Document:

The Newark Group, Inc. Stock Option Plan

 EXHIBIT 10.1 
  
 THE NEWARK GROUP, INC. 
 STOCK OPTION PLAN 
  
 As of May 1, 1995

  

 THE NEWARK GROUP, INC. 
 STOCK OPTION PLAN 
  

	Section 1.	Purposes 

  
 The purposes of the Plan are to attract qualified personnel to accept positions of responsibility with the Company, to provide incentives for Key Employees to remain in the employ of the Company, and to induce Key
Employees to maximize the Company’s performance during the terms of their Options. 
  

	Section 2.	Definitions 

  

	2.1	“Appreciation Distribution” means the amount payable pursuant to subsection 17.3 on any exercised Tandem Stock Appreciation Right.

  

	2.2	“Board” means the Board of Directors of the Company or Executive Committee thereof. 

  

	2.3	“Cause” means an Optionee’s willful misconduct, as determined by the Committee in its sole discretion. 

  
  

	2.4	“Chairman” means the Chairman of the Board of the Company. 

  

	2.5	“Closing” means the purchase by a Participant on the Closing Date of any Common Stock for which his or her Options have been exercised in accordance with such
Participant’s Exercise Notice. 

  

	2.6	“Closing Date” means such date as is specified in the Exercise Notice. 

  

	2.7	“Code” means the Internal Revenue Code of 1986, as amended. 

  

	2.8	“Committee” means the Plan Committee as provided for in Section 4. 

  

	2.9	“Common Stock” means the Company’s common stock, no par value per share. 

  

	2.10	“Company” means The Newark Group, Inc., a New Jersey corporation, its successors and assigns. 

  

	2.11	“Employee” means a regular, full-time employee of an Employer. 

  

	2.12	“Employer” means each of the Company, any Subsidiary, their successors and assigns. 

  

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	2.13	“Employment Termination Date” means the effective date as of which an Employee’s employment by the Group has terminated. 

  

	2.14	“ESOP” means The Newark Group, Inc. Employees’ Stock Ownership Plan (effective May 1, 1985), as amended from time to time. 

  

	2.15	“Exercise Notice” means the notice given by a Participant in accordance with Section 14 of his or her election to exercise any vested Options for their Exercise
Price. 

  

	2.16	“Exercise Period” means, with respect to any Option awarded by a Grant, the period beginning on an Optionee’s Vesting Date and ending on (a) the day
immediately preceding the tenth (10th) anniversary of the Grant Date for such Grant, or (b) such earlier date as may be established in accordance with Sections 11 or 15. 

  

	2.17	“Exercise Price” means the price per share of Common Stock upon exercise of any Options, as determined in accordance with Section 7. 

  

	2.18	“Fair Market Value” means, as of any Valuation Date, the fair market value per issued and outstanding share of Common Stock on such Valuation Date as set forth in
the latest annual valuation of the ESOP either (a) for the year the end of which coincides with the Valuation Date, or (b) if (a) is inapplicable, for the year immediately preceding the year which includes the Valuation Date; provided, however, that
if the ESOP does not exist on such Valuation Date, “Fair Market Value” means the fair market value per each such share of Common Stock as determined by the Committee in its sole discretion. 

  

	2.19	“Grant” means any award of Options to an Optionee as provided in Section 6. 

  

	2.20	“Grant Date” means the date as of which a Grant is made, as established by the Committee in its sole discretion. 

  

	2.21	“Grant Notice” means written notice to a Key Employee of his or her selection as an Optionee, as described in subsection 6.2. 

  

	2.22	“Group” means the Company and Subsidiaries, as consolidated. 

  

	2.23	 “Key Employee” means any officer of an Employer or any other Employee who the Committee determines is employed in an important management or other
high-level 

  

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position primarily responsible for the management, growth, and success of the Employer and who is expected to have a significant impact on the Group’s
growth and profitability. 

  

	2.24	“Normal Retirement Age” means the earlier of (a) the Participant’s attainment of age 60 with at least twenty (20) Years of Service, or (b) the
Participant’s attainment of age 65 with at least five (5) Years of Service. 

  

	2.25	“Option” means the right of an Optionee to purchase one share of Common Stock from the Company at the Exercise Price and during the Exercise Period set forth in the
Grant Notice, as may be adjusted in accordance with Section 11. 

  

	2.26	“Optionee” means any Key Employee who has received a Grant. 

  

	2.27	“Option Share” means one share of Common Stock purchased pursuant to the exercise of any Option, as well as any shares or other securities received in exchange
therefor or with respect thereto pursuant to Section 11. 

  

	2.28	“Participant” means any Optionee or SAR Recipient. 

  

	2.29	“Permanent Disability” means the inability of the Optionee to engage in any substantial gainful activity by reason of any physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period of at least 12 months, as determined by the Committee in its sole discretion. 

  

	2.30	“Personal Representative” means the person(s) who shall be the duly appointed, qualified, and acting executor(s) or administrator(s) of the Participant’s
estate. 

  

	2.31	“Plan” means The Newark Group, Inc. Stock Option Plan, as set forth herein. 

  

	2.32	“Plan Year” means the fiscal year of the Company. 

  

	2.33	“President” means the President of the Company. 

  

	2.34	“Purchase Price” means the Fair Market Value per Option Share as of the Sale Date multiplied by the number of Option Shares being purchased by the Company in
accordance with Section 16. 

  

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	2.35	“Sale Date” means the earlier of (a) the date on which written notice is given by an Optionee in accordance with subsection 16.2-1, or (b) the Employment
Termination Date of an Optionee subject to subsection 16.2-2. 

