Document:

The Newark Group, Inc. Employees' Stock Ownership Plan

 EXHIBIT 10.3 
  
 THE NEWARK GROUP, INC. 
  
 EMPLOYEES’ STOCK OWNERSHIP PLAN 
  
 This Stock Bonus Plan, executed on April 22, 2002, pursuant to resolutions adopted by the board of directors of The Newark Group, Inc., a corporation of
the State of New Jersey (the “Company”), 
  
 W I T N E
S S E T H   T H A T : 
  
 WHEREAS, effective May 1,
1985, the Company adopted The Newark Group, Inc. Employees’ Stock Ownership Plan (the “Plan”); and 
  
 WHEREAS, the Company reserved the right to amend the Plan at any time, provided the amendment does not adversely affect any accrued right of a Participant
or Beneficiary; and 
  
 WHEREAS, the Company has amended and
restated the Plan from time to time; and 
  
 WHEREAS, the Company
has resolved to again amend and restate the Plan in its entirety in order to conform the Plan’s terms to the most recent laws and regulations applicable to employee retirement plans; 
  
 NOW, THEREFORE, The Newark Group, Inc. Employees’ Stock Ownership Plan is hereby amended by restating it in its
entirety, effective May 1, 1997, except as otherwise provided in the Plan. 
  

 IN WITNESS WHEREOF, the Company has adopted this Plan and caused this instrument to be executed by its
duly authorized officers as of the above date. 
  

									
	 ATTEST:
	 	 	 	 THE NEWARK GROUP, INC.

				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 	 	 Fred G. von Zuben, President

  

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 THE NEWARK GROUP, INC. 
  
 EMPLOYEES’ STOCK OWNERSHIP PLAN 
  
 Section 1. Plan Identity. 
  
 1.1 Name. The name of this Plan is “The Newark Group, Inc. Employees’ Stock Ownership Plan.” 
  
 1.2 Purpose. The purpose of this Plan is to describe the terms and
conditions under which contributions made pursuant to the Plan will be allocated and paid to the Participants and their Beneficiaries. This Plan is intended to be a qualified stock bonus plan under section 401(a) of the Code satisfying the
requirements necessary for it to be an employee stock ownership plan under section 4975(e)(7) of the Code. 
  
 1.3 Effective Date. The Effective Date of this Plan is May 1, 1985. Notwithstanding the foregoing, the provisions of this Plan which were amended
and restated to comply with the most recent laws applicable to tax-qualified employee retirement plans, including, but not limited to, the Uniform Services Employment and Reemployment Rights Act of 1994, the Uruguay Round Agreements Act of 1994, the
Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the Balanced Budget Act of 1997, the IRS Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000, are effective May 1, 1997, except as
otherwise provided. 
  
 1.4 Fiscal Period. This Plan shall
be operated on the basis of a fiscal year beginning on May 1st of each year for the purpose of keeping the Plan’s books and records and distributing or filing any reports or returns required by law. 
  
 1.5 Single Plan for All Employers. This Plan shall be treated as a
single Plan with respect to all participating Employers for the purpose of allocating contributions and forfeitures, determining whether there has been any termination of employment, and applying the limitations set forth in sections 4.6 and 4.7.

  

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 1.6 Relationship to Prior Plan. This Plan is an amendment and restatement of the Prior Plan and is
intended to operate as a continuation of the Prior Plan, meaning that each Employee who is a Participant in the Prior Plan on April 30, 1997 is a Participant in this Plan and shall be governed by and subject to the provisions of this Plan.

  

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 Section 2. Definitions. The following capitalized words and phrases shall have the meanings
specified when used in this Plan and in the Trust Agreement, unless the context clearly indicates otherwise: 
  
 2.1 “Active Participant” means an Employee described in section 4.2. 
  
 2.2 “Beneficiary” means the person or persons who are designated by a Participant or the Plan to receive benefits
payable on the Participant’s death pursuant to section 7.9. 
  
 2.3 “Break in Service” means any calendar year or series of calendar years in which an Employee has fewer than 501 Hours of Service per year. Beginning May 1, 1991, however, a “Break in Service” means a period of at
least 365 days beginning on an Employee’s Severance Date in which he renders no services to an Employer. Solely for this purpose, an Employee shall be considered employed— 
  
 2.3-1 during a period of Parental Absence, but only to the extent provided in section 2.19, and 

 
 2.3-2 for his normal hours of paid employment through
April 30, 1991 and during any period of Recognized Absence, unless he does not resume employment with an Employer at the end of the period, in which event any resulting forfeiture shall be reallocated in the Plan Year in which the Employee fails to
resume employment. 
  
 2.4 “Code” means the Internal
Revenue Code of 1986, as amended. 
  
 2.5 “Committee”
means the committee described in section 10 which is responsible for the operation and administration of this Plan. 
  
 2.6 “Company” means The Newark Group, Inc. (formerly known as Newark Group Industries, Inc.), and any entity which succeeds to the business
thereof and adopts this Plan as its own pursuant to section 10.2. 
  
 2.7 “Compensation” means the compensation taken into account for a Participant in accordance with section 4.5. 
  

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 2.7A “415 Compensation” means wages, salaries and fees for professional services and other
amounts received (without regard to whether an amount is paid in cash) for professional services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in Treasury Regulation section 1.62-2(c)), and excluding the following: 
  
 2.7A-1 Employer contributions to a plan of deferred compensation which are not includible in the Employee’s gross income for the
taxable year in which contributed, or employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation, provided, however, that, for purposes of sections 2.13B and 2.16, nothing in this
subsection shall be interpreted as excluding from an Employee’s 415 Compensation amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the Employee’s gross income under sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code; 
  
 2.7B-2 Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

  
 2.7B-3 Amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option; and 
  
 2.7B-4 Other amounts which received special tax benefits, such as premiums for group-term life insurance (but only to the extent that the
premiums are not includible in the gross income of the Employee), or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403(b) of the Code (whether
or not the contributions are actually excludable from the gross income of the Employee). 
  

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 For Limitation Years beginning on or after May 1, 1998, 415 Compensation shall include,
for all purposes under this Plan, any “elective deferral” (as defined in section 402(g)(3) of the Code) and any amount which is not includible in the gross income of the Employee by reason of section 125 or 457 of the Code. 
  
 For Limitation Years beginning on or after May 1, 2001, “415
Compensation” shall include, for all purposes under this Plan, elective amounts that are not includible in the gross income of the Employee by reason of section 132(f)(4) of the Code. 
  
 2.8 “Disability” means only a disability which renders the
Participant totally unable, as a result of bodily or mental disease or injury, to perform any duties for an Employer for which he is reasonably fitted, which disability is expected to be permanent or of long and indefinite duration. However, this
term shall not include any disability directly or indirectly resulting from or related to habitual drunkenness or addiction to narcotics, the Participant’s commission of an offense (within the meaning of section 1.04 of the Model Penal Code),
service in the armed forces of any country, an act of war, declared or undeclared, any injury or disease occurring while compensation to the Participant was suspended, or any injury which was intentionally self-inflicted. Further, this term shall
apply only if (i) the Participant is sufficiently disabled to qualify for the payment of disability benefits under the federal Social Security Act or (ii) the Participant’s disability has been demonstrated to the satisfaction of the Committee.

  
 2.9 “Effective Date” means May 1, 1985. 

 
 2.10 “Eligibility Year” means a unit of service credited to an
Employee pursuant to section 3.2 for purposes of determining his eligibility to become a Participant. 
  
 2.11 “Employee” means any individual who is employed by an Employer on a salaried basis and, effective May 1, 1991 is regularly scheduled to
work at least 32 hours per week, for purposes of eligibility and allocations. For purposes of determining when an Employee has completed his first Eligibility Year pursuant to section 3.2 and computing the Employee’s Vesting Years pursuant to
section 6.2, his employment with any other corporation, partnership, or proprietorship which is not an Employer shall be taken into account, subject to 

  

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section 6.2, to the same extent it would have been if it had been employment by an Employer (but only either (i) for a period after 1975 in which the other
corporation, partnership, or proprietorship is a member of a controlled group of corporations, or is under common control with other trades and businesses, or is a member of an affiliated service group within the meaning of sections 414(b), 414(c)
and 414(m) of the Code and a member of the controlled group or one of the trades and businesses or a member of the affiliated service group is an Employer or is required to be aggregated with the Employer pursuant to section 414(o) of the Code, or
(ii) to the extent his employment constitutes service with a predecessor employer within the meaning of section 414(a) of the Code). 
  
 2.12 “Employer” means the Company, any entity identified as an Employer on Schedule A attached to this Plan and made a part hereof, any other
corporation, partnership, or proprietorship which adopts this Plan with the Company’s consent pursuant to section 10.1, and any entity which succeeds to the business of the other corporation, partnership, or proprietorship and adopts this Plan
pursuant to section 10.2. 
  
 2.13 “ERISA” means the
Employee Retirement Income Security Act of 1974 (P.L. 93-406), as amended. 
  
 2.13A “Five Percent Owner” means an owner of more than five percent of the outstanding stock, or of stock possessing more than five percent of the total combined voting power of all stock, of an Employer
which is a corporation, or of more than five percent of the capital or profits interest of an employer which is not a corporation, where “ownership” is determined by applying the constructive ownership rules contained in section 318 of the
Code (but applied by substituting five percent for fifty percent in section 318(a)(2)(C) of the Code). 
  
 2.13B “Highly Compensated Employee” means any Eligible Employee who: 
  
 2.13B-1 During the Plan Year (which for purposes of this section 4.9-9 shall be referred to as the
Determination Year) or the preceding Plan Year (which for purposes of this section 4.9-9 shall be referred to as the Look-Back Year) was at any time a Five Percent Owner; or 
  

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 2.13B-2 For Plan Years beginning on or after January 1, 1997, during the Look-Back Year
received 415 Compensation from the Employer of more than $ 80,000, or such other amount as determined by the Secretary of Treasury in accordance with section 415(d) of the Code; or 
  
 2.13B-3 For Plan Years beginning before January 1, 1997, during the Determination Year or the Look-Back
Year: (i) received 415 Compensation from the Employer of more than $ 75,000, (ii) received 415 Compensation from the Employer of more than $ 50,000 and was in the highest paid 20% of the Employer’s Employees, or (iii) was at any time an officer
of the Employer and received 415 Compensation of more than 50% of the amount under section 415(b) of the Code (provided, however, that no more than 50 Employees or, if lesser, the greater of 3 Employees or 10 percent of the Employees shall be
considered officers). An Employee shall be a Highly Compensated Employee for a Determination Year under clauses (i), (ii) or (iii) of the preceding sentence only if he was covered by one of such clauses for the Determination Year and either was
covered by one of such clauses for the Look-Back Year or is among the highest paid 100 of the Employer’s Employees for the Determination Year. If no officer has satisfied the 415 Compensation requirement of clause (iii) above either during a
Determination Year or a Look-Back Year, then the highest paid officer for such year shall be treated as a Highly Compensated Employee. 
  
 In addition to the foregoing, a Highly Compensated Employee shall include any Employee who separated from service prior to the Determination Year or
performs no service for the Employer during the Determination Year but was a Highly Compensated Employee for either the separation year (that is, the Plan Year in which the employee separated from service) or any Determination Year ending on or
after the Employee’s 55th birthday. 
  

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 2.14 “Hours of Service” means hours to be credited to an Employee under the following rules:

  
 2.14-1 Each hour for which an Employee is
paid or is entitled to be paid for services to an Employer is an Hour of Service. 
  
 2.14-2 Each hour for which an Employee is directly or indirectly paid or is entitled to be paid for a period of vacation, holidays,
illness, disability, layoff, jury duty, temporary military duty, or leave of absence is an Hour of Service. However, except as provided in section 2.3-2, no more than 501 Hours of Service shall be credited for any single continuous period during
which an Employee performs no duties. Further, no Hours of Service shall be credited on account of payments made solely under a plan maintained to comply with worker’s compensation, unemployment compensation, or disability insurance laws, or to
reimburse an Employee for medical expenses. 
  
 2.14-3 Each hour for which back pay (ignoring any mitigation of damages) is either awarded or agreed to by an Employer is an Hour of Service. However, no more than 501 Hours of Service shall be credited for any single continuous period
during which an Employee would not have performed any duties. 
  
 2.14-4 Hours of Service shall be credited in any one period only under one of sections 2.14-1, 2.14-2, and 2.14-3; an Employee may not get double credit for the same period. 
  
 2.14-5 If an Employer finds it impractical to count the
actual Hours of Service for any class or group of Employees, each Employee in that class or group shall be credited with the Hours of Service shown in the following table for each pay period in which he has at least one Hour of Service: 

 

			
	 Pay Period

	  	 Hours of
 Service Credit

	 daily
	  	10
	 weekly
	  	45
	 bi-weekly
	  	90
	 semi-monthly
	  	95
	 monthly
	  	190

  

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 However, an Employee shall be credited only for his normal working hours during a paid absence.

  
 2.14-6 Hours of Service to be credited on
account of a payment to an Employee (including back pay) shall be recorded in the period of service for which the payment was made. If the period overlaps two or more Plan Years ending on or before April 30, 1992, then the Hours of Service credit
shall be allocated in proportion to the respective portions of the period included in the several Plan Years. However, in the case of periods of 31 days or less, ending no later than April 30, 1992, the Committee may apply a uniform policy of
crediting the Hours of Service to either the first Plan Year or the second. 
  
 2.14-7 In all respects an Employee’s Hours of Service shall be counted as required by section 2530.200b-2 of the Department of Labor’s regulations under Title I of ERISA. 
  
 2.15 “Investment Account” means a Participant’s interest in
the Plan’s assets other than Stock. 
  
 2.16 “Key
Employee” means, with respect to a Plan Year, any Employee or former Employee who at any time during one of the five years ending on the top-heavy determination date for the Plan Year is: 
  
 2.16-1 an officer of the Employer with annual 415
Compensation exceeding 50 percent of the limitation in effect under section 415(c)(1)(A) of the Code for the calendar year in which the year ends; 
  
 2.16-2 one of the ten Employees with annual 415 Compensation exceeding the limitation in effect under section 415(c)(1)(A) of the Code for
the calendar year in which the year ends and for that year owning both more than a 1⁄2 percent interest and the largest interests in the Employer, provided that if two Employees have the same ownership interest in the Employer, the Employee
having the greater annual compensation shall be treated as having the larger ownership interest; 
  

 2-7 

 2.16-3 a Five Percent Owner; 
  
 2.16-4 an owner of more than one percent of the value of the
outstanding stock, or of stock possessing more than one percent of the total combined voting power of all stock, of any Employer which is a corporation, or of more than one percent of the capital or profits interest of any Employer which is not a
corporation, whose annual 415 Compensation during any one of the five years exceeds $150,000. 
  
 The number of individuals counted as “officers” shall be limited to the lesser of (i) 50 or (ii) the greater of three or ten percent of all active Employees of the Employer, and, if this number is less than
the number of actual officers, those individuals counted as “officers” shall be those with the highest one-year compensation during the applicable five-year period while “officers.” 
  
 For purposes of determining Employee ownership percentages, each Employer
that would otherwise be aggregated under section 414(b), (c) and (m) of the Code is treated as a separate Employer. However, for purposes of determining whether an Employee has annual 415 Compensation exceeding $150,000, or whether an Employee is a
Key Employee by reason of being an officer or top ten owner, annual 415 Compensation required to be aggregated under sections 414(b), (c) and (m) of the Code is taken into account. 
  
 The Beneficiary of a Key Employee shall also be considered to be a Key Employee. 
  
 Notwithstanding the foregoing, effective for Plan Years beginning on and
after May 1, 2002, “Key Employee” means any Employee who, at any time during the Plan Year for which top-heaviness is being determined was an officer having annual 415 Compensation greater than $130,000 (as adjusted under section 416(i)(1)
of the Code for Plan Years beginning on and after May 1, 2003), a Five Percent Owner, or an individual whose 415 Compensation exceeds $ 150,000 and who owns more than one percent of the outstanding stock of the Employer or stock possessing more than
one percent of the total combined voting power of all the stock of the Employer. The determination of who is a Key Employee will be made in accordance with 

  

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section 416(i) of the Code and the applicable regulations and other guidance of general applicability issued thereunder. 
  
 2.17 “Leased Employee” means any person who is not an Employee of
an Employer and who provides services to an Employer where: 
  
 2.17-1 such services are provided pursuant to an agreement between an Employer and any other person (the leasing organization); 
  

2.17-2 such person has performed such services for an Employer and any other corporation, partnership, or proprietorship which is a
member of a controlled group of corporations, or is under common control with other trades and businesses, or is a member of an affiliated service group within the meaning of sections 414(b), 414(c), 414(m) or 414(o) of the Code (and a member of the
controlled group or one of the trades and businesses or a member of the affiliated service group is an Employer) on a substantially full time basis for a period of at least one year pursuant to section 414(n)(2) of the Code; and 
  
 2.17-3 such services: 
  
 (a) For Plan Years beginning prior to May 1, 1997, are of a
type historically performed in the business field of an Employer by Employees; or 
  
 (b) For Plan Years beginning on and after May 1, 1997, are performed under the primary direction or control of an Employer. 
  
 2.17A “Limitation Year” means the Plan Year. 
  
 2.18 “Nonkey Employee” means an Employee who has never been a Key
Employee, and the Beneficiary of any Nonkey Employee. 
  
 2.19
“Parental Absence” means a period during which an Employee is initially absent from work— 
  
 2.19-1 by reason of the Employee’s pregnancy; or 
  
 2.19-2 by reason of the birth of a child of the Employee; or 
  

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 2.19-3 by reason of the placement of a child with the Employee in connection with the
Employee’s adoption of the child; or 
  
 2.19-4 for purposes of caring for a child described in section 2.19-2 or 2.19-3 for a period beginning immediately following the birth or placement. 
  
 The Employee shall be considered employed for his normal hours of paid employment (or 8 hours for each normal working day, if the Committee is unable to determine the
Employee’s normal hours of paid employment) during a Parental Absence, but in no event shall more than 501 Hours of Service be credited for any Parental Absence which began before May 1, 1991. Solely for purposes of determining when an Employee
has incurred a Break in Service (as defined in section 2.3) on or after May 1, 1991, the Employee shall be considered employed for that portion of the period of a Parental Absence ending on the second anniversary of the Employee’s absence from
service. In no event shall an Employee receive any credit for Hours of Service or employment pursuant to this section unless he timely provides the Committee with sufficient information to establish that his absence from work was a Parental Absence
and the number of days of the Parental Absence. 
  
 2.20
“Participant” means an Employee who is an Active Participant, or an Employee (or former Employee) who was previously an Active Participant and still has a balance credited to his accounts. 
  
 2.21 “Plan Year” means each period of 12 consecutive months
beginning on May 1st of 1985 and each succeeding year. 
  
 2.22
“Prior Plan” means The Newark Group, Inc. Employees’ Stock Ownership Plan, as in effect on April 30, 1989. Notwithstanding the preceding sentence, effective May 1, 1997, “Prior Plan” means the Newark Group, Inc.
Employees’ Stock Ownership Plan, as in effect on April 30, 1997. 
  
 2.23 “Recognized Absence” means a period for which: 
  
 2.23-1 an Employer grants an Employee a leave of absence for a limited period, but only if the Employer grants such leaves on a nondiscriminatory basis; or 
  

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 2.23-2 an Employee is temporarily laid off by an Employer because of a change in business
conditions; or 
  
 2.23-3 an Employee is on
active military duty, but only to the extent that his employment rights are protected by the Military Selective Service Act of 1967 (38 U.S.C. sec. 2021). 
  
 2.23A “Required Beginning Date” has the following meanings with respect to the following Participants: 
  
 2.23A-1 Five Percent Owner. The Required Beginning
Date of a Participant who is a Five Percent Owner is April 1st of the calendar year following the calendar year in
which the Participant attains age 701⁄2. 
  
 2.23A-2 Non-Five Percent Owner. The Required Beginning Date of a Participant who is not a Five Percent Owner is April 1 of the calendar year following the calendar year in which the Participant attains age 70 1⁄2. 
  
 2.24 “Severance Date” means the earlier of: 
  
 2.24-1 the date on or after May 1, 1991 on which an Employee
quits, retires, is discharged, or dies; or 
  
 2.24-2 the 365th day of an Employee’s continuous absence from service with an Employer on account of disability, layoff, leave of absence, or any other reason except quit, retirement, discharge, or death and which absence began on or
after May 1, 1991. 
  
 2.25 “Social Security Retirement
Age” means for a Participant: 
  
 2.25-1 age
65, if born before January 1, 1938; 
  
 2.25-2
age 66, if born after December 31, 1937 but before January 1, 1955; and 
  
 2.25-3 age 67, if born after December 31, 1954. 
  
 2.25A “Stock” means common stock issued by the Company (or by a corporation which is a member of the controlled group of corporations of which the Company is a member) 

  

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which is readily tradable on an established securities market. If there is no common stock which meets the foregoing requirement, the term “Stock”
means common stock issued by the Company (or by a corporation which is a member of the same controlled group) having a combination of voting power and dividend rights equal to or in excess of: (A) that class of common stock of the Company (or of any
other such corporation) having the greatest voting power, and (B) that class of common stock of the Company (or of any other such corporation) having the greatest dividend rights. Noncallable preferred stock shall be deemed to be “Stock”
if it is convertible at any time into stock constituting “Stock” hereunder and if such conversion is at a conversion price which (as of the date of acquisition by the Plan) is reasonable. For purposes of the preceding sentence, pursuant to
regulations as may be promulgated by the Secretary of the Treasury or his delegate (and as may be amended from time to time), preferred stock shall be treated as noncallable if after the call there will be a reasonable opportunity for a conversion
which meets the requirements of the preceding sentence. 
  
 2.26
“Stock Account” means a Participant’s interest in the Stock held by the Plan. 
  
 2.27 “Stock Obligation” means indebtedness arising from an extension of credit to the Plan or the Trust obtained for the purpose of buying Stock and involving, as a lender or guarantor, an Employer of
another “disqualified person” within the meaning of Section 4975(e)(2) of the Code. 
  
 2.28 “Top-Heavy Year” means a Plan Year in which the Plan is top-heavy within the meaning of section 416(g) of the Code and the Treasury Regulations promulgated thereunder. The Committee shall determine on a
regular basis whether each Plan Year is a Top-Heavy Year for purposes of implementing the various provisions of the Plan which apply only to the extent the Plan is top-heavy. In making this determination, the Committee shall use the following
definitions and principles: 
  
 2.28-1 The
“Employer” includes all corporations which are members of the same controlled group of corporations and all corporations, partnerships, and 

  

 2-12 

 
proprietorships which are under common control or are members of the same affiliated service group within the meaning of sections 414(b), 414(c) and 414(m)
of the Code or which are required to be aggregated under section 414(o) of the Code. 
  
 2.28-2 The “plan aggregation group” includes each qualified retirement plan maintained by the Employer (i) in which a Key
Employee is a Participant during one of the five years ending on the top-heavy determination date for the Plan Year (regardless of whether the plan has terminated), or (ii) which enables any plan in which a Key Employee is a Participant to satisfy
the requirements of section 401(a)(4) or 410 of the Code during one of the five years ending on the top-heavy determination date for the Plan Year, or (iii) which when aggregated with the plans described in clauses (i) and (ii) will satisfy the
requirements of sections 401(a)(4) and 410 of the Code and which is designated by the Committee as part of the plan aggregation group. 
  
 2.28-3 The “determination date” means, with respect to the first plan year of any plan, the last day of that plan year, and with
respect to each subsequent plan year, the last day of the preceding plan year. If any other plan had a determination date which differs from this Plan’s determination date, the top-heavy status of this Plan shall be determined on the basis of
the other plan’s determination date falling within the same calendar year as this Plan’s determination date. 
  
 2.28-4 The “aggregated benefits” for any Plan Year means the adjusted account balances in defined contribution plans on the
determination date (but excluding in the case of the second and subsequent plan years of a profit sharing plan any contributions made after the determination date that are allocated to accounts on or before the determination date) plus the adjusted
value of accrued benefits in defined benefit plans, calculated as of the annual valuation date coinciding with or next preceding the determination date, with respect to Key Employees and Nonkey Employees under all plans within the plan aggregation
group which includes this Plan, other than: 
  
 (a) any Nonkey Employee who was a Key Employee in a prior Plan Year; 
  

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 (b) for Plan Years beginning prior to May 1, 2002, a Key Employee or Nonkey Employee who
has not performed any service for any Employer that maintains a plan within the plan aggregation group at any time during the five years ending on the determination date; and 
  
 (c) for Plan Years beginning on and after May 1, 2002, a Key Employee or Nonkey Employee who has not
performed any service for any Employer that maintains a plan within the plan aggregation group at any time during the year ending on the determination date. 
  
 The “adjusted account balance” under a plan shall not include any amount attributable to a rollover contribution or similar
transfer to the plan initiated by an Employee and made after December 31, 1983, unless both plans involved are maintained by the Employer, in which event the transferred amount shall be counted in the transferee plan and ignored for all purposes in
the transferor plan. 
  
