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EXHIBIT 10.02
CHANGE OF CONTROL AND SEVERANCE AGREEMENT
AGREEMENT by and between NASHUA CORPORATION, a Delaware corporation (the
"Company") and XXXX X. XXXXXXXXX (the "Executive"), dated as of the 24th day of
June, 1998.
RECITALS:
WHEREAS, the Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company or other reasons of uncertainty;
WHEREAS, the Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and business concerns and
to encourage the Executive's full attention and dedication to the Company; and
WHEREAS, in order to accomplish these objectives, the Board believes it is in
the best interests of the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS.
(a) The "Effective Date" shall be the first date during the
"Change of Control Period" (as defined in Section 1(b)) on
which a Change of Control occurs. Anything in this Agreement
to the contrary notwithstanding, if the Executive's employment
with the Company is terminated or the Executive ceases to be
an officer of the Company prior to the date on which a Change
of Control occurs, and it is reasonably demonstrated that such
termination of employment (1) was at the request of a third
party who has taken steps reasonably calculated to effect the
Change of Control or (2) otherwise arose in connection with or
anticipation of the Change of Control, then for all purposes
of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of
employment.
(b) The "Change of Control Period" is the period commencing on the
date hereof and ending on the third anniversary of such date;
provided, however, that commencing on the date one year after
the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof is hereinafter
referred to as the "Renewal Date"), the Change of Control
Period shall be automatically extended so as to terminate
three years from such Renewal Date, unless at least 60 days
prior to the Renewal Date the Company shall give notice to the
Executive that the Change of Control Period shall not be so
extended.
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2. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of l934,
as amended (the "Exchange Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) (a "Person") of 30% or more of either (i) the
then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of
directors (the "Company Voting Securities"), PROVIDED,
HOWEVER, that any acquisition by (x) the Company or any of its
subsidiaries, or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its
subsidiaries or (y) any corporation with respect to which,
following such acquisition, more than 60% of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Company Voting Securities immediately prior
to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of the
Outstanding Company Common Stock and Company Voting
Securities, as the case may be, shall not constitute a Change
of Control; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose
election or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the Directors of the Company (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the
respective beneficial owners of the Outstanding Company Common
Stock and Company Voting Securities immediately prior to such
Business Combination do not, following such Business
Combination, beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from Business Combination in
substantially the same proportion as their ownership
immediately prior to such Business Combination of the
Outstanding Company Common Stock and Company Voting
Securities, as the case may be; or
(d) (i) a complete liquidation or dissolution of the Company or of
(ii) sale or other disposition of all or substantially all of
the assets of the Company other than to a corporation with
respect to which, following such sale or disposition, more
than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors is then owned beneficially, directly
or indirectly, by all or substantially all of the individuals
and
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entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Company Voting Securities
immediately prior to such sale or disposition in substantially
the same proportion as their ownership of the Outstanding
Company Common Stock and Company Voting Securities, as the
case may be, immediately prior to such sale or disposition.
3. EMPLOYMENT PERIOD. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ
of the Company, for the period commencing on the Effective Date and
ending on the third anniversary of such date (the "Employment Period").
4. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES.
(i) During the Employment Period, (A) the Executive's
position (including status, offices, titles and
reporting requirements), authority, duties and
responsibilities shall be at least commensurate in
all material respects with the most significant of
those held, exercised and assigned at any time during
the 90-day period immediately preceding the Effective
Date and (B) the Executive's services shall be
performed at the location where the Executive was
employed immediately preceding the Effective Date or
any office or location less than 35 miles from such
location.
(ii) During the Employment Period, and excluding any
periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business
hours to the business and affairs of the Company and,
to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder,
to use the Executive's reasonable best efforts to
perform faithfully and efficiently such
responsibilities. During the Employment Period it
shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal
investments, so long as such activities do not
significantly interfere with the performance of the
Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is
expressly understood and agreed that to the extent
that any such activities have been conducted by the
Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of
activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter
be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
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(b) COMPENSATION.
