-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ej7xNMiuJsX6iUipAXx2qcJ6YqhhwXof5nas8PXDAcrsJ9cGFikzZRqp7V4+aWcQ fwr29acHFjNrSS4TmH+ZKw== 0000950135-06-005319.txt : 20060822 0000950135-06-005319.hdr.sgml : 20060822 20060822155514 ACCESSION NUMBER: 0000950135-06-005319 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20060817 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060822 DATE AS OF CHANGE: 20060822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NASHUA CORP CENTRAL INDEX KEY: 0000069680 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 020170100 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05492 FILM NUMBER: 061048789 BUSINESS ADDRESS: STREET 1: SECOND FL STREET 2: 11 TRAFALGAR SQ CITY: NASHUA STATE: NH ZIP: 03063 BUSINESS PHONE: 6038802323 MAIL ADDRESS: STREET 1: SECOND FL STREET 2: 11 TRAFALGAR SQ CITY: NASHUA STATE: NH ZIP: 03063 8-K 1 b62094nce8vk.htm NASHUA CORPORATION e8vk
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 17, 2006
 
     
NASHUA CORPORATION
(Exact name of registrant as specified in its charter)
 
 
         
Massachusetts   1-05492   02-0170100
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (IRS Employer
Identification No.)
         
11 Trafalgar Square, Suite 201
Nashua, New Hampshire 03063
(Address of principal executive offices and zip code)
(603) 880-2323
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

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Item 1.01. Entry into a Material Definitive Agreement
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
Item 9.01. Financial Statements and Exhibits
SIGNATURE
EXHIBIT INDEX
Ex-10.1 Thomas Kubis Employment Agreement
Ex-10.2 Thomas Kubis Change of Control & Severance Agreement
Ex-10.3 Todd McKeown Employment Agreement
Ex-10.4 Todd McKeown Change of Control & Severance Agreement
Ex-99.1 Press Release dated August 17, 2006

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Item 1.01. Entry into a Material Definitive Agreement
     As discussed below in Item 5.02, on August 17, 2006, Nashua Corporation, a Massachusetts corporation (the “Company”), announced that Todd McKeown will join the Company as Vice President of Sales and Marketing, and Thomas Kubis, formerly Vice President of Manufacturing for the Company’s Label Products segment, was named Vice President of Operations.
Kubis Agreement
     The Company entered into an employment agreement with Thomas Kubis on August 21, 2006. Pursuant to the employment agreement, Mr. Kubis’ annual base salary will be $180,000. For 2006, Mr. Kubis will continue to participate in the Company’s Management Incentive Plan, which provides for a cash award of 22% of his annual base salary based upon the achievement of certain plan goals. Beginning January 1, 2007, Mr. Kubis will be entitled to an annual cash bonus of up to 40% of his annual base salary, based upon the achievement of certain plan goals established by the Company’s chief executive officer. Mr. Kubis’ employment agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference.
     The Company also entered into a change of control and severance agreement with Mr. Kubis on August 21, 2006. The change of control agreement provides that if, within one year after a change of control of the Company, the Company terminates Mr. Kubis’ employment without cause or Mr. Kubis terminates his employment for good reason, in each case as defined in the change of control agreement, Mr. Kubis would be entitled to receive severance pay equal to the sum of his accrued but unpaid base salary and vacation pay, plus the sum of his annual salary and annual bonus. Additionally, if the Company terminates Mr. Kubis’ employment without cause prior to a change of control of the Company or more than one year after a change of control, Mr. Kubis would be entitled to receive salary continuation and certain benefits for a period of one year. Mr. Kubis’ change of control agreement is attached as Exhibit 10.2 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference.
     Mr. Kubis will also be granted an award of 15,000 shares of restricted stock pursuant to the Company’s 2004 Value Creation Incentive Plan. The restricted stock award will vest and no longer be subject to forfeiture based upon the Company’s common stock achieving certain target prices per share of common stock on the Nasdaq Global Market over a 40-consecutive trading day period ending on August 21, 2009. The restricted stock award will vest as to (1) 33% of the shares if the average price for the 40-day trading period is equal to or greater than $13.00 and less than $14.00, (2) 66% of the shares if the average price for the 40-day trading period is equal to or greater than $14.00 and less than $15.00 and (3) 100% of the shares if the average price for the 40-day trading period is equal to or greater than $15.00. Additionally, if Mr. Kubis’ employment with the Company is terminated by the Company without cause, as defined in the 2004 Value Creation Incentive Plan, during the one-year period before August 21, 2009, and one of the price targets is met as of August 21, 2009, a portion of the restricted shares will still vest. The portion of the shares that will vest is calculated as the pro-rata portion of the percentage of shares that otherwise would have vested, based on the number of days during the final one-year