 The “adjusted value
of accrued benefits” under any defined benefit plan shall be determined on the basis of whichever actuarial assumptions are used to determine the plan’s benefit liabilities and the funding of those liabilities, unless the plan specifies
different assumptions to be used in determining top-heaviness. 
  
 For Plan Years beginning prior to May 1, 2002, the “adjusted account balance” and the “adjusted value of accrued benefit” for any Employee shall include all plan distributions made with respect to
the Employee during the five years ending on the determination date. For Plan Years beginning on and after May 1, 2002, the “adjusted account balance” and the “adjusted value of accrued benefit” for any Employee shall include all
plan distributions with respect to the Employee during the year ending on the determination date. Notwithstanding the foregoing, however, the “adjusted account balance” and the “adjusted value of accrued benefit” for any Employee
shall exclude any 

  

 2-14 

 
distributions on account of the Employee’s death which are in excess of the present value of the Employee’s account balance or accrued benefit
immediately prior to the Employee’s death, but shall include any distributions under a terminated plan maintained within such five year period, which, if the plan had not been terminated, would have been required to be included in the plan
aggregation group. 
  
 2.28-5 This Plan shall be
top-heavy for any Plan Year in which the aggregated benefits of Key Employees exceed 60 percent of the total aggregated benefits for both Key Employees and Nonkey Employees. 
  
 2.28-6 For Plan Years beginning prior to May 1, 2000, this Plan shall be super top-heavy for any Plan Year
in which the aggregated benefits of Key Employees exceed 90 percent of the total aggregated benefits for both Key Employees and Nonkey Employees. 
  
 2.29 “Trust” or “Trust Fund” means the trust fund created under this Plan. 
  
 2.30 “Trust Agreement” means the agreement between the Company and
the Trustee concerning the Trust Fund. If any assets of the Trust Fund are held in a commingled trust fund with assets of other qualified retirement plans, “Trust Agreement” shall be deemed to include the trust agreement governing that
commingled trust fund. With respect to the allocation of investment responsibility for the assets of the Trust Fund, the provisions of section 2.2 of the Trust Agreement are incorporated herein by reference. 
  
 2.31 “Trustee” means one or more corporate persons and individuals
selected from time to time by the board of directors of the Company to serve as trustee or co-trustees of the Trust Fund. 
  
 2.32 “Unallocated Stock Account” means the Plan’s holding of Stock which has not yet been allocated to Participant’s Stock Accounts.

  
 2.33 “Valuation Date” means the last day of the Plan
Year and each other date as of which the Committee shall determine the investment experience of the Trust Fund and adjust Participants’ accounts accordingly. 
  

 2-15 

 2.34 “Valuation Period” means the period following a Valuation Date and ending with the next
Valuation Date. 
  
 2.35 “Vesting Year” means a unit of
service credited to a Participant pursuant to section 6.2 for purposes of determining his vested interest in his Stock and Investment Accounts. 
  

 2-16 

 Section 3. Eligibility for Participation. 
  
 3.1 Eligibility and Entry Dates. An Employee first hired by an
Employer prior to May 1, 1992 shall enter the Plan as of the first day he is entitled to be credited with an Hour of Service on or after May 1, 1985. Any Employee first hired by an Employer on or after May 1, 1992 shall enter the Plan as of May 1st
or November 1st coinciding with or next following the last day of the Employee’s first Eligibility Year. An Employee hired on or after November 1, 1992 shall enter the Plan as of the October 31st or April 30 coinciding with or next following
the last day of the Employee’s first Eligibility Year. However, if an Employee is not actively employed by an Employer on the date on which he would otherwise first enter the Plan, his entry shall be deferred until the next day he is so
employed. Notwithstanding the foregoing, no Employee hired after April 30, 1994 shall enter the Plan and no Employee, regardless of when hired, shall enter the Plan after April 30, 1995. 
  
 3.1-1 A full-time Employee is any Employee regularly scheduled to work at least 32 hours per week on a
consistent basis during the Eligibility Year and each Plan Year during which the Employee is a Participant. 
  
 3.1-2 Any Employee who has been transferred from hourly paid status to salaried paid status shall receive credit for eligibility purposes
for his period of employment as an hourly paid employee and will enter the Plan on the earlier of (i) the completion of his first Eligibility Year as a full-time Employee or (ii) the first day of the month coinciding with or next following the
transfer date, if he had already completed at least one Eligibility Year as a full-time Employee. 
  
 An Employee who becomes a Participant as a result of a merger, consolidation or acquisition shall be given credit for service with the merged,
consolidated or acquired entity for purposes of determining whether the individual has completed an Eligibility Year only as specified in the relevant merger, consolidation or acquisition agreement or as specified in Schedule A attached to this Plan
and made part hereof. 
  

 3-1 

 3.2 Definition of Eligibility Year. An “Eligibility Year” means each period in which the
Employee has 365 days of service with an Employer beginning with his initial employment by an Employer. An Employee’s separate periods of service shall be aggregated, with each period of service consisting of the number of days from the first
date of the Employee’s service in that period to the following Severance Date. If an Employee quits, retires, or is discharged, or if he is continuously absent for any other reason and he subsequently quits, retires, or is discharges, and the
Employee then performs any active service within 365 days after the first day of absence, the period from the first day of his absence through his return to service shall be counted as service toward his first Eligibility Year. If an Employee has
not completed an Eligibility Year and the Employee renders no service to any Employer for a period of at least 365 consecutive days beginning on a Severance Date, the Employee’s service prior to such period shall be disregarded in determining
when the Employee has completed an Eligibility Year. Service for purposes of this section 3.2 shall not include service with other entities or divisions of the Company except as provided on Schedule A attached to this Plan and made a part hereof.

  
 3.3 Certain Employees Ineligible. In all events, no
Employee shall participate in the Plan while his employment is covered by a collective bargaining agreement between an Employer and the Employee’s collective bargaining representative if (i) retirement benefits have been the subject of good
faith bargaining between the Employer and the representative and (ii) the collective bargaining agreement does not provide for the Employee’s participation in the Plan. 
  
 No Employee whose employment is not covered by a collective bargaining agreement shall participate in the Plan while he is
compensated on other than a salaried basis and, effective May 1, 1991, regularly scheduled to work at least 32 hours per week. In the event an Employee who is ineligible to participate in the Plan becomes eligible to participate, such Employee shall
participate immediately provided such Employee has satisfied the service requirements and would have otherwise previously become a Participant. 
  

 3-2 

 Any Employee who sells Stock to the Plan, or any other Employee who is included in the class of
individuals described in section 409(n)(1) of the Code by reason of the sale of Stock to the Plan by another person shall be ineligible to participate in this Plan with respect to the Stock sold to the extent the Employee or other person who is the
seller of the Stock elects the nonrecognition treatment of section 1042 of the Code. 
  
 Any individual shall be ineligible to participate in the Plan while he is a Leased Employee. 
  
 3.4 Waiver of Participation. Any eligible Employee who does not wish to participate in the Plan shall file with the Committee a waiver of
participation on a form provided for this purpose. A waiver shall be effective until the first day of the Plan Year following the Employee’s revocation of the waiver. Notwithstanding the foregoing, any such waiver shall be invalid to the extent
necessary to satisfy section 410 of the Code and the regulations promulgated thereunder. 
  
 3.5 Periods of Eligibility. Subject to the satisfaction of the foregoing requirements, an Employee shall participate in the Plan during each period of his employment by an Employer from the date on which he
first becomes eligible until his termination or until he is no longer eligible to participate in the Plan. For this purpose, a re-employed eligible Employee who previously satisfied the initial eligibility requirements shall reenter the Plan as of
the date of his re-employment, transfer or return to full time employment. 
  
 3.6 Reclassified Employees. Notwithstanding any provision of this Plan to the contrary, an individual shall not be eligible to participate in the Plan if he or she is not reported on the payroll records of the
Employer as a common law employee, even if a court or administrative agency determines that such individual is or was a common law employee and not an independent contractor, and, as a result of such determination, the Employer treats such
individual as a common law employee retroactive to any date. 
  

 3-3 

 Section 4. Trust Fund, Contributions by Employers, and Allocations of Contributions and
Forfeitures. 
  
 4.1 Employer Contributions and Trust
Fund. Each Employer shall from time to time contribute, with respect to a Plan Year, such amounts as may be determined from time to time by its board of directors. An Employer shall have no obligation to contribute any amount under this Plan
except as provided in the following sentence. Notwithstanding any other provision of the Plan to the contrary, the Employers shall contribute for each Plan Year in cash and at such times as may be determined from time to time by its board of
directors an amount sufficient to cover all Stock Obligations and other liabilities of the Plan as they become due. The Company shall designate the Stock Obligation to which a contribution is to be applied. Contributions may be made in the form of
cash, or securities and other property to the extent permissible under ERISA, including securities of an Employer or an affiliate, and shall be held by the Trustee in accordance with the Trust Agreement. Any amount contributed by an Employer due to
a good faith mistake of fact, or based upon a good faith but erroneous determination of its deductibility under section 404 of the Code, shall be returned to the Employer within one year after the date on which the contribution was originally made,
or within one year after its nondeductibility has been finally determined. However, the amount to be returned shall be reduced to take account of any adverse investment experience within the Trust Fund in order that the balance credited to each
Participant’s Stock and Investment Accounts is not less than what it would have been if the contribution had never been made. 
  
 4.2 Active Participants. For purposes of this Plan, a Participant shall be an Active Participant, entitled to share in the Employer’s
contributions and any available forfeitures, in each Plan Year in which: 
  
 4.2-1 he is employed as an Employee by an Employer as of the last day of the Plan Year, or is on a Recognized Absence as of that date; or 
  
 4.2-2 his employment has terminated during the Plan Year after reaching age 65, or after reaching age 59 1/2
and he qualifies for an immediate payable pension 

  

 4-1 

 
benefit under The Newark Group, Inc. Salaried Employees’ Pension Plan, or by reason of Disability or death. A terminated Participant included in this
section 4.2-2 must have been employed for at least 32 hours each week (30 Hours of Service per week for Plan Years prior to May 1, 1991) during the portion of the Plan Year preceding his termination; or 
  
 4.2-3 for Plan Years ending on or before April 30, 1991, he
has either (i) at least 1,000 Hours of Service for the Plan Year or (ii) an average of at least 30 Hours of Service per week during the portion of the Plan Year in which he is employed and it is his first year of employment. 
  
 4.3 Release of Stock for Allocation. In each Plan Year in which
Employer contributions or earnings on the Trust’s investments are applied to satisfy a portion of a Stock Obligation, a certain number of shares of Stock held in the Unallocated Stock Account shall be released for allocation among the Active
Participants. The number of shares released shall bear the same ratio to the number of shares attributable to the Stock Obligation which are then in the Unallocated Stock Account (prior to the release) as (i) the principal payments made on the Stock
Obligation in the Plan Year bears to (ii) the year’s payments described in clause (i) plus the total remaining principal payments required to satisfy the Stock Obligation. For this purpose, each Stock Obligation, the Stock purchased in
connection with it, and any stock dividends on such Stock, shall be considered separately. 
  
 4.4 Allocation to Active Participant’s Accounts. As of the last day of a Plan Year, the sum of (i) the Stock released from the Unallocated Stock Account for that year, plus (ii) any Employer contributions
for that year not designated to be applied against Stock Obligations, plus (iii) any available forfeitures from terminated Participants’ Stock and Investment Accounts (the “annual sum”), shall be allocated as follows among the Active
Participants’ Stock and Investment Accounts, subject to the limitations in sections 4.6 and 4.7: 
  
 4.4-1 All of the Stock included in such sum shall be allocated among the Stock Accounts of the Active Participants in proportion to the
amounts of their Compensation; and 
  

 4-2 

 4.4-2 The amounts other than Stock included in such sum shall be allocated among the
Investment Accounts of the Active Participants in proportion to the amounts of their Compensation; and 
  
 4.4-3 For any Top-Heavy Year there shall be allocated to any Nonkey Employee who has not accrued, or is not accruing for that Top-Heavy
Year, a minimum top heavy benefit (within the meaning of section 416(c)(1) of the Code) under The Newark Group, Inc. Salaried Employees’ Pension Plan (if such plan is within the plan aggregation group, as defined in section 2.28-2), an amount
equal to the excess of (i) the lesser of (1) the largest percentage of 415 Compensation credited to the account of a Key Employee for the Plan Year or (2) three percent of each Active Participant’s 415 Compensation over (ii) the amount of
contributions credited to his accounts under this Plan for the Plan Year. The allocation amount, if any, shall be contributed in the form of Stock and credited to Nonkey Employees’ Stock Accounts. Solely for purposes of this section 4.4-3, the
term Nonkey Employer shall include any Active Participant who has less than 1,000 Hours of Service in the Top-Heavy Year but who is employed by an Employer as of the last day of the Top-Heavy Plan Year. 
  
 4.4-4 Notwithstanding the preceding to the contrary, if the
preceding would result in more than one third of the Employers’ contributions which are designated to be applied against the Stock Obligations for the Limitation Year and more than one third of the Employers’ total contributions for the
Limitation Year being allocated to Active Participants who are Highly Compensated Employees, then the amount to be allocated pursuant to those sections to each such Active Participant shall be reduced so that no more than one third of such
contributions are allocated to such Active 

  

 4-3 

 
Participants. The one third portion of the annual sum shall be allocated to the Stock and Investment Accounts of such Active Participants as follows:

  
 (i) the rate of allocation on 415
Compensation up to $50,000 (or such other amount as shall be determined from time to time under section 414(q) of the Code) made to the accounts of Active Participants who are Highly Compensated Employees shall be equal to the rate of allocation
made to the accounts of Active Participants who are not Highly Compensated Employees; and 
  
 (ii) for 415 Compensation in excess of $50,000 (or such other amount as shall be determined from time to time under section 414(q) of the
Code), the remaining portion of the annual sum shall be allocated among the Active Participants who Highly Compensated Employees in proportion to the amounts of their 415 Compensation in excess of $50,000 (or such other amount). 
  
 4.5 Definition of Compensation. For purposes of this Plan, a
Participant’s “Compensation” means the cash amount paid or accrued by the Company to such Participant for services rendered as a salaried Employee during a Plan Year in which he is an Active Participant, as reported on box 1 of Form
W-2 for Federal income tax purposes, and including bonuses whether paid or accrued and the amount of the Participant’s salary reduction elections pursuant to the Newark Group, Inc. Deferred Income Savings Plan and/or pursuant to a plan that is
subject to section 125 of the Code. 
  
 In addition to other
applicable limitations set forth in the Plan and notwithstanding any other provisions of the Plan to the contrary, for Plan Years beginning on or after May 1, 1994, a Participant’s Compensation shall not exceed the OBRA ‘93 annual
Compensation limit. The OBRA ‘93 annual Compensation limit is $150,000, as adjusted by the Commissioner for increases in cost of living in accordance with section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which Compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA ‘93 

  

 4-4 

 
annual Compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period and the denominator of
which is 12. 
  
 For Plan Years beginning on or after May 1, 1994,
any reference in this Plan to the limitations under section 401(a)(17) of the Code shall mean the OBRA ‘93 annual Compensation limit set forth in this provision. 
  
 If a Participant’s Compensation for any prior determination period is taken into account in determining the
Participant’s benefits accruing in the current Plan Year, the Compensation for that prior determination period is subject to the OBRA ‘93 annual Compensation limit in effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first Plan Year beginning on or after May 1, 1994, the OBRA ‘93 annual Compensation limit is $150,000. 
  
 For Plan Years beginning prior to May 1, 1997, in determining the Participant’s Compensation, the family aggregation
rules of section 414(q)(6) of the Code shall be applicable, except that “family” shall include only the Participant’s spouse, and any lineal descendants of the Participant who have not attained age 19 before the close of the Plan
Year. 
  
 4.6 Overall Annual Limitation. Notwithstanding
the foregoing, the annual addition to a Participant’s accounts (as hereinafter defined) shall not exceed for any Limitation Year an amount equal to the lesser of— 
  
 4.6-1 for Limitation Years beginning prior to May 1, 1995, 
  
 (a) $ 30,000, or if greater, one fourth of the dollar
limitation in effect under section 415(b)(1)(A) of the Code; or 
  
 (b) 25% of the Participant’s 415 Compensation for such Limitation Year; 
  
 4.6-2 for Limitation Years beginning on or after May 1, 1995, 
  
 (a) $ 30,000, or 
  

(b) 25% of the Participant’s 415 Compensation for such Limitation Year. 
  

 4-5 

 4.6-3 for Limitation Years beginning on or after May 1, 2002, 
  
 (a) $ 40,000, or 
  
 (b) 100% of the Participant’s 415 Compensation for such
Limitation Year. 
  
 For purposes of this section, the
“annual addition to a Participant’s accounts” shall mean the sum of (i) the Employer contributions, other than contributions designated to be applied against Stock Obligations, and other forfeitures allocated to a Participant’s
Accounts as of the end of the Limitation Year pursuant to section 4.4, plus (ii) that portion of the Employer contributions designated to be applied against Stock Obligations as is equal to the Participant’s proportionate share of the Stock
released from the Unallocated Stock Account and credited to a Participant’s Stock Accounts as of the end of the Limitation Year pursuant to section 4.4. However, in any Limitation Year in which no more than one third of the Employers’
contributions which are designated to be applied against Stock Obligations are allocated to Participants who are Highly Compensated Employees, the “annual addition to a Participant’s accounts” shall be determined without regard to any
allocation of forfeited Stock from any other Participant’s Stock Account which was originally acquired with a Stock Obligation, and without regard to the Participant’s deemed share of the portion of the Employer contributions applied to
interest on a Stock Obligation. Further, in any Limitation Year beginning before July 12, 1989 in which no more than one-third of the Employers’ total contributions are allocated to such Participants, the dollar limitation set forth in section
4.6-1 shall be increased by the lesser of (1) that dollar amount or (2) the amount of contributions for that year which are made in the form of Stock, or are applied to the purchase of Stock, including any payment on a Stock Obligation. 

 
 4.7 Overall Cumulative Limitation. This section shall apply only to
Limitation Years beginning prior to May 1, 2000. Aside from the limitation prescribed by section 4.6 with respect to the annual addition to a Participant’s accounts for any single Limitation Year, if a Participant has ever participated in one
or more defined benefit plans maintained by an Employer or an affiliate (within the purview of sections 414(b), (c), (m) and (o) 

  

 4-6 

 
and section 415(h) of the Code, which affiliate shall be deemed an Employer for this purpose), the annual additions to his accounts shall be limited on a
cumulative basis so that the sum of his defined contribution plan fraction and his defined benefit plan fraction does not exceed one. For this purpose: 
  
 4.7-1 A Participant’s defined contribution plan fraction with respect to a Limitation Year shall be a fraction, (i) the numerator of
which is the sum of the annual additions to his accounts under this Plan and any other defined contribution plans maintained by the Employers through the current year, and (ii) the denominator of which is the sum of the lesser of the following
amounts (A) and (B) determined for the current year and each prior year of service with an Employer: (A) is 1.25 times the dollar limitation in effect under section 415(c)(1)(A) of the Code for such year or 1.0 times such dollar limitation if the
Plan is super top-heavy, and (B) is 35 percent of the Participant’s total compensation for such year. However, the denominator of the defined contribution plan fraction shall be determined instead pursuant to the special transition rule set
forth in section 415(e)(6) of the Code if the Committee so elects. If the Participant was a Participant as of the end of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined contribution plans
maintained by the Employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the defined benefit fraction would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum of the fractions over 1.0 times (2) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the Plan made after May 5, 1986, but using the Code section 415 limitation
applicable to the first Limitation Year beginning on or after January 1, 1987. Further, if the Participant participated in any related defined 

  

 4-7 

 
contribution plan in any years beginning before 1976, any excess of the sum of the actual annual additions to the Participant’s accounts for those years
over the maximum annual additions which could have been made during such years had section 415(c) of the Code applied to such years shall be ignored, and voluntary contributions by the Participant during those years shall be taken into account as to
each such year only to the extent that his average annual voluntary contribution in those years exceeded 10 percent of his average annual compensation in those years. 
  
 4.7-2 A Participant’s defined benefit plan fraction with respect to a Limitation Year shall be a
fraction, (i) the numerator of which is his projected annual benefit payable at normal retirement under the Employers’ defined benefit plans, and (ii) the denominator of which is the lesser of (a) 1.25 times the currently applicable dollar
limitation under section 415(b)(1)(A) of the Code, or 1.0 times such dollar limitation if the Plan is super top-heavy, and (b) 1.4 times the Participant’s average total annual compensation during his highest paid three consecutive Limitation
Years. Notwithstanding the above, if the Participant was a participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined benefit plans maintained by the Employer which were in existence on May
6, 1986, the denominator of this fraction will not be less than 125 percent of the sum of the annual benefits under such plans which the Participant had accrued as of the close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the Plan after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Code section 415 for all Limitation
Years beginning before January 1, 1987. The denominator shall be appropriately adjusted to the extent required under sections 415(b)(2)(B), (C) and (D) of the Code on account of any form of benefit other than a single life annuity or a qualified
joint and survivor annuity, or on account of the commencement of benefits before or after the Participant’s Social Security Retirement Age. 
  

 4-8 

 Where the sum of the fractions would exceed one for a Participant, then the numerator of the defined benefit fraction
will be adjusted by determining his projected annual benefit payable at normal retirement under The Newark Group, Inc. Salaried Employee’s Pension Plan (and then, under any other qualified defined benefit pension plan of an Employer) to the
extent required for the sum of the fractions not to exceed one. 
  
 4.8 Effect of Limitations. No amount of Employer contributions or forfeitures shall be allocated to any Participant’s accounts except in accordance with sections 4.4, 4.6, and 4.7. An Employer shall not make any contribution for
a Plan Year which, taking into account the amount of available forfeitures, cannot be completely allocated to Participants’ accounts except to the extent a contribution is necessary to cover Stock Obligations. Any amount of forfeitures which
may not be allocated in the Plan Year in which it becomes available shall be held in a suspense account to be allocated as soon as possible in a subsequent Plan Year, or to be returned to the Employers if it cannot be allocated before the
termination of the Plan. 
  
 If as a result of the allocation of
forfeitures, a reasonable error in estimating a Participant’s Compensation, or as a result of any other facts and circumstances which the Internal Revenue Service finds justify the application of this section, the amount to be credited to a
Participant’s accounts for a Plan Year pursuant to sections 4.3 and 4.4 will cause the limitations set forth in sections 4.6 and 4.7 to be exceeded, then— 
  
 4.8-1 if the Participant made elective deferrals to The Newark Group, Inc. Salaried Employees’ 401(k)
Plan for the Plan Year pursuant to section 4.4 of the said Plan (or any other plan of an Employer qualified under sections 401(a) and 401(k) of the Code), then the elective deferrals shall be distributed to the Participant to the extent that the
distribution will reduce the amount by which the limitations set forth in sections 4.4, 4.6 and 4.7 are exceeded and shall not be treated as an annual addition pursuant to section 4.6, and 
  
 4.8-2 the remainder of the excess amount, if any, shall not
be deemed to be an annual addition and shall be held in a suspense account to be used to reduce an Employer’s contribution for the next Plan Year (and to the extent necessary, succeeding Plan Years) for that Participant. If the Participant
ceases to be a Participant before the excess amount has been fully absorbed by reducing subsequent Employer contributions, the remainder of the excess amount shall be used to reduce an Employer’s contributions for all remaining Participants and
shall be allocated to all remaining Participants in the Plan. 
  

 4-9 

 Section 5. Plan Accounts and Adjustments. 
  
 5.1 Stock and Investment Accounts. A Stock Account and an Investment
Account shall be maintained for each Employee who becomes an Active Participant. All shares of Stock allocated to an Active Participant shall be credited to his Stock Account, and his interest in all Plan assets other than Stock shall be credited to
his Investment Account. 
  
 5.2 Unallocated Stock Accounts.
An Unallocated Stock Account shall be maintained in which the Plan’s holdings of Stock which have been purchased on credit, whether or not the Stock is pledged as collateral, shall be segregated until payments on the corresponding Stock
Obligations permit the release and allocation of the Stock to Active Participants in accordance with sections 4.3 and 4.4. Any dividends with respect to such segregated Stock which are paid in the form of additional shares of Stock shall be
deposited in the Unallocated Stock Account and thereafter handled in the same manner as the underlying segregated Stock. 
  
 5.3 Treatment of Expenses. All expenses incurred by the Committee and the Trustee in connection with administering this Plan and the Trust Fund
shall be paid by the Trustee from the Trust Fund to the extent the expenses have not been paid or assumed by the Employers or by the Trustee. 
  
 5.4 Adjustments for Transactions. Each Participant’s Stock and Investment Accounts shall be adjusted for Employer contributions and other
Participants’ forfeitures under section 4.4, and benefit payments under section 7.2. 
  
