Exhibit 10.1
DAY INTERNATIONAL GROUP, INC.
2006 STOCK OPTION PLAN
ARTICLE I
PURPOSE
     The purpose of the Day International Group, Inc. 2006 Stock Option Plan is
to foster and promote the long-term financial success of the Company and to
materially increase stockholder value by (a) motivating superior performance by
participants in the Plan, (b) providing participants in the Plan with an
ownership interest in the Company and (c) enabling the Company to attract and
retain the services of an outstanding management team upon whose judgment,
interest and special effort the successful conduct of its operations is largely
dependent. The Plan is a compensatory benefit plan within the meaning of
Rule 701 of the Securities Act of 1933, as amended (the “Securities Act”).
ARTICLE II
DEFINITIONS
     1.1 Definitions. For purposes of this Plan, the following terms shall have
the meanings set forth below:
     (a) “Affiliate” has the meaning specified in the Stockholders Agreement.
     (b) “Approved Sale” has the meaning specified in the Stockholders
Agreement.
     (c) “Beneficiary” means the person(s) designated by a Participant in
writing to the Board or, if none are so designated or living at the time of the
Participant’s death, the person(s) and/or trust(s) by will or the laws of
descent and distribution or the estate or personal representative entitled to
receive the benefits specified under this Plan in the event of the Participant’s
death.
     (d) “Board” means the Board of Directors of the Company.
     (e) “Cause” has the meaning specified in the Stockholders Agreement.
     (f) “Code” means the Internal Revenue Code of 1986, as amended. References
to Sections of the Code shall be deemed to refer to such Sections as in effect
on the date this Plan is adopted as such Sections may, from time to time, be
amended.
     (g) “Common Stock” means the Voting Common Stock and the Non-Voting Common
Stock.
     (h) “Company” means Day International Group, Inc., a Delaware corporation,
and its successors and assigns.
     (i) “Director” means any member of the Board.

 

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     (j) “Effective Date” means August 9, 2006.
     (k) “Employee” means any executive, senior officer or other key employee of
the Company or any Subsidiary.
     (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     (m) “Fair Market Value” has the meaning specified in the Stockholders
Agreement.
     (n) “Grant Date” means, with respect to any Option, the date on which such
Option is granted pursuant to the Plan.
     (o) “Greenwich IV” means Greenwich IV, LLC, a Delaware limited liability
company.
     (p) “1998 Plan” means the Company’s 1998 Stock Option Plan (amended and
restated effective May 29, 2002).
     (q) “Non-Voting Common Stock” means the Class B and Class C Common Stock,
par value $.01 per share, of the Company.
     (r) “Option” means an option, granted to a Participant hereunder to
purchase one share of Voting Common Stock at a price determined in accordance
with the Plan and on the terms and conditions set forth hereunder. Options shall
not be incentive stock options within the meaning of Section 422 of the Code.
     (s) “Option Agreement” means an agreement between the Company and the
Participant embodying the terms of any Options granted hereunder.
     (t) “Participant” means any Employee or Director who has been granted an
Option pursuant to the Plan.
     (u) “Plan” means this Day International Group, Inc. 2006 Stock Option Plan,
as the same may be amended from time to time.
     (v) “Stockholders Agreement” means the Amended and Restated Stockholders
Agreement, dated as of October 19, 1999, as amended by amendment dated as of
December 2, 2005, among the Company and the other stockholders of the Company
party thereto, as the same may be further amended from time to time.
     (w) “Subsidiary” means any corporation or other entity a majority or more
of whose outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Company.
     (x) “Voting Common Stock” means the Class A Common Stock, par value $.01
per share, of the Company.

 