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period that Mr. Kubis was employed by the Company. Any shares that have not vested on or before August 21, 2009, will be forfeited to the Company. Additionally, all shares that have not vested and are still subject to forfeiture will be forfeited to the Company upon the termination of Mr. Kubis’ employment with the Company, other than for cause as described above, or upon death or disability.
McKeown Agreement
     The Company has entered into an employment agreement with Todd McKeown which will become effective on September 1, 2006. Pursuant to the employment agreement, Mr. McKeown’s annual base salary will be $250,000. Additionally, beginning on January 1, 2007, Mr. McKeown will be entitled to an annual cash bonus of up to 60% of his annual base salary, based upon the achievement of certain plan goals established by the Company’s chief executive officer. Mr. McKeown’s employment agreement is attached as Exhibit 10.3 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference.
     The Company has also entered into a change of control and severance agreement with Mr. McKeown effective on September 1, 2006. The change of control agreement will provide that if, within one year after a change of control of the Company, the Company terminates Mr. McKeown’s employment without cause or Mr. McKeown terminates his employment for good reason, in each case as defined in the change of control agreement, Mr. McKeown would be entitled to receive severance pay equal to the sum of his accrued but unpaid base salary and vacation pay, plus the sum of his annual salary and annual bonus. Additionally, if the Company terminates Mr. McKeown’s employment without cause prior to a change of control of the Company or more than one year after a change of control, Mr. McKeown would be entitled to receive salary continuation and certain benefits for a period of one year. Mr. McKeown’s change of control agreement is attached as Exhibit 10.4 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference.
     Mr. McKeown will also be granted an award of 15,000 shares of restricted stock pursuant to the Company’s 2004 Value Creation Incentive Plan. The restricted stock award will vest and no longer be subject to forfeiture based upon the Company’s common stock achieving certain target prices per share of common stock on the Nasdaq Global Market over a 40-consecutive trading day period ending on September 1, 2009. The restricted stock award will vest as to (1) 33% of the shares if the average price for the 40-day trading period is equal to or greater than $13.00 and less than $14.00, (2) 66% of the shares if the average price for the 40-day trading period is equal to or greater than $14.00 and less than $15.00 and (3) 100% of the shares if the average price for the 40-day trading period is equal to or greater than $15.00. Additionally, if Mr. McKeown’s employment with the Company is terminated by the Company without cause, as defined in the 2004 Value Creation Incentive Plan, during the one-year period before September 1, 2009, and one of the price targets is met as of September 1, 2009, a portion of the restricted shares will still vest. The portion of the shares that will vest is calculated as the pro-rata portion of the percentage of shares that otherwise would have vested, based on the number of days during the final one-year period that Mr. McKeown was employed by the Company. Any shares that have not vested on or before September 1, 2009, will be forfeited to the Company. Additionally, all shares that have not vested and are still subject to forfeiture will be forfeited to

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the Company upon the termination of Mr. McKeown’s employment with the Company, other than for cause as described above, or upon death or disability.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
     On August 17, 2006, the Company announced that Thomas Kubis will be appointed as Vice President of Operations effective August 21, 2006. From May 2004 to August 2006, Mr. Kubis served as Vice President of Manufacturing for the Company’s Label Products segment. From July 2003 to May 2004, Mr. Kubis served as Vice President of Manufacturing for the Label Products division in Tennessee. From August 1996 to July 2003, Mr. Kubis served as Plant Manager, Label Manufacturing Division, at Wallace Computer Services, a subsidiary of Moore Corporation Limited (predecessor of R.R. Donnelley & Sons Company).
     Also on August 17, 2006, the Company announced that Todd McKeown will be appointed as Vice President of Sales and Marketing effective September 1, 2006. From February 2005 to June 2006, Mr. McKeown was Vice President of Sales and Marketing for Interlake Material Handling, a manufacturer of storage rack products. From January 2004 to November 2004, Mr. McKeown served as Senior Vice President of Sales for Moore Wallace North America, a label and printing company and a subsidiary of R.R. Donnelley & Sons Company, a provider of print and related services. From February 2003 to January 2004, Mr. McKeown was Area Vice President for Moore Wallace North America. From 2001 to February 2003, he was Vice President of Corporate Accounts for Wallace Computer Services.
     The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
     A copy of the press release issued by the Company on August 17, 2006 is attached as Exhibit 99.1 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference.
Item 9.01. Financial Statements and Exhibits
(d)   Exhibits
 
    See Exhibit Index attached hereto.