 5.5 Adjustment for Net Changes in Assets. As of the last day of each Plan Year, the Committee shall determine the net increase or decrease in the number of shares of Stock and the net increase or decrease in
the current fair market value of all other assets held in the Trust Fund since the first day of the Plan Year. For this purpose, all shares of Stock and other assets held in the Unallocated Stock Account or representing Employer contributions for
the year shall be excluded. The net change in the number of shares of Stock shall be credited or charged to each Participant’s Stock Account in proportion to the ratio of (i) the number of shares credited to his Stock Account as of the first
day of the Plan Year to (ii) the sum of all shares 

  

 5-1 

 
credited to all Participants’ Stock Account as of that date. The net change in the current fair market value of all other assets held in the Trust Fund,
other than cash dividends on shares of Stock, shall be credited or charged to each Participant’s Investment Account in proportion to the ratio of (i) the balance credited to his Investment Account as of the first day of the Plan Year to (ii)
the sum of all balances credited to all Participants’ Investment Accounts as of that date. Any cash dividends on shares of Stock shall be credited to each Participant’s Investment Account in proportion to the ratio of (i) the number of
shares credited to his Stock Account as of the first day of the Plan Year to (ii) the sum of all shares credited to all Participants’ Stock Account as of that date. However, the Committee, in its sole discretion can distribute to the
Participant within 60 days after the last day of the Plan Year any cash dividends on shares of Stock which would otherwise be credited to his Investment Account for that Plan Year. Notwithstanding the foregoing, the Committee, in its sole
discretion, can apply cash dividends on shares of Stock allocated to Participants’ Stock Account toward the Stock Obligation provided, however, that shares of Stock whose aggregate fair market value is equal to the cash dividend so applied are
allocated to the Stock Account of each Participant in the same manner as cash dividends would have otherwise been credited to the Investment Account of each Participant. For purposes of this section, the number of shares of Stock credited to a
Participant’s Stock Account, and the balance credited to a Participant’s Investment Account, as of the first day of a Plan Year, shall be the number or balance as of that date as adjusted for benefit payments and forfeitures during the
Plan Year. The adjustments described in this section 5.5 shall be made each year before any Stock or other amounts are allocated to Participants’ accounts pursuant to section 4.4. 
  

 5-2 

 Section 6. Vesting and Forfeitures. 
  
 6.1 Vesting Schedule. A Participant shall have no vested interest in his Stock and Investment Accounts until he has
completed 5 Vesting Years, at which time the Participant’s interest in his accounts shall become 100 percent vested. 
  
 However, in the case of a Participant (other than a Participant who does not have an Hour of Service after the Plan becomes top-heavy) whose vested
interest is to be determined in a Top-Heavy Year, the Participant’s vested interest in his Stock and Investment Accounts shall instead be based on the following table: 
  

			
	 Vesting
 Years

	  	 Percentage of
Interest Vested

	 less than 2
	  	0%
	 2
	  	20%
	 3
	  	40%
	 4
	  	60%
	 5 or more
	  	100%

  
 Further, if the Plan at any time has
been top-heavy and then ceases being top-heavy, or if the vesting schedule is amended, then the vested percentage in the Stock and Investment Accounts of a Participant who has at least three Vesting Years as of the last day of the most recent
Top-Heavy Year, or the Plan Year in which the vesting schedule is amended, shall not be less than what it would be if the Plan had not ceased being top-heavy or the vesting schedule had not been amended, as the case may be. 
  
 If the Plan’s vesting schedule is amended, or the Plan is amended in any
way that directly or indirectly affects the computation of the Participant’s vested interest in his accounts or if the Plan is deemed amended by an automatic change to or from a vesting schedule determined in a Top-Heavy Year, then each
Participant with at least 3 Vesting Years may elect, within a reasonable period after the adoption of the amendment or change, to have his vested interest computed under the Plan without regard to such amendment or change. For Participants who do
not have at least 1 Hour of Service in any Plan Year beginning after December 31, 1988, the 

  

 6-1 

 
preceding sentence shall be applied by substituting “5 Years of Service” for “3 Years of Service” where such language appears.

  
 The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: 
  
 (1) 60 days after the amendment is adopted; 
  
 (2) 60 days after the amendment becomes effective; or 
  
 (3) 60 days after the Participant is issued written notice of the amendment by the Employer or plan administrator. 
  
 6.2 Computation of Vesting Years. For purposes of this Plan, a
“Vesting Year” means (a) each 12 month period beginning May 1st and ending April 30, 1991 in which a Participant has at least 1,000 Hours of Service, and (b) beginning May 1, 1991 each 365 days of a Participant’s service with an
Employer, beginning with the later of May 1, 1991 or his initial employment date by any Employer, and in either case, whether before or after May 1, 1991, including certain employment with other employers as provided in section 2.11. In general, a
Participant’s separate periods of service on and after May 1, 1991 shall be added together, with each period of service counted as the number of days from the first date of his service in that period to the following Severance Date. However, a
Participant’s Vesting Years on and after May 1, 1991 shall be computed only on the basis of completed years, assuming that 365 days equal one year, and any remaining balance of days less than 365 shall be disregarded. Further, a
Participant’s Vesting Years whether before or after May 1, 1991 shall be computed subject to the following conditions and qualifications: 
  
 (a) A Participant’s Vesting Years shall not include any service prior to May 1, 1985. 
  
 (b) A Participant’s vested interest in his Stock and
Investment Accounts accumulated before a 5 year Break in Service shall be determined without regard to any employment after the Break in Service. Further, if a Participant has a 5 year or more Break in Service before his interest in his Stock and
Investment Accounts has become 

  

 6-2 

 
vested to any extent, he shall lose credit for his Vesting Years before the Break in Service unless those Vesting Years (excluding any years which would be
excluded by this paragraph on account of an earlier Break in Service) are longer than the period of the Break in Service, (or exceed the number of consecutive years of the Break in Service if the provisions of section 6.2(d) are applicable) and the
Participant completes one Vesting Year after the Break in Service. 
  
 (c) If on or after May 1, 1991 a Participant quits, retires, or is discharged, or if he is continuously absent for any other reason and he subsequently quits, retires, or is discharged, and the Participant then
performs any active service within 365 days after the first day of absence, his Vesting Years shall include the period from the first day of his absence through his return to service unless otherwise specifically excluded. 
  
 (d) A Participant who as of May 1, 1991 had not become fully
vested in his Stock and Investment Accounts but had one or more Vesting Years at that date, shall receive credit for Vesting Years as follows: 
  
 (i) the number of Vesting Years as of April 30, 1991; 
  
 (ii) the greater of (A) the number of Vesting Years that would be credited to the Participant under
paragraph 6.2(b), as amended herein, for the Plan Year beginning May 1, 1991 or (B) the number of Vesting Years that would be credited to the Participant for the Plan Year beginning May 1, 1991 as if paragraph 6.2(b) prior to its amendment herein
were still in effect; and 
  
 (iii) the number of
Vesting Years after April 30, 1992 pursuant to paragraph 6.2(b) as amended herein. 
  
 (e) Unless otherwise specifically excluded, a Participant’s Vesting Years shall include service with other entities or divisions of
the Company and any Employer as provided on Schedule A attached to this Plan and made a part hereof. 
  

 6-3 

 (f) Unless otherwise specifically excluded, a Participant’s Vesting Years shall
include any period of active military duty to the extent required by the Military Selective Service Act of 1967 (38 U.S.C. sec. 2021). 
  
 6.3 Full Vesting Upon Certain Events. Notwithstanding section 6.1, a Participant’s interest in his Stock and Investment Accounts shall be
fully vested on the Participant’s 65th birthday, provided the Participant is employed by an Employer on or after that date. The Participant’s interest shall also be fully vested in the event that his employment is terminated by Disability
or death or after reaching age 59 1/2 and the Participant qualifies for an immediate payable pension benefit under The Newark Group, Inc. Salaried Employees’ Pension Plan. 
  
 6.4 Full Vesting Upon Plan Termination. Notwithstanding section 6.1, each Participant’s interest in his Stock
and Investment Accounts shall be fully vested upon termination of this Plan or upon the permanent and complete discontinuance of contributions by the Employers. In the event of a partial termination, each Participant’s interest shall be fully
vested with respect to that part of the Plan which is terminated. 
  
 6.5 Forfeiture After Termination of Employment. If a Participant’s employment terminates before his interest in his Stock and Investment Accounts is fully vested that portion which is not vested shall be forfeited as soon as he
has a 5 year Break in Service. If a terminated Participant has not received a distribution of his vested interest in the Plan and such Participant cannot be located by the Employer despite efforts to do so (including efforts to contact such
Participant through the auspices of the Internal Revenue Service and the Social Security Administration) then, following a 5 year Break in Service, the Participant will be deemed to have forfeited his entire interest in the Plan, subject to
restoration as provided in section 6.6. 
  
 6.6 Re-Employment
or Location of Lost Participants and Restoration of Forfeitures. If a former Participant is reemployed by an Employer after incurring a 5 year Break in Service, but before he has received the distribution of his entire vested balance from his
prior 

  

 6-4 

 
participation, the remaining vested balance shall be maintained as a fully vested sub-account within his Stock and Investment Accounts. This sub-account
shall be combined with the Participant’s Stock and Investment Accounts upon the Participant becoming 100% vested in his Stock and Investment Accounts. If a Participant whose whereabouts were unknown, despite diligent efforts, makes a claim for
benefits after his interest in the Plan was deemed to have been forfeited pursuant to section 6.5, then an amount equal to the vested portion of his Stock and Investment Accounts in the Plan shall be restored and credited to his Stock and Investment
Accounts. If the forfeited portion of a Participant’s Stock and Investment Accounts is to be restored, the amount to be so restored shall be obtained from the amounts forfeited pursuant to section 6.5 during the Valuation Period in which the
restoration is to be made. Notwithstanding any provision of the Plan to the contrary, if the aggregate amount to be so restored to the accounts of Participants during a Valuation Period exceeds the amount of such forfeitures during the Valuation
Period, the Employers shall make a contribution in the amount of such excess. Any such contribution shall be made without regard to whether or not the Employers have current or accumulated profits. 
  
 6.7 Accounting for Forfeitures. A forfeiture shall be charged to the
Participant’s Stock and Investment Accounts as of the first day of the Valuation Period in which the forfeiture occurs. Forfeitures shall be applied first to make any restoration of forfeitures required under section 6.6. Any remaining
forfeitures shall be added to the contributions of the Employers which are to be allocated to other Participants pursuant to section 4.4 as of the last day of the Plan Year in which the forfeiture occurs. 
  
 6.8 Vesting and Nonforfeitability. A Participant’s interest in
his Stock and Investment Accounts which has become vested shall be nonforfeitable except as provided in section 6.5. 
  

 6-5 

 Section 7. Payment of Benefits. 
  
 7.1 Distributions Before May 1, 1991. Any Participant whose employment ends for any reason may receive the vested
balance in his accounts as follows: 
  
 7.1-1 A
Participant whose employment ends on or after his 65th birthday shall receive his benefits within 60 days after the end of the Plan Year in which his employment ends; and 
  
 7.1-2 A Participant who does not qualify under section 7.1-1 shall receive his vested benefits within 60
days after the end of the Plan Year in which he reaches 65 unless he elects to receive his benefits prior to that date pursuant to section 2.23A-4. 
  
 7.2 Distributions on or After May 1, 1991. In addition to the provisions of section 7.1-1, the following distribution rules shall apply:

  
 7.2-1 A vested terminated Participant whose
benefits are $3,500 or less ($5,000 for Plan Years beginning on and after May 1, 1998) shall be paid his benefits as soon as practicable after the annual valuation of the Trust Fund for the Plan Year in which his last allocation was made.

  
 7.2-2 A vested terminated Participant whose
benefits exceed $3,500 ($5,000 for Plan Years beginning on and after May 1, 1998) shall be paid his benefits within 60 days after the end of the Plan Year in which he attains age 65 unless he elects to receive his benefits prior to that date. The
election must be made in writing and delivered to the Committee at least 10 days before the benefits would otherwise be payable. A Participant may modify such an election at any time, provided any new benefit commencement date is at least 90 days
after a modified election is delivered to the Committee. 
  
 7.2-3 Notwithstanding the foregoing provisions to the contrary, any Stock acquired by the Plan in a sale to which section 1042 of the Code applies shall not be distributed to Participants before the lapse of three
years from the date the Stock was acquired by the Plan unless the Stock is distributed on account of (a) the Participant 

  

 7-1 

 
terminating employment after age 591⁄2, (b) the Participant’s Disability, or (c) if the Stock is not distributed before the Participant incurs a one
year Break in Service, the Participant’s separation from service. 
  
 7.2-4 For purposes of this section and section 7.5, if the value of the Participant’s vested account balance is zero, the Participant shall be deemed to have received a distribution of such vested account balance
on the date his employment ends. 
  
 7.3 Benefit Amounts.
Except as otherwise provided in this section 7.3, a Participant’s benefits shall be calculated on the basis of the annual valuation of the Trust Fund pursuant to section 5.4 as of the most recent Valuation Date before the date of payment.
Payment shall be made to a Participant within a reasonable time after such annual valuation. Effective for distributions beginning on and after May 1, 1992, a Participant may elect to receive a distribution of his vested benefits based on the most
recent available annual valuation of the Trust Fund preceding the date of the Participant’s termination of employment provided, however, that the Participant affirmatively waives his right, if any, to any allocation for which he is otherwise
eligible for any Plan Year following the Valuation Date to which such annual valuation relates. The total benefits will be paid in a single lump sum. 
  
 7.4 Benefits on a Participant’s Death. If a Participant’s employment is ended by death, or if a Participant has a vested interest under
the Plan when his employment ends and he then dies before his benefits are paid, his vested interest in his accounts shall be paid to his Beneficiary. The benefits shall be calculated on the basis of the most recent Valuation Date before the date of
payment. The benefits will generally be paid in a lump sum within 60 days after the Valuation period for the Plan Year in which the Participant died. In all events, all of the Participant’s interest in this Plan shall be completely distributed
within five years after the date of his death, except if the Participant’s designated Beneficiary is his spouse, benefit payments need not begin until the date the Participant would have reached age 701⁄2 and, if the spouse dies before such
payments begin, the Participant’s interest in this Plan shall then be distributed pursuant to this section applied as if the spouse were the Participant. Further, for purposes of 

  

 7-2 

 
this section any benefits paid to a child of a Participant shall be treated as if they have been paid to the Participant’s spouse if the benefits will
become payable to the spouse when the child reaches majority (or upon such other designated event permitted by regulations). 
  
 7.5 Distributions in Stock. A Participant’s benefits from his Stock and Investment Accounts shall be paid in whole shares of Stock. However, a
Participant may elect to receive his benefits in cash. In connection with a distribution of Stock, the Committee shall cause the portion of the Participant’s Investment Account which is to be distributed to be converted into Stock at its
current fair market value, with the resulting Stock being distributed to the Participant or his Beneficiary, along with the shares of Stock credited to the Participant’s Stock Account which is being distributed, provided, that the value of any
fractional share of Stock shall be paid in cash. In connection with a distribution of cash, the Committee shall cause the portion of the shares of Stock credited to the Participants Stock Account to be converted into cash at the Stock’s current
fair market value, with the resulting cash being paid to the Participant or his Beneficiary, along with the portion of the Participant’s Investment Account which is being distributed. Notwithstanding the foregoing, if an Employer’s
certificate of incorporation or by-laws in effect at the time of distribution restrict the ownership of substantially all of the Employer’s Stock to its employees and to qualified retirement plans for the benefit of its employees, a
Participant’s benefits attributable to the Employer’s Stock shall be paid in cash and neither the Participant nor his Beneficiary shall have any right to request that the benefits be paid in Stock. 
  
 7.6 Option to Have Company Purchase Stock. Any Participant or
Beneficiary who receives Stock pursuant to section 7.5, the donees of a Participant or Beneficiary, and any person who receives Stock from a Participant or Beneficiary by reason of the Participant’s or Beneficiary’s death or incompetency
shall have the right to require the Company to purchase the Stock for its current fair market value (the “put right”). This put right shall apply only to the extent that the Stock is not readily tradable on an established market in
accordance with federal and state securities laws and regulations. The put right shall be exercisable with respect to all 

  

 7-3 

 
Stock received in the distribution by giving written notice to the Committee during the 60-day period following the date of distribution of the Stock and, if
this put right is not exercised within such 60-day period, for an additional period of 60 days in the next following Plan Year (or such other period as described in regulations issued pursuant to section 409(h)(4) of the Code.) A put right may not
be exercised unless all Stock in the Participant’s Stock Account is distributed and offered. If the put right is exercised, the Trustee may, in its sole discretion, assume the Company’s rights and obligations with respect to purchasing the
Stock. The Company, or the Trustee if applicable, may elect to pay for the Stock in substantially equal periodic installments (not less frequent than annually) beginning no later than 30 days after the exercise of the put right and extending over a
period not longer than five years from the date the put right is exercised, with interest at a reasonable rate; otherwise the Company, or the Trustee, if applicable, shall pay for the Stock not later than 30 days after the put right is exercised. If
the Stock is to be paid for in installments, the Company or the Trustee, as the case may be, shall furnish the seller with adequate security, and the terms of the installment payments shall be set forth in a promissory note delivered to the seller
with normal terms as to acceleration upon any uncured default. With the seller’s consent, the installment period may be extended to the earlier of 10 years from the exercise of the put right or the date on which all Stock Obligations related to
the Stock have been satisfied, if that is longer than five years. Nothing contained herein shall be deemed to obligate an Employer to register any Stock under any federal or state securities law or to create a public market to facilitate
transferability of Stock. The put right set forth in this section shall be nonterminable; the right shall continue in effect to the extent provided herein even though all Stock Obligations may have been repaid or this Plan ceases to be a qualified
employee stock ownership plan. 
  
 For purposes of this section
7.6, the determination of the fair market value of stock shall be based upon a methodology consistent with that utilized in connection with the valuation of the Stock acquired by the Trust Fund on December 30, 1985 which methodology is set forth in
the opinion of the advisor to the Trustee, dated December 30, 1985 or a similar 

  

 7-4 

 
valuation technique reflecting the basis of the original valuation, but shall not be less than the price per share paid on December 30, 1985 increased by the
cumulative increase in the book value of such shares after December 30, 1985 (excluding the effect of any Stock Obligation and any net reductions to such book value) to the April 30 immediately preceding the date on which notice of exercise of the
put right pursuant to section 7.6 is delivered to the Committee. 
  
 7.7 Restrictions on a Participant’s Disposition of Stock. Any Participant or Beneficiary who receives Stock pursuant to section 7.5, the donees of a Participant or Beneficiary, and any person who receives Stock from a
Participant or Beneficiary by reason of the Participant’s or Beneficiary’s death or incompetency shall, prior to any sale or other transfer of the Stock and if at the time of the sale or other transfer the Stock is not publicly traded,
first offer the Stock to the Company and the Plan at the greater of its current fair market value or an amount equal to any bona-fide written offer received from a prospective third-party buyer. This restriction shall apply to any transfer, whether
voluntary, involuntary, or by operation of law, and whether for consideration or gratuitous. Either the Company or the trustee may accept the offer within 14 days after it is delivered. Any Stock distributed by the Plan shall bear a conspicuous
legend describing the right of first refusal under this section as well as any other restrictions upon the transfer of the Stock pursuant to federal and state securities laws and regulations. Notwithstanding any provision of this Plan to the
contrary, Stock acquired with proceeds of a Stock Obligation shall not be subject to any restrictions on transferability except to the extent set forth in this section; and this restriction shall be nonterminable even though the Stock Obligation may
have been repaid or this Plan ceases to be a qualified employee stock ownership plan. 
  
 7.8 Delay in Benefit Determination. If the Committee is unable to determine the benefits payable to a Participant or Beneficiary on or before the latest date prescribed for payment pursuant to sections 7.1, 7.2
or 7.3, the benefits shall in any event be paid within 60 days after they can first be determined, with whatever makeup payments may be appropriate in view of the delay. 
  

 7-5 

 7.9 Designation of Beneficiaries. A Participant may designate or change his Beneficiary at any
time by giving a signed notice to the Committee. If any benefits remain payable at a time when there is no Beneficiary designated by the Participant to receive them, the benefits shall be paid to the Participant’s spouse, if living, or to the
Participant’s issue, per stirpes, if the Participant is not survived by a spouse. The Committee may rely upon the advice of the Participant’s executor or administrator as to the identity and relationship of the Participant’s spouse
and issue. If there shall not be any spouse or issue then living, the remaining benefits shall be paid to the estate of the last to die of the Participant or the person last receiving, or entitled to receive, the benefits. Notwithstanding any
provision of this Plan to the contrary, any Beneficiary designation or change by a Participant which would result in the designation of a Beneficiary other than the Participant’s spouse shall not be effective unless (i) the Participant’s
spouse consents to the designation or change (or has previously so consented) or (ii) it is established to the satisfaction of the Committee that the consent cannot be obtained because the Participant is not married, because the Participant’s
spouse cannot be located or because of other such circumstances as may be prescribed in regulations. Any consent by a Participant’s spouse must be in writing, must acknowledge the effect of the designation or change being made by the
Participant and that the spouse has the authority to limit the consent to the specific named Beneficiary, and must be notarized or witnessed by a member of the Committee. 
  
 7.10 Accounting for Benefit Payments. Any benefit payment shall be charged to the Participant’s accounts as of
the first day of the Plan Year in which the payment is made. 
  
 7.11 Direct Rollover. This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this section 7.11,
a Distributee may elect, at the time and in the manner prescribed by the Plan administrator, to have all or any Minimum Portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover. Notwithstanding the foregoing, if a Participant’s distribution 

  

 7-6 

 
from the Plan for any Plan Year is expected to be less than $200, then such distribution shall be paid directly to the Participant. 
  
 In the event a Participant fails to direct the Plan administrator to make a
Direct Rollover with respect to an Eligible Rollover Distribution within the time and in the manner prescribed, than the Plan administrator shall, instead, pay the Eligible Rollover Distribution to the Participant on the date the payment would
otherwise commence, subject to such withholding for federal and state income tax as may apply. 
  
 This distribution is one to which sections 401(a)(11) and 417 of the Code do not apply. 
  
 No less than 30 days and no more than 90 days prior to the date of the Eligible Rollover Distribution, the Committee shall notify the Distributee in
writing of: (1) the rules under which the Distributee may elect that the distribution be paid in the form of a Direct Rollover to and Eligible Retirement Plan; (2) the rules that require the withholding of tax on the distribution if it is not paid
in a Direct Rollover; (3) the rules under which the Distributee may defer tax on the distribution if it is contributed in a rollover to an Eligible Retirement Plan within 60 days of the distribution; (4) if applicable, certain special rules
regarding the taxation of the distribution as described in sections 402(d) and (e) of the Code; and (5) for distributions occurring after December 31, 2001, the provisions under which distributions from the Eligible Retirement Plan receiving the
distribution may be subject to restrictions and tax consequences different from those applicable to distributions from the plan making such distribution. If the Distributee, after having received this written notice, affirmatively elects a
distribution, the Committee may commence the distribution of benefits to the Distributee less than 30 days after such notice is provided, provided that the Committee provides information to the Distributee clearly indicating that he has a right to
at least 30 days to consent to the distribution. 
  
 Notwithstanding the preceding paragraph, effective for Plan Years beginning on or after May 1, 2001, the Committee may provide the Distributee with a summary of the notice referred to in this section in lieu of the full notice, provided
that the Committee furnishes the 

  

 7-7 

 
Distributee with such summary no less than 30 days and no more than 90 days prior to the date of the Eligible Rollover Distribution, and provided further,
that if the Distributee, after receiving the summary requests, the Committee furnishes the Distributee with a full notice, at no charge to the Distributee, no less than 30 days prior to the date of the Eligible Rollover Distribution, unless the
Distributee waives such 30-day requirement in the manner set forth above. Any summary provided by the Committee shall refer the Distributee to the most recent version of the notice and advise the Distributee that, upon request, a copy of the notice
will be provided at no charge. 
  
 7.12 Definitions for Direct
Rollover Provisions. 
  
 7.12-1 Eligible
Rollover Distribution: An Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: 
  
 (i) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary
or for a specified period of ten years or more; 
  
 (ii) any distribution to the extent such distribution is required under section 401(a)(9) of the Code; 
  
 (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities); and 
  
 (iv) any distribution to a Participant for any Plan Year which is expected to be less than $200. 
  
 7.12-2 Eligible Retirement Plan: An Eligible Retirement Plan is an individual retirement account described in section 408(a) of the Code,
an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401(a) of the Code, 

  

 7-8 

 
that accepts the Distributee’s Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or individual retirement annuity. 
  
 For distributions made after December 31, 2001, an Eligible Retirement Plan shall additionally include an annuity contract described in
section 403(b) of the Code, and an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from this Plan. 
  
 7.12-3 Distributee: A Distributee includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. 
  
 7.12-4 Direct Rollover: A Direct Rollover is a payment by
the Plan to the Eligible Retirement Plan specified by the Distributee. 
  
 7.12-5 Minimum Portion: A Minimum Portion of an Eligible Rollover Distribution is an amount of at least $500 or, if less, the entire Eligible Rollover Distribution. 
  