(i) BASE SALARY. During the Employment Period, the
Executive shall receive an annual base salary
("Annual Base Salary"), which shall be paid at a
monthly rate, at least equal to twelve times the
highest monthly base salary paid or payable to the
Executive by the Company and its affiliated companies
in respect of the twelve-month period immediately
preceding the month in which the Effective Date
occurs. During the Employment Period, the Annual Base
Salary shall be reviewed at least annually and shall
be increased at any time and from time to time as
shall be substantially consistent with increases in
base salary awarded in the ordinary course of
business to other peer executives of the Company and
its affiliated companies. Any increase in Annual Base
Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced after any
such increase and the term Annual Base Salary as
utilized in this Agreement shall refer to Annual Base
Salary as so increased. As used in this Agreement,
the term "affiliated companies" includes any company
controlled by, controlling or under common control
with the Company.
(ii) ANNUAL BONUS. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year
beginning or ending during the Employment Period, an
annual bonus (the "Annual Bonus") in cash at least
equal to the average bonus paid or payable, including
by reason of deferral, to the Executive by the
Company and its affiliated companies in respect of
the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs
(annualized for any fiscal year during the Employment
Period consisting of less than twelve full months or
with respect to which the Executive has been employed
by the Company for less than twelve full months) (the
"Recent Annual Bonus"). Each such Annual Bonus shall
be paid no later than the end of the third month of
the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such
Annual Bonus.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition
to Annual Base Salary and Annual Bonus payable as
hereinabove provided, the Executive shall be entitled
to participate during the Employment Period in all
incentive, savings and retirement plans, practices,
policies and programs applicable generally to other
peer executives of the Company and its affiliated
companies, but in no event shall such plans,
practices, policies and programs provide the
Executive with incentive, savings and retirement
benefit opportunities, in each case, less favorable,
in the aggregate, than (x) the most favorable of
those provided by the Company and its affiliated
companies for the Executive under such plans,
practices, policies and programs as in effect at any
time during the 90-day period immediately preceding
the Effective Date or (y) if more favorable to the
Executive, those provided at any time after the
Effective Date to other peer executives of the
Company and its affiliated companies.
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(iv) WELFARE BENEFIT PLANS. During the Employment Period,
the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by
the Company and its affiliated companies (including,
without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group
life, accidental death and travel accident insurance
plans and programs) to the extent generally
applicable to other peer executives of the Company
and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide
the Executive with benefits which are less favorable,
in the aggregate, than (x) the most favorable of such
plans, practices, policies and programs in effect for
the Executive at any time during the 90-day period
immediately preceding the Effective Date or (y) if
more favorable to the Executive, those provided at
any time after the Effective Date generally to other
peer executives of the Company and its affiliated
companies.
(v) EXPENSES. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in
accordance with the most favorable policies,
practices and procedures of the Company and its
affiliated companies in effect for the Executive at
any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time
thereafter with respect to other peer executives of
the Company and its affiliated companies.
(vi) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits in
accordance with the most favorable plans, practices,
programs and policies of the Company and its
affiliated companies in effect for the Executive at
any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time
thereafter with respect to other peer executives of
the Company and its affiliated companies.
(vii) OFFICE AND SUPPORT STAFF. During the Employment
Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and othe
appointments, and to exclusive personal secretarial
and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive
by the Company and its affiliated companies at any
time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the
Executive, as provided generally at any time
thereafter with respect to other peer executives of
the Company and its affiliated companies.
(viii) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with
the most favorable plans, policies, programs and
practices of the Company and its affiliated companies
as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer
incentives of the Company and its affiliated
companies.
5. TERMINATION OF EMPLOYMENT.
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(a) DEATH OR DISABILITY. The Executive's employment shall
terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice
in accordance with Section 15(b) of this Agreement of its
intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement,
"Disability" means the absence of the Executive from the
Executive's duties with the Company on a full-time basis for
180 consecutive business days as a result of incapacity due to
mental or physical illness which is determined to be total and
permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or Executive's legal
representative (such agreement as to acceptability not to be
withheld unreasonably).