  

	2.36	“SAR Recipient” means any Optionee who is selected by the Committee in accordance with Section 17 also to receive any Tandem Stock Appreciation Rights.

  

	2.37	“Seller” means any Optionee or Personal Representative who sells Option Shares to the Company in accordance with Section 16.2. 

  

	2.38	“Subsidiary” means any corporation the majority of the issued and outstanding shares of which are owned directly or indirectly by the Company.

  

	2.39	“Tandem Stock Appreciation Rights” means the right of a SAR Recipient to receive, upon surrendering any vested Option, a cash distribution from the Company equal to
the excess of (a) the Fair Market Value of the Common Stock which is purchasable upon the exercise of such surrendered, vested Option, over (b) the Exercise Price for such Common Stock. 

  

	2.40	“Valuation Date” means any date as of which Fair Market Value is to be determined. 

  

	2.41	“Vesting Date” means, with respect to any Option, the date on which such Option vests in accordance with Section 8. 

  

	2.42	“Year of Service” means each completed year of a Participant’s employment with the Group (including any employment with other employers which is credited under
the ESOP), assuming 365 days equal one year and disregarding any partially completed year. 

  

	Section 3.	Eligibility 

  
 Only Key Employees are eligible to participate in the Plan. 
  

	Section 4.	Administration 

  

	4.1	 Appointment of Committee. The Board shall appoint a Plan Committee, which shall have such authority and responsibility as specified herein. The Committee
shall consist 

  

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of not less than three (3) members of the Board, one of whom shall be the Chairman and one of whom shall be the President, and who shall serve at the
pleasure of the Board. The Board also shall designate one Committee member as chairman of the Committee, and may appoint a secretary of the Committee (who need not be a member of the Committee). 

  

	4.2	Quorum. A majority of Committee members shall constitute a quorum, and all determinations of the Committee at any meeting shall be made by a majority of Committee members
present at such meeting. 

  

	4.3	Committee Members as Participants. A person who is a Committee member may be a Participant, but shall abstain from any deliberation or vote of the Committee relative to any
Grant to be awarded to him or her. 

  

	4.4	Governing Rules. The Committee may establish such rules and regulations relating to the Plan and/or governing the conduct of its business as it deems advisable in its sole
discretion; provided, however, that no such rules or regulations shall be inconsistent with any Plan terms. 

  

	4.5	Interpretation. The Committee shall have the sole and exclusive responsibility to interpret the Plan, including determining severability of any and all of its provisions, and
to make all other determinations in connection with the administration of the Plan not inconsistent with the terms of the Plan. The Committee’s decision in connection therewith shall be final, conclusive, and binding with respect to all
Employees, Participants, and other persons. 

  

	4.6	Additional Terms. The Committee may subject any Options and/or Tandem Stock Appreciation Rights to such additional terms and conditions (not inconsistent with any Plan terms)
as may be specified in the Grant Notice, including, without limitation, additional restrictions or conditions on the exercise of such Options or Tandem Stock Appreciation Rights. 

  

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	Section 5.	Authorized Shares of Common Stock 

  
 There are hereby authorized and reserved for issuance in satisfaction of Grants to be awarded from time to time under the Plan an aggregate of three hundred thousand
(300,000) shares of Common Stock, subject to adjustment as provided in Section 11 hereof. If any Options granted under the Plan should expire or terminate for any reason without having been exercised in full, the unpurchased shares shall become
available for the award of any new Grant under the Plan. 
  

	Section 6.	Grants 

  

	6.1	Grant Determinations. The Committee shall determine in its sole discretion (a) which, if any, Key Employees shall receive a Grant for any Plan Year, (b) the number of Options
constituting any Grant to an Optionee, (c) the Grant Date, and (d) the Exercise Price. Factors influencing individual Grants include, but shall not be limited to, the Key Employee’s job performance, the nature of services rendered and expected
to be rendered by the Key Employee, and the current and projected profitability of the Key Employee’s Employer and the Group. The Committee may award a Grant to a Key Employee at any time. 

  

	6.2	Grant Notice. The Committee or its designee shall give written notification to any Key Employee it selects as an Optionee for any Plan Year of (a) his or her selection as an
Optionee, (b) the number of Options constituting his or her Grant for such Plan Year, (c) the Grant Date, (d) the Fair Market Value of one share of Common Stock as of the Grant Date, (e) the Vesting Dates for such Options, (f) the Exercise Price of
such Options, (g) the Exercise Period of such Options, and (h) all of the terms and conditions of the Plan. Generally, such notification will be made no earlier than December 1st of the Plan Year for which the Grant is being made and no later than
February 15th of the immediately following Plan Year. 

  

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	Section 7.	Exercise Price 

  
 The Exercise Price of each Option granted to an Optionee shall be the Fair Market Value of one share of Common Stock on such Optionee’s applicable Grant Date.

  

	Section 8.	Vesting of Options 

  

	8.1	Vesting Schedule. Except as provided in Sections 10, 11, and 15, all Options constituting a Grant shall vest according to the following schedule: 

  

			
	 Date

	  	Vested Interest in Grant

	 Grant Date
	  	0%
	 First Anniversary of Grant Date
	  	10%
	 Second Anniversary of Grant Date
	  	20%
	 Third Anniversary of Grant Date
	  	30%
	 Fourth Anniversary of Grant Date
	  	40%
	 Fifth Anniversary of Grant Date
	  	50%
	 Sixth Anniversary of Grant Date
	  	60%
	 Seventh Anniversary of Grant Date
	  	70%
	 Eighth Anniversary of Grant Date
	  	80%
	 Ninth Anniversary of Grant Date
	  	100%

  
 An Optionee shall
have a vested interest in that number of Options constituting any Grant which results from multiplying the total number of Options constituting such Grant by the applicable percentage stated above, with such resultant rounded down to the nearest
whole number if it is not a whole number. 
  