 7.13 Special Distribution Rules for Alternate Payees. Effective May 1,
1993 if the amount of the benefit to be distributed to an “alternate payee” pursuant to a Qualified Domestic Relations Order (as described in section 11.2 of the Plan) is $3,500 or less ($5,000 for Plan Years beginning on and after May 1,
1998), it will be paid to the “alternate payee” as soon as practicable after receipt of the Qualified Domestic Relations Order. If the benefit exceeds $3,500 ($5,000 for Plan Years beginning on and after May 1, 1998), then it will be paid
as soon as practicable after the “alternate payee” requests a distribution or at the required beginning date imposed by section 401(a)(9) of the Code, if that date is earlier. In all circumstances, however, 

  

 7-9 

 
distributions to an “alternate payee” will be made without regard to the age or employment status of the Participant. 
  
 7.14 Required Minimum Distributions. The provisions of this section
7.14 apply to all distributions to a Participant and take precedence over any other inconsistent provisions of this Plan. All distributions required under this section 7.14 shall be made in accordance with section 401(a)(9) of the Code. The entire
interest of a Participant must be distributed or begin to be distributed no later than the Participant’s Required Beginning Date; provided, however, that a Participant (other than a Five Percent Owner) who is employed by the Employer after his
Required Beginning Date may, subject to such administrative procedures as the Committee may require, elect prior to his or her Required Beginning Date, and prior to each December 31st thereafter, to defer distribution of any minimum required distribution which would otherwise be made by such date. 
  
 With respect to distributions under the Plan made for any calendar years
beginning on or after January 1, 2001, the Plan will apply the minimum distribution requirements of section 401(a)(9) of the Code in accordance with the regulations under section 401(a)(9) of the Code that were proposed on January 17, 2001,
notwithstanding any provision of the Plan to the contrary. This paragraph shall continue in effect until the last day of the calendar year beginning before the effective date of the final regulations under section 401(a)(9) of the Code or such other
date as may be specified in guidance published by the Internal Revenue Service. 
  

 7-10 

 Section 8. Rules Governing Benefit Claims and Review of Appeals.  
  
 8.1 Claim for Benefits. Any Participant or Beneficiary qualifying for
benefits shall file a claim with the Committee on an application form provided by the Committee. The claim, including any election of an alternative benefit form, shall be filed not later than 60 days after the benefits become payable. If a
Participant or Beneficiary fails to file a claim by the date benefits become payable and does not request that payment be deferred for 60 days to permit the election of an alternative benefit form, he shall be presumed to have filed a claim for
payment of the Participant’s benefits in the standard form prescribed by section 7.3 or 7.4. 
  
 8.2 Notification by Committee. Within 90 days after receiving a claim for benefits (or within 180 days, if special circumstances require an
extension of time and written notice of the extension is given to the Participant or Beneficiary within 90 days after receiving the claim for benefits), the Committee shall notify the Participant or Beneficiary whether the claim has been approved or
denied. If the Committee denies a claim in any respect, the Committee shall set forth in a written notice to the Participant or Beneficiary: 
  
 (i) each specific reason for the denial; 
  
 (ii) specific references to the pertinent Plan provisions on which the denial is based; 
  
 (iii) a description of any additional material or
information which could be submitted by the Participant or Beneficiary to support his claim, with an explanation of the relevance of that material or information; and 
  
 (iv) an explanation of the claims review procedure described in section 9.3. 
  
 8.3 Claims Review Procedure. Within 60 days after a Participant or
Beneficiary receives notice from the Committee that his claim for benefits has been denied in any respect, he may file with the Committee a written notice of appeal setting forth his reasons for disputing the Committee’s determination. In
connection with the appeal the Participant or Beneficiary or his representative may inspect or purchase copies of pertinent documents and records to the extent not inconsistent with other Participants’ and Beneficiaries’ privacy rights.
Within 60 days after receiving a notice of appeal from a prior determination (or within 120 days, if special circumstances require an extension of time and written notice of the extension is given to the Participant or Beneficiary and his
representative within 60 days after receiving the notice of appeal), the Committee shall furnish to the Participant or Beneficiary and his representative, if any, a written statement of the Committee’s final decision with respect to his claim,
including the reasons for the decision and the particular Plan provisions upon which it is based. 
  

 8-1 

 Section 9. The Committee and Its Functions. 
  
 9.1 The Committee. The exclusive responsibility and authority to
control and manage the operation and administration of the Plan, except to the extent such responsibility and authority are otherwise specifically (i) allocated to the Company or the Trustee under the Plan and Trust Agreement, (ii) delegated to
other persons by the Committee or (iii) allocated to other parties by operation of law, shall be vested in the Committee. The Committee also shall be the “plan administrator” within the meaning of ERISA. The Committee shall have no
investment responsibility with respect to the Trust Fund except to the extent, if any, specifically provided in the Trust Agreement. The Committee shall consist of one or more individuals selected by the board of directors of the Company. Any
individual, including but not limited to a director, shareholder, officer, or employee of an Employer, shall be eligible to serve on the Committee. The board shall designate which individual is to be the chairperson and which individual is to be the
secretary of the Committee. The board shall have the power to remove any member of the Committee at any time without cause and without notice, and any member may resign at any time upon five days notice to the board. The board shall notify the
Trustee of any change in the membership of the Committee. The secretary shall keep whatever records may be necessary to implement the Plan, shall furnish to the Trustee whatever information may be necessary to properly administer the Trust, and
shall see to the filing with the appropriate government agencies of all reports and returns required of the Committee as the plan administrator under ERISA and other laws. 
  
 9.2 Power of Delegation. The Committee shall have the power to designate one or more persons, other than a member of
the Committee, to whom the Committee may delegate, and among whom the Committee may allocate, specified fiduciary responsibilities (other than any responsibility to manage or control the assets of the Plan). Any designation shall be in writing and
shall specify the person so designated, the fiduciary responsibilities being delegated, and the terms of the delegation. Without the express approval of the board of directors of the Company, the Committee shall not enter into any delegation under
this section 

  

 9-1 

 
which does not provide for the termination thereof by the Committee upon reasonable notice to such person. Without limiting the generality of the foregoing,
the Committee shall have the power to delegate, in accordance with the foregoing provisions of this section, to one or more persons, the authority to (i) determine the amount of benefits due to any person under the Plan, (ii) to execute, in the name
and on behalf of the Committee, any direction for payment of any benefit under the Plan and (iii) to maintain records and accounts. 
  
 9.3 Ministerial Plan Services. The Committee may designate any employee of the Company or any other Employer or any other person to perform
ministerial services in the administration of the Plan. The Committee shall furnish any such person with such framework or policies, interpretations, rules, practices and procedures as the Committee shall deem necessary or appropriate. The Committee
may rely on any information, data, statistics, reports or analyses furnished by any such person. 
  
 9.4 Power to Construe. The Committee shall have the power to construe, interpret and apply the provisions of the Plan, except to the extent such
power is otherwise specifically allocated to the Company, the Employers, or the Trustee under the Plan and Trust Agreement or allocated to other parties by operation of law. The Committee shall have the power to determine any questions of fact which
may arise under the Plan. 
  
 9.5 Power to Direct
Disbursements. The Committee shall have authority to direct the Trustee with respect to any payments or disbursements from, or contributions to, the Plan. 
  

9.6 Power to Make Rules. The Committee shall adopt such rules and regulations of uniform applicability as it deems necessary or appropriate for
the proper administration and interpretation of the Plan, including, but not limited to, rules governing the manner in which the Committee shall act and manage its affairs. 
  
 9.7 Valuation of Stock. The Trustee shall determine in its best judgment the fair market value of Stock from time to
time as may be necessary for any purpose under the Plan, 

  

 9-2 

 
and shall obtain and be protected in relying upon whatever expert assistance may be required for its determination. 
  
 9.8 Voting of Stock. Notwithstanding the Trustee’s general
authority to vote any Stock held by the Plan, each Participant or Beneficiary shall be entitled to direct the Trustee on how to vote the shares of Stock allocated to his Stock Account with respect to any corporate matter on which such Stock in
entitled to vote, provided, however, that the Company has a registration-type class of securities within the meaning of section 409(e)(4) of the Code. If, however, the Company does not have a registration-type class of securities, then each
Participant or Beneficiary shall be entitled to direct the Trustee to vote the shares of Stock allocated to his Stock Account with respect to corporate matters which involve the voting of such shares with respect to the approval or disapproval of
any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such other transactions as may be prescribed in regulations pursuant to section
409(e)(3) of the Code. 
  
 9.9 Compliance with ERISA and Manner
of Exercise of Powers and Authority. The Committee shall perform all acts necessary to comply with ERISA. Each member of the Committee shall discharge his powers and authority under the Plan in good faith and in accordance with the applicable
requirements of ERISA. 
  
 9.10 Action by Committee. The
Committee shall hold meetings upon such notice, at such place or places, and at such time or times as it may determine from time to time. All resolutions or other actions taken by the Committee shall be by the affirmative vote of a number of members
which is a majority of the total number of members at that time appointed. The Committee may act without a meeting by written assent of all members of the Committee at that time appointed. 
  
 9.11 Service in Various Fiduciary Capacities. Any person or group of
persons may serve in more than one fiduciary capacity with respect to the Plan, and any fiduciary may 

  

 9-3 

 
serve as such in addition to being a shareholder, director, partner, officer, employee, agent or other representative of a party in interest (as defined in
section 3(14) of ERISA). 
  
 9.12 Retention of Advisors and
Servicers. The Committee may employ one or more persons to render advice with regard to any responsibility assumed by it under the Plan or ERISA. The Committee shall have the authority to retain such clerical, legal, accounting, actuarial and
other services as it may deem necessary or appropriate in exercise of its authority hereunder. 
  
 9.13 Reports of the Committee. The Committee shall report to the board of directors of the Company, not less often than annually, on the performance of its responsibilities and on the performance of any persons
to whom any of its powers and responsibilities may have been delegated pursuant to section 9.2. 
  
 9.14 Responsibilities to Participants. The Committee shall determine which Employees are to enter the Plan. The Committee shall be responsible for
furnishing to each eligible Employee whatever summary plan descriptions, summary annual reports, and other notices and information as may be required under ERISA. The Committee also shall determine when a Participant or his Beneficiary qualifies for
benefits under the Plan. The Committee shall furnish to each Participant or Beneficiary whatever information is required under ERISA or is otherwise appropriate to enable the Participant or Beneficiary to make whatever elections may be available
pursuant to section 7, and the Committee shall provide for the payment of benefits in the proper form and amount from the assets of the Trust Fund. The Committee shall exercise in good faith its authority to approve or disapprove elections by
Participants and Beneficiaries which are subject to its approval, and may decide in its sole discretion to permit modifications of elections and to defer or accelerate benefits to the extent consistent with applicable law and the best interests of
the persons concerned. 
  
 9.15 Alternative Payees in the Event
of Incapacity. If the Committee finds at any time that an individual qualifying for benefits under this Plan is a minor or is incompetent, the Committee may direct the benefits to be paid, in the case of a minor, to his parents, his legal

  

 9-4 

 
guardian, a custodian for him under the Uniform Gifts to Minors Act of the state of which he is a resident, or the person having actual custody of him, or,
in the case of an incompetent, to his spouse, his legal guardian, or the person having actual custody of him, the payments to be used for the individual’s benefit. The Committee and the Trustee, shall not be obligated to inquire as to the
actual use of the benefits by the person receiving them under this section, and any such payment shall completely discharge the obligations of the Plan, the Trustee, the Committee and the Employers, to the extent of the payment. 
  
 9.16 Reimbursement and Indemnification by Company. A member of the
Committee shall be compensated by the Company for his services as a member of the Committee only as may be determined from time to time by the board of directors of the Company, but he shall in any event be fully reimbursed for expenses incurred in
connection with administering the Plan. Further, a member shall be indemnified and held harmless by the Company to the fullest extent permitted by law against any and all costs, damages, expenses, and liabilities reasonably incurred by or imposed
upon him in connection with any claim made against him or in which he may be involved by reason of his being, or having been, a member of the Committee, to the extent such amounts are not paid by insurance. 
  
 9.17 Nonparticipation by Interested Member. Any member of the
Committee who also is a Participant shall take no part in any determination specifically relating to his own participation or benefits, unless his abstention would leave the Committee incapable of acting on the matter. 
  

 9-5 

 Section 10. Adoption, Amendment or Termination of the Plan. 
  
 10.1 Adoption of Plan by Other Employers. With the consent of the
Company, any entity may become a participating Employer under the Plan by (i) taking such action as shall be necessary to adopt the Plan, (ii) filing with the Committee a duly certified copy of the Plan as adopted by the entity, (iii) becoming a
party to the Trust Agreement establishing the Trust Fund, and (iv) executing and delivering such instruments and taking such other action as may be necessary or desirable to put the Plan into effect with respect to the entity’s employees.

  
 10.2 Adoption of Plan by Successor. In the event that
any Employer shall be reorganized by way of merger, consolidation, transfer of assets or otherwise, so that an entity other than an Employer shall succeed to all or substantially all of the Employer’s business, the successor entity may be
substituted for the Employer under the Plan by adopting the Plan and becoming a party to the Trust Agreement. Contributions by the Employer shall be automatically suspended from the effective date of any such reorganization until the date upon which
the substitution of the successor entity for the Employer under the Plan becomes effective. If, within 90 days following the effective date of any such reorganization, the successor entity shall not have elected to become a party to the Plan, or, if
the Employer shall adopt a plan of complete liquidation other than in connection with a reorganization, the Plan shall be automatically terminated with respect to Employees of the Employer as of the close of business on the 90th day following the
effective date of the reorganization, or as of the close of business on the date of adoption of a plan of complete liquidation, as the case may be. 
  
 10.3 Plan Restatement Subject To Qualification. In the event that this restated Plan is held by the Internal Revenue Service not to qualify under
section 401(a) of the Code, the Plan may be amended retroactively to the earliest date permitted by U.S. Treasury regulations in order to secure qualification under section 401(a). In the event that this restated Plan is amended after its
qualification and the Plan as amended is held by the Internal Revenue Service not to qualify under section 401(a), the amendment may be modified retroactively to the earliest date 

  

 10-1 

 
permitted by U.S. Treasury regulations in order to secure approval of the amendment under section 401(a). 
  
 10.4 Right to Amend or Terminate. The Company intends to continue the
Plan as a permanent program. However, each participating Employer separately reserves the right to suspend, supersede, or terminate the Plan at any time and for any reason, as it applies to that Employer’s Employees, and the Company reserves
the right to amend, suspend, supersede, merge, consolidate, or terminate the Plan at any time and for any reason, as it applies to the Employees of all Employers. Any amendment, suspension, supersession, merger, consolidation or termination of the
Plan shall be authorized by a written resolution of the Executive Committee of the board of directors of the Company or an Employer, as applicable. No amendment, suspension, supersession, merger, consolidation, or termination of the Plan shall
reduce any Participant’s or Beneficiary’s proportionate interest in the Trust Fund, decrease his account balance or eliminate an optional form of benefit (as defined in section 411(d)(6) of the Code) with respect to benefits attributable
to service prior to the amendment or divert any portion of the Trust Fund to purposes other than the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan. Moreover, there shall not
be any transfer of assets to a successor plan or merger or consolidation with another plan unless, in the event of the termination of the successor plan or the surviving plan immediately following such transfer, merger, or consolidation, each
participant or beneficiary would be entitled to a benefit equal to or greater than the benefit he would have been entitled to if the plan in which he was previously a participant or beneficiary had terminated immediately prior to such transfer,
merger, or consolidation. Following a termination of this Plan by the Company, the Trustee shall continue to administer the Trust and pay benefits in accordance with the Plan as amended from time to time and the Committee’s instructions.

  

 10-2 

 Section 11. Miscellaneous Provisions. 
  
 11.1 Plan Creates No Employment Rights. Nothing in this Plan shall be
interpreted as giving any Employee the right to be retained by an Employer, or as limiting or affecting the rights of an Employer to control its Employees or to modify or terminate the employment of any Employee at any time and for any reason,
subject to any applicable employment or collective bargaining agreements. 
  
 11.2 Nonassignability of Benefits. Except as provided in this section, no assignment, pledge, or other anticipation of benefits from the Plan will be permitted or recognized by the Employers, the Committee, or
the Trustee. Moreover, benefits from the Plan shall not be subject to attachment, garnishment, or other legal process for debts or liabilities of any Participant or Beneficiary, to the extent permitted by law. However, the preceding shall not apply
to a Qualified Domestic Relations Order (within the meaning of section 414(p) of the Code), that is, a judgment, decree, or order (including approval of a property settlement agreement) which (i) relates to the provision of child support, alimony,
or marital property rights to a spouse, former spouse, child or other dependent of a Participant (an “alternate payee”), (ii) creates or recognizes the existence of an alternate payee’s right to, or assigns to an alternate payee the
right to, receive all or a portion of the Participant’s benefits, (iii) is made pursuant to a State domestic relations law (including a community property law), and (iv) otherwise satisfies the requirements of section 414(p) of the Code and the
regulations thereunder. In accordance with the requirements of section 414(p) of the Code, the Committee shall establish reasonable procedures for notifying a Participant and his alternate payees of the receipt of a possible Qualified Domestic
Relations Order, determining whether the order is a Qualified Domestic Relations Order, investing in a segregated account any amounts which may become payable under the order to an alternate payee, and disposing of the segregated account.

  
 Notwithstanding any provision of the Plan to the contrary,
with respect to certain judgments, orders, decrees and/or settlements issued or entered into on or after August 5, 1997, 

  

 11-1 

 
this section 11.2 shall not preclude any offset of a Participant’s benefits in an amount which a Participant is required to pay to the Plan in
accordance with section 401(a)(13) of the Code. 
  
 11.3 Limit
of Employer Liability. The liability of an Employer with respect to Participants under this Plan shall be limited to making such voluntary contributions to the Trust as may have been determined from time to time by its board of directors in
accordance with section 4.1. Participants and Beneficiaries shall look solely to the Trust Fund for the payment of any benefits. 
  
 11.4 Interpretation of Provisions. The Employers intend this Plan and the Trust to be a qualified stock bonus plan under section 401(a) of the Code
and of the Code and to satisfy any applicable requirements under ERISA. Accordingly, the Plan and Trust Agreement shall be interpreted and applied in a manner consistent with this intent and shall be administered at all times and in all respects in
a nondiscriminatory manner. 
  
 11.5 Number and Gender. Any
use of the singular shall be interpreted to include the plural and the plural the singular. Any use of the masculine, feminine or neuter shall be interpreted to include the masculine, feminine or neuter, as the context shall require. 
  
 11.6 Nondiversion of Assets. Except as provided in section 4.1, under
no circumstances shall any portion of the Trust Fund be diverted to or used for any purpose other than the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan. 
  
 11.7 Separability of Provisions. If any provision of this Plan is held
to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan. 
  
 11.8 Service of Process. The agent for the service of process upon the Plan shall be the president of the Company, or
such other person as may be designated from time to time by the board of directors of the Company. 
  

 11-2 

 11.9 Military Service. Notwithstanding any provision of the Plan to the contrary, effective
December 12, 1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code. 
  

 11-3 

 C O N T E N T S 
  

					
	 	  	 	  	Page No.

	 Section 1.
	  	 Plan Identity
	  	1-1
	 1.1
	  	 Name
	  	1-1
	 1.2
	  	 Purpose
	  	1-1
	 1.3
	  	 Effective Date
	  	1-1
	 1.4
	  	 Fiscal Period
	  	1-1
	 1.5
	  	 Single Plan for All Employers
	  	1-1
	 1.6
	  	 Relationship to Prior Plan
	  	1-2
			
	 Section 2.
	  	 Definitions
	  	2-1
			
	 Section 3.
	  	 Eligibility for Participation
	  	3-1
			
	 3.1
	  	 Eligibility and Entry Dates
	  	3-1
	 3.2
	  	 Definition of Eligibility Year
	  	3-2
	 3.3
	  	 Certain Employees Ineligible
	  	3-2
	 3.4
	  	 Waiver of Participation
	  	3-3
	 3.5
	  	 Periods of Eligibility
	  	3-3
	 3.6
	  	 Reclassified Employees
	  	3-3
			
	 Section 4.
	  	 Trust Fund, Contributions by Employers, and Allocations of Contributions and Forfeitures
	  	4-1
			
	 4.1
	  	 Employer Contributions and Trust Fund
	  	4-1
	 4.2
	  	 Active Participants
	  	4-1
	 4.3
	  	 Release of Stock for Allocation
	  	4-2
	 4.4
	  	 Allocation to Active Participant’s Accounts
	  	4-2
	 4.5
	  	 Definition of Compensation
	  	4-4
	 4.6
	  	 Overall Annual Limitation
	  	4-5
	 4.7
	  	 Overall Cumulative Limitation
	  	4-6
	 4.8
	  	 Effect of Limitations
	  	4-9
			
	 Section 5.
	  	 Plan Accounts and Adjustments
	  	5-1
			
	 5.1
	  	 Stock and Investment Accounts
	  	5-1
	 5.2
	  	 Unallocated Stock Accounts
	  	5-1
	 5.3
	  	 Treatment of Expenses
	  	5-1
	 5.4
	  	 Adjustments for Transactions
	  	5-1
	 5.5
	  	 Adjustment for Net Changes in Assets
	  	5-1
			
	 Section 6.
	  	 Vesting and Forfeitures
	  	6-1
			
	 6.1
	  	 Vesting Schedule
	  	6-1
	 6.2
	  	 Computation of Vesting Years
	  	6-2
	 6.3
	  	 Full Vesting Upon Certain Events
	  	6-4
	 6.4
	  	 Full Vesting Upon Plan Termination
	  	6-4
	 6.5
	  	 Forfeiture After Termination of Employment
	  	6-4

  

 -i- 

					
	 6.6
	  	 Re-Employment or Location of Lost Participants and Restoration of Forfeitures
	  	6-4
	 6.7
	  	 Accounting for Forfeitures
	  	6-5
	 6.8
	  	 Vesting and Nonforfeitability
	  	6-5
			
	 Section 7.
	  	 Payment of Benefits
	  	7-1
			
	 7.1
	  	 Distributions Before May 1, 1991
	  	7-1
	 7.2
	  	 Distributions on or After May 1, 1991
	  	7-1
	 7.3
	  	 Benefit Amounts
	  	7-2
	 7.4
	  	 Benefits on a Participant’s Death
	  	7-2
	 7.5
	  	 Distribution in Stock
	  	7-3
	 7.6
	  	 Option to Have Company Purchase Stock
	  	7-3
	 7.7
	  	 Restriction on a Participant’s Disposition of Stock
	  	7-5
	 7.8
	  	 Delay in Benefit Determination
	  	7-5
	 7.9
	  	 Designation of Beneficiaries
	  	7-6
	 7.10
	  	 Accounting for Benefit Payments
	  	7-6
	 7.11
	  	 Direct Rollover
	  	7-6
	 7.12
	  	 Definitions for Direct Rollover Provisions
	  	7-8
	 7.13
	  	 Special Distribution Rules for Alternate Payees
	  	7-9
	 7.14
	  	 Minimum Required Distributions
	  	7-10
			
	 Section 8.
	  	 Rules Governing Benefit Claims and Review of Appeals
	  	8-1
			
	 8.1
	  	 Claim for Benefits
	  	8-1
	 8.2
	  	 Notification by Committee
	  	8-1
	 8.3
	  	 Claims Review Procedure
	  	8-1
			
	 Section 9.
	  	 The Committee and Its Functions
	  	9-1
			
	 9.1
	  	 The Committee
	  	9-1
	 9.2
	  	 Power of Delegation
	  	9-1
	 9.3
	  	 Ministerial Plan Services
	  	9-2
	 9.4
	  	 Power to Construe
	  	9-2
	 9.5
	  	 Power to Direct Disbursements
	  	9-2
	 9.6
	  	 Power to Make Rules
	  	9-2
	 9.7
	  	 Valuation of Stock
	  	9-2
	 9.8
	  	 Voting of Stock
	  	9-3
	 9.9
	  	 Compliance with ERISA and Manner of Exercise of Powers and Authority
	  	9-3
	 9.10
	  	 Action by Committee
	  	9-3
	 9.11
	  	 Service in Various Fiduciary Capacities
	  	9-3
	 9.12
	  	 Retention of Advisors and Servicers
	  	9-4
	 9.13
	  	 Reports of the Committee
	  	9-4
	 9.14
	  	 Responsibilities to Participants
	  	9-4
	 9.15
	  	 Alternative Payees in the Event of Incapacity
	  	9-4

  

 -ii- 

					
	 9.16
	  	 Reimbursement and Indemnification by Company
	  	9-5
	 9.17
	  	 Nonparticipation by Interested Member
	  	9-5
			
	 Section 10.
	  	 Adoption, Amendment or Termination of the Plan
	  	10-1
			
	 10.1
	  	 Adoption of Plan by Other Employers
	  	10-1
	 10.2
	  	 Adoption of Plan by Successor
	  	10-1
	 10.3
	  	 Plan Restatement Subject to Qualification
	  	10-1
	 10.4
	  	 Right to Amend or Terminate
	  	10-2
			
	 Section 11.
	  	 Miscellaneous Provisions
	  	11-1
			
	 11.1
	  	 Plan Creates No Employment Rights
	  	11-1
	 11.2
	  	 Nonassignability of Benefits
	  	11-1
	 11.3
	  	 Limit of Employer Liability
	  	11-2
	 11.4
	  	 Interpretation of Provisions
	  	11-2
	 11.5
	  	 Number and Gender
	  	11-2
	 11.6
	  	 Nondiversion of Assets
	  	11-2
	 11.7
	  	 Separability of Provisions
	  	11-2
	 11.8
	  	 Service of Process
	  	11-2
	 11.9
	  	 Military Service
	  	11-3

  

 -iii- 

 AMENDMENT TO 
 THE NEWARK GROUP, INC. EMPLOYEES’ 
 STOCK OWNERSHIP PLAN 
  
 AMENDMENT, dated this
             day of                      2003, to The Newark Group, Inc.
Employees’ Stock Ownership Plan (the “Plan”), as amended and restated effective May 1, 1997. 
  