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ARTICLE III
ELIGIBILITY AND PARTICIPATION
     Participants in the Plan shall be any Director whose participation in the
Plan is approved by the Board and those Employees (other than the Chief
Executive Officer) recommended by the Chief Executive Officer of the Company and
approved by the Board to participate in the Plan. The Chief Executive Officer’s
participation in the Plan shall be designated by the Board. The selection of an
Employee as a Participant shall neither entitle such Employee to, nor disqualify
such Employee from, participation in any other award or incentive plan.
ARTICLE IV
POWERS OF THE BOARD
     4.1 Power to Grant. The Board shall determine the Participants to whom
Options shall be granted and the terms and conditions of any and all options
granted to Participants, provided that nothing in the Plan shall limit the right
of Directors to receive awards hereunder. Each Option grant to a Director shall
be approved by a majority of the Directors, excluding the Director to whom such
Option is to be granted.
     4.2 Administration. The Board shall be responsible for the administration
of the Plan. Any authority exercised by the Board under the Plan shall be
exercised by the Board in its sole discretion. Subject to the terms of the Plan,
the Board, by majority action thereof, is authorized to prescribe, amend and
rescind rules and regulations relating to the administration of the Plan, to
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Company and the Subsidiaries, and to make all other
determinations necessary or advisable for the administration and interpretation
of the Plan in order to carry out its provisions and purposes. Determinations,
interpretations or other actions made or taken by the Board pursuant to the
provisions of the Plan shall be final, binding and conclusive for all purposes
and upon all persons.
     4.3 Delegation by the Board. All of the powers, duties and responsibilities
of the Board specified in the Plan may, to the full extent permitted by
applicable law, be exercised and performed by any duly constituted committee of
the Board (which shall consist of two or more Directors as appointed from time
to time by the Board), in any such case, to the extent authorized by the Board
to exercise and perform such powers, duties and responsibilities.
ARTICLE V
OPTIONS SUBJECT TO PLAN
     5.1 Number. Subject to the provisions of Sections 5.2 and 5.3, the maximum
number of shares of Common Stock subject to Options granted under the Plan may
not exceed 2,500 shares of the Company’s Voting Common Stock. The shares of
Voting Common Stock to be delivered upon the exercise of Options granted under
the Plan may consist, in whole or in part, of treasury Voting Common Stock or
authorized but unissued Voting Common Stock not reserved for any other purpose.
     5.2 Cancelled, Terminated or Forfeited Options. Any shares of Voting Common
Stock subject to an Option which for any reason is cancelled, terminated or
otherwise forfeited,

 

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in whole or in part, without having been exercised, shall again be available for
grant under the Plan to the extent so cancelled, terminated or otherwise
forfeited.
     5.3 Adjustment in Capitalization. The number and class of shares of Voting
Common Stock available for issuance upon exercise of Options granted under the
Plan, and the number, class and exercise price of any shares of Voting Common
Stock subject to outstanding Options, may be adjusted by the Board, in its sole
discretion, if it shall deem such an adjustment to be necessary or appropriate
to reflect any Common Stock dividend, stock split or share combination or any
recapitalization, merger, consolidation, exchange of shares or similar
transaction or any liquidation or dissolution of the Company.
ARTICLE VI
TERMS OF OPTIONS
     6.1 Grant of Options. The Board may provide that different terms apply to
Options granted to the same or different Participants on the same Grant Date or
to the same Participant on different Grant Dates. Each Option granted to a
Participant shall be evidenced by an Option Agreement that shall specify the
exercise price for each share of Voting Common Stock which may be purchased
pursuant to such Option, the vesting schedule for, and the duration of, such
Option and such other terms consistent with the Plan as the Board shall
determine. The Option Agreement to be entered into with Participants may also
include additional requirements or terms, as the Board shall determine, to
ensure compliance with relevant securities laws or to ensure favorable treatment
under relevant tax laws.
     6.2 Terms of Options.
     (a) Number of Shares. Options to purchase 2,500 shares of Voting Common
Stock issuable under the Plan shall be granted to Participants selected by the
Board at such time or times as determined by the Board. By adopting this Plan,
the Board hereby grants, effective as of the Effective Date and subject to the
applicable terms hereof, Options to the Participants listed on the attached
Schedule 1 in the applicable amounts set forth in such Schedule 1.
     (b) Exercise Price. The exercise price per share of Voting Common Stock
purchased upon the exercise of each Option granted as of the Effective Date
shall be $2,500 per share. The exercise price per share of Voting Common Stock
purchased upon the exercise of each Option granted after the Effective Date
shall be the Fair Market Value of a share of Voting Common Stock on the Grant
Date.
     (c) Exercise of Options. Unless otherwise provided by the Board in the
Option Agreement evidencing an Option, each Option awarded to a Participant
shall vest and become exercisable in four equal annual installments on each of
the first four anniversaries of the Grant Date. Any granted, unvested Options
shall immediately become 100% vested and become exercisable in full upon, and
concurrently with, an Approved Sale. Notwithstanding the foregoing, no portion
of any Option shall vest or become exercisable on or after the date on which the
holder thereof ceases to be employed by the Company or a Subsidiary or ceases to
serve as a Director.