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	8.2	Acceleration. The Committee may, at its discretion, accelerate the vesting schedule of any outstanding Option at any time. 

  

	Section 9.	Exercise of Options During Employment 

  
 Subject to Section 14, an Optionee while employed by the Group may exercise any vested Options during their Exercise Period. 
  

	Section 10.	Termination of Employment 

  

	10.1	Generally. Except as provided in this Section 10, if an Optionee’s employment with the Group terminates at any time and for any reason, whether voluntarily or
involuntarily: 

  

	 	(a)	all non-vested Options will be forfeited, and 

  

	 	(b)	all vested, unexercised Options (if any) shall be exercisable during the period beginning on the Optionee’s Employment Termination Date and ending on the earlier of (i) the
last day of their Exercise Period, or (ii) the thirtieth (30th) day following the Optionee’s Employment Termination Date. Any unexercised Options at the end of such period shall automatically expire. 

  

	10.2	Normal Retirement Age; Disability; Death. If an Optionee’s employment with the Group terminates at or after his or her Normal Retirement Age for any reason other than
Cause, whether voluntarily or involuntarily, or at any earlier age either due to Permanent Disability, death, or such other circumstance as approved by the Committee in its sole discretion: 

  

	 	(a)	all otherwise non-vested Options will become fully vested at that time, and 

  

	 	(b)	 all vested, unexercised Options (if any) shall be exercisable by the Optionee (or, if the Optionee has died, by his or her Personal Representative) during the
period beginning on the Optionee’s Employment Termination Date and ending on the earlier of (i) the last day of their Exercise Period, or (ii) the thirtieth (30th) day 

  

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following the Optionee’s Employment Termination Date. Any unexercised Options at the end of such period shall automatically expire.

  

	10.3	Extension of Exercise Period. The Committee may specify at any time prior to the expiration of any Options pursuant to subsections 10.1(b) or 10.2(b) that the deadline
imposed by subsections 10.1(b)(ii) or 10.2(b)(ii), as applicable, with respect to such Options shall be extended to a date ending not later than the day immediately preceding the first anniversary of the Optionee’s Employment Termination Date.

  

	10.4	Cause. Notwithstanding any provision of the Plan to the contrary, if an Optionee’s employment with the Group is terminated at any time due to Cause, all unexercised
Options (whether otherwise vested or not) shall automatically expire at that time. 

  

	Section 11.	Changes in Capital and Corporate Structure 

  
 The Committee may adjust (a) the number and kind of shares reserved for issuance under the Plan upon the grant and exercise of Options, (b) the number of shares subject
to outstanding Options, (c) the Exercise Price for any Grant, (d) the Vesting Dates applicable to any Grant, or (e) any other Plan provision, to reflect, in an equitable manner, any change in the capital or corporate structure of the Company that
relates to Common Stock, such as a stock split, stock dividend, stock combination, exchange of shares, recapitalization, reorganization, reclassification, merger, consolidation, or comparable transaction. In no event shall fractional shares be
issued or issuable pursuant to any adjustment made under this Section 11. The determination of the Committee as to any such adjustment shall be final and conclusive. 
  

	Section 12.	Expiration 

  
 Subject to Sections 10 and 15, all Options constituting a Grant shall expire and no longer be exercisable on the tenth (10th) anniversary of the Grant Date for such Grant. 
  

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	Section 13.	Nonqualified Status 

  
 It is the intention of the Plan that Options shall not qualify as incentive stock options under Section 422 of the Code or any comparable Code provision that
hereafter may be enacted. 
  

	Section 14.	Method of Exercise 

  

	14.1	Exercise Notice. To the extent permitted by the terms of the Plan, Optionees may exercise their Options for their Exercise Price by giving written notice thereof to the
Committee. Such Exercise Notice shall be in such form as approved by the Committee and shall state (a) the number of Options exercised (i.e., the number of shares of Common Stock to be purchased), which number prior to the last day on which such
Options expire shall be either any whole number multiple of 50 or 100% of the Options then exercisable by such Optionee, and which number on such last day may be any number, and (b) the desired Closing Date, which shall be at least fifteen (15) days
(or such fewer days as the Committee, in its discretion, may agree upon) and no more than thirty (30) days after the giving of such Exercise Notice. 

  

	14.2	 Closing. At the Closing, the Company shall deliver to the Optionee or, if the Optionee has died, his Personal Representative, at the principal office of the
Company, or such other place as shall be mutually acceptable, a certificate or certificates for such shares against payment in full of the Exercise Price for the number of such shares of Common Stock to be delivered pursuant to the exercise of any
vested Options. Such payment shall be (a) by a certified or bank cashier’s check, or (b) if the Committee in its sole discretion authorizes, by (i) an agreement by the Optionee to surrender other vested Options then exercisable by him or her
valued at the excess of the aggregate Fair Market Value of the Common Stock subject to such other Options on the Closing Date over the aggregate Exercise Price of such Common Stock, (ii) directing the Company to withhold such number of shares of
Common Stock otherwise issuable upon exercise of such Option having an aggregate Fair Market Value on the Closing Date equal to the Exercise Price of 

  

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the Option, (iii) transfer to the Company of any Common Stock owned by the Optionee having a Fair Market Value on the Closing Date equal to the Exercise
Price of the shares of Common Stock purchased, (iv) any other method, or (v) by any combination of (a) and (b)(i), (ii), (iii), or (iv) as the Committee, in its sole discretion, may authorize. If the Optionee (or other person entitled to exercise
the Options) fails to accept delivery of and pay for any of the shares specified in the Exercise Notice when the Company shall tender such shares to him or her, such Optionee’s right to exercise the Options with respect to such unpurchased
shares may be terminated. 