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  NASHUA CORPORATION
 		  
Date: August 22, 2006  By:   /s/ John L. Patenaude    
    John L. Patenaude   
    Vice President - Finance, Chief Financial Officer and Treasurer   

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EXHIBIT INDEX
     
Exhibit No.   Description
 
    
10.1
  Employment Agreement, by and between the Company and Thomas Kubis, dated as of August 21, 2006.
 
    
10.2
  Change of Control and Severance Agreement, by and between the Company and Thomas Kubis, dated as of August 21, 2006.
 
    
10.3
  Employment Agreement, by and between the Company and Todd McKeown, dated as of September 1, 2006.
 
    
10.4
  Change of Control and Severance Agreement, by and between the Company and Todd McKeown, dated as of September 1, 2006.
 
    
99.1
  Press Release issued by the Company on August 17, 2006.

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EX-10.1 2 b62094ncexv10w1.txt EX-10.1 THOMAS KUBIS EMPLOYMENT AGREEMENT Exhibit 10.1 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 21st day of August, 2006, is entered into by Nashua Corporation, a Massachusetts corporation with its principal place of business at 11 Trafalgar Square, Suite 201, Nashua, New Hampshire 03063 (the "Company"), and Thomas Kubis, residing at 3088 Federal Boulevard, Morristown, Tennessee 37814 (the "Executive"). The Company desires to employ the Executive, and the Executive desires to be employed by the Company. In consideration of the mutual covenants and promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement, the parties agree as follows: 1. Employment At-Will. The Company hereby agrees to employ the Executive, and the Executive hereby accepts employment with the Company, upon the terms set forth in this Agreement, commencing on August 21, 2006 (the "Commencement Date"). Subject to the provisions set forth herein and in the change of control and severance agreement, of even date herewith, attached hereto as Exhibit A (the "Change of Control Agreement"), the Executive's employment with the Company shall be at-will meaning that either party may terminate the employment relationship at any time, for any reason, with or without cause or notice subject to the provisions set forth herein. 2. Title; Capacity. The Executive shall serve on a full-time basis as Vice President of Operations. The Executive shall be based in the Company's office in Jefferson City, Tennessee. The Executive shall be subject to the supervision of, and shall have such authority as is delegated to the Executive by, the President and Chief Executive Officer (CEO). The Executive hereby accepts such employment and agrees to undertake the duties and responsibilities inherent in such position and such other duties and responsibilities as the CEO shall from time to time reasonably assign to the Executive. The Executive agrees to devote his entire business time, attention and energies to the business and interests of the Company and shall not engage in any other business activities without the prior (written) approval of the CEO. The Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company. 3. Compensation and Benefits. 3.1 Salary. The Company shall pay the Executive, in periodic installments in accordance with the Company's customary payroll practices, an annualized base salary of $180,000, for the period commencing on the Commencement Date. 3.2 Annual Bonus. The Executive's participation in the 2006 Management Incentive Plan will continue as outlined in the April 3, 2006 memo provided to the Executive. Beginning January 1, 2007, the Executive shall be eligible to receive an annual cash bonus, payable as a percentage (40%) of the Executive's base salary, based upon the achievement of certain plan goals established by the CEO. 3.3 Fringe Benefits. The Executive shall be entitled to participate in all bonus and benefit programs that the Company establishes and makes available to its employees, if any, to the extent that Executive's position, tenure, salary, age, health and other qualifications make him eligible to participate. The Executive shall be entitled to four weeks paid vacation per year, to be taken at such times as may be approved by the CEO. Vacation time may not be carried over from year to year. 3.4 Reimbursement of Expenses. The Company shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, in accordance with policies and procedures, and subject to limitations, adopted by the Company from time to time. 3.5 Withholding. All salary, bonus and other compensation payable to the Executive shall be subject to applicable withholding taxes. 3.6 Restricted Stock. Subject to approval of the Board and the Executive's execution of the applicable Company restricted stock agreements, the Executive shall be granted 15,000 shares of common stock, par value $1.00 per share, of the Company (the "Common Stock"), subject to the terms and conditions of the Company's 2004 Value Creation Incentive Plan, or if granted pursuant to a different stock incentive plan of the Company, such grant of Common Stock shall be on substantially similar terms and conditions as the Company's 2004 Value Creation Incentive Plan. The common stock shall vest as to (i) 33% if the average of the last reported sales price per share of the Common Stock on the Nasdaq National Market (or other national securities exchange or nationally recognized trading system) for a 40 consecutive trading day period ending on the third anniversary of the Commencement Date (the "40-Day Average Closing Price") is equal to or greater than $13.00 and less than $14.00, (ii) 66% if the 40-Day Average Closing Price is equal to or greater than $14.00 and less than $15.00 and (iii) 100% if the 40-Day Average Closing Price is equal to or greater than $15.00. The common stock shall vest upon the terms and conditions set forth in the 2004 Value Creation Incentive Plan. 3.7 Change of Control Agreement. The Executive shall, upon execution of this Agreement, execute the Change of Control Agreement. 4. Confidentiality, Non-Competition, Return of Property and Developments Agreement. The Executive shall, upon execution of this Agreement, execute a non-competition and non-solicitation agreement in the form attached hereto as Exhibit B. 5. Other Agreements. The Executive represents that his performance of all the terms of this Agreement and the performance of his duties as an employee of the Company do not and will not breach any agreement with any prior employer or other party to which the Executive is a party (including without limitation any nondisclosure or non-competition agreement). Any agreement to which the Executive is a party relating to nondisclosure, non-competition or non-solicitation of employees or customers is listed on Schedule A attached hereto. -2- 6. Miscellaneous. 