Quad/Graphics, Inc.s Description of Securities

The following description summarizes the material terms of Quad/Graphics, Inc.'s (“Quad”) capital stock. In conjunction with this summary, you should read the complete text of Quad’s amended and restated articles of incorporation (“Articles”), Quad’s amended bylaws (“Bylaws”), and the relevant provisions of the Wisconsin Business Corporation Law (the “WBCL”).

Quad’s authorized capital stock consists of:

The following table compares Quad’s class A common stock, class B common stock and class C common stock:

Preferred stock may be issued from time to time in one or more series, the shares of each series to have the designations and powers, preferences, rights, qualifications, limitations and restrictions as are stated and expressed in the resolution or resolutions providing for the issuance of that series adopted by the Quad board of directors.

The Quad board of directors has the authority to create one or more series of preferred stock and, with respect to each series, to fix and state the following:

The shares of each series of preferred stock may vary from the shares of any other series in any or all of the foregoing respects. The Quad board of directors may increase or decrease the number of shares of the preferred stock designated for any existing series by a resolution adding or subtracting from the series; provided, however, that the board of directors may not decrease the number of shares of any existing series to a number less than the number of shares of that series then issued and outstanding.

Provisions of Wisconsin law have certain anti-takeover effects. Quad’s Articles and Bylaws also contain provisions that may have similar effects.

    

Sections 180.1140 to 180.1144 of the WBCL restrict a broad range of business combinations between a Wisconsin resident domestic corporation, defined as a public Wisconsin corporation that, as of the stock acquisition date in question, has (i) its principal offices located in Wisconsin, (ii) significant business operations located in Wisconsin, (iii) more than 10% of the holders of record of its stock who are residents of Wisconsin, or (iv) more than 10% of its shares held of record by residents of Wisconsin, and an “interested stockholder” for a period of three years unless specified conditions are met. The WBCL defines a “business combination” as including certain mergers or share exchanges, sales of assets, issuances of stock or rights to purchase stock and other related party transactions. An “interested stockholder” is a person who beneficially owns, directly or indirectly, at least 10% of the outstanding voting stock of a corporation or who is an affiliate or associate of the corporation and beneficially owned at least 10% of the voting stock within the last three years. During the initial three-year period after a person becomes an interested stockholder in a Wisconsin resident domestic corporation, with some exceptions, the WBCL prohibits a business combination with the interested stockholder unless the corporation’s board of directors approved the business combination or the acquisition of the stock by the interested stockholder prior to the acquisition date. Following this three-year period, the WBCL also prohibits a business combination with an interested stockholder unless:

Sections 180.1130 to 180.1133 of the WBCL govern certain mergers or share exchanges between Wisconsin resident domestic corporations and significant shareholders, and sales of all or substantially all of the assets of Wisconsin resident domestic corporations to significant shareholders. These transactions must be approved by 80% of all votes entitled to be cast and two-thirds of votes entitled to be cast other than the voting shares owned by the significant shareholder, unless the shareholders receive a statutory “fair price.” Section 180.1130 of the WBCL generally defines a “significant shareholder” as the beneficial owner of 10% or more of the voting power of the outstanding voting shares, or an affiliate of the corporation who beneficially owned 10% or more of the voting power of the then outstanding shares within the last two years.

Section 180.1150 of the WBCL provides that in particular circumstances the voting power of shares of a Wisconsin resident domestic corporation held by any person in excess of 20% of the voting power is limited to 10% of the voting power these excess shares would otherwise have. Full voting power may be restored if a majority of the voting power of shares represented at a meeting, including those held by the party seeking restoration, are voted in favor of the restoration or as otherwise specified by the board of directors. This voting restriction does not apply to shares acquired directly from the corporation.