  

	Section 15.	Mandatory Exercise 

  
 Notwithstanding anything to the contrary set forth in the Plan, if the Company adopts either (a) a plan of reorganization pursuant to which it shall merge into,
consolidate with, or sell its assets to, any other corporation or entity, or any other corporation or entity shall merge into the Company in a transaction in which the Company shall become a wholly-owned subsidiary of another entity, or (b) a plan
of complete liquidation, then the Committee may provide that an Optionee shall immediately become fully vested in all otherwise nonvested Options awarded to him or her, and/or may give an Optionee written notice thereof requiring such Optionee
either (i) to exercise his or her vested Options within thirty (30) days after receipt of such notice, whether or not they would otherwise be exercisable at that time, or (ii) to surrender such Options. Those Options which the Company requests to be
exercised and which shall not have been exercised in accordance with the provisions of the Plan by the end of such thirty-day period shall automatically lapse and the Optionee shall have no further rights with respect to such Options. 
  

	Section 16.	Transfer Restrictions 

  

	16.1	 General Prohibition. No Option Share may be anticipated, alienated, sold, transferred, assigned, pledged, or encumbered by the Optionee or, if the Optionee
has died, his 

  

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Personal Representative, except as expressly provided in the Plan or as the Chairman of the Board or the President may otherwise agree in writing.

  

	16.2	Purchase by Company. 

  

	 	16.2-1 	Put Option. An Optionee may, at any time prior to the earlier of his Employment Termination Date or the date his Options expire, upon giving no less than thirty (30) days,
and no more than forty-five (45) days, prior written notice to the Company, require the Company to purchase for their Fair Market Value as of the Sale Date all, but not less than all, of the Option Shares then held by such Optionee.

  

	 	16.2-2	Put Obligation. Within thirty (30) days after an Optionee’s Employment Termination Date, the Optionee or, if the Optionee has died, his Personal Representative shall
offer to sell to the Company, and the Company shall purchase, for their Fair Market Value as of the Sale Date, all of the Option Shares then held by such Optionee. 

  

	 	16.2-3	Purchase by the Company. Any purchase of Option Shares by the Company pursuant to Section 16.2 shall take place at the principal business office of the Company on a date
specified by the Committee that is as soon as practicable following the calculation by the Committee of the Fair Market Value of such Option Shares on the Sale Date. At that time, Seller shall tender to the Company the certificates evidencing the
number of Option Shares to be sold to the Company pursuant to the terms hereof, properly endorsed for transfer to the Company with signature guaranteed, accompanied by any other documents which are necessary in the reasonable opinion of counsel for
the Company to evidence the authority of Seller to make such sale and transfer good title to the Option Shares. 

  

	 	16.2-4	 Purchase Price. Following receipt by the Company of the certificates described in subsection 16.2-3, the Purchase Price of the Option Shares being purchased
by the Company shall be paid by the Company out of its general assets either (a) in a 

  

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lump sum, or (b) in monthly installments over a period that does not exceed sixty (60) months and that commences on or about the first day of the month next
following such receipt, as the Committee in its sole discretion shall determine. Each such installment payment shall be in substantially equal amounts, with interest thereon at such rate(s) as the Committee in its sole discretion shall determine.
The Company shall furnish Seller with a promissory note evidencing the liability of the Company for such payment. 

  

	 	16.2-5	Termination of Transfer Restrictions. The provisions of subsections 16.2-1, 16.2-2, 16.2-3, and 16.2-4 shall apply only to the extent that the Option Shares are not publicly
tradable on an established market in accordance with federal and state securities laws and regulations. 

  

	Section 17.	Tandem Stock Appreciation Rights 

  

	17.1	Committee Authority. The Committee may, in its sole discretion, grant Tandem Stock Appreciation Rights concurrently to one or more Key Employees awarded Grants under this
Plan. The number of Tandem Stock Appreciation Rights initially granted shall equal the number of Options constituting a Grant, and shall thereafter be reduced by the number of Tandem Stock Appreciation Rights exercised by the Participant and by the
number of Option Shares purchased by the Participant pursuant to the Grant. Each Tandem Stock Appreciation Right shall entitle the holder to a payment based on the appreciation in the Fair Market Value of one share of Common Stock into which one of
his vested Options would be converted upon exercise, in exchange for his surrender of one vested Option. Each Tandem Stock Appreciation Right shall, except as specifically set forth below, be subject to the same terms and conditions applicable to
the particular Grant to which it pertains. 

  

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	17.2	Exercise. A SAR Recipient may exercise his Tandem Stock Appreciation Rights only by filing written notice thereof with the Committee, on a form approved by the Committee,
prior to the expiration of his corresponding vested Options to be surrendered. 

  

	17.3	Appreciation Distribution. The amount payable by the Company for each exercised Tandem Stock Appreciation Right (the “Appreciation Distribution”) shall equal the
excess of (a) the Fair Market Value, determined as of the date the notice described in subsection 17.2 is received by the Committee, of one share of Common Stock into which one surrendered, vested Option would be converted upon exercise, over (b)
the Exercise Price payable for such share. 

  

	17.4	Method of Payment. The Appreciation Distribution shall be paid in cash out of the Company’s general assets either in a lump sum or in monthly installments over a period
that does not exceed sixty (60) months, as the Committee in its sole discretion shall determine. Such payment shall be made or begin, as applicable, as soon as practicable following the calculation by the Committee of Fair Market Value under Section
17.3. If any Appreciation Distribution is payable in installments, it shall be credited with an amount as interest, commencing with the first day of the month as of which the installments begin, at such rate(s) as the Committee in its sole
discretion shall determine. 