6.1 Notices. Any notices delivered under this Agreement shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service, in each case to the address of the recipient set forth in the introductory paragraph hereto. Either party may change the address to which notices are to be delivered by giving notice of such change to the other party in the manner set forth in this Section 8.1. 6.2 Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. 6.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement. 6.4 Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive. 6.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without reference to the conflicts of laws provisions thereof). Any action, suit or other legal proceeding arising under or relating to any provision of this Agreement shall be commenced only in a court of the Commonwealth of Massachusetts (or, if appropriate, a federal court located within Massachusetts or the Northern District of Illinois), and the Company and the Executive each consents to the jurisdiction of such a court. 6.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to the Company's assets or business, provided, however, that the obligations of the Executive are personal and shall not be assigned by him. 6.7 Waivers. No delay or omission by the Company or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. 6.8 Captions. The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. 6.9 Severability. In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. -3- THE EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above. NASHUA CORPORATION By: /s/ Thomas G. Brooker ------------------------------------ Name: Thomas G. Brooker Title: President and CEO EXECUTIVE /s/ Thomas M. Kubis ---------------------------------------- Thomas Kubis -4- SCHEDULE A Prior Agreements EX-10.2 3 b62094ncexv10w2.txt EX-10.2 THOMAS KUBIS CHANGE OF CONTROL & SEVERANCE AGREEMENT Exhibit 10.2 CHANGE OF CONTROL AND SEVERANCE AGREEMENT AGREEMENT by and between NASHUA CORPORATION, a Massachusetts corporation (the "Company") and THOMAS KUBIS (the "Executive"), dated as of the 21st day of August, 2006. 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; WHEREAS, the Board is implementing a value creation incentive plan to provide the Executive and other members of management of the Company with additional equity incentives; 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 such third anniversary, 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 one year 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. 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 50% 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, or (z) Gabelli Funds, LLC, GAMCO Investors, Inc., Gabelli Advisers, Inc., MJG Associates, Inc., Gabelli Group Capital Partners, Inc., Gabelli Asset Management Inc., Marc J. Gabelli and/or Mario J. Gabelli and/or any affiliate of any of the foregoing, in the case of each of such clauses (x), (y) and (z), 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) Consummation by 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 -2- 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 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 first 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 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, the Executive agrees to devote her reasonable full time and attention 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 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 civic or charitable boards or committees, (B) serve on corporate boards or committees other than the Company's to the extent approved by the Company's Board, (C) deliver lectures, fulfill speaking engagements or teach at educational institutions and (D) manage personal investments, so long as such activities do not 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. -3- (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 current monthly base salary being paid to the Executive by the Company and its affiliated companies as of the date of this Agreement. During the Employment Period, the Annual Base Salary shall be reviewed at least annually and may be increased at any time and from time to time in the sole discretion of the Board. 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 may be awarded, for each fiscal year beginning or ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash as determined by the Board of Directors, in its sole discretion. (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. (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. (v) Expenses. During the Employment Period, the Executive shall be entitled to receive reimbursement for all reasonable documented expenses incurred by the Executive in accordance with the policies, practices and procedures 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 plans, practices, programs and policies of the Company and its affiliated companies in effect. (vii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the plans, policies, programs and practices -4- of the Company and its affiliated companies as in effect. 5. TERMINATION OF EMPLOYMENT. (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 120 consecutive business days as a result of incapacity due to mental or physical illness determined 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) the Executive's continued documented failure to perform her reasonably assigned duties (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Executive gives notice of termination for Good Reason), which failure is not cured within 60 days after written notice for substantial performance is received by the Executive from the Board which identifies the manner in which the Board believes the Executive has not substantially performed the Executive's duties, (ii) the Executive being convicted of a felony, or (iii) the Executive's engagement in illegal conduct or gross misconduct injurious to the Company. (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 material respect with the Executive's position (including offices, titles and reporting requirements), authority or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a material diminution in such position, authority or responsibilities; (ii) a reduction in the Executive's Annual Base Salary as in effect on the date of this Agreement or as the same was or may be increased thereafter from time