales of any securities of WCP, and WCP has made no covenant to make such Rule available, (v) when and if any of the Option Shares may be disposed of without registration in reliance on Rule 144, such disposition can be made only in limited amounts in ac ...