  

	17.5	Underlying Common Stock. The shares of Common Stock subject to each surrendered Option for which a SAR Recipient has received an Appreciation Distribution shall not be
available for subsequent issuance as Grants under the Plan. 

  

	Section 18.	Representations 

  
 The Company may require an Optionee, as a condition to any Grant, exercise of any Options, or issuance or delivery of shares upon the exercise of any Options or payment
therefor, to make such representations and warranties, and to execute and deliver such notices of exercise and other documents as the Committee may deem consistent with the Plan or the terms and conditions of the Grant. The Committee also may
require the Optionee to execute and deliver documents 

  

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(including the investment letter described in Section 19), containing such representations, warranties, and agreements as the Committee or counsel to the
Committee may deem necessary or advisable to comply with any exemption from registration under the Securities Act of 1933, as amended, any applicable State securities laws, and any other applicable law, regulation or rule. 
  

	Section 19.	Investment Letter 

  
 If required by the Committee, each Optionee shall, as a condition of receiving any Grant, execute a statement directed to the Company, upon each and every exercise of any
Options constituting such Grant, indicating that any shares issued upon exercise of any such Options are being acquired for investment purposes only and not with a view to the redistribution thereof, and containing an agreement that such shares will
not be sold or transferred unless either (a) registered under the Securities Act of 1933, as amended, or (b) exempt from such registration in the opinion of Company counsel. If required by the Company, certificates representing shares of Common
Stock issued upon exercise of Options shall bear a restrictive legend summarizing the restrictions on transferability applicable thereto. 
  

	Section 20.	Participation Agreement 

  
 The Committee may require any Participant to sign an agreement, in such form and containing such terms as the Committee in its sole discretion shall determine, signifying
his consent to the terms and conditions of the Plan. 
  

	Section 21.	Requirements of Law 

  
 Any Grant, the issuance of shares upon the exercise of Options, and the delivery of shares upon the payment therefor, shall be subject to compliance with all applicable
laws, rules and regulations. Without limiting the generality of the foregoing, the Company shall not be obligated to sell, issue, or deliver any shares unless all required approvals from governmental authorities 

  

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shall have been obtained and all applicable requirements of governmental authorities shall have been complied with. 
  

	Section 22.	Tax Withholding 

  
 The Company, as and when appropriate, shall have the right to require each Optionee purchasing or receiving shares of Common Stock under the Plan, as a condition thereof,
to pay any federal, state, or local taxes required by law to be withheld. Optionee shall satisfy such withholding obligation by making cash payment to the Company or, as the Optionee may request and the Committee in its sole discretion may
authorize, by directing the Company to withhold, from the shares of Common Stock purchased under the Plan, such number of shares having a Fair Market Value as of the Closing Date equal to the amount required to be withheld. 
  

	Section 23.	Nonassignability 

  
 Except to the extent as may be required by law or as provided in the Plan, the interests and rights of any Participant in and to any Grant shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge. 
  

	Section 24.	No Shareholder Rights 

  
 An Optionee shall have no rights as a shareholder of the Company with respect to any shares subject to any Options until the Options have been exercised and the
certificate with respect to the shares purchased upon exercise of the Options has been duly issued and registered in the name of the Optionee. 
  

	Section 25.	Amendment, Suspension, or Termination 

  
 The Board may at any time amend, suspend, or terminate the Plan as it may deem advisable, except that no such action shall adversely affect any Optionee’s rights
which have accrued under the Plan with respect to any Grant prior to such action. 
  

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	Section 26.	Weekend or Holiday 

  
 In the event that the time for the performance of any action or the giving of any notice is called for under the Plan within a period of time which ends on a Saturday,
Sunday or legal holiday, such period shall be deemed to end on the next date following such Saturday, Sunday or legal holiday which is not a Saturday, Sunday or legal holiday. 
  

	Section 27.	Noncompetition 

  
 As a condition of any Grant, the Committee may require any Key Employee to enter into a written covenant not to compete with the Group, which shall be effective from the
Grant Date until the first anniversary of his or her Employment Termination Date and which shall contain such other terms and conditions as the Committee in its discretion may specify. 
  

	Section 28.	Indemnification 

  
 Neither the Chairman, President, nor any member of the Board or Committee, shall be liable for any action, failure to act, or determination made in good faith with
respect to the Plan. Employers shall defend, indemnify, and hold harmless their directors, officers, Committee members, and employees against and from any loss or expense arising from any act or omission to act in connection with any responsibility,
obligation, or duty in the operation or administration of the Plan, unless any such act or omission to act is due to willful misconduct. 
  

	Section 29.	No Employment Rights 

  
 Nothing herein shall give any Participant or Key Employee the right to be retained in the service of any Employer or limit the right of any Employer to discipline or
terminate the employment of any Participant or Key Employee. 
  

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	Section 30.	Section Headings 

  
 The headings contained herein are for the purpose of convenience only and are not intended to define or limit the contents of the respective sections to which they
relate. 
  

	Section 31.	Notices 

  
 Any notice given to the Company hereunder shall be in writing and shall be addressed to the President at 20 Jackson Drive, Cranford, New Jersey, 07016, or at such other address as the Company may hereafter designate
to Participants by notice as provided herein. Any notice given hereunder to a Participant shall be in writing and shall be addressed to the Participant at the most recent address of the Participant as maintained in the Company’s records.
Notices shall be deemed to have been duly given when personally delivered or mailed by registered or certified mail to the appropriate party. 
  

	Section 32.	Governing Law 

  
 The Plan shall be governed by the laws of the State of New Jersey, without giving effect to its choice or conflicts of law provisions. 
  