to time; (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 -5- (v) any failure by the Company to comply with and satisfy Section 14(c) of this Agreement. (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). (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 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) and (ii) 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 to the Accrued Obligations, in the event (A) the Board subsequently approves the payment of an annual bonus to members of management for the fiscal year in which the Date of Termination occurred and (B) the Executive was employed at least one quarter of such fiscal year, then the Executive's estate or beneficiary shall be entitled to receive an additional payment equal to the bonus that such Executive would have received for such fiscal year (as determined by the Board) multiplied by a fraction, the numerator of which is the number of days in such fiscal year for which the Executive was actually employed and the denominator is 365 days. (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 to the Accrued Obligations, in the event (A) the Board subsequently approves the payment of an annual bonus to members of management for the -6- fiscal year in which the Date of Termination occurred and (B) the Executive was employed at least one quarter of such fiscal year, then the Executive shall be entitled to receive an additional payment equal to the bonus that such Executive would have received for such fiscal year (as determined by the Board) multiplied by a fraction, the numerator of which is the number of days in such fiscal year for which the Executive was actually employed and the denominator is 365 days. (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) one (1) and (y) the sum of (i) Annual Base Salary and (ii) the Annual Bonus paid or payable (including any bonus or portion thereof which has been earned but deferred) for the most recently completed fiscal year. 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 or other event shall have occurred before the Date of Termination that would result in the Executive becoming entitled to receive payments under this Agreement or any other arrangement that would be "parachute payments", as defined in Section 280G of the Internal Revenue Code of 1986, as amended -7- from time to time (the "Code"), the Company shall not be obligated to make such payments to the Executive to the extent necessary to eliminate any "excess parachute payments" as defined in said Section 280G; provided, however, that if the 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 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 (but only in the event the Executive is successful on the merits of such contest) 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 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 she ever had or now has against the Company, its officers, directors, stockholders, corporate affiliates, agents and employees, including, but not limited to, all -8- claims arising out of her employment, all employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C., 621 et seq., the Americans With Disabilities Act, 42 U.S.C., 12101 et seq., the New Hampshire Law Against Discrimination, N.H. Rev. Stat. Ann. 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 she has been given twenty-one (21) days to consider the terms of this Release and that the Company advised her to consult with an attorney of her 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. 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. -9- (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (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 Commonwealth of Massachusetts, 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: Thomas Kubis 3088 Federal Boulevard Morristown, Tennessee 37814 If to the Company: Nashua Corporation 11 Trafalgar Square Nashua, New Hampshire 03063 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 -10- 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 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. [Remainder of Page Intentionally Left Blank] -11- 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/ Thomas G. Brooker /s/ Thomas M. Kubis ---------------------------------- ---------------------------------------- Name: Thomas G. Brooker Thomas Kubis Title: President and Chief Executive Officer -12- EX-10.3 4 b62094ncexv10w3.txt EX-10.3 TODD MCKEOWN EMPLOYMENT AGREEMENT Exhibit 10.3 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 1st day of September, 2006, is entered into by Nashua Corporation, a Massachusetts corporation with its principal place of business at 11 Trafalgar Square, Suite 201, Nashua, New Hampshire 03063 (the "Company"), and Todd McKeown, residing at 2408 Comstock Court, Naperville, Illinois 60564 (the "Executive"). The Company desires to employ the Executive, and the Executive desires to be employed by the Company. In consideration of the mutual covenants and promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement, the parties agree as follows: 1. Employment At-Will. The Company hereby agrees to employ the Executive, and the Executive hereby accepts employment with the Company, upon the terms set forth in this Agreement, commencing on September 1, 2006 (the "Commencement Date"). Subject to the provisions set forth herein and in the change of control and severance agreement, of even date herewith, attached hereto as Exhibit A (the "Change of Control Agreement"), the Executive's employment with the Company shall be at-will meaning that either party may terminate the employment relationship at any time, for any reason, with or without cause or notice subject to the provisions set forth herein. 2. Title; Capacity. The Executive shall serve on a full-time basis as Vice President of Sales and Marketing. The Executive shall be based in the Company's office in Park Ridge, Illinois. The Executive shall be subject to the supervision of, and shall have such authority as is delegated to the Executive by, the President and Chief Executive Officer (CEO). The Executive hereby accepts such employment and agrees to undertake the duties and responsibilities inherent in such position and such other duties and responsibilities as the CEO shall from time to time reasonably assign to the Executive. The Executive agrees to devote his entire business time, attention and energies to the business and interests of the Company and shall not engage in any other business activities without the prior (written) approval of the CEO. The Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company. 