 W I T N E S S E T H : 
  
 WHEREAS, The Newark Group, Inc. (the “Company”) sponsors and maintains the Plan; and 
  
 WHEREAS, the Company desires to amend the Plan to incorporate certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
and certain other regulatory changes governing tax-qualified plans; and 
  
 WHEREAS, Section 10.4 of the Plan reserves to the Company the right to amend the Plan at any time; 
  
 NOW, THEREFORE, the Plan is hereby amended as follows: 
  
 FIRST 
  
 Section 2.8A of the Plan is hereby added to provide as follows: 
  

“2.8A ‘Disability Review Board’ means the entity described in section 9.1A of the Plan which is responsible for reviewing the
Committee’s decision to deny a claim involving disability benefits, as provided by section 8.3A of the Plan.” 
  

 SECOND 
  
 The last paragraph of Section 2.28-4 of the Plan is hereby amended in its entirety to read as follows: 
  
 “The aggregated benefits for any Employee shall include all plan
distributions made with respect to the Employee during the five years ending on the determination date. Notwithstanding the foregoing, effective for Plan Years beginning on and after May 1, 2002, the aggregated benefits of any Employee as of the
determination date shall be increased by distributions made with respect to such Employee under the Plan and any plan aggregated with the Plan under section 416(g)(2) of the Code during the one-year period ending on the determination date. The
preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other
than separation from service, death or disability, this provision shall be applied by substituting ‘five-year period’ for ‘one-year period.’” 
  
 THIRD 
  
 Section 4.5 of the Plan is hereby amended by adding the following paragraph at the end thereof: 
  
 “Notwithstanding the foregoing, the annual Compensation of a
Participant taken into account under the Plan in determining allocations for Plan Years beginning on and after May 1, 2002 shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the
Code.” 
  
 FOURTH 
  
 Section 7.12-2 of the Plan is hereby amended by adding the following sentence
at the end of the last paragraph thereof: 
  
 “This
definition of Eligible Retirement Plan shall also apply in the case of distributions made after December 31, 2001 to a surviving spouse of a deceased Participant and to a spouse or former spouse who is an alternate payee under a qualified domestic
relations order (as defined in section 414(p) of the Code).” 
  

 -2- 

 FIFTH 
  
 Section 8.2 of the Plan is hereby amended by replacing the parenthetical phrase in the first sentence thereof with the
following: 
  
 “(or within 180 days, if special
circumstances require an extension of time, and written notice explaining the special circumstances and the expected date of a decision is furnished to the Participant or Beneficiary within 90 days after receiving the claim for benefits)”

  
 SIXTH 
  
 Section 8.2(iv) of the Plan is hereby amended in its entirety to provide as
follows: 
  

	 	“(iv)	an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the right of the Participant or Beneficiary to bring a
civil action under section 502(a) of ERISA following a denial of a claim upon review.” 

  
 SEVENTH 
  
 Section 8.2A of the Plan is hereby added to provide as follows: 
  
 “8.2A Notification by Committee — Approval or Denial of Claim Involving Disability Benefits. Notwithstanding anything contained in
section 8.2 of the Plan to the contrary, the Committee shall notify the Participant or Beneficiary whether a claim involving disability benefits has been approved or denied within 45 days after receiving the claim. This period of time may be
extended for up to 30 days, provided an extension is necessary due to matters beyond the control of the Committee and written notice of the extension is furnished to the Participant or Beneficiary prior to the expiration of the 45-day period. This
30-day extension period may itself be extended for up to 30 additional days, provided an additional extension is necessary due to matters beyond the control of the Committee and written notice of the extension is furnished to the Participant or
Beneficiary prior to the expiration of the first 30-day period. 
  
 Any notice of extension shall explain the matters beyond the control of the Committee requiring an extension and the expected date of a decision, and shall further describe the standards on which 

  

 -3- 

 
entitlement to disability benefits is based, any unresolved issues preventing a decision and any additional information needed to resolve those issues; if
additional information is needed, the Participant or Beneficiary shall be afforded at least 45 days to provide the information. 
  
 If the Committee denies a claim in any respect, the Committee shall set forth in a written notice to the Participant or Beneficiary the following
information, in addition to the information set forth in section 8.2(i)-(iv) of the Plan: 
  

	 	(i)	If an internal rule or guideline was relied upon in denying the claim, either the specific rule or guideline, or a statement that such rule or guideline was relied upon in denying
the claim, and that a copy of such rule or guideline will be provided to the Participant or Beneficiary free of charge and upon request; and 

  

	 	(ii)	if the denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the clinical judgment for the
determination, applying the terms of the Plan to the medical circumstances of the Participant or Beneficiary, or a statement that such explanation will be provided to the Participant or Beneficiary free of charge and upon request.”

  
 EIGHTH 
  
 Section 8.3 of the Plan is hereby amended in its entirety to provide as
follows: 
  
 “8.3 Claims Review Procedure. Within 60
days after a Participant or Beneficiary receives notice from the Committee that his claim for benefits has been denied in any respect, he may file with the Committee a written request for review setting forth his reasons for disputing the
Committee’s decision. 
  
 In connection with the review, the
Participant or Beneficiary shall be provided, upon request and free of charge, reasonable access to copies of all documents, records and other information relating to the claim (to the extent not inconsistent with the privacy rights of other
Participants and Beneficiaries). 
  
 The Participant or
Beneficiary may submit written comments, documents and other information relating to the claim. The review 

  

 -4- 

 
of the claim shall take into account all comments, documents, records and other information submitted, regardless of whether they were initially submitted
with respect to the claim. 
  
 Within 60 days after receiving a
written request for review of a prior decision (or within 120 days, if special circumstances require an extension of time, and written notice explaining the special circumstances and the expected date of a decision upon review is furnished to the
Participant or Beneficiary within 60 days after receiving the written request for review), the Committee shall furnish to the Participant or Beneficiary written notice of the Committee’s final decision upon review with respect to the claim; if
the Committee’s final decision upon review is to deny the claim in any respect, the written notice shall contain the following information: 
  

	 	(i)	each specific reason for the denial; 

  

	 	(ii)	specific references to the pertinent Plan provisions on which the denial is based; 

  

	 	(iii)	a statement that the Participant or Beneficiary shall be provided upon request and free of charge reasonable access to and copies of all documents, records and other information
relating to the claim, to the extent not inconsistent with the privacy rights of other Participants and Beneficiaries; and 

  

	 	(iv)	the right of the Participant or Beneficiary to bring an action under section 502(a) of ERISA.” 

  
 NINTH 
  
 Section 8.3A of the Plan is hereby added to provide as follows: 
  

“8.3A Claims Review Procedure — Review of Claim Involving Disability Benefits. Notwithstanding anything contained in section 8.3 of
the Plan to the contrary, within 180 days after a Participant or Beneficiary receives notice from the Committee that a claim involving disability benefits has been denied in any respect, he may file with the Disability Review Board a written request
for review setting forth his reasons for disputing the Committee’s decision. The review shall not afford deference to the Committee’s decision. 
  
 In reviewing any decision based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug,
or other item is experimental, investigational, or not medically necessary or appropriate, the 

  

 -5- 

 
Disability Review Board shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the
medical judgment. This health care professional shall neither be an individual consulted in connection with the decision that is the subject of the review, nor be the subordinate of such individual. 
  
 In connection with the review, the Participant or Beneficiary shall be
provided with the identification of any medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the claim denial, without regard to whether the advice was relied upon in denying the claim. The Participant or
Beneficiary shall also be provided, upon request and free of charge, reasonable access to copies of all documents, records and other information relating to the claim (to the extent not inconsistent with the privacy rights of other Participants and
Beneficiaries). 
  
 The Participant or Beneficiary may submit
written comments, documents and other information relating to the claim. The review of the claim shall take into account all comments, documents, records and other information submitted, regardless of whether they were initially submitted with
respect to the claim. 
  
 Within 45 days after receiving after
receiving a written request for review of the Committee’s decision (or within 90 days, if special circumstances require an extension of time, and written notice explaining the special circumstances and the expected date of a decision upon
review is furnished to the Participant or Beneficiary within 45 days after receiving the written request for review) the Disability Review Board shall furnish to the Participant or Beneficiary written notice of the Disability Review Board’s
final decision upon review with respect to the claim; if the Disability Review Board’s final decision upon review is to deny the claim in any respect, the written notice shall contain the information set forth in section 8.2A(i)-(ii) and
8.3(i)-(iv) of the Plan.” 
  
 TENTH 

 
 Section 9.1A of the Plan is hereby added to provide as follows:

  
 “9.1A The Disability Review Board. The Disability
Review Board shall consist of one or more individuals selected by the Board of Directors. Any individual shall be eligible to serve on the Disability Review Board, including but not limited to a director, shareholder, officer, or employee of an
Employer. Notwithstanding 

  

 -6- 

 
the foregoing, however, an individual is not eligible to serve on the Disability Review Board if such individual is a member of the Committee that denied the
claim under review, or is a subordinate of a member of the Committee that denied the claim under review. 
  
 Any member of the Disability Review Board may at any time resign by giving to the Company and to the remaining members of the Disability Review Board, if
any, then acting hereunder written notice of such resignation; any such resignation shall become effective upon the last business day of the calendar month next succeeding the calendar month in which such notice shall be received by the Company or
on such earlier date as the Company may determine. The Board may at any time remove any or all of the members of the Disability Review Board then acting hereunder by giving written notice of such removal to all of the members of the Disability
Review Board then acting hereunder; any such removal shall become effective immediately upon the delivery of such notice to the member of the Disability Review Board so removed or on such later date as may be specified in such notice. 
  
 If the Disability Review Board consists of two or more individuals, the
chairperson of the Disability Review Board and the secretary of the Disability Review Board shall be designated by the Board of Directors in its discretion. The secretary shall keep whatever records may be necessary to implement the Plan, and shall
furnish to the Trustee whatever information may be necessary to properly administer the Trust. 
  
 The Disability Review Board shall hold meetings upon such notice, at such place or places, and at such time or times as is necessary to comply with
section 8.3A of the Plan. All resolutions or other actions taken by the Disability Review Board shall be by an affirmative vote of a number of members which is a majority of the total number of members at that time appointed. The Disability Review
Board may act without a meeting by written assent of all members of the Disability Review Board at that time appointed. 
  
 The Disability Review Board shall have the power and discretion to construe, interpret and apply the provisions of the Plan, except to the extent such
power is otherwise specifically allocated to the Company, the Employers, the Committee or the Trustee under the Plan and Trust Agreement or allocated to other parties by operation of law. The Disability Review Board shall have the power and
discretion to determine any questions of fact which may arise under the Plan.” 
  

 -7- 

 ELEVENTH 
  
 Each of AMENDMENTS FIRST, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH and TENTH is effective for new claims filed on or after
January 1, 2002. Each of AMENDMENTS SECOND, THIRD and FOURTH is effective as of the date specified therein. 
  
 IN WITNESS WHEREOF, this Amendment has been executed by the undersigned officer of the Company as evidence of its adoption effective as of the date
first above written. 
  

			
	THE NEWARK GROUP, INC.
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  

	
	 WITNESS:

	
	  

  

 -8- 

 AMENDMENT TO 
 THE NEWARK GROUP, INC. 
 EMPLOYEES’ STOCK OWNERSHIP PLAN 
  
 AMENDMENT, dated this
             day of                  2004, to The Newark Group, Inc. Employees’ Stock
Ownership Plan (the “Plan”). 
  
 W I T N E S S E T H :

  
 WHEREAS, The Newark Group, Inc. (the
“Company”) sponsors and maintains the Plan; and 
  
 WHEREAS, the Company desires to amend the Plan to incorporate final IRS regulations governing the payment of “required minimum distributions,” by adopting with only minor changes the model amendment published in IRS Revenue
Procedure 2002-29; and 
  
 WHEREAS, Section 10.4 of the
Plan reserves to the Company the right to amend the Plan at any time; 
  
 NOW, THEREFORE, the Plan is hereby amended as follows: 
  
 FIRST 
  
 The second paragraph of Section
7.14 of the Plan is hereby amended in its entirety to provide as follows: 
  
 “Effective January 1, 2001, any distributions required by section 401(a)(9) of the Code will be made in accordance with the regulations proposed on January 17, 2001; provided, however, that effective January 1,
2003, any distributions required by section 401(a)(9) of the Code shall be made in accordance with Appendix A of this Plan.” 
  
 SECOND 
  
 Appendix A, attached hereto, is hereby added to the Plan. 
  

 THIRD 
  
 Each of the foregoing Amendments is effective as of the dates specified therein. 
  
 IN WITNESS WHEREOF, this Amendment has been executed by the
undersigned officer of the Company as evidence of its adoption effective as of the date first above written. 
  

			
	THE NEWARK GROUP
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  

	
	 WITNESS:

	
	  

  

 -2- 

 APPENDIX A 
  
 REQUIRED MINIMUM DISTRIBUTIONS 
  

	Section 1.	General Rules. 

  
 1.1. Effective Date. The provisions of this Appendix A will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. 
  
 1.2. Precedence. The requirements of this Appendix A will take precedence over any
inconsistent provisions of the Plan. 
  
 1.3. Requirements of Treasury
Regulations Incorporated. All distributions required under this Appendix A will be determined and made in accordance with the Treasury Regulations under Section 401(a)(9) of the Internal Revenue Code. 
  

	Section 2.	Time and Manner of Distribution. 

  
 2.1. Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the
Participant’s Required Beginning Date. 
  
 2.2. Death of Participant
Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows: 
  

	 	(a)	If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, then distributions to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later. 

  

	 	(b)	If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, then distributions to the Designated Beneficiary will begin by December 31 of
the calendar year immediately following the calendar year in which the Participant died. 

  

	 	(c)	If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, then the Participant’s entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. 

  

	 	(d)	 If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before

  

 -3- 

	 	 
distributions to the surviving spouse begin, this Section 2.2, other than Section 2.2(a), will apply as if the surviving spouse were the Participant.

  
 For purposes of this Section 2.2 and Section 4, unless
Section 2.2(d) applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Section 2.2(d) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse
under Section 2.2(a). 
  
 2.3. Forms of Distribution. Unless the
Participant’s interest is distributed in the form of a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Sections 3 and 4 of this Appendix A.

  

	Section 3.	Required Minimum Distributions During Participant’s Lifetime. 

  
 3.1. Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be
distributed for each Distribution Calendar Year is the lesser of: 
  

	 	(a)	the quotient obtained by dividing the Participant’s Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury
Regulations, using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or 

  

	 	(b)	if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s spouse, the quotient obtained by dividing the Participant’s
Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays
in the Distribution Calendar Year. 

  
 3.2. Lifetime Required
Minimum Distributions Continue Through Year of Participant’s Death. Required minimum distributions will be determined under this Section 3 beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar
Year that includes the Participant’s date of death. 
  

	Section 4.	Required Minimum Distributions After Participant’s Death. 

  
 4.1. Death On or After Date Distributions Begin. 
  

	 	(a)	 Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the
minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the remaining Life Expectancy of
the 

  

 -4- 

	 	 
Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows: 

  

	 	(1)	The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

  

	 	(2)	If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each
Distribution Calendar Year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving spouse’s death, the
remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

  

	 	(3)	If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using
the age of the Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year. 

  

	 	(b)	No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the
year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the
Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. 

  
 4.2. Death Before Date Distributions Begin. 
  

	 	(a)	Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that
will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated
Beneficiary, determined as provided in Section 4.1. 

  

	 	(b)	No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the
year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. 

  

 -5- 

	 	(c)	Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s
surviving spouse is the Participant’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 2.2(a), this Section 4.2 will apply as if the surviving spouse
were the Participant. 

  

	Section 5.	Definitions. 

  
 5.1. Designated Beneficiary. The individual who is designated as the Beneficiary under Sections 2.2 and 7.9 of the Plan and is the Designated Beneficiary under Section 401(a)(9) of the Internal Revenue Code and
Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations. 
  
 5.2.
Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant’s Required Beginning Date. For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under
Section 2.2. The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s Required Beginning Date. The required minimum distribution for other Distribution Calendar
Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year. 
  
 5.3. Life Expectancy. Life expectancy as computed by use of the Single Life Table in
Section 1.401(a)(9)-9 of the Treasury Regulations. 
  
 5.4. Participant’s
Account Balance. The Account Balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (“Valuation Calendar Year”) increased by the amount of any contributions made and allocated or
forfeitures allocated to the Account Balance as of dates in the Valuation Calendar Year after the Valuation Date and decreased by distributions made in the Valuation Calendar Year after the Valuation Date. The Account Balance for the Valuation
Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year. 
  
 5.5. Required Beginning Date. The date specified in Section 2.23A of the Plan.

  

 -6- 

 This TRUST AGREEMENT dated April 22, 2002, 
  

			
	 BETWEEN
	  	THE NEWARK GROUP, INC., a corporation of the State of New Jersey (the “Company”),
		
	 AND
	  	EDWARD K. MULLEN, ROBERT H. MULLEN and FRED G. von ZUBEN (hereinafter collectively called the “Trustee”),

  
 W I T N E S S E T
H   T H A T 
  
 WHEREAS, effective January 1, 1985, the
Company adopted The Newark Group, Inc. Employees’ Stock Ownership Plan (hereinafter the “Plan”); and 
  
 WHEREAS, coincident with the establishment of the Plan, the Company executed a trust agreement (hereinafter the “Prior Trust Agreement”) for the purpose
of funding retirement benefits provided by the Plan; and 
  
 WHEREAS, in
Section 7.1 of the Prior Trust Agreement, the Company reserved the right to amend the Prior Trust Agreement at any time and for any reason by resolution of its board of directors, provided such amendment does not divert any part of the Trust Fund
for purposes other than for the exclusive benefit of the Participants and Beneficiaries; and 
  
 WHEREAS, the Company has amended and restated the Plan effective May 1, 1997, and now desires and has resolved to amend and restate the Prior Trust Agreement; 
  
 NOW, THEREFORE, in consideration of the appointment of Edward K. Mullen, Robert H.
Mullen and Fred G. von Zuben as Trustee and in consideration of the premises and covenants contained herein, the Company and the Trustee hereby agree to amend the Prior Trust Agreement effective as of May 1, 2002, by substituting the following Trust
Agreement in lieu thereof in its entirety: 
  
 Creation of Trust. 
  
 Trustees. Each of Edward K. Mullen,
Robert H. Mullen and Fred G. von Zuben shall be a trustee of the Trust Fund created in accordance with and in furtherance of the Plan, and shall serve as a trustee until his removal or resignation in accordance with section 6 hereof. The date on
which any person’s trusteeship commences and the date on which it terminates shall be set forth on Schedule A, annexed hereto. 
  
 Trust Fund. The Trustee hereby acknowledges its retention of the assets comprising the Trust Fund created under the Plan, and agrees to accept additional
contributions from the Employers and amounts which have been distributed to Participants from other qualified retirement plans from time to time in accordance with the terms of the Plan. All such property and contributions, together with income
thereon and increments thereto, shall constitute the “Trust Fund” to be held in accordance with the terms of this Trust Agreement. 
  
 Incorporation of Plan. The instrument entitled “The Newark Group, Inc. Employees’ Stock Ownership Plan” is incorporated herein by reference, and
this Trust Agreement shall be 

  

 
interpreted consistently with that Plan. All words and phrases defined in that Plan shall have the same meaning when used in this Trust Agreement.

  
 Name. The name of this trust shall be “The Newark Group, Inc.
Employees’ Stock Ownership Plan-Trust.” 
  
 Nondiversion of
Assets. In no event shall any part of the corpus or income of the Trust Fund be used for, or diverted to, purposes other than for the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities
under the Plan. 
  
 Investment of Trust
Fund and Administrative Powers of the Trustee. 
  
 Investment Policy.
The basic investment policy of the Plan and this Trust shall be to invest primarily in and hold Stock of the Employers for the exclusive benefit of the Participants and their Beneficiaries. The Trustee shall have full and complete investment
authority and responsibility with respect to the purchase, retention, sale, pledge, and voting of Stock and the payment of Stock Obligations. In connection with purchases of Stock, the Trustee may purchase newly issued or outstanding Stock from an
Employer or any other holders of Stock, including Participants and Beneficiaries. All purchases and sales of Stock shall be made by the Trustee at fair market value as determined by the Trustee in good faith and in accordance with any applicable
requirement under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Such purchase may be made with assets of the Trust Fund, with funds borrowed for this purpose (with or without guarantees of repayment to the
lender by an Employer), by installment payment contracts, or by any combination of the foregoing. In determining the proper extent of the Trust’s investment in Stock and the fair market value of Stock, the Trustee may employ investment counsel,
legal counsel, appraisers, and other agents and may pay their reasonable expenses and compensation. Notwithstanding any other provision of the Plan or this Trust Agreement, the Trustee shall not make any investment or take any action involving those
assets for which it remains responsible which (i) is inconsistent with the investment policy of the Plan and this Trust, (ii) is inconsistent with the prudence and diversification requirements set forth in sections 404(a)(1)(B) and (C) of ERISA to
the extent such requirements apply to an Employees’ Stock Ownership Plan, or (iii) is prohibited by section 406 of ERISA, or (iv) would impair the qualification of the Plan or the exemption of the Trust under sections 401 and 501 of the Code.
Except as otherwise agreed by the Trustee and the Company, the Trustee shall return custody of all Trust Assets and shall be responsible for their safekeeping. The Company shall indemnify and hold the Trustee harmless from any and all costs,
damages, expenses, and liabilities which the Trustee may incur by reason of any action taken or omitted to be taken by the Trustee upon directions from the board of directors, a Manager, or an insurer pursuant to this section 2.1. 
  
