EXHIBIT 7
NEW ENGLAND BUSINESS SERVICE, INC.
RESTRICTED STOCK AWARD AGREEMENT
(New England Business Service, Inc. Stock Compensation Plan)
Preamble
This restricted stock award agreement (the "Agreement") is
made and entered into as of August 6, 2002 (the "Date of Grant")
by New England Business Service, Inc. (the "Issuer") and Xxxxxx
X. Xxxxxx (the "Executive"), a key employee of the Issuer or a
Subsidiary1 of the Issuer (hereunder individually and
collectively referred to as the "Company").
1. Shares Subject to the Restricted Stock Award.
Pursuant to the provisions of the New England Business
Service, Inc. Stock Compensation Plan (the "Plan"), as in effect
on the Date of Grant, the Issuer hereby grants to the Executive a
restricted stock award ("Restricted Stock Award") of 6,726 shares
of its Stock (the "Awarded Shares"). The Awarded Shares are
being issued to the Executive in lieu of one hundred percent
(100%) of the gross bonus awarded to the Executive for the fiscal
year ended June 29, 2002 (the "Bonus Award") pursuant to the
FY2002 NEBS Performance Restricted Stock Plan adopted by the
Organization and Compensation Committee of the Board for such
fiscal year and are valued for purposes of this Agreement at
$22.30 per share, the Fair Market Value of a share of Stock on
the Date of Grant, in accordance with and subject to all the
terms and conditions of the Plan and subject to the terms and
conditions hereinafter set forth. The Plan and any amendments
are hereby incorporated by reference and made a part hereof.
2. Terms and Conditions of the Restricted Stock Award.
The issuance of Awarded Shares pursuant to the Restricted
Stock Award shall be subject to the following terms and
conditions.
2.1 Withholding Taxes. Notwithstanding anything to the
contrary in Section 2.3(b), the Issuer's obligation to deliver
vested Awarded Shares pursuant to this Restricted Stock Award
shall be subject to the Executive's satisfaction of all
applicable federal, state and local income and employment tax
withholding obligations. Without limiting the generality of the
foregoing, the Company shall have the right to deduct from
payments of any kind otherwise due to the Executive any federal,
state or local taxes of any kind required by law to be withheld
with respect to any Awarded Shares issued pursuant to this
Restricted Stock Award. The Executive may satisfy such
withholding obligations by having the Company withhold vested and
unrestricted Awarded Shares, or by delivering to the Company
already owned unrestricted shares of Stock, having a Fair Market
Value as of the date of delivery of such unrestricted shares
equal to the amount required to be withheld.
2.2 Vesting, Forfeiture or Early Vesting of Unvested
Awarded Shares.
(a) Except as provided in this Section 2.2, the
Awarded Shares shall remain unvested and subject to the
restrictions of this Section 2.2 and Section 2.3 until the third
annual meeting of stockholders of the Issuer that follows the
Date of Grant of the Awarded Shares (the "Vesting Period").
(i) So long as the Executive's Service continues,
the Awarded Shares shall vest in the Executive (and shall no
longer be subject to the restrictions of this Section 2.2 and
Section 2.3 hereof) in accordance with the following vesting
schedule(rounded up to the nearest whole share):
Vesting Schedule
Percentage of Cumulative
Vesting Date Awarded Percentage of
Shares Vesting Awarded Shares
Vested
Date of 1st annual 15% 15%
meeting of
stockholders
following Date of
Grant
Date of 2nd annual 35% 50%
meeting of
stockholders
following Date of
Grant
Date of 3rd annual 50% 100%
meeting of
stockholders
following Date of
Grant
(ii) If the Executive ceases to perform Service
by reason of death, Disability or Retirement, all Awarded Shares
not previously vested pursuant to this Section 2.2 shall
thereupon immediately vest in the Executive (or in the case of
death, in the person or persons to whom the Awarded Shares pass
by will or by the laws of descent and distribution) or his
permitted transferees pursuant to Section 2.3(a) and shall no
longer be subject to the restrictions of this Section 2.2 and
Section 2.3 hereof.