	Section 33.	Effective Date 

  
 The Plan shall become operative and in effect as of May 1, 1995. 
  

 -19-The Newark Group, Inc. Stock Appreciation Rights Plan

 EXHIBIT 10.2 
  
 THE NEWARK GROUP, INC. 
 STOCK APPRECIATION RIGHTS PLAN 
  
 As of
May 1, 1995 
  

 THE NEWARK GROUP, INC. 
 STOCK APPRECIATION RIGHTS PLAN 
  

	Section 1.	Purposes 

  
 The purposes of the Plan are: 
  

	(a)	to promote the interests of each Employer by providing additional contingent compensation as an incentive to its Key Employees who make substantial contributions to the management,
growth, and success of their respective Employers through their ability, loyalty, and creativity; and 

  

	(b)	to enable each Employer to attract, retain, and motivate Key Employees who are essential for the Employer’s continued growth and profitability. 

  
 Such compensation shall be based upon the award of SARs, the value of which is related to the
appreciation in the value of Stock. 
  

	Section 2.	Definitions 

  

	2.1	“Award” means any grant of SARs to a Participant. 

  

	2.2	“Award Date” means the date as of which an Award is made, as established by the Committee in its sole discretion. 

  

	2.3	“Board” means the Board of Directors of the Company or its Executive Committee. 

  

	2.4	“Cause” means a Participant’s willful misconduct, as determined by the Committee in its sole discretion. 

  

	2.5	“Chairman” means the Chairman of the Board of the Company. 

  

	2.6	“Committee” means the Plan Committee as provided for in section 4. 

  

	2.7	“Company” means The Newark Group, Inc., a New Jersey corporation, its successors and assigns. 

  

	2.8	“Employee” means a regular, full-time employee of an Employer. 

  

	2.9	“Employer” means each of the Company, any Subsidiary, their successors and assigns. 

  

 -2- 

	2.10	“Employment Termination Date” means the effective date as of which an Employee’s employment by the Group has terminated. 

  

	2.11	“ESOP” means The Newark Group, Inc. Employees’ Stock Ownership Plan (effective May 1, 1985), as amended from time to time. 

  

	2.12	“Exercise Date” means the date on which the Committee receives written notice, given in accordance with subsection 13.1, of a Participant’s election to receive
the Exercise Value of his or her vested SARs, or the date of a deemed exercise in accordance with subsection 13.2. 

  

	2.13	“Exercise Period” means, with respect to any SAR granted by an Award, the period beginning on a Participant’s Vesting Date and ending on (and inclusive of) (a)
the fifth (5th) anniversary of the Award Date for such Award, or (b) such other date as may be established in accordance with Sections 12 or 14. 

  

	2.14	“Exercise Value” means, with respect to any SAR, the positive difference, if any, between the Fair Market Value per share of Stock on the Exercise Date less the
Fair Market Value per share of Stock on the Award Date. 

  

	2.15	“Fair Market Value” means, as of any Valuation Date, the fair market value per issued and outstanding share of Stock as set forth in the annual valuation of the
ESOP either (a) for the year the end of which coincides with the Valuation Date, or (b) if (a) is inapplicable, for the year immediately preceding the year which includes the Valuation Date; provided, however, that if the ESOP does not exist on such
Valuation Date, “Fair Market Value” means the fair market value per each such share of Stock as determined by the Committee in its sole discretion. 

  

	2.16	“Group” means the Company and Subsidiaries, as consolidated. 

  

	2.17	“Key Employee” means any officer of an Employer or any other Employee who the Committee determines is employed in an important management or other high-level
position primarily responsible for the management, growth, and success of the Employer and who is expected to have a significant impact on the Group’s growth and profitability. 

  

 -3- 

	2.18	“Normal Retirement Age” means the later of the Participant’s 65th birthday or fifth anniversary of employment by the Group. 

  

	2.19	“Participant” means any Key Employee who has received an Award. 

  

	2.20	“Permanent Disability” means the inability of the Participant to engage in any substantial gainful activity by reason of any physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last for a continuous period of at least 12 months, as determined by the Committee in its sole discretion. 

  

	2.21	“Plan” means The Newark Group, Inc. Stock Appreciation Rights Plan, as set forth herein. 

  

	2.22	“Plan Year” means the fiscal year of the Company. 

  

	2.23	“President” means the President of the Company. 

  

	2.24	“SAR” means one stock appreciation right granted to a Participant, as described in section 6. 

  

	2.25	“SAR Account” means the account established and maintained on the Company’s books pursuant to section 8. 

  

	2.26	“Stock” means the Company’s common stock, no par value per share. 

  

	2.27	“Subsidiary” means any corporation the majority of the issued and outstanding shares of which are owned directly or indirectly by the Company.

  

	2.28	“Valuation Date” means any date as of which Fair Market Value is to be determined. 

  

	2.29	“Vesting Date” means, with respect to any SAR, the date on which such SAR vests in accordance with Section 9. 

  

	Section 3.	Eligibility 

  
 Only Key Employees are eligible to participate in the Plan. 
  

 -4- 

	Section 4.	Administration 

  

	4.1	Appointment of Committee. The Board shall appoint a Plan Committee, which shall have such authority and responsibility as specified herein. The Committee shall consist of not
less than three (3) members of the Board, one of whom shall be the Chairman and one of whom shall be the President, and who shall serve at the pleasure of the Board. The Board shall designate one Committee member as chairman of the Committee, and
may appoint a secretary of the Committee (who need not be a member of the Committee). 

  

	4.2	Quorum. A majority of Committee members shall constitute a quorum, and all determinations of the Committee at any meeting shall be made by a majority of Committee members
present at such meeting. 