 Trustee Powers. In addition to and not by way of limitation upon the fiduciary powers
granted to it by law, the Trustee shall have the following specific powers, subject to the limitations set forth in section 2.1: 
  
 to receive, hold, manage, invest, and reinvest the money or other property which constitutes the Trust Fund, without distinction between principal and income; 

 

 -2- 

 to hold funds uninvested temporarily without liability for interest thereon, and to deposit funds in one or more savings
or similar accounts with any banks and savings and loan associations which are insured by an instrumentality of the federal government, including the Trustee if the Trustee is such an institution; 
  
 to invest or reinvest the whole or any portion of the money or other property which
constitutes the Trust Fund in such common or preferred stocks, investment trust shares, mutual funds, common trust funds, partnership interests, bonds, notes, or other evidences of indebtedness, and real and personal property as the Trustee in its
absolute judgment and discretion may deem to be for the best interests of the Trust Fund, regardless of nondiversification to the extent that such nondiversification is clearly prudent, and regardless of whether any such investment or property is
authorized by law regarding the investment of trust funds; 
  
 of a wasting asset
nature; 
  
 temporarily nonincome producing; or 
  
 within or without the State of New Jersey or the United States; 
  
 to invest in common and preferred stocks, bonds, notes, or other obligations of an Employer
and any other corporation or business enterprise in which an Employer or its stockholders may own an interest; provided, however, that the Trustee shall not purchase from an Employer any shares of the Employer’s common or preferred stock unless
the requirements of N.J.S.A. 14A:8-1 have been satisfied; 
  
 to invest in real
property purchased from, leased to, and managed or operated by or for an Employer or any other corporation or business enterprise in which an Employer or its stockholders may own an interest, upon such terms and conditions as the Trustee in its
absolute discretion may deem advisable; 
  
 to exchange any investment or
property, real or personal, for other investments or properties at such time and upon such terms as the Trustee shall deem proper; 
  

 -3- 

 to sell, transfer, convey, or otherwise dispose of any investment or property, real or personal, for cash or on credit,
in such manner and upon such terms and conditions as the Trustee shall deem advisable; and no person dealing with the Trustee shall be under any duty to inquire as to the validity, expediency, or propriety of any such sale or as to the application
of the purchase money paid to the Trustee; 
  
 to hold any investment or property
in the name of the Trustee, with or without the designation of any fiduciary capacity, or in the name of a nominee, or unregistered, or in such other form that title may pass by delivery; provided, however, that the Trustee’s records always
shall show that such investment or property belongs to the Trust and the Trustee shall not be relieved hereby of its responsibility to maintain safe custody of the Trust Fund; 
  
 to organize one or more corporations to hold, manage, or liquidate any property, including real estate, owned or acquired by the Trust Fund
if in the sole discretion of the Trustee the organization of such corporation or corporations is for the best interests of the Trust; 
  
 to extend the time for payment of, to modify, to renew, or to release security from any mortgage, note, or other evidence of indebtedness, or to take advantage of or
waive any default; to foreclose mortgages and bid on property under foreclosure or to take title to property by conveyance in lieu of foreclosure, either with or without the payment of additional consideration; 
  
 to vote in person or by proxy all stocks and other securities having voting privileges; to
exercise or refrain from exercising any option or privilege with respect to stocks and other securities, including any right or privilege to subscribe for or otherwise to acquire stocks and other securities; or to sell any such right or privilege;
to assent to and join in any plan of refinance, merger, consolidation, reorganization, or liquidation of any corporation or other enterprise in which this Trust may have an interest, to deposit stocks and other securities with any committee formed
to effectuate the same, to pay any expense incidental thereto, to exchange stocks and other securities for those which may be issued pursuant to any such plan, and to retain as an investment the stocks and other securities received by the Trustee;
and to deposit any investment in a voting trust; 
  

 -4- 

 to abandon any property, real or personal, which the Trustee shall consider to be worthless or not of sufficient value to
warrant its keeping or protecting; to abstain from the payment of taxes, water rents, assessments, repairs, maintenance, and upkeep of any such property; to permit any such property to be lost by tax sale or other proceedings, and to convey any such
property for a nominal consideration or without consideration; 
  
 to borrow money
from an Employer or from others (including the Trustee) and to enter into installment purchase contracts for any purpose, including the purchase of Stock, with or without interest upon such terms and conditions as the Trustee may deem to be
advisable; to issue its promissory note as Trustee to evidence such debt; to pledge as security therefor assets of the Trust, and to authorize the holders of any such notes to pledge the notes to secure obligations of the holders and in connection
therewith to repledge any assets of the Trust held as security therefor, provided that, with respect to any extension of credit to the Trust involving, as a lender or guarantor, an Employer or another “disqualified person” within the
meaning of section 4975(e)(2) of the Code: 
  
 each loan or installment contract
is primarily for the benefit of Participants and Beneficiaries of the Plan; 
  
 any interest on a loan or installment contract does not exceed a reasonable rate; 
  
 the terms of a loan, whether or not between independent parties, must, at the time the loan is made, be at least as favorable to the Plan and this Trust as the terms of a comparable loan resulting from
arm’s-length negotiations between independent parties; 
  
 the proceeds of a
loan shall be used only to acquire Stock, to repay the loan, or to repay a previous loan meeting these conditions, and the subject of an installment contract shall be only the Trust’s purchase of Stock; 
  
 any collateral pledged to a creditor by the Trustee shall consist only of the assets
purchased with borrowed funds, or received in accordance with an installment contract, or assets pledged as collateral on a previous loan or installment contract meeting these conditions which is repaid with the proceeds of the current loan and the
creditor shall have no recourse against the Trust 

  

 -5- 

 
Fund except with respect to the collateral (although the creditor may have recourse against an Employer as guarantor); 
  
 no person entitled to payment under a loan or installment contract shall have any right to
assets of the Trust other than assets pledged as collateral on the loan, amounts contributed by the Employers to the Trust Fund to enable the Trustee to meet its obligations under the loan or installment contract, and earnings attributable to such
collateral and the investment of such contributions; 
  
 payments with respect to
a loan or installment contract shall be made only from those amounts contributed by the Employers to the Trust Fund and from amounts earned on Trust investment; 
  

upon the payment of any portion of the balance due on a loan or upon any installment payment, a proportionate part of any assets originally pledged as collateral for
such indebtedness shall be released from encumbrance pursuant to section 4.3 of the Plan; and 
  
 in the event of a default, the value of the assets transferred in satisfaction of the loan or the installment contract shall not exceed the amount of the default and, if the lender is a “disqualified
person”, the loan must provide for a transfer of assets upon default only upon and to the extent of the failure of the Plan to meet the loan payment schedule; 
  
 to manage and operate any real property which shall at any time constitute an asset of the Trust Fund; to make repairs, alterations, and
improvements thereto; to insure such property against loss by fire or other casualty; to lease or grant options for the sale of such property, which lease or option may be for a period of time which may extend beyond the life of this Trust; and to
take any other action or enter into any other contract respecting such property which is consistent with the best interests of the Trust; 
  
 to employ and compensate agents, investment counsel, custodians, appraisers, attorneys, and accountants and to pay any and all expenses incurred in connection with the
exercise of any power, right, authority or discretion granted herein; 
  
 to
employ and consult with any legal counsel, who also may be counsel to an Employer or the Committee, with respect to the meaning or construction of this Trust Agreement, the extent of 

  

 -6- 

 
the Trustee’s obligations and duties hereunder, and whether the Trustee should take or decline to take a particular action hereunder, and the Trustee
shall be fully protected with respect to any action taken or omitted by it in good faith pursuant to such advice; 
  
 to defend any action or proceeding instituted against the Trust Fund, to institute any action on behalf of the Trust Fund, and to compromise or submit to arbitration any
dispute concerning the Trust Fund; 
  
 to make, execute, acknowledge, and deliver
any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; 
  

to commingle the Trust Fund created pursuant hereto, excluding any portion invested in Stock, in a single trust with all or any portion of any other trust fund,
assigning an undivided interest to each such commingled trust fund, provided that such commingled trust is itself exempt from taxation pursuant to section 501(a) of the Code, or its successor section; and provided further that the trust agreement
governing such commingled trust shall be deemed incorporated by reference in the Plan; 
  
 where two or more trusts governed by this Trust Agreement have an undivided interest in any property, to credit the income from such property to such trusts in proportion to their undivided interests, and when non pro rata distributions of
property or money are made from such trusts, to make appropriate adjustments to the undivided fractional interests of such trusts; 
  
 to invest all or any portion of the Trust Fund in one or more group annuity contracts, deposit administration contracts, and other such contracts with insurance
companies, including any commingled separate accounts established under such contracts, as shall be determined by the Trustee to be desirable and for the best interest of the Trust Fund; 
  
 generally, with respect to all cash, stocks, and other securities, and property, both real and personal, received or held in the Trust Fund
by the Trustee, to exercise all the same rights and powers as are or may be lawfully exercised by persons owning cash, or stocks and other 

  

 -7- 

 
securities, or such property in their own right; and to do all other acts, whether or not expressly authorized, which it may deem necessary or proper for the
protection of the Trust Fund; and 
  
 whenever more than two persons shall qualify
to act as co-trustees, to exercise and perform every power (including discretionary powers), authority or duty by the concurrence of a majority of them with the same effect as if all had joined therein, except that the unanimous vote of such persons
shall be necessary to determine the number (one or more) and identity of persons who may sign checks, make withdrawals from financial institutions, have access to safe deposit boxes, or direct the sale of trust assets and the disposition of the
proceeds. 
  

 -8- 

 Compensation and Indemnification of Trustee and Payment of Expenses and Taxes.

  
 Compensation. The Trustee shall receive as its compensation and as
reimbursement for expenses such amounts as shall be agreed upon from time to time between it and the board of directors of the Company. However, in no event shall any compensation be paid from the Trust Fund to an individual trustee who receives
full-time compensation as an employee of an Employer. 
  
 Indemnification.
Notwithstanding any other provision of this Trust Agreement, any individual designated as a trustee hereunder shall be indemnified and held harmless by the Company to the fullest extent permitted by law against any and all costs, damages, expenses,
and liabilities reasonably incurred by or imposed upon such individual in connection with any claim made against him or in which he may be involved by reason of his being, or having been, a trustee hereunder, to the extent such amounts are not
satisfied by insurance maintained by the Company. 
  
 Expenses. All
expenses of administering this Trust and the Plan, whether incurred by the Trustee or the Committee, shall be paid by the Trustee from the Trust Fund to the extent such expenses shall not have been assumed by the Company or the Trustee. 

 
 Taxes. All taxes of any kind that may be levied or assessed upon the Trust Fund,
its income or assets, shall be paid from the Trust Fund, but the Trustee shall not be obliged to pay such tax so long as it shall contest the validity of such levy or assessment upon the advice of counsel. 
  
 Records and Valuation. 
  
 Records. The Trustee shall maintain accurate and detailed records and accounts of all
investments, receipts, disbursements, and other transactions made by it with respect to the Trust Fund, and all accounts, books, and records relating thereto shall be open at all reasonable times to inspection and audit by the Committee. 

 
 Annual Valuation. From time to time upon the request of the Committee, but at least
annually as of each April 30th, the Trustee shall determine the number of shares of Stock and the current market value of all other assets held in the Trust Fund in accordance with section 5.4 of the Plan and shall report these amounts to the
Committee. 
  
 Distributions. 

 
 Certification of Committee Members. From time to time the president of the Company
shall certify to the Trustee in writing the names of the individuals comprising the and shall furnish to the Trustee a specimen signature of each member. 
  
 Instructions to Trustee. The Trustee shall pay such sums to such persons and at such times as shall be set forth in written instructions from the Committee. The
Trustee shall be fully protected in taking any action based upon such written instructions and shall have no power, authority, or duty to interpret the Plan or to inquire into the decisions or determinations of that Committee, or to question the
instructions given to it that Committee. 
  
 Plan Termination. In the event
of a termination of the Plan, the Trustee shall continue to disburse funds in accordance with the instructions of the Committee. 
  

 -9- 

 Removal, Resignation, and Appointment of Trustees. The Company may at any time, by action of its board of
directors, remove any person serving as a trustee hereunder by giving to such person written notice of removal and, if applicable, the name and address of the successor trustee. Any person serving as a trustee hereunder may resign at any time by
giving written notice to the Company. Any such removal or resignation shall take effect within 30 days after such written notice has been given by the trustee or by the Company, as the case may be, or at such earlier time as may be acceptable to
both the trustee and the Company. The removed or resigned trustee shall transfer, pay over, and deliver any portion of the Trust Fund in its possession or control (less an appropriate reserve for any unpaid fees and expenses) and all records
pertaining thereto to the successor or remaining trustee. Thereafter, the removed or resigned trustee shall have no liability for the Trust Fund or for its administration by the successor or remaining trustee, but shall render an accounting to the
Committee of its administration of the Trust Fund to the date on which its trusteeship shall have been terminated. The Company may also, upon 30 days’ notice to each person currently serving as a trustee, appoint one or more persons to serve as
co-trustees hereunder. 
  
 Miscellaneous.

  
 Right to Amend. This Trust Agreement may be amended from time to time
by an instrument in writing executed by the Company; provided, however, that any amendment affecting the powers or duties of the Trustee must be approved by the Trustee, and provided, further, that no amendment may divert any portion of the Trust
Fund to purposes other than the exclusive benefit of the Participants and their Beneficiaries; and further provided that Section 3.2 cannot be amended at any time. Any amendment shall apply to the Trust Fund as constituted at the time of the
amendment as well as to that portion of the Trust Fund which is subsequently acquired. 
  
 Compliance with ERISA. In the exercise of its powers and the performance of its duties hereunder, the Trustee shall act in good faith and in accordance with the applicable requirements under ERISA. Except as may be otherwise required
by ERISA, the Trustee shall not be required to furnish any bond in any jurisdiction for the performance of its duties hereunder and, if a bond is required despite this provision, no surety shall be required on it. 
  
 Nonresponsibility for Funding. The Trustee shall be under no duty to enforce the
payment of any contributions and shall not be responsible for the adequacy of the Trust Fund to meet and discharge any Stock obligations or to satisfy any obligations for benefits under the Plan. 
  
 Reports. The Trustee shall file any report which it is required by law to file with
any governmental authority with respect to this Trust, and the Committee shall furnish to the Trustee whatever information is necessary to prepare the report. 
  

Dealings with Trustee. Persons dealing with the Trustee shall be under no obligation to inquire concerning the validity of anything which the Trustee purports
to do, nor need any person see to the proper application of any money paid or any property transferred upon the order of the Trustee or to inquire into the Trustee’s authority as to any transaction. 
  
 Successor Trustees. This Trust Agreement shall apply to any person who shall be
appointed to succeed one of the persons currently appointed as a trustee; and any reference herein to the 

  

 -10- 

 
Trustee shall be deemed to include any one or more individuals or corporations, or any combination thereof who or which shall at any time act as a co-trustee
or as the sole trustee hereunder. 
  
 Governing State Law. This Trust
Agreement shall be interpreted in accordance with the laws of the State of New Jersey to the extent those laws may be applicable under the provisions of ERISA. 
  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 
  

									
	 ATTEST:
	 	 	 	 THE NEWARK GROUP, INC.

					
	 By:
	 	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 	 	 Fred G. von Zuben, President

			
	 WITNESS:
	 	 	 	 
				
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 Edward K. Mullen, Trustee

				
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 Robert H. Mullen, Trustee

				
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 Fred G. von Zuben, Trustee

  

 -11- 

			
	 Section 1.   Creation of Trust
	  	1
	 1.1 Trustees
	  	1
	 1.2 Incorporation of Plan
	  	1
	 1.3 Name
	  	2
	 1.4 Nondiversion of Assets
	  	2
	 Section 2.   Investment of Trust Fund and Administrative Powers of the Trustee
	  	2
	 2.1 Investment Policy
	  	2
	 Section 3.   Compensation and Indemnification of Trustee and Payment of Expenses and Taxes
	  	9
	 3.1 Compensation
	  	9
	 3.2 Indemnification
	  	9
	 3.3 Expenses
	  	9
	 3.4 Taxes
	  	9
	 Section 4.   Records and Valuation
	  	9
	 4.1 Records
	  	9
	 4.2 Annual Valuation
	  	9
	 Section 5.   Distributions
	  	9
	 5.1 Certification of Committee Members
	  	9
	 5.2 Instructions to Trustee
	  	9
	 5.3 Plan Termination
	  	9
	 Section 6.   Removal, Resignation, and Appointment of Trustees
	  	10
	 Section 7.   Miscellaneous
	  	10
	 7.1 Right to Amend
	  	10
	 7.2 Compliance with ERISA
	  	10
	 7.3 Nonresponsibility for Funding
	  	10
	 7.4 Reports
	  	10
	 7.5 Dealings with Trustee
	  	10
	 7.6 Successor Trustees
	  	10
	 7.7 Governing State Law
	  	11

  

 -12- 

 SCHEDULE A 
 TO 
 THE NEWARK GROUP, INC. 
 EMPLOYEES’ STOCK OWNERSHIP PLAN-TRUST 
  

					
	 Name of Trustee

	  	 Date of Commencement of
 Trusteeship

	  	 Date of Termination of
 Trusteeship

	 Edward K. Mullen
	  	February 16, 1999	  	 
	 Robert H. Mullen
	  	February 16, 1999	  	 
	 Fred G. von Zuben
	  	February 16, 1999Purchase Agreement dated as of March 5, 2004

 EXHIBIT 10.4 
  
 $175,000,000 
  
 THE NEWARK GROUP, INC. 
 (a New Jersey
corporation) 
  
 9 3/4% Senior Subordinated Notes due 2014

  
 PURCHASE AGREEMENT 
  
 March 5, 2004 

 March 5, 2004 
  
 Wachovia Capital Markets, LLC 
     One Wachovia Center

     301 South College Street 
     Charlotte, North Carolina 28288 
  
 Ladies and
Gentlemen: 
  
 The Newark Group, Inc., a New Jersey corporation
(the “Company”), proposes to issue and sell to the several purchasers named in Schedule I hereto (the “Initial Purchasers”) on the terms and conditions herein, for whom Wachovia Capital Markets, LLC is acting as
Representative (in such capacity, the “Representative”), $175,000,000 aggregate principal amount of its 9 3/4% Senior Subordinated Notes due 2014 (the “Notes”). The Notes will be issued pursuant to an Indenture (the
“Indenture”) to be dated as of the Closing Date (as defined in Section 2) by and between the Company, and The Bank of New York, as Trustee (the “Trustee”). This Agreement, the Registration Rights Agreement to be
dated the Closing Date between the Initial Purchasers and the Company (the “Registration Rights Agreement”), the Notes and the Indenture are hereinafter collectively referred to as the “Transaction Documents” and
the execution and delivery of the Transaction Documents and the transactions contemplated herein and therein are hereinafter referred to as the “Transactions.” 
  
 The Notes will be offered and sold through the Initial Purchasers without being registered under the Securities Act of 1933,
as amended (the “Securities Act”), to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act, and in offshore transactions in reliance on Regulation S under
the Securities Act (“Regulation S”). The Initial Purchasers have advised the Company that they will offer and sell the Notes purchased by them hereunder in accordance with Section 3 hereof as soon as the Representative deems
advisable. 
  
 In connection with the sale of the Notes, the
Company has prepared a preliminary offering memorandum dated February 23, 2004 (the “Preliminary Memorandum”) and a final offering memorandum dated the date hereof (the “Final Memorandum” and, with the Preliminary
Memorandum, each a “Memorandum”). Each Memorandum sets forth certain information concerning the Company, the Notes, the Transaction Documents and the Transactions. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement thereto, in connection with the offer and sale of the Notes by the Initial Purchasers. 
  
 On the Closing Date, the Company will enter into a $150.0 million senior secured revolving credit facility (the
“Senior Secured Credit Facility”) with the Company and Newark Group International B.V., a Netherlands corporation and wholly owned subsidiary of the Company as borrowers, Wachovia Bank, National Association as administrative agent
and Wachovia Capital Markets, LLC as, lead arranger and sole bookrunner, approximately $25.0 million of which will be drawn on the Closing Date. 
  

 1. Representations and Warranties of the Company. The Company represents and warrants to, and
agrees with, each of the Initial Purchasers that: 
  
 (a) The Preliminary Memorandum does not contain, and the Final Memorandum, in the form used by the Initial Purchasers to confirm sales and on the Closing Date, and any amendment or supplement thereto does not and will not contain any untrue
statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations or warranties set forth
in this paragraph shall not apply to statements in or omissions from either Memorandum made in reliance upon and in conformity with information furnished in writing to the Company by the Initial Purchasers or their representatives expressly for use
therein, as specified in Section 11. The statistical and industry data included in each Memorandum are based on or derived from sources that the Company believes to be reliable and accurate. 
  
 (b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of New Jersey. The Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such qualification, except where the failure to so qualify or be in good standing would not have or would not reasonably be expected to have a Material Adverse Effect. “Material
Adverse Effect” shall mean a material adverse change in or effect on or any development having a material adverse effect on (i) the business, operations, properties, assets, liabilities, stockholders’ equity, earnings, condition
(financial or otherwise), results of operations or management of the Company and its subsidiaries, considered as one enterprise, whether or not in the ordinary course of business, or (ii) the ability of the Company to perform its obligations under
the Notes or the Transaction Documents. 
  
 (c)
The Company has full power (corporate and other) to own or lease its properties and conduct its business as described in each Memorandum; and the Company has full power (corporate and other) to enter into the Transaction Documents and to carry out
all the terms and provisions hereof and thereof to be carried out by it. 
  
 (d) The authorized, issued and outstanding capital stock of the Company is as set forth in the Final Memorandum. All of the issued shares of capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any security holder of the Company. 
  
 (e) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Final Memorandum
and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect; all of the issued shares of capital stock of each subsidiary of the Company have been duly and 

  

 -2- 

 
validly authorized and issued, are fully paid and non-assessable, and are owned directly or through wholly-owned subsidiaries by the Company, free and clear
of all liens, encumbrances, equities or claims, other than those resulting pursuant to the terms of the Company’s existing credit facility with JPMorgan Chase Bank (the “Existing Credit Facility”). 
  
 (f) No subsidiary of the Company is prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or any other subsidiary of the
Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except under the terms of the Existing Credit Facility and the Senior Secured Credit Facility and as otherwise
disclosed in the Final Memorandum. 
  
 (g) Except
for employee and director stock options or as otherwise disclosed in the Final Memorandum, there are no outstanding (i) securities or obligations of the Company convertible into or exchangeable for any capital stock of the Company, (ii) warrants,
rights or options to subscribe for or purchase from the Company any such capital stock or any such convertible or exchangeable securities or obligations or (iii) obligations of the Company to issue any such capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or options. 
  
 (h) Deloitte & Touche LLP is an independent certified public accountant with respect to the Company within the meaning of the
Securities Act and the applicable rules and regulations thereunder. The consolidated balance sheets as of April 30, 2003 and 2002, and the related statements of operations, stockholders’ equity and cash flows, for each of the three years in the
period ended April 30, 2003, included in the final memorandum, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report. 
  

(i) The audited financial statements as of April 30, 2003 and 2002 of the Company and its subsidiaries in the Final Memorandum fairly
present in all material respects the financial position, results of operations, cash flows and changes in stockholders’ equity of the Company and its subsidiaries for each of the three years in the period ended April 30, 2003. The interim
financial statements included in the Final Memorandum fairly present in all material respects the information they purport to show and have been prepared on a basis substantially consistent with the audited financial statements included therein;
since the date of the latest of such financial statements, there has been no change nor any development or event which has had or could reasonably be expected to have a Material Adverse Effect; such consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America and has been consistently applied throughout the periods involved (except as otherwise expressly disclosed in the notes thereto). The “Summary
Consolidated Financial Data” and “Selected Consolidated Financial Data” in the Final Memorandum have been derived from the consolidated financial statements of the Company and its subsidiaries, and has been compiled on a basis
consistent with that of the financial statements included in the Final Memorandum, except for the unaudited consolidated Income Statement Data and unaudited consolidated Other Financial Data for the twelve month period 

  

 -3- 

 
ended October 31, 2003 which are calculated by subtracting the data for the six months ended October 31, 2002 from the data for the fiscal year ended April
30, 2003 and then adding the appropriate data for the six months ended October 31, 2003; and the ratios of earnings to fixed charges set forth in the Final Memorandum under the caption “Selected Consolidated Financial Data” have been
calculated in compliance with Item 503(d) of Regulation S-K under the Securities Act. 
  
 (j) Subsequent to the respective dates as of which information is given in the Final Memorandum, (i) none of the Company and its
subsidiaries have incurred any material liability or obligation, direct or contingent, or entered into any material transaction in each case not in the ordinary course of business; (ii) the Company has not purchased any of its outstanding capital
stock, and has not declared, paid or otherwise made any dividend or distribution of any kind on any class of its capital stock, except pursuant to the terms of the Company’s Employee Stock Ownership Plan; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries taken as a whole, except as disclosed in the Final Memorandum. 
  
 (k) The Company and its subsidiaries each maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
  
 (l) This Agreement has been duly authorized, executed and delivered by the Company. 
  
 (m) The Indenture and the Registration Rights Agreement have
been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered by the Company, and will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting enforcement of creditors’ rights generally and except as enforcement
thereof is subject to general principles of equity; and the Indenture and the Registration Rights Agreement will conform in all material respects to the description thereof in the Final Memorandum and will be substantially in the form previously
delivered to you. 
  
 (n) The Indenture will
conform on the Closing Date to the requirements of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and to the rules and regulations of the Securities and Exchange Commission (the
“Commission”) applicable to an indenture that is qualified thereunder. 
  

 -4- 

 (o) The Notes have been duly authorized and, on the Closing Date, when executed and
authenticated in the manner provided for in the Indenture and delivered to and paid for by the Initial Purchasers as provided in this Agreement, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting enforcement of creditors’ rights generally and except as
enforcement thereof is subject to general principles of equity, and will be entitled to the benefits of the Indenture and the Registration Rights Agreement; the Exchange Notes (as defined in the Registration Rights Agreement) have been duly
authorized and, when executed and authenticated in the manner provided for in the Registration Rights Agreement and the Indenture, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity, and will be entitled to the benefits of the Indenture; and the Notes and the Exchange Notes, when issued pursuant to the terms of the Indenture and the Registration Rights Agreement, will conform to the descriptions
thereof in the Final Memorandum. 
  
 (p) The
execution, delivery and performance by the Company of this Agreement and the other Transaction Documents, the issuance and sale of the Notes and the compliance by the Company with all of the provisions of the Notes, the Indenture, the Registration
Rights Agreement and this Agreement and the consummation of the transactions contemplated hereby and thereby, including the execution, delivery and performance by the Company of the Senior Secured Credit Facility, will not (i) conflict with, result
in a breach or violation of, or constitute a default under, any indenture, mortgage, deed of trust or loan agreement, stockholders’ agreement, purchase or credit agreement, lease, or any other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or any of their respective properties are subject, except for any such conflicts, breaches, violations or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect, or with the certificate of incorporation or bylaws of the Company or any of its subsidiaries, or any statute, rule or regulation or any judgment, order, decree or ruling of any governmental authority or
court or any arbitrator applicable to the Company or any of its subsidiaries, or (ii) require the consent, approval, authorization, order, registration or filing or qualification with, any governmental authority or court, or body or arbitrator
having jurisdiction over the Company or any of its subsidiaries, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer or sale of the Notes, the Exchange Notes and the resale of the
Notes pursuant to the Registration Rights Agreement and by Federal and state securities laws with respect to the obligations of the Company under the Registration Rights Agreement and the qualification of the Indenture under the Trust Indenture Act.

  
 (q) No legal or governmental actions, suits,
proceedings or investigations are pending or, to the Company’s knowledge, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its 

  

 -5- 

 
subsidiaries is subject, other than proceedings accurately described in the Preliminary Memorandum and the Final Memorandum and such proceedings or
investigations that would not, singly or in the aggregate, result in a Material Adverse Effect. 
  