 

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     (d) Forfeiture of Options. Notwithstanding anything to the contrary
contained in the Plan (or any Option Agreement) or in the 1998 Plan (or any
option agreement entered into by the Company in connection therewith), in the
event that (i) a Participant exercises any Options granted to such Participant
under the Plan, then, as a condition to such exercise, all options granted such
Participant under the 1998 Plan shall be forfeited by such Participant and shall
no longer be exercisable by such Participant and (ii) a Participant exercises
any options granted to such Participant under the 1998 Plan, then, as a
condition to such exercise, all Options granted such Participant under the Plan
shall be forfeited by such Participant and shall no longer be exercisable by
such Participant.
     6.3 Board Discretion. The Board may at any time extend the post-termination
exercise period of all or any portion of the Options up to and including, but
not beyond, the tenth anniversary of the Grant Date.
     6.4 Payment. The Board shall establish procedures governing the exercise of
Options, which procedures shall generally require that written notice of the
exercise thereof be given and that the exercise price thereof be paid in full in
cash or cash equivalents, including by personal check, at the time of exercise.
If so determined by the Board in its sole discretion on or after the Grant Date,
the exercise price of any Options may be paid in full or in part in the form of
shares of Common Stock of the Company already owned by the Participant, based on
the Fair Market Value of such Common Stock on the date of exercise or at such
time as shall be set forth in the Option Agreement. As soon as practicable after
receipt of a written exercise notice and payment in full of the exercise price
of any exercisable Options, the Company shall deliver to the Participant a
certificate or certificates representing the shares of Common Stock acquired
upon the exercise thereof. Notwithstanding the foregoing, the Company may, with
the consent of a Participant, in lieu of issuing shares of Voting Common Stock
upon the exercise of any Option, return to the Participant any payment tendered
to exercise the Option (if the Participant has tendered such payment to the
Company) and pay the Participant an additional amount in cash equal to the
product of (i) the excess of (x) the Fair Market Value of each such share
subject to the Option over (y) the per share exercise price of the Option being
exercised times (ii) the number of shares as to which the Participant has
exercised the Option.
     6.5 Notice of Approved Sale. Notwithstanding anything to the contrary
herein, the Company shall, to the extent possible, give each Participant at
least twenty (20) business days advance notice of the consummation of any
Approved Sale. Any Participant holding vested Options at the time such
Participant receives such advance notice may notify the Company of his or her
intent to exercise such Options upon the consummation of the Approved Sale by
executing and delivering an exercise notice to the Company on or before the date
such Approved Sale is consummated. Such exercise shall be considered a
conditional exercise of such Option and shall become binding upon such
Participant (and such Participant shall become obligated to pay the exercise
price therefor) upon consummation of such Approved Sale.
     6.6 Stockholders Agreement. Notwithstanding anything to the contrary
herein, the Company and the Participant shall be subject to and have the rights
and obligations which are set forth in the Stockholders Agreement. As a
condition to receiving any grant of Options hereunder, any Participant who is
not already a party to the Stockholders Agreement shall be required to execute a
counterpart of the Stockholders Agreement and thereby become a party to

 

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the Stockholders Agreement with respect to any Options granted under this Plan
and shares of Common Stock acquired upon the exercise of such Options.
ARTICLE VII
EXPIRATION OF OPTIONS
     7.1 Expiration Date. Notwithstanding any other Plan provision, all Options
(vested and unvested) which have not expired or been exercised previously, will
expire on the earlier of (i) the tenth anniversary of the Grant Date or (ii) the
consummation of the first Approved Sale.
     7.2 Accelerated Expiration: Termination of Employment. Unless otherwise
determined by the Board at or after the Grant Date, (i) all unvested Options
held by a Participant whose employment with the Company or its Subsidiaries or
status as a Director is terminated will expire as of the date of termination,
(ii) all vested Options held by a Participant whose employment or status as a
Director is terminated for Cause will expire as of the date of termination, and
(iii) all vested Options held by a Participant whose employment or status as a
Director terminates other than for Cause will expire 30 days after the date of
termination (or, if shorter, during the remaining term of the Options). Any
Options that expire or are terminated when employment or status as a Director is
terminated may be available for grant again.
ARTICLE VIII
AMENDMENT, MODIFICATION AND
TERMINATION OF THE PLAN AND OPTIONS
     The Board at any time may terminate or suspend the Plan, and from time to
time may amend or modify the Plan. No amendment, modification, termination or
suspension of the Plan shall in any manner adversely affect any Option
theretofore granted under the Plan, without the consent of the Participant
holding such Option. The Board may amend or modify any Option in any manner to
the extent the Board would have had the authority under the Plan initially to
grant such Option; provided that, except as expressly contemplated elsewhere
herein or in any agreement evidencing such Option, no such amendment or
modification shall impair the rights of any Participant under any outstanding
Option without the consent of such Participant.
ARTICLE IX
MISCELLANEOUS PROVISIONS
     9.1 Nontransferability of Awards. Except to the extent otherwise expressly
provided under the Stockholders Agreement, no Options granted under the Plan may
be sold, transferred, pledged, assigned, encumbered or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution. All
rights with respect to Options granted to a Participant under the Plan shall be
exercisable during such Participant’s lifetime by such Participant only (or his
or her legal guardian or legal representative). Following a Participant’s death,
all rights with respect to Options that were exercisable at the time of such
Participant’s death and have not terminated shall be exercisable by such
Participant’s designated Beneficiary or by such Participant’s estate in
accordance with, and subject to, the terms and conditions hereof, the
Stockholders Agreement and the applicable Option Agreement.