(iii) If the Executive voluntarily terminates
Service or his Service is involuntarily terminated for "cause",
as determined in good faith by the Board or Committee (which
determination shall be binding on both the Company and the
Executive and/or his permitted transferee(s) pursuant to Section
2.3(a)), the Awarded Shares not previously vested pursuant to
this Section 2.2 shall thereupon be forfeited in their entirety
to the Issuer without any further action by the Issuer or the
Executive and for no consideration.
(iv) If the Executive's Service is involuntarily
terminated without cause, the Awarded Shares not previously
vested pursuant to this Section 2.2 shall thereupon be forfeited
in their entirety to the Issuer without any further action by the
Issuer or the Executive and for no consideration; provided,
however, that the Committee may, in its sole discretion, waive
the forfeiture of all or any portion of the unvested Awarded
Shares and such shares shall thereupon immediately vest in the
Executive and no longer be subject to the restrictions of this
Section 2.2 and Section 2.3 hereof.
(b) Notwithstanding any of the foregoing, if a Change in
Control occurs during the Vesting Period and prior to any
forfeiture of all or any portion of the Awarded Shares pursuant
to this Section 2.2, all Awarded Shares that were not previously
vested pursuant to this Section 2.2 and not forfeited by
termination of the Executive's Service prior to the occurrence of
the Change in Control shall thereupon immediately vest in the
Executive and the restrictions of this Section 2.2 and Section
2.3 shall terminate.
2.3 Restrictions on Transfer and Escrow of Unvested
Awarded Shares; Delivery of Vested Shares; Stockholder Rights.
The Executive hereby agrees to the following conditions:
(a) Awarded Shares which are not yet vested may not be
sold, hypothecated or otherwise disposed of by the Executive or
anyone claiming through him; provided, however, that Awarded
Shares may be transferred by the Executive, either directly or in
trust, to one or more members of Executive's Family, or to a
family partnership or other entity for the exclusive benefit of
one or more members of Executive's Family if and only to the
extent that (i) the Executive notifies the Committee in writing
of his desire to transfer Awarded Shares and the Committee does
not within thirty (30) days of such notification advise the
Executive in writing that such transfer will not be allowed and
(ii) such Family member or trust or family partnership for the
benefit thereof executes an agreement to be subject to all of the
terms and conditions of this Agreement.
(b) Awarded Shares which are not yet vested shall be held
in escrow by the Issuer. Upon the vesting of any Awarded Shares
pursuant to Section 2.2 and the satisfaction of all obligations
imposed by Section 2.1, the Issuer shall promptly cause a
certificate to be issued for the Awarded Shares (or portion
thereof which has vested) and shall deliver such certificate to
the Executive or his permitted transferee(s) pursuant to Section
2.3(a).
(c) Subject to the terms hereof, the Executive shall have
all the rights of a stockholder with respect to the Awarded
Shares while they are held in escrow, and prior to their
forfeiture pursuant to Section 2.2, including without limitation,
the right to vote the Awarded Shares, except as provided in (d)
below.
(d) Any dividends declared and paid with respect to the
Awarded Shares while they are held in escrow, and prior to their
forfeiture pursuant to Section 2.2, shall not be paid to the
Executive but shall instead be automatically reinvested in shares
of Stock at the Fair Market Value of a share of Stock on the date
of such dividend payment, and such additional shares of Stock
shall be deemed additional Awarded Shares (granted, for purposes
of Section 2.2 only, on the Date of Grant) and shall be subject
to the forfeiture and other provisions of Section 2.2 and this
Section 2.3.
2.4 Investment Representation. The Executive shall hold
the Awarded Shares for investment and not with a view to, or for
resale in connection with, any public distribution of such
Shares, and if requested, shall deliver to the Issuer an
appropriate certification to that effect. This restriction shall
terminate upon the registration of such Shares under federal
securities laws or if, in the opinion of counsel for the Issuer,
such Shares may be resold without registration.
