EXHIBIT 10.10

 

THIS AMENDMENT No. 2 dated as of August 1, 2004 to AGREEMENT dated May 1, 1980,

 

BETWEEN    THE NEWARK GROUP, INC., a New Jersey corporation having its principal
office at 20 Jackson Drive, Cranford, NJ 07016 (“Newark”), AND    FREDERICK G.
VON ZUBEN, a resident of New Vernon, New Jersey (“von Zuben”);

 

W I T N E S S E T H    T H A T :

 

WHEREAS, by agreement dated May 1, 1980, and amended on March 1, 1995, Newark
and von Zuben agreed that upon termination of von Zuben’s employment by Newark,
Newark would purchase all shares of stock of Newark then owned by von Zuben; and

 

WHEREAS, von Zuben and Newark desire to provide flexibility with respect to any
obligation to purchase and with respect to the timing of any such purchase; and

 

WHEREAS, the parties understand and agree that it remains in the best interests
of Newark to restrict the transferability of the shares owned by von Zuben;

 

NOW THEREFORE, the parties hereto agree that the Agreement dated May 1, 1980, as
amended on March 1, 1995 (“Amendment No. 1”), is hereby further amended in the
following respects:

 

1. The first paragraph of Section 1 of the Agreement, up to but not including
subparagraph 1.1 of the Agreement, shall be restated in its entirety as follows:

 

“At no time shall von Zuben sell, assign, transfer or otherwise dispose of any
of his Newark shares, either for value or by gift, without the consent of
Newark. Such consent may be given subject to such conditions and limitations as
Newark, through its board of directors, may determine to be desirable and in its
best interests, including without limitation, subjecting the shares to be
transferred by von Zuben to continued restrictions on transferability. If von
Zuben’s employment by Newark and all its subsidiaries is terminated for any
reason, voluntarily or involuntarily and irrespective of the existence or
absence of any cause, von Zuben shall have

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the right and option (a “put”), to require Newark to purchase his shares in
accordance with the terms and conditions of Sections 1.1 through 1.4 below (as
such Sections were amended by Amendment No. 1), and Newark agrees to purchase
such shares on such terms if the put is exercised. The put may be exercised only
for all of the shares then owned by von Zuben, and not in part, except that any
Newark shares acquired by von Zuben pursuant to Newark’s Employees Stock
Ownership Plan (“ESOP”) may be purchased and sold pursuant to the terms of the
ESOP at von Zuben’s election rather than under the terms of this Agreement.
Exercise of the put by von Zuben shall be effected by his delivering written
notice of his election to exercise the put, including the proposed closing date
for the purchase and sale, to the Chief Executive Officer and Chief Financial
Officer of Newark; provided, however, that without Newark’s consent the closing
date may not be less than 30 days after its receipt of von Zuben’s notice of
exercise. If von Zuben has not exercised the put within 30 days after his
termination of employment, then Newark shall also have the right and option to
require von Zuben to sell all of such shares to Newark on the same terms as
would prevail if the put were exercised (Newark’s “call” right) by giving von
Zuben at least 30 days advance written notice of its election to call such
shares. Both von Zuben’s put option and Newark’s call option shall expire three
(3) years after the date of von Zuben’s termination of employment. The closing
of such purchase shall take place at Newark’s principal place of business in
Cranford, New Jersey.”

 

2. Section 1.2 of the Agreement shall be deleted in its entirety.

 

3. The first sentence of Section 1.4 of the Agreement shall be restated in its
entirety as follows:

 

“Ten percent (10%) of the purchase price paid with respect to each seller of
shares shall be paid in cash and the balance of the purchase price shall be paid
by a subordinated installment promissory note, dated as of the date of the
closing with respect to such shares, substantially in the form set forth in
Exhibit A, attached hereto, except that the interest rate shall be stated as
being at the prime rate as in effect from time to time as published in the Money
Rates column of the Wall Street Journal.”

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4. In all other respects the Agreement shall remain in full force and effect.

 

    THE NEWARK GROUP, INC.     By:  

/s/ Edward K. Mullen

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        Edward K. Mullen, Vice Chairman, President WITNESS:        

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Benedict M. Kohl       Frederick G. von Zuben

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4. In all other respects the Agreement shall remain in full force and effect.

 

    THE NEWARK GROUP, INC.     By:  

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        Robert Mullen, President WITNESS:        

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/s/ Frederick G. von Zuben

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Benedict M. Kohl       Frederick G. von Zuben