  

	4.3	Committee Members as Participants. A person who is a Committee member may be a Participant, but shall abstain from any deliberation or vote of the Committee relative to any
Award to be granted to him. 

  

	4.4	Governing Rules. The Committee may establish such rules and regulations relating to the Plan and/or governing the conduct of its business as it deems advisable in its sole
discretion; provided, however, that no such rules or regulations shall be inconsistent with any Plan terms. 

  

	4.5	Interpretation. The Committee shall have the sole and exclusive responsibility to interpret the Plan, including determining severability of any and all of its provisions, and
to make all other determinations in connection with the administration of the Plan not inconsistent with the terms of the Plan. The Committee’s decision in connection therewith shall be final, conclusive, and binding with respect to all
Employees, Participants, and other persons. 

  

	4.6	Additional Terms. The Committee may subject any SARs to such additional terms and conditions (not inconsistent with any Plan terms) as may be specified in the Award,
including, without limitation, additional restrictions or conditions on the exercise of such SARs. 

  

 -5- 

	Section 5.	Granting of Awards 

  

	5.1	Awards. The Committee shall determine in its sole discretion (a) which, if any, Key Employees shall become Participants for any Plan Year, (b) the number of SARs constituting
any Award to a Participant, and (c) the Award Date. Factors influencing individual Awards include, but shall not be limited to, the Key Employee’s job performance, the nature of services rendered and expected to be rendered by the Key Employee,
and the current and projected profitability of the Key Employee’s Employer and the Group. The Committee may grant an Award to a Key Employee at any time. 

  

	5.2	Participant Notification. The Committee or its designee shall give written notification to any Key Employee it selects as a Participant for any Plan Year of (a) his or her
selection, (b) the number of SARs constituting his or her Award for such Plan Year, (c) the Award Date, (d) the Fair Market Value of each SAR as of the Award Date and, as soon as practicable following a Participant’s exercise of vested SARs in
accordance with the Plan, as of the Exercise Date, (e) the Vesting Dates and Exercise Period for such Award, and (f) all of the terms and conditions of the Plan. Generally, such notification will be made no earlier than December 1st of the Plan Year
for which the Award is being made and no later than February 15th of the immediately following Plan Year. 

  

	Section 6.	Valuation of SARs 

  
 The granting of a SAR provides a right to a Participant, in effect, to benefit from the appreciation in value of Stock. However, no Stock or other securities will
actually be issued to any Participant. The value of each vested SAR will be determined as of the Exercise Date, and will equal its Exercise Value. 
  

 -6- 

	Section 7.	SAR Pool 

  
 The Chairman shall determine from time to time the maximum number of SARs to be awarded by the Committee for any Plan Year. Factors influencing such determination shall include, but not be limited to, the Group’s
estimated gross profit and net earnings for the Plan Year for which the Award is to be made. 
  

	Section 8.	SAR Accounts 

  
 SARs granted to a Participant shall be credited to a SAR Account established and maintained on the Company’s books for such Participant. SAR Accounts shall be the record of SARs granted to Participants under the
Plan, are established and maintained solely for bookkeeping purposes, and shall not involve any segregation of Company assets. 
  

	Section 9.	Vesting of SARs 

  
 Except as provided in Sections 11, 12, and 14, SARs constituting an Award shall vest according to the following schedule: 
  

				
	 Date

	  	Vested Interest
in Award

	 
	 Award Date
	  	0	%
	 First Anniversary of Award Date
	  	33 1/3	%
	 Second Anniversary of Award Date
	  	66 2/3	%
	 Third Anniversary of Award Date
	  	100	%

  
 A Participant shall have a vested
interest in that number of SARs constituting any Award which results from multiplying the total number of SARs constituting such Award by the applicable percentage stated above. 
  

 -7- 

	Section 10.	Exercise of SARs During Employment 

  
 A Participant while employed by the Group may exercise any vested SAR during its Exercise Period. 
  

	Section 11.	Termination of Employment 

  

	11.1	Generally. Except as provided in subsections 11.2 or 11.3, if a Participant’s employment with the Group terminates at any time and for any reason, whether voluntarily or
involuntarily: 

  

	 	(a)	all non-vested SARs will be forfeited, and 

  

	 	(b)	all vested, unexercised SARs shall be deemed exercised at that time. 

  

	11.2	Normal Retirement Age; Disability; Death. If a Participant’s employment with the Group terminates at or after his or her Normal Retirement Age for any reason other than
Cause, whether voluntarily or involuntarily, or at any earlier age either due to Permanent Disability, death, or such other circumstance as approved by the Committee in its sole discretion: 

  

	 	(a)	all otherwise non-vested SARs will become fully vested at that time, and 

  

	 	(b)	all vested, unexercised SARs shall be exercisable by the Participant (or, if the Participant has died, by his or her personal representative, executor, or administrator, as the case
may be) during the period ending on the earlier of the first anniversary of the Participant’s Employment Termination Date or the last day of the Exercise Period with respect to such SARs. 

  

	11.3	Cause. Notwithstanding any provision of the Plan to the contrary, if a Participant’s employment with the Group is terminated at any time due to Cause, all unexercised
SARs (whether otherwise vested or not) shall automatically be forfeited. 

  

 -8- 

	Section 12.	Changes in Capital and Corporate Structure 

  
 The Committee may adjust (a) the number of SARs subject to outstanding Awards, (b) the Exercise Value for any Award, (c) the Vesting Dates applicable to any Award, or (d)
any other Plan provision, to reflect, in an equitable manner, any change in the capital or corporate structure of the Company that relates to Stock, such as a stock split, stock dividend, stock combination, exchange of shares, recapitalization,
reorganization, reclassification, merger, consolidation, or comparable transaction. The determination of the Committee as to any adjustment shall be final and conclusive. 
  

