Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 12th day of
March, 2006, is entered into by Nashua Corporation, a Massachusetts corporation
with its principal place of business at 00 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxx Xxxxxxxxx 00000 (the "Company"), and Xxxxxx Xxxxxxx, residing at 0000 X.
Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxx 00000 (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 May 4, 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
President and Chief Executive Officer. The Executive shall be based in the
Company's office in Chicago, Illinois. The Executive shall be subject to the
supervision of, and shall have such authority as is delegated to the Executive
by, the Board of Directors (the "Board") or such officer of the Company as may
be designated by the Board.
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 Board or its designee 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 Board. 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 $350,000, for the period commencing on the
Commencement Date. Effective January 1, 2007, and provided Executive remains
employed by the Company, the Executive's annualized base salary shall be
increased to $400,000. Such salary shall be subject to adjustment thereafter as
determined by the Board.
3.2 Annual Bonus. The Executive shall be eligible to receive an
annual cash bonus, payable as a percentage of the Executive's base salary, based
upon the achievement of certain plan goals established by the Board. The Board
in its sole discretion will determine the bonus award, if any, as follows:
Budgeted Profits Bonus
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<90% 0%
90% 25%
100% 50%
110% 75%
120% 100%
125% 150%
130% or more 200%
The Board shall set the performance criteria by January 31 of each
calendar year. For 2006, the Executive shall be entitled to receive a minimum
bonus of 25% of the Executive's annual base salary for the year and the bonus
payment for 2006 shall be payable 66 2/3% in cash and 33 1/3% in shares of
restricted stock (valued on the date the bonus is paid) that vest annually in
three equal installments on the first, second and third anniversary of the date
the bonus is paid; provided, however that if the Company does not have available
under its stock incentive plans sufficient shares to pay the portion of the 2006
bonus payable in shares of restricted stock or if the Board determines in good
faith that it is not advisable or in the best interests of the Company to pay
such portion of the 2006 bonus in shares of restricted stock, the Company may
pay all or part, at the Board's discretion, of such portion of the 2006 bonus in
cash. Bonus payments, if any, will be paid less applicable taxes and
withholdings. Bonus payments will be paid within 2 1/2 months after the end of
the year in which they are earned. If the Executive resigns or is terminated for
Cause (as defined in the Change of Control Agreement) prior to the time that any
bonus award is earned or paid, the Executive shall not be entitled to such bonus
award.
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 Board. 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. The Company shall also reimburse the Executive for all
reasonable attorneys fees up to $10,000 incurred in the negotiation of this
Agreement.
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 40,000 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. Effect of Termination. In the event the Executive's employment with
the Company is terminated by the Company for any reason other than Cause (as
defined in the Change of Control Agreement) prior to the second anniversary of
the Commencement Date (the "Date of Termination"), and provided the Executive
enters into a binding release of claims in favor of the Company, the Company
shall continue to pay to the Executive his salary in effect on the date of
termination until the second anniversary of the Commencement Date; provided
however, that any salary continuation received by the Executive pursuant to this
Section 4 shall be reduced on a dollar-for-dollar basis for any severance paid
pursuant to the Change of Control Agreement. The Executive shall be entitled to
receive payments pursuant to this Section 4 as follows: (i) if there are less
than six months until the second anniversary of the Commencement Date, payments
shall be made on the first business day that is six months and one day following
the Date of Termination and (ii) if there are more than six months until the
second anniversary of the Commencement Date, payments shall be made on the first
business day that is six months and one day following the Date of Termination
and thereafter the Executive shall receive salary continuation pursuant to this
Section 4 in accordance with the Company's customary payroll practices.
5. Non-Competition and Non-Solicitation. The Executive shall, upon
execution of this Agreement, execute a non-competition and non-solicitation
agreement in the form attached hereto as Exhibit B.
6. Proprietary Information and Developments. The Executive shall, upon
execution of this Agreement, execute a proprietary and confidential information
and developments agreement in the form attached hereto as Exhibit C.
7. 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.
8. Miscellaneous.
8.1 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.
8.2 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.
8.3 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.
8.4 Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
8.5 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.
8.6 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.
8.7 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.
8.8 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.
8.9 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.
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/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: CEO
EXECUTIVE
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
SCHEDULE A
Prior Agreements
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