3. Compensation and Benefits. 3.1 Salary. The Company shall pay the Executive, in periodic installments in accordance with the Company's customary payroll practices, an annualized base salary of $250,000, for the period commencing on the Commencement Date. 3.2 Annual Bonus. Beginning January 1, 2007, the Executive shall be eligible to receive an annual cash bonus, payable as a percentage (60%) of the Executive's base salary, based upon the achievement of certain plan goals established by the CEO. 3.3 Fringe Benefits. The Executive shall be entitled to participate in all bonus and benefit programs that the Company establishes and makes available to its employees, if any, to the extent that Executive's position, tenure, salary, age, health and other qualifications make him eligible to participate. The Executive shall be entitled to four weeks paid vacation per year, to be taken at such times as may be approved by the CEO. Vacation time may not be carried over from year to year. 3.4 Reimbursement of Expenses. The Company shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, in accordance with policies and procedures, and subject to limitations, adopted by the Company from time to time. 3.5 Withholding. All salary, bonus and other compensation payable to the Executive shall be subject to applicable withholding taxes. 3.6 Restricted Stock. Subject to approval of the Board and the Executive's execution of the applicable Company restricted stock agreements, the Executive shall be granted 15,000 shares of common stock, par value $1.00 per share, of the Company (the "Common Stock"), subject to the terms and conditions of the Company's 2004 Value Creation Incentive Plan, or if granted pursuant to a different stock incentive plan of the Company, such grant of Common Stock shall be on substantially similar terms and conditions as the Company's 2004 Value Creation Incentive Plan. The common stock shall vest as to (i) 33% if the average of the last reported sales price per share of the Common Stock on the Nasdaq National Market (or other national securities exchange or nationally recognized trading system) for a 40 consecutive trading day period ending on the third anniversary of the Commencement Date (the "40-Day Average Closing Price") is equal to or greater than $13.00 and less than $14.00, (ii) 66% if the 40-Day Average Closing Price is equal to or greater than $14.00 and less than $15.00 and (iii) 100% if the 40-Day Average Closing Price is equal to or greater than $15.00. The common stock shall vest upon the terms and conditions set forth in the 2004 Value Creation Incentive Plan. 3.7 Change of Control Agreement. The Executive shall, upon execution of this Agreement, execute the Change of Control Agreement. 4. Confidentiality, Non-Competition, Return of Property and Development Agreement. The Executive shall, upon execution of this Agreement, execute a non-competition and non-solicitation agreement in the form attached hereto as Exhibit B. 5. Other Agreements. The Executive represents that his performance of all the terms of this Agreement and the performance of his duties as an employee of the Company do not and will not breach any agreement with any prior employer or other party to which the Executive is a party (including without limitation any nondisclosure or non-competition agreement). Any agreement to which the Executive is a party relating to nondisclosure, non-competition or non-solicitation of employees or customers is listed on Schedule A attached hereto. -2- 6. Miscellaneous. 6.1 Notices. Any notices delivered under this Agreement shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service, in each case to the address of the recipient set forth in the introductory paragraph hereto. Either party may change the address to which notices are to be delivered by giving notice of such change to the other party in the manner set forth in this Section 8.1. 6.2 Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. 6.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement. 6.4 Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive. 6.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without reference to the conflicts of laws provisions thereof). Any action, suit or other legal proceeding arising under or relating to any provision of this Agreement shall be commenced only in a court of the Commonwealth of Massachusetts (or, if appropriate, a federal court located within Massachusetts or the Northern District of Illinois), and the Company and the Executive each consents to the jurisdiction of such a court. 6.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to the Company's assets or business, provided, however, that the obligations of the Executive are personal and shall not be assigned by him. 6.7 Waivers. No delay or omission by the Company or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. 6.8 Captions. The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. 6.9 Severability. In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. -3- THE EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above. NASHUA CORPORATION By: /s/ Thomas G. Brooker ------------------------------------ Name: Thomas G. Brooker Title: President and CEO EXECUTIVE /s/ Todd McKeown ---------------------------------------- Todd McKeown -4- SCHEDULE A Prior Agreements EX-10.4 5 b62094ncexv10w4.txt EX-10.4 TODD MCKEOWN CHANGE OF CONTROL & SEVERANCE AGREEMENT Exhibit 10.4 CHANGE OF CONTROL AND SEVERANCE AGREEMENT AGREEMENT by and between NASHUA CORPORATION, a Massachusetts corporation (the "Company") and TODD MCKEOWN (the "Executive"), dated as of the 1st day of September, 2006. 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; WHEREAS, the Board is implementing a value creation incentive plan to provide the Executive and other members of management of the Company with additional equity incentives; 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 such third anniversary, 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 one year 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. 