(b) CAUSE. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this
Agreement, "Cause" means (i) an action taken by the Executive
involving willful and wanton malfeasance involving
specifically a wholly wrongful and unlawful act, or (ii) the
Executive being convicted of a felony.
(c) GOOD REASON. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason.
For purposes of this Agreement, "Good Reason" means:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's
position (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of
this Agreement, or any other action by the Company
which results in a diminution in such position,
authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other
than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location other than that described in
Section 4(a)(i)(B) hereof;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly
permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 14(c) of this Agreement.
For purposes of this Agreement, any good faith determination of Good
Reason made by the Executive shall be conclusive.
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(d) NOTICE OF TERMINATION. Any termination by the Company for
Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party
hereto given in accordance with Section 15(b) of this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon,
(ii) to the extent applicable sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision
so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more
than fifteen days after the giving of such notice). In the
case of a termination of the Executive's employment for Cause,
a Notice of Termination shall include a copy of a resolution
duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board at a meeting
of the Board called and held for the purpose (after reasonable
notice to the Executive and reasonable opportunity for the
Executive, together with the Executive's counsel, to be heard
before the Board prior to such vote), finding that in the good
faith opinion of the Board the Executive was guilty of conduct
constituting Cause. No purported termination of the
Executive's employment for Cause shall be effective without a
Notice of Termination. The failure by the Executive to set
forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive
from asserting such fact or circumstance in enforcing the
Executive's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date
specified therein, as the case may be; provided, however, that
(i) if the Executive's employment is terminated by the Company
other than for Cause or Disability, the Date of Termination
shall be the date on which the Company notifies the Executive
of such termination and (ii) if the Executive's employment is
terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) DEATH. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other
than the following obligations: (i) payment of the Executive's
Annual Base Salary through the Date of Termination to the
extent not theretofore paid, (ii) payment of the product of
(x) the greater of (A) the Annual Bonus paid or payable,
including by reason of deferral, (and annualized for any
fiscal year consisting of less than twelve full months or for
which the Executive has been employed for less than twelve
full months) for the most recently completed fiscal year
during the Employment Period, if any, and (B) the Recent
Annual Bonus (such greater amount hereafter referred to as the
"Highest Annual Bonus") and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365
and (iii) payment of any compensation previously deferred by
the Executive (together with any accrued interest thereon) and
not yet paid by the Company and any accrued vacation pay not
yet paid by the Company (the amounts described in paragraphs
(i), (ii) and (iii) are hereafter referred to as "Accrued
Obligations"). All Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination. In
addition, the Executive's estate or designated beneficiaries
shall be entitled to receive the Executive's Annual Base
Salary for the balance of the Employment Period; PROVIDED,
HOWEVER, that such payments of Annual Base Salary shall be
reduced by any
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survivor benefits paid to the Executive's estate or designated
beneficiary under the Retirement Plan. Anything in this
Agreement to the contrary notwithstanding, the Executive's
estate and family shall be entitled to receive benefits at
least equal to the most favorable benefits provided generally
by the Company and any of its affiliated companies to the
estates and surviving families of peer executives of the
Company and such affiliated companies under such plans,
programs, practices and policies relating to death benefits,
if any, as in effect generally with respect to other peer
executives and their estates and families at any time during
the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive's
family, as in effect on the date of the Executive's death
generally with respect to other peer executives of the Company
and its affiliated companies and their families.
(b) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued
Obligations. All Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of
Termination. In addition, the Executive shall be entitled to
receive the Executive's Annual Base Salary for the balance of
the Employment Period; PROVIDED, HOWEVER, that such payments
of Annual Base Salary shall be reduced by any benefits paid to
the Executive under the Retirement Plan by reason of
Disability. Anything in this Agreement to the contrary
notwithstanding, the Executive shall be entitled after the
Disability Effective Date to receive disability and other
benefits at least equal to the most favorable of those
generally provided by the Company and its affiliated companies
to disabled executives and/or their families in accordance
with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to
other peer executives and their families at any time during
the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with
respect to other peer executives of the Company and its
affiliated companies and their families.