2.5 Provision of Information. The Issuer will furnish
upon request of the Executive copies of the certificate of
incorporation of the Issuer, as amended, and by-laws of the
Issuer, as amended, and such publicly available financial and
other information concerning the Issuer and its business and
prospects as may be reasonably requested by the Executive in
connection with the issuance or purchase of Awarded Shares
pursuant to this Agreement.
2.6 Compliance with the Plan. The Executive shall comply
with all terms and conditions of the Plan (a copy of which is
attached hereto) and of this Agreement. All decisions under, and
interpretations of, the provisions of the Plan and of this
Agreement by the Board or by the Committee shall be final,
binding and conclusive upon the Company and its successors and
assigns and upon the Executive and anyone claiming through the
Executive.
3. Right to Terminate.
Nothing contained in the Plan or in this Agreement shall
restrict the right of the Company to terminate the employment of
the Executive at any time and for any reason, with or without
notice, or shall otherwise affect the terms and conditions of the
Executive's employment except as specifically provided in either
the Plan or in this Agreement.
4. Adjustment in Shares.
Appropriate adjustment shall be made by the Board or by the
Committee in the number and kind of the Awarded Shares issued
pursuant to this Restricted Stock Award to give effect to any
stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital
structure of the Issuer after the Date of Grant. In the event of
a change of the Stock resulting from a merger or similar
reorganization as to which the Issuer is the surviving
corporation, or sale of all or substantially all of the assets of
Issuer to a corporation that does not result in a Change in
Control, the number and kind of the Awarded Shares issued
pursuant to this Agreement shall be appropriately adjusted in
such a manner as the Board or the Committee shall deem equitable
to prevent dilution or enlargement of the rights granted
hereunder.
5. Restrictions on Transfer of Stock.
The Awarded Shares shall be subject to any restrictions then
in effect pursuant to the certificate of incorporation or by-laws
of the Issuer and to any other restrictions or provisions
attached hereto and made a part hereof or set forth in any other
contract or agreement binding on the Executive.
6. Notice Concerning Tax Matters.
The Company makes no representation about the tax treatment
to the Executive with respect to the receipt of the Restricted
Stock Award or the acquisition, holding or disposition of the
Awarded Shares. The Executive is urged to consult a professional
tax adviser of his or her own choosing for advice as to the tax
consequences (including the application of Section 83 of the
Code) of receiving a Restricted Stock Award or of holding or
selling Awarded Shares issued pursuant to this Agreement.
7. Governing Law; Etc.
This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware,
without giving effect to principles of conflicts of law, and
applicable federal law. This Agreement shall be binding upon and
inure to the benefit of the heirs and legal representatives of
the Executive and the successors and assigns of the Issuer, but
shall not be assigned by the Executive at any time, except as
otherwise permitted by Section 2.3(a) hereof, without the prior
written permission of the Issuer.
8. Definitions.
8.1 "Affiliate" has the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
8.2 "Agreement" has the meaning defined in the Preamble
above.
8.3 "Awarded Shares" has the meaning defined in Section 1
above.
8.4 "Beneficial Owner" has the meaning set forth in Rule
13d-3 under the Exchange Act.
8.5 "Board" means the Board of Directors of the Issuer.
8.6 "Bonus Award" has the meaning set forth in Section 1
above.