 (r) There are no relationships, direct or indirect, between or among the Company or any of its subsidiaries, on the one hand, and the
respective directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other hand, that would be required by the Securities Act to be disclosed in a prospectus were the Notes being issued and sold in a
public offering registered on Form S-1 under the Securities Act, except with respect to the executive compensation information required under Item 402 of Regulation S-K, that are not so disclosed in the Final Memorandum; and there are no contracts
or other documents that would be required by the Securities Act to be disclosed in a prospectus were the Notes being issued and sold in a public offering registered on Form S-1 under the Securities Act that are not so disclosed in the Final
Memorandum. 
  
 (s) The Company is not now nor
after giving effect to the issuance of the Notes and the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby or described in the Preliminary Memorandum or the Final
Memorandum, will be (i) insolvent, (ii) left with unreasonably small capital with which to engage in its anticipated business or (iii) incurring debts or other obligations beyond its ability to pay such debts or obligations as they become due.

  
 (t) The Company and its Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)) have not distributed and, prior to the later of (i) the Closing Date and (ii) the completion of the distribution of the Notes, will not distribute any
offering material in connection with the offering and sale of the Notes other than the Preliminary Memorandum, the Final Memorandum or any amendment or supplement thereto. 
  
 (u) The Company and its subsidiaries have not sustained, since the date of the latest audited financial
statements included in the Final Memorandum (exclusive of any amendment or supplement thereto), any material loss or interference with its business or properties from fire, explosion, flood, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or decree (whether domestic or foreign) otherwise than as set forth in the Final Memorandum (exclusive of any amendment or supplement thereto); and, since such date, there
has not occurred any change or development having or that would reasonably be expected to have a Material Adverse Effect. 
  
 (v) The statements set forth in the Final Memorandum under the caption “Description of Notes”, insofar as they purport to
constitute a summary of the terms of the Notes, and under the captions “Management”, “Certain Relationships and Related Party Transactions”, “Description of Certain Indebtedness”, “Security Ownership of Certain
Beneficial Owners and Management”, and “Material United States Federal Tax Considerations”, “Exchange Offer; Registration Rights”, insofar as they purport to summarize 

  

 -6- 

 
the provisions of the laws and documents referred to therein, fairly and accurately summarize the subject matter thereof in all material respects.

  
 (w) The Company and its subsidiaries have
good and marketable title in fee simple to all items of real property and good and marketable title to all personal property owned by each of them, free and clear of any pledge, lien, encumbrance, security interest or other defect or claim of any
third party, except as set forth in the Final Memorandum and such as do not materially detract from the value of such property. Any property leased by the Company and its subsidiaries is held under valid, subsisting and enforceable leases, and there
is no default under any such lease or any other event that with notice or lapse of time or both would constitute a default thereunder. 
  
 (x) (i) The Company and each trade or business (whether or not incorporated) that is treated as a single employer with the Company under
Section 414 of the Code (“ERISA Affiliate”) has operated and administered each employee benefit plan (as defined in section 3(3) of ERISA, and hereinafter referred to as a “Plan”) in compliance with all applicable
laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of
the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect (“ERISA”) or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA
Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate material. 
  
 (ii) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities by more than $13,000,000 in the case of any single Plan or by more than $24,000,000 in the aggregate for all Plans. The term “benefit liabilities” has the meaning specified in section 4001 of
ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA. 
  
 (iii) The Company and the ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are material. 
  
 (iv) The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year
in accordance with Financial 

  

 -7- 

 
Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of
the Company and the subsidiaries is not material. 
  
 (v) The execution and delivery of the Senior Secured Credit Facility and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a
tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. This representation is made in reliance and subject to the accuracy of the Initial Purchasers’ representation in paragraph (f) of the Notice to Investors section of the
Final Memorandum. 
  
 (y) Except as disclosed in
each Memorandum, no labor dispute with the employees of the Company or any of its subsidiaries exists, is imminent or, to the Company’s knowledge, is threatened, and the senior officers of the Company and its subsidiaries are not aware of any
existing, imminent or threatened labor disturbance by the employees of any of their respective principal suppliers, manufacturers, customers or contractors, which, in either case, could reasonably be expected to result in a Material Adverse Effect.

  
 (z) No proceedings for the merger,
consolidation, liquidation or dissolution of the Company or the sale of all or a material part of the assets of the Company and its subsidiaries or any material acquisition by the Company are pending or contemplated. 
  
 (aa) The Company and each of its subsidiaries owns or
otherwise possesses adequate rights to use all material patents, trademarks, service marks, trade names, copyrights, licenses, permits, franchises and authorizations, all applications and registrations for each of the foregoing, and all other
material proprietary rights and confidential information necessary to conduct their respective businesses as currently conducted; none of the Company or any of its subsidiaries has received any notice, or is otherwise aware, of any infringement of
or conflict with the rights of any third party with respect to any of the foregoing. 
  
 (bb) The Company and each of its subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts and with such deductibles as are prudent in the business in which it is engaged; and none of the Company or any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue their respective businesses at a cost that would not have a Material Adverse Effect. 
  
 (cc) The Company and each of its subsidiaries has complied
in all material respects with all laws, ordinances, regulations and orders applicable to the Company and its subsidiaries, and their respective businesses, and none of the Company or any of its subsidiaries has received any notice to the contrary;
and each of the Company and its subsidiaries owns or possesses all certificates, authorizations, permits, licenses, approvals, orders, franchises, patents, copyrights, service marks, trademarks and trade names, or rights thereto (collectively,
“Licenses”), necessary to conduct their respective businesses 

  

 -8- 

 
in the manner and to the full extent now operated or proposed to be operated as described in the Final Memorandum, in each case issued by the appropriate
federal, state, local or foreign governmental or regulatory authorities (collectively, the “Agencies”), except where the failure to so comply or to possess such Licenses could not have a Material Adverse Effect. The Licenses are in
full force and effect and no proceeding has been instituted or, to the Company’s knowledge, is threatened or contemplated which in any manner affects or calls into question the validity or effectiveness thereof. The Licenses contain no
restrictions, except for restrictions applicable to operations of similar facilities or equipment, that are materially burdensome to the Company. 
  
 (dd) The operation of the recycled paperboard business of the Company and its subsidiaries in the manner and to the full extent now
operated or proposed to be operated as described in the Final Memorandum is in accordance with the Licenses, and all orders, rules and regulations of the Agencies, and no event has occurred which permits (nor has an event occurred which with notice
or lapse of time or both would permit) the revocation or termination of any necessary Licenses or which might result in any other impairment of the rights of the Company therein or thereunder, and the Company and each of its subsidiaries is in
compliance in all material respects with all statutes, orders, rules and regulations of the Agencies relating to or affecting its recycled paperboard operations, except where the failure to comply, or the loss or revocation could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. 
  
 (ee) (i) The Company and each of its subsidiaries is and has been in compliance with all applicable laws, statutes, ordinances, rules,
regulations, orders, judgments, decisions, decrees, standards, and requirements relating to: human health and safety; pollution; management, disposal or release of any chemical substance, product or waste; and protection, cleanup, remediation or
corrective action relating to the environment or natural resources (“Environmental Law”); 
  
 (ii) The Company and each of its subsidiaries has obtained and is in compliance with the conditions of all permits, authorizations,
licenses, approvals and variances necessary under any Environmental Law for the continued conduct in the manner now conducted of their respective businesses (“Environmental Permits”); 
  
 (iii) There are no past or present conditions or
circumstances, including but not limited to pending changes in any Environmental Law or Environmental Permits, that are likely to interfere with the conduct of the business of the Company and its subsidiaries in the manner now conducted or which
would interfere with compliance with any Environmental Law or Environmental Permits; and 
  
 (iv) There are no past or present conditions or circumstances at, or arising out of, their respective businesses, assets and properties of
the Company and each of its subsidiaries or, to the Company’s knowledge, any business, assets or properties formerly leased, operated or owned by the Company or any of its subsidiaries, including but not limited to on-site or off-site disposal
or release of any chemical substance, product or waste, which may give rise to: (i) liabilities or obligations for any cleanup, remediation or corrective action under any Environmental Law; (ii) claims arising under any Environmental 

  

 -9- 

 
Law for personal injury, property damage, or damage to natural resources; (iii) liabilities or obligations incurred by the Company or its subsidiaries to
comply with any Environmental Law; or (iv) fines or penalties arising under any Environmental Law, 
  
 except in each case for any noncompliance or conditions or circumstances that, singly or in the aggregate, would not result in a Material Adverse Effect.

  
 (ff) The Company (i) is not in violation of
its certificate of incorporation or its bylaws, and (ii) no default or breach exists, and no event has occurred that, with notice or lapse of time or both, would constitute a default in the due performance and observation of any term, covenant or
condition of any indenture, mortgage, deed of trust, lease, loan agreement, stockholders’ agreement or any other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of their respective properties are subject, except, in the case of clause (ii) above, for any such default or breach that could not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. 
  
 (gg) The Company and each of
its subsidiaries has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof and has paid all taxes required to be paid by it and any other assessment, fine or penalty with respect to
Taxes levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith and for which the Company and its subsidiaries retains adequate
reserves. 
  
 (hh) Except as disclosed in
the Final Memorandum, there are no contracts, agreements or understandings between the Company or any of its subsidiaries and any person granting such person the right to require the Company or any of its subsidiaries to file a registration
statement under the Securities Act or to require the Company to include any securities held by any person in any registration statement filed by the Company under the Securities Act. 
  
 (ii) The Company is not, and after giving effect to the offering and sale of the Notes and the application
of the proceeds thereof as described in the Final Memorandum will not be, an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as
amended (the “Investment Company Act”). 
  
 (jj) Within the preceding six months, none of the Company or any of its Affiliates has, directly or through any agent, made offers or sales of any security of the Company, or solicited offers to buy or otherwise
negotiated in respect of any securities of the Company of the same or a similar class as the Notes, other than the Notes offered or sold to the Initial Purchasers hereunder. 
  
 (kk) None of the Company or any of its Affiliates has, directly or through any person acting on its or their
behalf (other than the Initial Purchasers, as to which no statement is made), offered, solicited offers to buy or sold the Notes by any form of general solicitation or general advertising (within the meaning of Regulation D) or in any 

  

 -10- 

 
manner involving a public offering within the meaning of Section 4(2) of the Securities Act. 
  
 (ll) None of the Company, any of its Affiliates, nor any person acting on its or their behalf (other than
the Initial Purchasers, as to which no statement is made), has engaged in any directed selling efforts with respect to the Notes, and each of them has complied with the offering restrictions requirement of Regulation S under the Securities Act
(“Regulation S”). Terms used in this paragraph have the meanings given to them by Regulation S. 
  
 (mm) None of the Company or any of its Affiliates has taken, directly or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes; nor has the Company or any of its Affiliates paid
or agreed to pay to any person any compensation for soliciting another to purchase any securities of the Company (except as contemplated by this Agreement). 
  
 (nn) The Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the Securities Act. 
  
 (oo) Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 3 hereof and compliance by the Initial Purchasers with the procedures set forth in Section 3 hereof, it is not necessary in connection with the offer, sale and delivery of the Notes to the Initial
Purchasers in the manner contemplated by this Agreement and disclosed in the Preliminary Memorandum and the Final Memorandum to register the Notes under the Securities Act or to qualify the Indenture under the Trust Indenture Act. 
  
 (pp) None of the Transactions (including, without
limitation, the use of proceeds from the sale of the Notes) will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any regulation promulgated thereunder,
including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System. 
  
 (qq) There are, and during the last 12 months there have been, no material disputes between the Company and any of its ten largest
suppliers (as measured by dollar volume of goods purchased by the Company) (“Material Suppliers”) or ten largest customers (as measured by dollar volume of goods sold by the Company) (“Material Customers”). The
Company’s relations with its Material Suppliers and Material Customers are good, and the Company has received no notice, and is not otherwise aware, of any anticipated material dispute with any of its Material Suppliers and Material Customers,
or that (i) any Material Supplier intends to cease or reduce its supply to the Company in any material respect or (ii) any Material Customer intends to cease or reduce its purchases from the Company in any material respect. 
  

 -11- 

 (rr) Except as disclosed in the Final Memorandum, there are no agreements, arrangements
or understandings that will require the payment of any commissions, fees or other remuneration to any investment banker, broker, finder, consultant or intermediary in connection with the transactions contemplated by this Agreement. 
  
 (ss) The Company does not intend to treat any of the
transactions contemplated by the Transaction Documents as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event the Company determines to take any action inconsistent with such
intention, it will promptly notify the Representative thereof. If the Company so notifies the Representative, the Company acknowledges that one or more of the Initial Purchasers may treat its purchase and resale of Notes as part of a transaction
that is subject to Treasury Regulation Section 301.6112-1, and such Initial Purchaser or Initial Purchasers, as applicable, will maintain the lists and other records required by such Treasury Regulation. 
  
 (tt) The Company has been advised by the NASD’s Portal
Market that the Notes have been designated Portal-eligible securities in accordance with the rules and regulations of the NASD. 
  
 (uu) There are no stamp or other issuance or transfer taxes or duties or other similar fees or charges required to be paid in connection
with the execution and delivery of this Agreement or the issuance or sale by the Company of the Notes. 
  
 (vv) None of the Company, its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such Persons of Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA; and the Company, its subsidiaries and, to the knowledge of the Company, its Affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. 
  
 Each certificate signed by any officer of the Company and delivered to the Initial Purchasers or their counsel shall be deemed to be a representation and warranty by the Company to the Initial Purchasers as to the
matters covered thereby. 
  
 2. Purchase, Sale and Delivery of
the Notes. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell $175,000,000 aggregate principal amount of Notes
to the Initial Purchasers, and each of the Initial Purchasers, severally and not jointly, agree to purchase from the Company the principal amount of Notes set forth opposite the 

  

 -12- 

 
name of such Initial Purchaser in Schedule I hereto at a purchase price equal to 97.0% of the principal amount thereof (the “Purchase
Price”). One or more certificates in definitive form or global form, as instructed by the Representative for the Notes that the Initial Purchasers have severally agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representative requests upon notice to the Company not later than one full business day prior to the Closing Date (as defined below), shall be delivered by or on behalf of the Company to the Representative for
the respective accounts of the Initial Purchasers, with any transfer taxes payable in connection with the transfer of the Notes to the Initial Purchasers duly paid, against payment by or on behalf of the Initial Purchasers of the Purchase Price
therefor by wire transfer in Federal or other funds immediately available to the account of the Company. Such delivery of and payment for the Notes shall be made at the offices of Cahill Gordon & Reindel LLP (“Counsel for
the Initial Purchasers”), 80 Pine Street, New York, New York, at 10:00 A.M., New York City time, on March 12, 2004, or at such other place, time or date as the Representative and the Company may agree upon, such time and date of delivery
against payment being herein referred to as the “Closing Date”. The Company will make such certificate or certificates for the Notes available for examination by the Initial Purchasers at the offices of Counsel for the Initial
Purchasers not later than 10:00 A.M., New York City time on the business day prior to the Closing Date. 
  
 3. Offering of the Notes and the Initial Purchasers’ Representations and Warranties. Each of the Initial Purchasers, severally and not
jointly, represent and warrant to and agree with the Company that: 
  
 (a) It is a qualified institutional buyer as defined in Rule 144A under the Securities Act (a “QIB”). 
  
 (b) It will solicit offers for such Notes only from, and will offer such Notes only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States, QIBs and (B) in the case of offers outside the United States, to persons other than U.S. persons (“foreign purchasers”, which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)) in reliance upon Regulation S under the Securities Act that, in each case, in purchasing such Notes are deemed to have represented
and agreed as provided in the Final Memorandum under the caption “Notice to Investors”. 
  
 (c) It will not offer or sell the Notes using any form of general solicitation or general advertising (within the meaning of Regulation D)
or in any manner involving a public offering within the meaning of Section 4(2) under the Securities Act. 
  
 (d) With respect to offers and sales outside the United States: 
  
 (i) at or prior to the confirmation of any sale of any Notes sold in reliance on Regulation S, it will have
sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration that purchases Notes from it during the distribution compliance period (as defined in Regulation S) a confirmation or notice substantially to
the following effect: 
  
 “The Notes covered
hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, (i) as part of
their distribution at any time; or (ii) otherwise until 40 days after the later of the commencement of the offering of the Notes and March 5, 2004, except in either case in accordance with Regulation S or Rule 144A under the Securities Act. Terms
used above have the meanings given to them by Regulation S.”; and 
  

 -13- 

 (ii) such Initial Purchaser has offered the Notes and will offer and sell the Notes (A)
as part of its distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 903 of Regulation S or as otherwise permitted in Section 3(b);
accordingly, such Initial Purchaser has not engaged nor will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Notes, and such Initial Purchasers has complied and will comply with the offering
restrictions requirements of Regulation S. 
  
 Terms used in this
Section 3(d) have the meanings given to them by Regulation S. 
  
 4. Covenants of the Company. The Company covenants and agrees with the Initial Purchasers that: 
  
 (a) The Company will prepare the Final Memorandum in the form approved by the Representative and will not amend or supplement the Final
Memorandum without first furnishing to the Representative a copy of such proposed amendment or supplement for review and will not use any amendment or supplement to which the Representative may object. 
  
 (b) The Company will furnish to the Initial Purchasers and
to Counsel for the Initial Purchasers prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period referred to in paragraph (c) below, without charge, as many copies of the Final
Memorandum and any amendments and supplements thereto as they reasonably may request. 
  
 (c) At any time prior to the completion of the distribution of the Notes by the Initial Purchasers, if any event occurs or condition
exists as a result of which the Final Memorandum, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it should be necessary to amend or supplement the Final Memorandum to comply with applicable law, the Company will promptly (i) notify the Initial Purchasers of the same; (ii) subject to the requirements
of paragraph (a) of this Section 4, prepare and provide to the Initial Purchasers, at its own expense, an amendment or supplement to the Final Memorandum so that the statements in the Final Memorandum as so amended or supplemented will not, in the
light of the circumstances when the Final Memorandum is delivered to a purchaser, be misleading or so that the Final Memorandum, as amended or supplemented, will comply with applicable law; and (iii) supply any supplemented or amended Final
Memorandum 

  

 -14- 

 
to the Initial Purchasers and Counsel for the Initial Purchasers, without charge, in such quantities as may be reasonably requested. 
  
 (d) The Company will (i) qualify the Notes for sale by the
Initial Purchasers under the laws of such jurisdictions as the Representative may designate and (ii) maintain such qualifications for so long as required for the sale of the Notes by the Initial Purchasers. Notwithstanding the foregoing, the Company
shall not be required to qualify as a foreign corporation or as a dealer in securities or file a general consent to service of process in any jurisdiction. The Company will promptly advise the Initial Purchasers of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. 
  
 (e) At any time prior to the completion of the distribution of the Notes by the Initial Purchasers, the
Company will deliver to the Initial Purchasers such additional information concerning the business and financial condition of the Company as the Initial Purchasers may from time to time request and whenever it or any of its subsidiaries publishes or
makes available to the public (by filing with any regulatory authority or securities exchange or by publishing a press release or otherwise) any information that would reasonably be expected to be material in the context of the issuance of the Notes
under this Agreement, shall promptly notify the Initial Purchasers as to the nature of such information or event. The Company will likewise notify the Initial Purchasers of (i) any decrease in the rating of the Notes or any other debt securities of
the Company by any nationally recognized statistical rating organization (as defined in Rule 436(g)(2) under the Securities Act) or (ii) any notice or public announcement given of any intended or potential decrease in any such rating or that any
such securities rating agency has under surveillance or review, with possible negative implications, its rating of the Notes, as soon as the Company becomes aware of any such decrease, notice or public announcement. The Company will also, for a
period of 5 years from the Closing Date, make available to the Initial Purchasers, as soon as available and without request, copies of any reports and financial statements furnished to or filed with the Commission. 
  
 (f) The Company will not, and will not permit any of its
Affiliates to, resell any of the Notes that have been acquired by any of them, other than pursuant to an effective registration statement under the Securities Act. 
  
 (g) Except as contemplated in the Registration Rights Agreement, none of the Company or any of its
Affiliates, nor any person acting on its or their behalf (other than the Initial Purchasers or any of their respective Affiliates, as to which no statement is made) will, directly or indirectly, make offers or sales of any security, or solicit
offers to buy any security, under circumstances that would require the registration of the Notes under the Securities Act. 
  
 (h) None of the Company or any of its Affiliates, nor any person acting on its or their behalf (other than the Initial Purchasers or any
of their respective Affiliates, as to which no statement is made), will solicit any offer to buy or offer to sell the Notes by means of any form of general solicitation or general advertising (within the meaning of 

  

 -15- 

 
Regulation D) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. 
  
 (i) None of the Company or any of its Affiliates, nor any
person acting on its or their behalf (other than the Initial Purchasers or any of their respective Affiliates, as to which no statement is made), will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the
Notes, and each of them will comply with the offering restrictions requirements of Regulation S. 
  
 (j) None of the Company or any of its Affiliates, nor any person acting on its or their behalf (other than the Initial Purchasers or any
of their respective Affiliates, as to which no statement is made), will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any securities of the same or a similar class as the Notes, other than the Notes offered or
sold to the Initial Purchasers hereunder in a manner which would require the registration under the Securities Act of the Notes. 
  
 (k) So long as any of the Notes are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, at
any time that the Company is not then subject to Section 13 or 15(d) of the Exchange Act, the Company will provide at its expense to each holder of the Notes and to each prospective purchaser (as designated by such holder) of the Notes, upon the
request of such holder or prospective purchaser, any information required to be provided by Rule 144A(d)(4) under the Securities Act. (This covenant is intended to be for the benefit of the holders, and the prospective purchasers designated by such
holders from time to time, of the Notes.) 
  
 (l)
The Company will apply the net proceeds from the sale of the Notes as set forth under “Use of Proceeds” in the Final Memorandum. 
  
 (m) Until completion of the distribution of the Notes, neither the Company nor any of its Affiliates will take, directly or indirectly,
any action designed to cause or result in, or which has constituted or which might reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes.

  
 (n) For so long as any Notes are outstanding,
the Company and its subsidiaries will conduct its operations in a manner that will not subject the Company or any subsidiary to registration as an investment company under the Investment Company Act. 
  
 (o) Each Note will bear a legend substantially to the
following effect until such legend shall no longer be necessary or advisable because the Notes are no longer subject to the restrictions on transfer described therein: 
  
 THIS NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT, AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED 

  

 -16- 

 
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE SECURITIES
ACT, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION AND IN ACCORDANCE WITH TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE UNDER WHICH THIS NOTE WAS ISSUED AND THE OFFERING MEMORANDUM
PURSUANT TO WHICH THIS NOTE WAS ORIGINALLY SOLD. THE HOLDER OF THE NOTE WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY A PROPOSED TRANSFEREE OF THE NOTICE OF THE RESALE RESTRICTIONS APPLICABLE TO THE NOTE. 
  
 THIS SECURITY MAY NOT BE ACQUIRED OR HELD WITH THE ASSETS OF
(I) AN “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO ERISA, (II) A “PLAN” DESCRIBED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”), (III) ANY ENTITY DEEMED TO HOLD “PLAN ASSETS” OF ANY OF THE FOREGOING BY REASON OF AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY, OR (IV) A GOVERNMENTAL PLAN OR CHURCH
PLAN SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), UNLESS THE ACQUISITION AND HOLDING OF THIS SECURITY BY
THE PURCHASER OR TRANSFEREE, THROUGHOUT THE PERIOD THAT IT HOLDS THIS SECURITY, DOES NOT AND WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA AND/OR SECTION 4975 OF THE CODE OR UNDER ANY PROVISIONS OF SIMILAR LAW. BY ITS
ACQUISITION OR HOLDING OF THIS SECURITY, EACH PURCHASER AND TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE FOREGOING REQUIREMENTS HAVE BEEN SATISFIED. 
  
 (p) The Company will not, directly or indirectly, offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company or warrants to purchase debt securities of the Company substantially similar to the Notes (other than the Notes offered pursuant to this Agreement and the Exchange Notes pursuant to the terms of the Registration Rights
Agreement) for a period of 180 days after the date hereof, without the prior written consent of Wachovia Capital Markets, LLC. 
  
 (q) The Company will, promptly after it has notified the Representative of any intention by the Company to treat the Transactions as being
a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4), deliver a duly completed copy of IRS Form 8886 or any successor form to the Representative. 
  