 

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     9.2 Beneficiary Designation. Each Participant under the Plan may from time
to time name any Beneficiary or Beneficiaries (who may be named contingently or
successively) by whom any right under the Plan is to be exercised in case of
such Participant’s death. Each designation will revoke all prior designations by
the same Participant, shall be in a form reasonably prescribed by the Board, and
will be effective only when received by the Board and only if received during
the Participant’s lifetime.
     9.3 No Guarantee of Employment or Participation. Nothing in the Plan or in
any Option Agreement shall interfere with or limit in any way the right of the
Company or any Subsidiary to terminate any Participant’s employment at any time,
or confer upon any Participant any right to continue in the employ of the
Company or any Subsidiary or to continue to receive such Participant’s current
(or other) rate of compensation. No Employee shall have a right to be selected
as a Participant or, having been so selected, to receive any Options.
     9.4 Tax Withholding. The Company or the Subsidiary employing a Participant
shall have the power to withhold, or to require such Participant to remit to the
Company or such Subsidiary, subject to such other arrangements as the Board may
set forth in the Option Agreement to which such Participant is a party, an
amount sufficient to satisfy all federal, state, local and foreign withholding
tax requirements in respect of any Option granted under the Plan or any share of
Common Stock purchased upon the exercise of any such Option.
     9.5 Indemnification. Each person who is or shall have been a member of the
Board or any committee of the Board shall be indemnified and held harmless by
the Company to the fullest extent permitted by law from and against any and all
losses, costs, liabilities and expenses (including any related attorneys’ fees
and advances thereof) in connection with, based upon or arising or resulting
from any claim, action, suit or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and from and against any and all amounts paid by him in settlement
thereof, with the Company’s approval, or paid by him in satisfaction of any
judgment in any such action, suit or proceeding against him, provided that he
shall give the Company an opportunity, at its own expense, to defend the same
before he undertakes to defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or By-laws, by contract, as a matter of
law, or otherwise.
     9.6 Requirements of Law. The granting of Options and the issuance of shares
of Common Stock pursuant to such Options shall be subject to all applicable
laws, rules and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required. No Options shall be granted
under the Plan, and no shares of Common Stock shall be issued upon exercise of
any Options granted under the Plan, if such grant or exercise would result in a
violation of applicable law, including the federal securities laws and any
applicable state or foreign securities laws.
     9.7 Freedom of Action. Subject to ARTICLE VIII, nothing in the Plan or any
Option Agreement shall be construed as limiting or preventing the Company or any
Subsidiary from taking any action that it deems appropriate or in its best
interest.

 

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     9.8 Term of Plan. The Plan shall be effective as of the Effective Date. The
Plan shall thereafter continue in effect, unless sooner terminated pursuant to
ARTICLE VIII, until the tenth anniversary of the Effective Date. The provisions
of the Plan, however, shall continue thereafter to govern all outstanding
Options theretofore granted.
     9.9 No Voting Rights. No Participant holding any Options granted under the
Plan shall have any right, in respect of such Options, to vote on any matter
submitted to the Company’s stockholders until such time as the shares of Common
Stock issuable upon exercise of such Options have been so issued.
     9.10 Governing Law. The Plan, and all agreements hereunder, shall be
governed by, construed and interpreted in accordance with the laws of the State
of Delaware, without giving effect to the conflicts of laws principles thereof.