8.7 "Change in Control" means the occurrence of any of the
following events:
(a) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Issuer representing
35% or more of either the then outstanding shares of common stock
of the Issuer or the combined voting power of the Issuer's then
outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in
subparagraph (c)(i) below;
(b) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any
new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Issuer) whose
appointment or election by the Board of Directors or nomination
for election by the Issuer's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the
directors then in office who either were directors on the date
hereof or whose appointment, election or nomination for election
was previously so approved or recommended;
(c) there is consummated a merger or consolidation of
the Issuer or any direct or indirect Subsidiary of the Issuer
with another corporation, other than (i) a merger or
consolidation which would result in the voting securities of the
Issuer outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 60% of the
combined voting power of the securities of the Issuer or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the
Issuer (or similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or indirectly, of securities of
the Issuer (not including in the securities Beneficially Owned by
such Person any securities acquired directly from the Issuer of
its Affiliates) representing 35% or more of the combined voting
power of the Issuer's then outstanding securities; or
(d) the stockholders of the Issuer approve a plan of
complete liquidation or dissolution of the Issuer or there is
consummated an agreement for the sale or disposition by the
Issuer of all or substantially all of the Issuer's assets, other
than a sale or disposition by the Issuer of all or substantially
all of the Issuer's assets to an entity, at least 60% of the
combined voting power of the voting securities of which are owned
by stockholders of the Issuer in substantially the same
proportions as their ownership of the Issuer immediately prior to
such sale.
8.8 "Code" means the Internal Revenue Code of 1986, as
heretofore and hereafter amended, and the regulations promulgated
thereunder.
8.9 "Committee" has the meaning defined in the Plan.
8.10 "Company" has the meaning defined in the Preamble
above.
8.11 "Date of Grant" has the meaning defined in the
Preamble above.
8.12 "Disability" has the meaning defined in Code Section
22(e)(3).
8.13 "Exchange Act" means the Securities Exchange Act of
1934, as heretofore and hereafter amended.
8.14 "Executive" has the meaning defined in the Preamble
above.
8.15 "Fair Market Value" means the last sales price per
share of Stock as reported on the New York Stock Exchange prior
to the Date of Grant (or other date on which such valuation is
made) or if no price has been so reported within one week prior
to the Date of Grant (or other date on which such valuation is
made), fair market value shall be determined by a principal
market maker for the Stock designated by the Committee (or if no
such market maker is designated, by the Board in its good faith
business judgment).
8.16 "Family" means the Participant's: (i) spouse and
lineal descendants of such spouse; (ii) lineal descendants and
the spouses of such lineal descendants: (iii) lineal ancestors
and the spouses of such lineal ancestors; and (iv) siblings and
the spouses and children of such siblings.
8.16 "Issuer" has the meaning defined in the Preamble
above.
8.17 "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include
(a) the Issuer or any of its Subsidiaries, (b) a trustee or other
fiduciary holding securities under an employee benefit plan of
the Issuer or any of its Affiliates, (c) an underwriter
temporarily holding securities pursuant to an offering of such
securities and (d) a corporation owned, directly or indirectly,
by the stockholders of the Issuer in substantially the same
proportions as their ownership of stock of the Issuer.
8.18 "Plan" has the meaning defined in Section 1 above.
8.19 "Restricted Stock Award" has the meaning defined in
Section 1 above.
8.20 "Retirement" means the actual cessation of the
Executive's Services on or after the date that he attains age 62.
8.21 "Service" means the performance of work for the
Company or a Subsidiary as an employee.
8.22 "Stock" has the meaning defined in the Plan.
8.23 "Subsidiary" has the meaning defined in Code Section
424(f).
8.24 "Vesting Period" has the meaning defined in Section
2.2 above.
9. Amendments.
Any amendment to this Agreement, or waiver of any terms
hereof, may be made only pursuant to a writing executed by the
Issuer and the Executive.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement under seal as of the date first appearing above.
EXECUTIVE
___/s/ Xxxxxx X.Murray________________
Signature
Address of Executive:
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
NEW ENGLAND BUSINESS SERVICE, INC.
CORPORATE SEAL By:___/s/ Xxxxxx X.Whitney____________
Name: Xxxxxx X. Xxxxxxx
Title: Sr. Vice President, Human Resources
_______________________________
1 Capitalized terms not otherwise defined herein are defined in
Section 8 below.
