December 14, 1995
Xxxxxxx X. Xxxx
0000-0 Xxxxxxxx Xxxxxx
Xxxxxxx, XX
Re: Separation Agreement
Dear Xxxx:
This letter contains the terms of the agreement between you and New
England Business Service, Inc. ("NEBS" or the "Company") with respect to your
separation from the Company.
1. Termination of Employment. You hereby resign as President,
Chief Executive Officer, Director, member of the Executive Committee and as an
employee of the Company effective as of the date hereof, and, on behalf of the
Board of Directors of the Company, your resignation is hereby accepted. The
foregoing notwithstanding, you shall continue to be eligible to participate in
the Company's employee welfare benefit plans to the extent permitted
thereunder through January 15, 1996. During such period you will continue to
be eligible for all benefits under such plans, but no salary or retirement
benefits will accrue and you will have no authority to act on behalf of the
Company. Your last paycheck will be that deposited on your behalf on
December 15, 1995.
2. Stock Options. You agree that you will not exercise any stock
options held by you and that all such options shall terminate upon termination
of employment as provided in the applicable option grants.
3. Termination Payment. Within three days following the date
hereof, the Company shall pay to you $750,000 in cash by check, subject to
required withholdings. In addition, the Company shall pay in cash by check
an amount equal to $37,500 on each of March 31, June 30, September 30 and
December 31, 1996, subject to required withholdings. In addition, the Company
hereby releases you from all obligations relating to the advance of $106,000
made to you on November 30, 1995, waiving all interest thereon. The Company
will deliver to you the original note executed by you in connection with such
advance within three days following the date hereof. The payments
contemplated hereby are in lieu of all other rights for compensation and
benefits that you have from the Company, including without limitation any such
rights under the Company's 1996 Executive Bonus Plan and Stock Option plans.
4. Restrictions. In consideration of the benefits provided to
you hereunder and other good and valuable consideration, the receipt and
adequacy of which you hereby acknowledge, and in recognition of the
confidential and proprietary business information which you have obtained in
the course of your employment with the Company, you hereby agree to the
following restriction on your activities on and after the date hereof:
a) For a period of eighteen (18) months following the date hereof,
you agree that you will not, directly, on your own behalf or on
behalf of an employer or other affiliate, solicit, identify for
solicitation, or be involved in attempting to recruit any person
who is now a management employee of NEBS while such person is a
management employee of NEBS. This shall not limit (i) your
employer or an affiliate from hiring or soliciting any NEBS
management employee without your direct or indirect involvement,
(ii) you from referring any NEBS management employee who
approaches you to the Human Resources Department of your employer
in a manner which does not otherwise violate the preceding
sentence; (iii) your providing your views on any person who has
previously approached your employer or your employer has previously
solicited without your involvement who is in serious discussions
with regard to employment; or (iv) your giving third party
references at the request of NEBS employees.
b) In addition to any other obligations under applicable law, for a
period of two (2) years following the date hereof, you agree that
you will not, directly or indirectly, on your own behalf or on
behalf of an employer or other affiliate, use or disclose to any
person any trade secrets or other confidential information of
NEBS, including without limitation the existence of the
Manhattan/Patriot project and the status or results thereof. The
foregoing sentence shall not prohibit any disclosure required by
valid legal process. You hereby represent and warrant that, to
the best of your knowledge, you do not have now, and you agree to
promptly return to NEBS, anything tangible or electronically
stored which constitutes, represents, evidences or records any
trade secret or other confidential information of NEBS, retaining
no copies thereof. The terms "trade secret" and other
"confidential" information shall include without limitation all
designs, processes, procedures, formulas, inventions or
improvements, marketing plans, business plans, information and
plans concerning strategic alliances, business acquisition plans,
personnel acquisition plans, and customer lists of the Company to
the extent that the same are confidential.
c) For a period of two (2) years following the date hereof, you agree
that you will not, directly or indirectly, on your own behalf or on
behalf of an employer or other affiliate, interfere (for your
benefit or the benefit of your employer or an affiliate) with the
Company's existing custom print desk in-store NEBS employee services
targeted at home and small office businesses relationship with
Kinko's, Inc., Kinko's Graphics Corporation or their affiliates or
expansion of such existing services to other Kinko's stores. This
subparagraph will not preclude you or any employer of yours from
doing business with such entities or their affiliates.
d) For a period of one (1) year following the date hereof, you agree
that you will not, directly or indirectly, take any of the
following actions or participate with any other person, directly
or indirectly, in connection with any of the following actions
without the prior written consent of the Company or its Board of
Directors: (i) acquire, offer to acquire, or agree to acquire,
by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of the Company
or any subsidiary thereof or of any successor to or person in
control of the Company, or any assets of the Company or division
thereof or of any such successor or controlling person; (ii) make
any "solicitation" of "proxies" (as such terms are used in the
rules of the Securities Exchange Commission) to vote, or seek to
advise or influence any person or entity with respect to the
voting of, and voting securities of the Company; (iii) make any
public announcement with respect to, or submit a proposal for, or
offer of (with or without conditions) any extraordinary
transaction involving the Company or its securities or assets;
(iv) form, join or in any way participate in a "group" (as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) in connection with any of the foregoing; or (v) request
the Company or any of its representatives to amend or waive any
provision of this subparagraph 6(d).
5. Communications; Cooperation. For a period of two (2) years
following the date hereof, you and the Company agree that no disparaging or
negative comments will be made concerning the Company or any of its officers,
directors, employees, or plans on the one hand, or you or your performance on
the other. The parties understand and agree that the foregoing sentence shall
not prohibit non-public communications of a normal competitive nature
concerning products and services offered by the Company. Public announcement
of your separation from the Company will only be made pursuant to a mutually
agreed upon press release; provided that this will not restrict any
announcement by your employer. You agree to cooperate with the Company in
connection with the internal transition of management through
January 15, 1996; provided that such cooperation will not require you to
communicate with customers on behalf of NEBS.
6. Entire Agreement. This letter sets forth the entire agreement
of the parties with respect to the subject matter hereof. The benefits
granted to you hereunder are in lieu of any and all other rights or claims
which you may have for severance or other compensation of any kind.
Please acknowledge your agreement to the terms hereof by signing this
letter in the space provided below.
Sincerely,
NEW ENGLAND BUSINESS
SERVICE, INC.
By:/s/ Xxxxxx X. Xxxxxx
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Acknowledged and Agreed Xxxxxx X. Xxxxxx, Chairman,
President and CEO
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