(c) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment shall be terminated for Cause during the Employment
Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay
to the Executive Annual Base Salary through the Date of
Termination plus the amount of any compensation previously
deferred by the Executive, in each case to the extent
theretofore unpaid. If the Executive terminates employment
during the Employment Period other than for Good Reason, this
Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations. In such case,
all Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination.
(d) GOOD REASON; OTHER THAN FOR CAUSE OR DISABILITY. If, during
the Employment Period, the Company shall terminate the
Executive's employment other than for Cause or Disability, or
the Executive shall terminate employment during the Employment
Period for Good Reason, the Company shall pay to the Executive
in a lump sum in cash within 60 days after the Date of
Termination, and subject to receiving an executed irrevocable
Release as described in Section 11, the aggregate of the
following amounts:
A. all Accrued Obligations; and
B. the product of (x) three and (y) the sum of (i)
Annual Base Salary and (ii) the Highest Annual Bonus;
and
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C. a lump-sum retirement benefit equal to the difference
between (a) the actuarial equivalent of the benefit
under the Nashua Corporation Retirement Plan for
Salaried Employees (the "Retirement Plan") and any
supplemental and/or excess retirement plan providing
benefits for the Executive (the "SERP") which the
Executive would receive if the Executive's employment
continued at the compensation level provided for in
Sections 4(b)(i) and 4(b)(ii) of this Agreement for
the remainder of the Employment Period, assuming for
this purpose that all accrued benefits are fully
vested, and (b) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if any,
under the Retirement Plan and the SERP; for purposes
of determining the amount payable pursuant to this
Section 6(d)(i)C the accrual formulas and actuarial
assumptions utilized shall be no less favorable than
those in effect with respect to the Retirement Plan
and the SERP during the 90-day period immediately
prior to the Effective Date.
In addition, for the remainder of the Employment Period (if
the termination took place during the Employment Period under
this Section 6), the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to
those which would have been provided to them in accordance
with the plans, programs, practices and policies described in
Section 4(b)(iv) of this Agreement if the Executive's
employment had not been terminated in accordance with the most
favorable plans, practices, programs or policies of the
Company and its affiliated companies applicable generally to
other peer executives and their families during the 90-day
period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the
Company and its affiliated companies and their families. For
purposes of determining eligibility of the Executive for
retiree benefits pursuant to such plans, practices, programs
and policies, the Executive shall be considered to have
remained employed until the end of the Employment Period and
to have retired on the last day of such period.
Notwithstanding the foregoing, if a Change of Control shall
have occurred before the Date of Termination, the aggregate
amount of "parachute payments", as defined in Section 280G of
the Internal Revenue Code of 1986, as amended from time to
time (the "Code") payable to the Executive pursuant to all
arrangements with the Company shall not exceed one dollar less
than three times the Executive's "base amount", as defined in
Section 280G of the Code (the "cut back amount"); provided,
however, that if Executive would be better off by at least
$25,000 on an after-tax basis by receiving the full amount of
the parachute payments as opposed to the cut back amount
(notwithstanding a 20% excise tax) the Executive shall receive
the full amount of the parachute payments.
7. SEVERANCE BENEFITS. Notwithstanding anything contained in this
Agreement to the contrary, if, before or after the Employment Period,
the Executive's employment is terminated by the Company for reason
other than misconduct, the Company shall pay to the Executive one
year's salary continuation and continue medical and dental benefits
during such continuation period.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or
practices, provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under
any other agreements with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or
program of the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program except as
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explicitly modified by this Agreement.