 -17- 

 5. Expenses. (a) Whether or not the transactions contemplated in this Agreement are consummated or
this Agreement is terminated, the Company agrees to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel and the
Company’s accountants in connection with the issuance and sale of the Notes and all other fees or expenses in connection with the preparation of each Memorandum and all amendments and supplements thereto, including, without limitation, all
printing costs associated therewith, and the delivering of copies thereof to the Initial Purchasers, in the quantities herein above specified, (ii) all costs and expenses related to the transfer and delivery of the Notes to the Initial Purchasers,
including any transfer or other taxes payable thereon, (iii) the cost of producing any Blue Sky or legal investment memorandum in connection with the offer and sale of the Notes under state securities laws and all expenses in connection with the
qualification of the Notes for offer and sale under state securities laws as provided in Section 4(d) hereof, including, without limitation, filing fees and the reasonable fees and disbursements of Counsel for the Initial Purchasers in connection
with such qualification and in connection with the Blue Sky or legal investment memorandum, (iv) any fees charged by rating agencies for the rating of the Notes, (v) the fees and expenses, if any, incurred in connection with the admission of the
Notes for trading in The Portal Market or any appropriate market system, (vi) the costs and charges of the Trustee and any transfer agent, registrar or depositary, (vii) the cost of the preparation, issuance and delivery of the Notes, (viii) all
costs and expenses relating to investor presentations, including any “road show” presentations undertaken in connection with the marketing of the offering of the Notes, including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives (including the Initial Purchasers) and officers of the Company and any
such consultants, and the reasonable cost of any aircraft chartered in connection with the road show, and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise
made in this Section 5. It is understood, however, that except as provided in Sections 5(a) and 5(b) of this Agreement and Section 2 of the engagement letter dated December 2, 2003, between Wachovia Capital Markets, LLC and the Company (which shall
remain in full force and effect notwithstanding the execution of this Agreement), the Initial Purchasers will pay all of their costs and expenses, including fees and disbursements of their counsel, transfer taxes payable on resale of any of the
Notes by them and any advertising expenses connected with any offers they may make. 
  
 (b) If the sale of the Notes provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set
forth in Section 6 hereof is not satisfied, because this Agreement is terminated pursuant to Section 9 hereof or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder other than by reason of a default by any of the Initial Purchasers, the Company will reimburse the Initial Purchasers upon demand for all reasonable out-of-pocket expenses (including reasonable counsel
fees and disbursements) that shall have been incurred by them in connection with the proposed purchase and sale of the Notes; provided, however, that the obligations of the Company under this Section 5(b) shall be in addition to, and
not in place of, the provisions for expense reimbursement set forth in the Engagement Letter. 
  

 -18- 

 6. Conditions to the Initial Purchaser’s Obligations. The obligations of the several Initial
Purchasers to purchase and pay for the Notes shall be subject to the accuracy of the representations and warranties of the Company in Section 1 hereof, in each case as of the date hereof and as of the Closing Date, as if made on and as of the
Closing Date, to the accuracy of the statements of the Company’s officers made pursuant to the provisions hereof, to the performance by the Company of its covenants and agreements hereunder and to the following additional conditions:

  
 (a) The Initial Purchasers shall have
received an opinion, dated the Closing Date, of Lowenstein Sandler PC, counsel for the Company, in form and substance satisfactory to the Initial Purchasers, to the effect set forth in Exhibit A hereto. 
  
 (b) The Initial Purchasers shall have received an opinion,
dated the Closing Date, of Cahill Gordon & Reindel LLP, Counsel for the Initial Purchasers, with respect to the issuance and sale of the Notes and such other related matters as the Initial Purchasers may reasonably require, and
the Company shall have furnished to such counsel such documents as it may reasonably request for the purpose of enabling it to pass upon such matters. In rendering such opinion, such counsel may rely as to certain matters of New Jersey law upon the
opinions of Lowenstein Sandler PC referred to in Section 6(a). 
  
 (c) The Initial Purchasers shall have received on each of the date hereof and the Closing Date a letter, dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Initial
Purchasers and Counsel for the Initial Purchasers, from Deloitte & Touche LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters
with respect to the financial statements and certain financial information contained in each Memorandum; provided that the letter shall use a “cut-off date” within three days of the date of such letter. References to the Final
Memorandum in this paragraph (c) with respect to either letter referred to above shall include any amendment or supplement thereto at the date of such letter. 
  

(d) (i) None of the Company or any of its subsidiaries shall have sustained, since the date of the latest audited financial statements
included in the Final Memorandum (exclusive of any amendment or supplement thereto), any loss or interference with their respective businesses or properties from fire, explosion, flood, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or decree (whether domestic or foreign) otherwise than as set forth in the Final Memorandum (exclusive of any amendment or supplement thereto); and (ii) since the respective
dates as of which information is given in the Preliminary Memorandum or the Final Memorandum, there shall not have been any change in the capital stock or long-term debt of the Company and its subsidiaries, or any change in or effect on or any
development having a prospective change in or effect on the business, operations, properties, assets, liabilities, stockholders’ equity, earnings, condition (financial or otherwise), results of operations or management of the Company and its
subsidiaries, whether or not in the ordinary course of business, otherwise than as set forth in each such Memorandum (exclusive of any amendment or supplement thereto), the effect of which, in any such case described in clause (i) or (ii), is, in
the sole judgment of the Representative, 

  

 -19- 

 
so material and adverse as to make it impracticable or inadvisable to proceed with the offering, sale or delivery the Notes on the terms and in the manner
described in the Final Memorandum (exclusive of any amendment or supplement thereto). 
  
 (e) None of the information set forth in the sections of the Final Memorandum entitled “Use of Proceeds”, “Security
Ownership of Certain Beneficial Owners and Management”, “Certain Relationships and Related Party Transactions” and “Description of Certain Indebtedness” shall have changed, nor shall there have been any change in the
information with respect to the directors and officers of the Company from what is set forth in the section of the Final Memorandum entitled “Management”, if the effect of any such change, individually or in the aggregate, in the sole
judgment of the Representative makes it impracticable or inadvisable to proceed with the offering or the delivery of the Notes on the terms and in the manner described in the Final Memorandum, exclusive of any amendment or supplement thereto.

  
 (f) The Initial Purchasers shall have
received a certificate, dated the Closing Date and in form and substance satisfactory to the Initial Purchasers, of the Chief Executive Officer and the Vice President of Planning and Finance of the Company as to the accuracy of the representations
and warranties of the Company in this Agreement at and as of the Closing Date; that the Company has performed all covenants and agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date; and as
to the matters set forth in Sections 6(d) and (e). 
  
 (g) The Notes shall have received initial ratings of not less than B- by Standard & Poor’s and Caa1 by Moody’s, and, subsequent to the date hereof, there shall not have been any decrease in the rating of the Notes or any of
the Company’s other debt securities by any “nationally recognized statistical rating agency”, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and no such organization shall have
publicly announced that it has under surveillance or review its ratings of the Securities or any of the Company’s other debt securities or any notice or public announcement given of any intended or potential decrease in any such rating or that
any such securities rating agency has under surveillance or review, with possible negative implications, its rating of the Notes. 
  
 (h) The Notes shall have been designated for trading on The Portal Market. 
  
 (i) The Notes shall be eligible for clearance and settlement through The Depository Trust Company.

  
 (j) On or before the Closing Date, the
Initial Purchasers and Counsel for the Initial Purchasers shall have received such further certificates, documents or other information as they may have reasonably requested from the Company. 
  
 (k) The Company and the bank agents and lenders party
thereto shall have entered into the Senior Secured Credit Facility in form and substance reasonably satisfactory to the Representative. Prior to or concurrently with the consummation of the offering of the Notes on the Closing Date, the Company
shall have made the initial 

  

 -20- 

 
borrowings under the Senior Secured Credit Facility as contemplated by the Offering Memorandum. 
  
 7. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser,
its affiliates, directors and officers and each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Initial Purchaser against any judgments, losses, claims (whether or not
valid), damages, reasonable costs, fees, expenses or liabilities, joint or several, to which such Initial Purchaser or such other person may become subject, insofar as such judgments, losses, claims, damages, costs, fees, expenses or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Memorandum or the Final Memorandum or any amendment or supplement thereto; or (ii) the
omission or alleged omission to state in the Preliminary Memorandum or the Final Memorandum or any amendment or supplement thereto a material fact necessary to make the statements therein, in the light of the circumstances in which they were made,
not misleading, and will reimburse, as incurred, each Initial Purchaser and each such other person for any legal or other expenses reasonably incurred by such Initial Purchaser or such other person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Memorandum, the Final Memorandum or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such Initial Purchasers through the Representative specifically for use therein as set forth in Section 11 hereof. 
  
 (b) Each Initial Purchaser, severally and not jointly, will indemnify and hold harmless the Company and its affiliates,
directors, officers, and each person, if any, who controls any of the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Company, any such
affiliates, directors or officers or such controlling person may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Preliminary Memorandum or the Final Memorandum or any amendment or supplement thereto, or (ii) the omission or alleged omission to state in the Preliminary Memorandum or the Final Memorandum or any
amendment or supplement thereto a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Initial Purchaser through the Representative specifically for use therein as set forth in
Section 11 hereof and, subject to the limitation set forth immediately preceding this clause, will reimburse as incurred, any legal or other expenses reasonably incurred by the Company or any such affiliates, directors or officers or such
controlling person in connection with investigating, defending against or appearing as a third-party witness in connection with, any such loss, claim, damage, liability or action in respect thereof. 
  

 -21- 

 (c) Promptly after receipt by any person to whom indemnity may be available under this Section 7 (the
“indemnified party”) of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any person from whom indemnity may be sought under this Section 7 (the
“indemnifying party”), notify such indemnifying party of the commencement thereof; provided that the failure so to notify such indemnifying party will not relieve such indemnifying party from any liability which it may have
to such indemnified party under this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 7. In case any such action is brought against any indemnified party, and such indemnified party notifies the
relevant indemnifying party of the commencement thereof, such indemnifying party will be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof, jointly with any other indemnifying party similarly
notified, with counsel satisfactory to such indemnified party; provided, however, that if the named parties in any such action (including impleaded parties) include both the indemnified party and the indemnifying party and the
indemnified party shall have concluded, based on advice of outside counsel, that there may be one or more legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying
party or that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, the indemnifying party shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from an indemnifying party to an indemnified
party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, such indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or
other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) such indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence or (ii) such indemnifying party does not promptly retain counsel satisfactory to such indemnified party or (iii) such indemnifying party has authorized the employment of counsel for such indemnified
party at the expense of the indemnifying party. After such notice from an indemnifying party to an indemnified party, such indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified
party without the written consent of such indemnifying party. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel
as contemplated by (i), (ii) or (iii) of the third sentence of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (x) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid request and (y) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. An indemnifying
party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not the indemnified party or any other person that may be entitled to indemnification hereunder is a party to such claim, action, suit or proceeding) 

  

 -22- 

 
unless such settlement, compromise or consent (x) includes an unconditional release of the indemnified party and such other persons from all liability
arising out of such claim, action, suit or proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party. 
  
 (d) (i) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 7 is unavailable or insufficient, for any reason, to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (including, without limitation, any legal or other expenses
incurred in connection with defending or investigating any action or claim) (or actions in respect thereof) (“Losses”), the Company on the one hand, and the Initial Purchasers, on the other, in order to provide for just and
equitable contribution, agree to contribute to the amount paid or payable by such indemnified party as a result of such Losses to which the Company, on the one hand, and the Initial Purchasers, on the other, may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the other, from the offering of the Notes or (ii) if the allocation provided by the foregoing clause (i) is unavailable for any
reason, not only such relative benefits but also the relative fault of the Company, on the one hand, and the Initial Purchasers, on the other, in connection with the statements or omissions or alleged statements or omissions that resulted in such
Losses. The relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the other, shall be deemed to be in the same proportion as the total proceeds from the offering (before deducting expenses) received by the
Company bear to the total discounts and commissions received by the Initial Purchasers from the Company in connection with the purchase of the Notes hereunder as set forth in the Final Memorandum. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Initial Purchasers,
the parties’ intent, relative knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. The Company and the Initial Purchasers
agree that it would not be just and equitable if contribution were determined by pro rata allocation or by any other method of allocation (even if the Initial Purchasers were treated as one entity for such purpose) that does not take into account
the equitable considerations referred to above. Notwithstanding any other provision of this paragraph (d), no Initial Purchaser shall be obligated to make contributions hereunder that in the aggregate exceed the total discounts and commissions
received by such Initial Purchaser from the Company in connection with the purchase of the Notes hereunder, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ respective obligations to contribute hereunder are several in proportion to their respective obligations to purchase Notes as set
forth on Schedule I hereto and not joint. For purposes of this paragraph (d), each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each other person
listed in Section 7(a) hereof shall have the same rights to contribution as such Initial Purchaser, and each affiliate, director or officer of the Company and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Company. 
  

 -23- 

 (e) The obligations of the Company under this Section 7 shall be in addition to any obligations or
liabilities which the Company may otherwise have and the obligations of the respective Initial Purchasers under this Section 7 shall be in addition to any obligations or liabilities which the Initial Purchasers may otherwise have. 
  
 8. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, and the several Initial Purchasers set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, its respective officers or directors or any controlling person referred to in Section 7 hereof or any Initial Purchaser and (ii) delivery of and payment for the Notes. The
respective agreements, covenants, indemnities and other statements set forth in Sections 5 and 7 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement. 
  
 9. Termination. (a) The Initial Purchasers may terminate this
Agreement by notice to the Company at any time on or prior to the Closing Date in the event that the Company shall have failed, refused or been unable to perform in any material respect all obligations and satisfy in any material respect all
conditions on its part to be performed or satisfied hereunder at or prior thereto or if, at or prior to the Closing Date, (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange, or the NASDAQ National Market
or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or minimum or maximum prices shall have been established on any such exchange or market; (ii)
there has been a material disruption in commercial banking or securities settlement, payment or clearance services in the United States; (iii) a banking moratorium shall have been declared by New York, North Carolina or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of hostilities between the United States and any foreign power, (B) an outbreak or escalation of any other insurrection or armed conflict involving the United States, (C) the occurrence of any
other calamity or crisis involving the United States or (D) any change in general economic, political or financial conditions which has an effect on the U.S. financial markets that, in the case of any event described in this clause (iv), in the sole
judgment of the Representative, makes it impracticable or inadvisable to proceed with the offer, sale and delivery of the Notes as disclosed in the Preliminary Memorandum or the Final Memorandum, exclusive of any amendment or supplement thereto.

  
 (b) Termination of this Agreement pursuant to this Section 9
shall be without liability of any party to any other party except as provided in Sections 5 and 7 hereof. 
  
 10. Defaulting Initial Purchasers. If, on the Closing Date, any Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers shall be obligated to purchase the Notes that such defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase on the Closing Date (the “Remaining Notes”) in the
respective proportions that the principal amount of the Notes set opposite the name of each non-defaulting Initial Purchaser in Schedule I hereto bears to the total number of the Notes set opposite the names of all the non-defaulting Initial
Purchasers in Schedule I hereto; provided, however, that the non-defaulting Initial Purchasers shall not be obligated to purchase any of the 

  

 -24- 

 
Notes on the Closing Date if the total amount of Notes which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase on such
date exceeds 10% of the total amount of Notes to be purchased on the Closing Date, and no non-defaulting Initial Purchaser shall be obligated to purchase more than 110% of the amount of Notes that it agreed to purchase on the Closing Date pursuant
to this Agreement. If the foregoing maximums are exceeded, the non-defaulting Initial Purchasers, or those other purchasers satisfactory to the Initial Purchasers who so agree, shall have the right, but not the obligation, to purchase, in such
proportion as may be agreed upon among them, all the Remaining Notes. If the non-defaulting Initial Purchasers or other Initial Purchasers satisfactory to the Initial Purchasers do not elect to purchase the Remaining Notes, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser or the Company, except that the Company will continue to be liable for the payment of expenses to the extent set forth herein. 
  
 Nothing contained in this Agreement shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its default. If other purchasers are obligated or agree to purchase the Notes of a defaulting or withdrawing Initial Purchaser, the Company or the Representative may
postpone the Closing Date for up to five full business days in order to effect any changes in the Transaction Documents or in any other document or arrangement that, in the opinion of counsel for the Company or Counsel for the Initial Purchasers,
may be necessary. 
  
 11. Information Supplied by Initial
Purchasers. The statements set forth in the second paragraph, the second, third and fourth sentence of the third paragraph and the second and third sentence of the fifth paragraph under the heading “Plan of Distribution” in the
Preliminary Memorandum and the Final Memorandum, to the extent such statements relate to the Initial Purchasers, constitute the only information furnished by the Initial Purchasers to the Company for the purposes of Sections 1(a) and 7 hereof.

  
 12. Notices. All communications hereunder shall be in
writing and, if sent to any of the Initial Purchasers, shall be delivered or sent by mail, telex or facsimile transmission and confirmed in writing to Wachovia Capital Markets, LLC, One Wachovia Center, 301 South College Street, Charlotte, North
Carolina 28288-0604, Attention: Jay Braden, with a copy to Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York, Attention: Jonathan A. Schaffzin, and if sent to the Company, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to the Company at The Newark Group, Inc., 20 Jackson Drive, Cranford, New Jersey, Attention: David M. Ascher, with a copy to Lowenstein Sandler PC, 65 Livingston Avenue, Roseland, New
Jersey, Attention: Benedict M. Kohl. 
  
 13. Successors.
This Agreement shall inure to the benefit of and shall be binding upon the several Initial Purchasers and the Company and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the several Initial Purchasers and the Company and their respective successors and legal representatives, and for the benefit of no other person, except that (i) the indemnities of the Company contained in
Section 7 of this Agreement shall also be for the benefit of any person or persons who 

  

 -25- 

 
control any Initial Purchasers within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Initial Purchasers contained in Section 7 of this Agreement shall also be for the benefit of the affiliates, directors and officers of the Company, and any person or persons who control the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act. No purchaser of Notes from any Initial Purchaser shall be deemed a successor to such Initial Purchaser because of such purchase. 
  
 14. Applicable Law. This Agreement shall be governed by the laws of the State of New York. 
  
 15. Consent to Jurisdiction and Service of Process. (a) All judicial
proceedings arising out of or relating to this Agreement may be brought in any state or federal court of competent jurisdiction in the State of New York, which jurisdiction is non-exclusive. 
  
 (b) Each party agrees that any service of process or other legal summons in
connection with any Proceeding may be served on it by mailing a copy thereof by registered mail, or a form of mail substantially equivalent thereto, postage prepaid, addressed to the served party at its address as provided for in Section 12 hereof.
Nothing in this Section shall affect the right of the parties to serve process in any other manner permitted by law. 
  
 16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. 
  
 [The remainder of
this page is intentionally left blank.] 
  

 -26- 

 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the
space provided below for that purpose, whereupon this letter shall constitute an agreement binding the Company and the Initial Purchasers. 
  

			
	Very truly yours,
	
	THE NEWARK GROUP, INC.
		
	By:	 	/s/    William D. Harper
	 	 	 Name: William D. Harper

	 	 	 Title: Senior Vice President—Business
 Development and Asset Management

  
 Accepted as of the date
hereof. 
  

			
	WACHOVIA CAPITAL MARKETS, LLC
	
	 Acting severally on behalf of itself and the several Initial Purchasers named in Schedule I hereto

		
	 By:
	 	WACHOVIA CAPITAL MARKETS, LLC
		
	 By:
	 	 /s/    Rit N. Amin

	 	 	 Name: Rit N. Amin

	 	 	 Title: Vice President

  

 -27- 

 EXHIBIT A 
  
 FORM OF OPINION OF LOWENSTEIN SANDLER PC 
  
 The opinion of Lowenstein Sandler PC to be delivered pursuant to Section 6(a) of the Purchase Agreement shall be to the effect that:

  
 A. The Company is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation. 
  
 B. The Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction set forth on Schedule A hereto. 
  
 C. The Company has full power (corporate and other) to own or lease its properties and conduct its business as described in
each Memorandum, to enter into the Transaction Documents and to carry out its obligations thereunder. 
  
 D. The Company has authorized capital stock of 10,000,000 shares of common stock. 
  
 E. After reasonable inquiry, such counsel does not know of any legal or governmental proceedings pending against the Company
or any of its subsidiaries or to which any of the properties of the Company or any of its subsidiaries is subject, that if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse
Effect, other than proceedings fairly summarized in all material respects in the Final Memorandum. 
  
 F. The Purchase Agreement has been duly authorized, executed and delivered by the Company. 
  
 G. Each of the Indenture and the Registration Rights Agreement has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company, enforceable in accordance with its terms. 
  
 H. The Notes have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with
the terms of the Purchase Agreement, will be valid and binding obligations of the Company enforceable in accordance with its terms, and will be entitled to the benefits of the Indenture and the Registration Rights Agreement. In our opinion, the
conditions precedent to be satisfied in Sections 13.4 and 13.5 of the Indenture and with respect to the authentication of the Notes under Section 2.2 of the Indenture have been complied with. 
  
 I. The Exchange Notes have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture and Registration Rights Agreement and delivered to the noteholders in exchange for the Notes in accordance with the terms of the Registration Rights Agreement, will be
valid and binding obligations 

  

 
of the Company enforceable in accordance with its terms, and will be entitled to the benefits of the Indenture. 
  
 J. The statements in the Final Memorandum under the captions (a) “Risk
Factors—Risks Related to the Notes and our Other Indebtedness—The terms of our debt may severely limit our operating and financial flexibility”, “Business—Legal Proceedings”, “Description of Certain
Indebtedness”, “Certain Relationships and Related Party Transactions”, and “Notice to Investors” and (b) “Description of Notes”, and “Exchange Offer; Registration Rights”, insofar as such statements
constitute summaries of legal matters or documents, fairly summarize in all material respects such matters or documents. 
  
 K. The statements in the Final Memorandum under the caption “Material United States Federal Income Tax Considerations”, insofar as such
statements constitute a summary of the United States federal tax laws referred to therein, are accurate and fairly summarize in all material respects the United States federal tax laws referred to therein. 
  
 L. Such counsel has reviewed the statements in the Final Memorandum
describing the material contracts, agreements, instruments or other arrangements to which the Company is a party or which are binding on the Company and such statements, insofar as they constitute summaries of legal matters or documents, fairly
summarize in all material respects such matters or documents. 
  
 M. Based upon the representations, warranties and agreements of the Company in Sections 1(t), 1(jj), 1(kk), 1(ll), 1(nn), 4(g), 4(h), 4(i) and 4(j) of the Purchase Agreement and of the Initial Purchasers in Section 3 of the Purchase
Agreement, it is not necessary in connection with the offer, sale and delivery of the Notes to the Initial Purchasers under the Purchase Agreement or in connection with the initial resale of such Notes by the Initial Purchasers in accordance with
Section 3 of the Purchase Agreement to register the Notes under the Securities Act of 1933 or to qualify the Indenture under the Trust Indenture Act of 1939, it being understood that no opinion is expressed as to any subsequent resale of any Notes.

  
 N. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Purchase Agreement, the Indenture, the Registration Rights Agreement and the Notes will not (x) contravene (i) the certificate of incorporation or bylaws of the Company, (ii) any provision of
applicable law, (iii) to our knowledge after reasonable inquiry, any agreement or other instrument binding upon the Company or any of its subsidiaries or (iv) to our knowledge after reasonable inquiry, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any of its subsidiaries, and (y) no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by
the Company and its subsidiaries of their respective obligations under the Purchase Agreement, the Indenture, the Registration Rights Agreement or the Notes, except such as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes and by Federal and state securities laws with respect to the obligations of the Company under the Registration Rights Agreement, except in the case of clauses (x)(iii) and (x)(iv) above, for any such
conflict, breach, violation or default that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
  

 O. The Company is not, and after giving effect to the offering and sale of the Notes and the application
of the proceeds thereof as described in the Final Memorandum will not be, an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as
amended. 
  
 P. The Preliminary Memorandum and the Final
Memorandum comply as to form in all material respects with requirements of Form S-1 under the Securities Act of 1933, except with respect to the requirements set forth in Items 402 and 503(d) of Regulation S-K and Part II of Form S-1 under the
Securities Act. To the best of our knowledge after reasonable inquiry, there are no contracts or other documents that would be required by the Securities Act to be disclosed in a prospectus were the Notes being issued and sold in a public offering
registered on Form S-1 under the Securities Act that are not so disclosed in the Preliminary Memorandum or the Final Memorandum. 
  
 In such counsel’s capacity as counsel to the Company, such counsel has examined a copy of the Final Memorandum. Such counsel has also reviewed and
participated in discussions concerning the preparation of the Final Memorandum with certain officers and employees of the Company, with its auditors and with representatives of and counsel to the Initial Purchasers. The limitations inherent in the
independent verification of factual matters and in the role of outside counsel are such, however, that we cannot and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements made in the Final Memorandum,
except as set forth in paragraphs K, L and J(b) of our opinion. 
  
 Subject to the limitations set forth in the immediately preceding paragraph, such counsel advises that, on the basis of the information we gained in the course of performing the services referred to above, no facts came to their attention
which give us reason to believe that the Final Memorandum (other than the financial statements and schedules and other financial data included therein or omitted therefrom, as to which we have not been requested to express a view), as of its date or
the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. 
  

 SCHEDULE I 
  
 INITIAL PURCHASERS 
  

				
	 Initial Purchaser

	  	Aggregate Principal
Amount of Notes to be
Purchased from the Company

	 Wachovia Capital Markets, LLC
	  	$	122,500,000
	 J.P. Morgan Securities Inc.
	  	$	21,875,000
	 Fleet Securities, Inc.
	  	$	21,875,000
	 PNC Capital Markets, Inc.
	  	$	8,750,000
	 Total
	  	$	175,000,000

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