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 50% 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, or (z) Gabelli Funds, LLC, GAMCO Investors, Inc., Gabelli Advisers, Inc., MJG Associates, Inc., Gabelli Group Capital Partners, Inc., Gabelli Asset Management Inc., Marc J. Gabelli and/or Mario J. Gabelli and/or any affiliate of any of the foregoing, in the case of each of such clauses (x), (y) and (z), 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) Consummation by 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 -2- 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 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 first 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 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, the Executive agrees to devote her reasonable full time and attention 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 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 civic or charitable boards or committees, (B) serve on corporate boards or committees other than the Company's to the extent approved by the Company's Board, (C) deliver lectures, fulfill speaking engagements or teach at educational institutions and (D) manage personal investments, so long as such activities do not 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. -3- (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 current monthly base salary being paid to the Executive by the Company and its affiliated companies as of the date of this Agreement. During the Employment Period, the Annual Base Salary shall be reviewed at least annually and may be increased at any time and from time to time in the sole discretion of the Board. 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 may be awarded, for each fiscal year beginning or ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash as determined by the Board of Directors, in its sole discretion. (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. (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. (v) Expenses. During the Employment Period, the Executive shall be entitled to receive reimbursement for all reasonable documented expenses incurred by the Executive in accordance with the policies, practices and procedures 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 plans, practices, programs and policies of the Company and its affiliated companies in effect. (vii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the plans, policies, programs and practices -4- of the Company and its affiliated companies as in effect. 5. TERMINATION OF EMPLOYMENT. (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 120 consecutive business days as a result of incapacity due to mental or physical illness determined 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) the Executive's continued documented failure to perform her reasonably assigned duties (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Executive gives notice of termination for Good Reason), which failure is not cured within 60 days after written notice for substantial performance is received by the Executive from the Board which identifies the manner in which the Board believes the Executive has not substantially performed the Executive's duties, (ii) the Executive being convicted of a felony, or (iii) the Executive's engagement in illegal conduct or gross misconduct injurious to the Company. (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 material respect with the Executive's position (including offices, titles and reporting requirements), authority or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a material diminution in such position, authority or responsibilities; (ii) a reduction in the Executive's Annual Base Salary as in effect on the date of this Agreement or as the same was or may be increased thereafter from time to time; (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 -5- (v) any failure by the Company to comply with and satisfy Section 14(c) of this Agreement. (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). (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 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) and (ii) 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 to the Accrued Obligations, in the event (A) the Board subsequently approves the payment of an annual bonus to members of management for the fiscal year in which the Date of Termination occurred and (B) the Executive was employed at least one quarter of such fiscal year, then the Executive's estate or beneficiary shall be entitled to receive an additional payment equal to the bonus that such Executive would have received for such fiscal year (as determined by the Board) multiplied by a fraction, the numerator of which is the number of days in such fiscal year for which the Executive was actually employed and the denominator is 365 days. (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 to the Accrued Obligations, in the event (A) the Board subsequently approves the payment of an annual bonus to members of management for the -6- fiscal year in which the Date of Termination occurred and (B) the Executive was employed at least one quarter of such fiscal year, then the Executive shall be entitled to receive an additional payment equal to the bonus that such Executive would have received for such fiscal year (as determined by the Board) multiplied by a fraction, the numerator of which is the number of days in such fiscal year for which the Executive was actually employed and the denominator is 365 days. (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) one (1) and (y) the sum of (i) Annual Base Salary and (ii) the Annual Bonus paid or payable (including any bonus or portion thereof which has been earned but deferred) for the most recently completed fiscal year. 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 or other event shall have occurred before the Date of Termination that would result in the Executive becoming entitled to receive payments under this Agreement or any other arrangement that would be "parachute payments", as defined in Section 280G of the Internal Revenue Code of 1986, as amended -7- from time to time (the "Code"), the Company shall not be obligated to make such payments to the Executive to the extent necessary to eliminate any "excess parachute payments" as defined in said Section 280G; provided, however, that if the 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 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 (but only in the event the Executive is successful on the merits of such contest) 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 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 she ever had or now has against the Company, its officers, directors, stockholders, corporate affiliates, agents and employees, including, but not limited to, all -8- claims arising out of her employment, all employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C., 621 et seq., the Americans With Disabilities Act, 42 U.S.C., 12101 et seq., the New Hampshire Law Against Discrimination, N.H. Rev. Stat. Ann. 