Section 180.1134 of the WBCL requires shareholder approval for some transactions in the context of a tender offer or similar action for more than 5% of the voting shares of any class of a Wisconsin resident domestic corporation’s stock. Shareholder approval is required for the acquisition of more than 5% of the corporation’s stock at a price above market value from any person who holds more than 3% of the voting shares and has held the shares for less than two years, unless the corporation makes at least an equal offer to acquire all shares. Shareholder approval is also required for the sale or option of assets that amount to at least 10% of the market value of the corporation, but this requirement does not apply if the corporation has at least three independent directors and a majority of the independent directors vote not to have this provision apply to the corporation.

In addition to the anti-takeover provisions described above, various provisions of Quad’s Articles and Bylaws, which are summarized in the following paragraphs, may be deemed to have anti-takeover effects.

The WBCL provides that shareholders are denied the right to cumulate votes in the election of directors unless the articles of incorporation provide otherwise. Quad’s Articles do not provide for cumulative voting.

Quad’s Bylaws provide the board with discretion in postponing shareholder meetings, including, within certain limits, special meetings of shareholders. Additionally, the Chairman of the Board, the Chief Executive Officer or the President or the board of directors (acting by resolution) can adjourn a shareholder meeting at any time before business is transacted at the meeting.

Quad’s Bylaws also provide that shareholders seeking to nominate persons for directors or seeking to bring other business before an annual meeting must provide timely notice of their proposal in writing to the corporate secretary. To be timely, a shareholder’s notice must be received on or before December 31 of the year immediately preceding the annual meeting. Quad’s Bylaws also specify requirements as to the form and content of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Quad’s Bylaws also establish a procedure which shareholders seeking to call a special meeting of shareholders must satisfy. This procedure involves notice to Quad, the receipt by Quad of written demands for a special meeting from holders of 10% or more of all the votes entitled to be cast on any issue proposed to be considered, a review of the validity of such demands by an independent inspector and the fixing of the record and meeting dates by the board of directors. In addition, shareholders demanding a special meeting must deliver a written agreement to pay the costs incurred by Quad in holding a special meeting, including the costs of preparing and mailing the notice of meeting and the proxy materials for the solicitation of proxies, in the event such shareholders are unsuccessful in their proxy solicitation.

Quad’s Articles provides that any director may be removed from office, but only for cause by the approval of 66 2/3% of the voting power of the then outstanding shares of stock of the voting group of shareholders that elected the director. However, if at least two-thirds of the directors plus one director vote to remove a director, that director can be removed without cause by the affirmative vote of a majority of such outstanding shares. As defined in Quad’s Articles, “cause” exists only if the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal or such director has been adjudged to be liable for willful misconduct in the performance of his or her duty to Quad in a matter which has a material adverse effect on Quad’s business, and such adjudication is no longer subject to direct appeal.

Quad’s authorized but unissued shares of common stock and preferred stock will be available for future issuance without shareholder approval. Quad could use these additional shares for a variety of corporate purposes, including future public offerings to raise capital, corporate acquisitions and issuances under employee benefit plans. Additionally, Quad could issue a series of preferred stock that could, depending on its terms, impede the consummation of a merger, tender offer or other takeover attempt. The board of directors of Quad will make any determination to issue such shares based on its judgment as to the best interests of Quad and its shareholders. The board, in so acting, could issue preferred stock having terms that could discourage an acquisition attempt through which an acquiror may be able to change the composition of the board of directors, including a tender offer or other transaction that some, or a majority, of Quad’s shareholders might believe to be in their best interests or in which shareholders might receive a premium over the then-current market price of the class A common stock.

The WBCL allows Quad to amend its Articles at any time to add or change a provision that is required or permitted to be included in the Articles or to delete a provision that is not required to be included in the Articles. The board of directors of Quad can also propose one or more amendments for submission to shareholders and may condition its submission of any proposed amendment on any basis if it provides certain notice and includes certain information regarding the proposed amendment in that notice. The provisions in Quad’s Articles relating to the structure of the board of directors and certain amendments to the Bylaws may only be amended by the approval of 66 2/3% of the voting power of the then outstanding shares entitled to vote.

No holder of Quad common stock has any preemptive or subscription rights to acquire shares of Quad common stock.