	Section 13.	Exercise; Payment 

  

	13.1	Exercise. Vested SARs may be exercised only by written notice to the Committee that is signed and dated, setting forth the number of SARs to be exercised as of the Exercise
Date. 

  

	13.2	Deemed Exercise. Any vested, nonforfeited SAR that remains unexercised at the end of the periods described in Section 10, subsection 11.1(b), subsection 11.2(b), or Section
14, as applicable, shall be deemed exercised at that time. 

  

	13.3	Payment. The Participant’s Employer shall pay the Exercise Value of any SARs exercised in accordance with the Plan as soon as practicable after the later of (a) the date
on which the Fair Market Value of such SARs as of the Exercise Date has been determined, or (b) the Exercise Date; provided, however, that if the Participant has elected to defer payment in accordance with Section 13.4, payment of the Exercise Value
(together with any amount payable as interest in accordance with Section 13.4) shall be deferred to the Participant’s Employment Termination Date. 

  

	13.4	 Payment Deferral. Each Participant may elect in writing, in such form as the Committee shall approve, to defer payment of the Exercise Value of any SARs
pursuant to Section 13.3 to the Participant’s Employment Termination Date. Any such election must be filed with the Committee within thirty (30) days after the date on which the Committee notifies 

  

 -9- 

	 	 
the Participant in writing, in accordance with Section 5.2, of his selection as a Participant for the Plan Year for which such SARs were awarded, and shall
be irrevocable after the end of such thirty-day period. If payment of the Exercise Value has been so deferred, the Exercise Value shall be credited with an additional amount as interest, during the period commencing on the later of the dates
specified in subsections 13.3(a) and (b) and ending on the Participant’s Employment Termination Date, at such rate(s) as the Committee, in its discretion, shall approve. Any deferred amounts shall be payable out of the general assets of the
Company as soon as practicable following the Participant’s Employment Termination Date. The Committee may accelerate any deferred payment upon a showing of hardship by the Participant, as the Committee in its sole discretion may determine.

  

	Section 14.	Mandatory Exercise 

  
 Notwithstanding anything to the contrary set forth in the Plan, if the Company adopts either (a) a plan of reorganization pursuant to which it shall merge into,
consolidate with, or sell its assets to, any other corporation or entity, or any other corporation or entity shall merge into the Company in a transaction in which the Company shall become a wholly-owned subsidiary of another entity, or (b) a plan
of complete liquidation, then the Committee may provide that a Participant shall immediately become fully vested in all otherwise nonvested SARs awarded to him or her, and/or may give a Participant written notice thereof requiring such Participant
to exercise his or her vested SARs within thirty (30) days after receipt of such notice, whether or not they would otherwise be exercisable at that time. 
  

	Section 15.	Tax Withholding. 

  
 Any payments under the Plan shall be subject to reporting and withholding for all applicable taxes. 
  

 -10- 

	Section 16.	Nonassignability 

  
 Except and to the extent as may be required by law or as provided in the Plan, the interests and rights of any Participant in and to any Award shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge. 
  

	Section 17.	Amendment, Suspension or Termination of Plan 

  
 The Board may at any time amend, suspend, or terminate the Plan as it may deem advisable, except that no such action shall adversely affect any Participant’s rights
which have accrued under the Plan with respect to any Award prior to such action. 
  

	Section 18.	Sunday or Holiday 

  
 In the event that the time for the performance of any action or the giving of any notice is called for under the Plan within a period of time which ends or falls on a
Sunday or legal holiday, such period shall be deemed to end or fall on the next date following such Sunday or legal holiday which is not a Sunday or legal holiday. 
  

	Section 19.	Indemnification 

  
 Neither the Chairman, the President, nor any member of the Board or Committee, shall be liable for any action, failure to act, or determination made in good faith with
respect to this Plan. Employers shall defend, indemnify, and hold harmless their directors, officers, Committee members, and employees against and from any loss or expense arising from any act or omission to act in connection with any
responsibility, obligation, or duty in the operation or administration of the Plan, unless any such act or omission to act is due to willful misconduct. 
  

 -11- 

	Section 20.	No Employment Rights 

  
 Nothing herein shall give any Participant or Key Employee the right to be retained in the service of any Employer or limit the right of any Employer to discipline or
terminate the employment of any Participant or Key Employee. 
  

	Section 21.	Unfunded Status 

  
 The Plan shall be unfunded at all times and all Awards shall be payable only in cash out of the applicable Employer’s general assets. Participants shall have only
the rights of general unsecured creditors of their respective Employers with respect to any rights they may have under the Plan. 
  

	Section 22.	Section Headings 

  
 The headings contained herein are for the purpose of convenience only and are not intended to define or limit the contents of the respective sections to which they
relate. 
  

	Section 23.	Notices 

  
 Any notice given to the Company hereunder shall be in writing and shall be addressed to the President at 20 Jackson Drive, Cranford, New Jersey, 07016, or at such other address as the Company may hereafter designate
to Participants by notice as provided herein. Any notice given to a Participant hereunder shall be in writing and shall be addressed to the Participant at the most recent address of the Participant as maintained in the Company’s records.
Notices shall be deemed to have been duly given when personally delivered or mailed by registered or certified mail to the appropriate party. 
  

	Section 24.	Governing Law 

  
 The Plan shall be governed by and construed in accordance with the laws of the State of New Jersey, without giving effect to its choice or conflicts of law provisions. 
  

 -12- 

	Section 25.	Effective Date 

  
 The Plan shall become operative and in effect as of May 1, 1995. 
  

 -13-

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