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 she has been given twenty-one (21) days to consider the terms of this Release and that the Company advised her to consult with an attorney of her 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. 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. -9- (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (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 Commonwealth of Massachusetts, 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: Todd McKeown 2408 Comstock Court Naperville, Illinois 60564 If to the Company: Nashua Corporation 11 Trafalgar Square Nashua, New Hampshire 03063 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 -10- 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 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. [Remainder of Page Intentionally Left Blank] -11- 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/ Thomas G. Brooker /s/ Todd McKeown ---------------------------------- ---------------------------------------- Name: Thomas G. Brooker Todd McKeown Title: President and Chief Executive Officer -12- EX-99.1 6 b62094ncexv99w1.txt EX-99.1 PRESS RELEASE DATED AUGUST 17, 2006 Exhibit 99.1 Contact: Tom Brooker/John Patenaude Rich Coyle Nashua Corporation Citigate Sard Verbinnen 847-318-1797/603-880-2145 212-687-8080 NASHUA CORPORATION REALIGNS MANAGEMENT TWO NEW SENIOR MANAGERS NAMED TO LEAD SALES AND OPERATIONS NASHUA, N.H. - AUGUST 17, 2006 - Nashua Corporation (NASDAQ: NSHA), a manufacturer of labels and thermal and specialty papers, today announced it has realigned senior management responsibilities for its marketing and manufacturing operations. Industry veteran Todd McKeown is joining Nashua as Vice President of Sales and Marketing, and will be responsible for these activities for the Company's combined Label and Converted products. Sales and marketing for these products, which account for approximately 85 percent of Nashua's revenue, formerly were led by executives in each business unit. Thomas Kubis, formerly Vice President of Manufacturing for the Company's Label segment, has been named Vice President of Operations and will be responsible for Nashua's manufacturing facilities currently located in California, Florida, Nebraska, New Jersey and Tennessee. Both executives will report directly to Thomas Brooker, Nashua's President and Chief Executive Officer. "We are combining our Label and Converted products sales force and integrating our manufacturing management teams as part of our ongoing strategy to generate top-line growth and increase productivity," said Brooker. "The flatter, more streamlined organization structure will better position Nashua to capture opportunities and respond to changes in our highly competitive industry. By combining the major parts of our business under the leadership of two highly experienced executives we will be more effective in developing and executing strategies." Brooker stated, "On behalf of the senior management team, I'd like to welcome Todd to Nashua. He is an experienced executive with a proven track record in sales and marketing. His substantial industry experience will prove invaluable as we realign the sales force to better focus on our customers and their needs." Brooker continued, "I'd also like to congratulate Tom on his well-deserved promotion. During his tenure at Nashua, he has demonstrated his leadership capabilities and has been an integral part of the success we've achieved in optimizing our manufacturing resources. He is ideally suited to lead our operations team." Nashua also announced that Thomas Pagel, Vice President and President of the Label Products Division, and Margaret Adams, Vice President, President of the Converted Products Division and Chief Information Officer, have left the Company. "Both Tom and Margaret made important contributions to Nashua, and we wish them well in their future endeavors," said Brooker. 2 Kevin Coulouris, Nashua's Vice President of Information Technology, will continue in that capacity and report to Brooker. EXECUTIVE BIOGRAPHIES Prior to joining Nashua, Todd McKeown was Vice President of Sales and Marketing for Interlake Material Handling from 2005 to 2006 where he was responsible for all facets of the Interlake brand. He previously served as Senior Vice President of Sales for Moore Wallace North America, an RR Donnelly & Sons Company, where he was responsible for Moore Wallace's direct sales force. During his 18-year tenure at Moore Wallace, McKeown held a variety of sales, marketing and customer support positions. He also served in a number of sales and marketing management and executive positions. McKeown received a Bachelor of Science degree in Economics from Illinois State University in 1989. Thomas Kubis joined Nashua in 2003 as Vice President of Manufacturing for the Label Products Division in Tennessee, and was promoted to Vice President of Manufacturing for the Label segment in 2004. Prior to joining Nashua, Kubis was involved in label manufacturing and sales at Wallace Computer Services for 16 years, 13 of which were spent in label manufacturing. Mr. Kubis holds a Bachelor of Science degree in Marketing from the University of Connecticut. ABOUT NASHUA Nashua Corporation manufactures and markets a wide variety of specialty imaging products and services to industrial and commercial customers to meet various print application needs. The Company's products include thermal coated papers, pressure-sensitive labels, bond, point of sale, ATM and wide format papers, entertainment tickets, and ribbons for use in imaging devices. Additional information about Nashua Corporation can be found at www.nashua.com. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "will," "estimates," "expects" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the Company's ability to consummate the transaction, the Company's future capital needs and resources, fluctuations in customer demand, intensity of competition from other vendors, timing and acceptance of new product introductions, delays or difficulties in programs designed to increase sales and profitability, general economic and industry conditions, the resolution of certain litigation matters, and other risks set forth in the Company's filings with the Securities and Exchange Commission, and the information set forth herein should be read in light of such risks. In addition, any forward-looking statements represent the Company's estimates only as of the date of this press release and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if its estimates change. -----END PRIVACY-ENHANCED MESSAGE-----