9. FULL SETTLEMENT. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company
may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement. The Company agrees to
pay, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof,
plus in each case interest at the applicable Federal rate provided for
in Section 7872(f)(2) of the Internal Revenue Code of l986, as amended
(the "Code").
10. OTHER AGREEMENTS. The parties agree that this Agreement supersedes and
replaces the Retention Agreement between the parties dated as of the
24th day of October, 1997 and any and all other agreements, policies,
understandings or letters (including but not limited to employment
agreements, severance agreements and job abolishment policies) between
the parties related to the subject matter hereof.
11. RELEASE. Prior to receipt of the payment described in Sections 6(d) or
7, the Executive shall execute and deliver a Release to the Company as
follows:
The Executive hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges the Company,
its officers, directors, stockholders, corporate affiliates,
agents and employees from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities and expenses (including
attorneys' fees and costs), of every kind and nature which he
ever had or now has against the Company, its officers,
directors, stockholders, corporate affiliates, agents and
employees, including, but not limited to, all claims arising
out of his employment, all employment discrimination claims
under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
ss.2000e ET SEQ., the Age Discrimination in Employment Act, 29
U.S.C., ss.621 ET SEQ., the Americans With Disabilities Act,
42 U.S.C., ss.12101 ET SEQ., the New Hampshire Law Against
Discrimination, N.H. Rev. Stat. Xxx. ss.354-A:1 ET SEQ. and
similar state antidiscrimination laws, damages arising out of
all employment discrimination claims, wrongful discharge
claims or other common law claims and damages, provided,
however, that nothing herein shall release the Company from
Executive's Stock Option Agreements or Restricted Stock
Agreements. The Release shall also contain, at a minimum, the
following language:
The Executive acknowledges that he has been given
twenty-one (21) days to consider the terms of this
Release and that the Company advised him to consult
with an attorney of his own choosing prior to signing
this Release. The Executive may revoke this Release
for a period of seven (7) days after the execution of
the Release and the Release shall not be effective or
enforceable until the expiration of this seven (7)
day revocation period.
At the same time, the Company shall execute and deliver a Release to
the Executive as follows:
The Company hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges the Executive
from any and all claims which it ever had or now has against
the Executive, other than for intentional harmful acts.
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12. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive's employment by the
Company or any of its affiliated companies and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the
Executive shall not, without the prior written consent of the Company,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 12
constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
13. ARBITRATION. Any controversy or claim arising out of this Agreement
shall be settled by binding arbitration in accordance with the
commercial rules, policies and procedures of the American Arbitration
Association. Judgment upon any award rendered by the arbitrator may be
entered in any court of law having jurisdiction thereof. Arbitration
shall take place in Nashua, New Hampshire at a mutually convenient
location.
14. SUCCESSORS.
(a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
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(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or
otherwise.
15. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
IF TO THE EXECUTIVE:
Xxxx X. Xxxxxxxxx
00 Xxxxx Xxxx
Xxxxxx, XX 00000
IF TO THE COMPANY:
Nashua Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: President
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by
the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
(e) The Executive's failure to insist upon strict compliance with
any provision hereof or the failure to assert any right the
Executive may have hereunder, including, without limitation,
the right to terminate employment for Good Reason pursuant to
Section 5(c)(i)-(v), shall not be deemed to be a waiver of
such provision or right or any other provision or right
thereof.
(f) This Agreement contains the entire understanding of the
Company and the Executive with
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respect to the subject matter hereof. The Executive and the
Company acknowledge that the employment of the Executive by
the Company is "at will" and, prior to the Effective Date,
both the Executive's employment and this Agreement may be
terminated by either the Company or the Executive at any time.
In the event that this Agreement is terminated by the Company
prior to the Effective Date and the Executive remains employed
by the Company, the Executive would be entitled to the same
severance benefits as set forth in Section 7 of this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
NASHUA CORPORATION EXECUTIVE
By /s/ Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxxx
------------------------------------- -----------------------------
President and Chief Executive Officer Name: Xxxx X. Xxxxxxxxx
