M E M O R A N D U M
To: Xxxxxxx X. Xxxxxxx, Xx. Date: October 25, 1996
From: Xxxxxx X. Xxxxxx Subject: Employment
Agreement
The following is an outline of the employment agreement between you and NEBS.
The provisions illustrated below constitute the total benefits which will be
provided to you as part of your agreement.
1. PAY/STATUS INFORMATION
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(a) Your last day of regular work in Groton will be November 1, 1996. You
will then work on special projects as mutually agreed.
(b) You will receive your current, regular pay (on a monthly basis) for a
period of eight (8) months following your last day of work in Groton. This
will encompass the period of November 2, 1996 through June 30, 1997.
(c) You will continue your employment with NEBS from July 1, 1997 to July
24, 2003 with compensation equal to $4,166.66 per month, or $50,000 on an
annualized basis. This compensation will be paid to you on a monthly basis
until such time you reach the age of 60 (subject to (d) below). You would
then be eligible to officially retire from active employment with NEBS and
begin collecting retirement benefits and applicable fringe benefits.
(d) You will be paid $50,000 by NEBS from July 1, 1997 through June 30,
1998 regardless of any other employment you may obtain during that period.
After June 30, 1998, however, if you obtain employment (before your
official retirement from NEBS) comparable to your current position and
compensation, this package will end. For purposes of this agreement,
comparable employment shall be defined as follows: a position that pays a
base salary of at least $200,000 annually; if a position you obtain
includes a bonus, any bonus amounts in excess of 50% of your base salary
shall be counted as part of base salary for purposes of determining
comparable employment under this agreement. If you obtain a position that
pays a base salary of $150,000 or more, your annual compensation from NEBS
shall be reduced on a dollar for dollar basis, except that you shall be
paid no less than $10,000 annually during the term of this agreement as
long as your position is not comparable as defined above. The $200,000
salary figure used to define comparable employment
Xxxxxxx X. Xxxxxxx, Xx.
October 25, 1996
Page 2
shall be adjusted annually beginning in calendar year 1998 according to the
Social Security Cost of Living Adjustment. You agree that you shall be
responsible for reporting to NEBS any change in your position that would
require an adjustment in compensation under this agreement.
2. PAYCHECK DISTRIBUTION
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(a) If you have your pay automatically deposited, this process will
continue through your final separation or retirement date. Your paystub
will be mailed to your home on regularly scheduled paydays.
(b) If you do not have automatic deposit, your paycheck will be mailed to
your home.
3. EXECUTIVE BONUS DISTRIBUTION
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You will be eligible to receive a FY97 Executive Bonus payout, prorated
through November 1, 1996, if such a payout is earned based on the
attainment of the Company's FY97 revenue and earnings goals at such time as
all other payments are made under the plan.
4. OUTPLACEMENT ASSISTANCE
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(a) You will receive appropriate stationery items to assist in resume
preparation and job search process.
(b) To assist you in your search for a new job, NEBS will provide you with
outplacement counseling at a cost not to exceed 15% of your base pay
($202,700 x .15 = $30,405), by a company of your choice, through June 30,
1998.
5. MEDICAL/DENTAL PLAN
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(a) Continuation Should you leave the Company before age 60:
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Medical/Dental/Vision Plan Coverage available to NEBS employees (if
applicable) will remain in effect through your last day worked (including
your time as an employee under this agreement) plus 30 days. Normal payroll
deductions for your share of the premium will continue to be deducted from
your pay on a pretax basis. Any other payments available to employees, such
as the benefit bonus, shall be paid to you (if you are eligible).
Should you become eligible for group medical/dental coverage from a new
employer, please notify Corporate Compensation and Benefits.
Xxxxxxx X. Xxxxxxx, Xx.
October 25, 1996
Page 3
Should you leave the Company before age 60 you will be provided with
appropriate COBRA information.
6. FRINGE BENEFIT ELIGIBILITY
--------------------------
You will be eligible for the benefits described in the Fringe Benefits
Summary for NEBS Officers if you remain actively employed by the Company
through retirement as described in Section 2.
These are some of the post-retirement benefits currently available to
retired NEBS officers upon attainment of early retirement at age 60:
* Health Insurance
* Dental Insurance
* Xxxxx Clinic Physicals
* NEBS Matching Gift Program
Please note the following additional provisions of your fringe benefit
eligibility:
In the event of your death, medical/dental insurance will continue for your
spouse until her death, subject to a change in NEBS' group benefit
policies. Coverage for any other eligible dependents will continue until
they reach the age of 19 (25 if full-time students).
Your group life benefit will be based on your annualized salary in force at
the time of your death.
You will remain eligible for employee discounts while you are employed by
NEBS.
You will remain eligible to participate in the NEBS Matching Gifts program
while you are employed by NEBS.
7. FLEXIBLE SPENDING ACCOUNTS
--------------------------
Payroll deductions for Health Care Flexible Spending Accounts will continue
during your employment on a pre-tax basis, if elected.
8. LIFE INSURANCE
--------------
Your basic, supplemental, and dependent life insurance will end effective
with your retirement date or date you leave the Company before age 60.
While you are
Xxxxxxx X. Xxxxxxx, Xx.
October 25, 1996
Page 4
employed by the Company your group life plan will be based on your
annualized salary in force at the time of your death.
9. ACCIDENTAL DEATH AND DISMEMBERMENT
----------------------------------
Your coverage under this plan ends on your retirement date or date you
leave the Company before age 60. There is no conversion opportunity under
this plan.
10. BUSINESS TRAVEL ACCIDENT INSURANCE
----------------------------------
Your coverage under this program ends on your retirement date or date you
leave the Company before age 60. There is no conversion opportunity under
this plan.
11. DISABILITY PROGRAMS
-------------------
Short-Term Disability coverage ceases on your retirement date or date you
leave the Company before age 60. Long-Term Disability insurance ceases 31
days after your retirement date or date you leave the Company before age
60. There is no conversion opportunity under these plans.
12. INVESTMENT PLUS 401(k) PLAN
---------------------------
If you are currently participating in the Investment Plus Plan your
contributions will cease on your retirement date or date you leave the
Company before age 60. If you have an account balance, you will receive
more information regarding your plan distribution options within six weeks
of your termination date.
If you have any questions, please call Xxxx Xxxxxx, Corporate Compensation
and Benefits Department, (000) 000-0000, Ext. 3446.
13. STOCK OPTIONS
-------------
As you possess unexercised grants, you will have until the official end of
the option(s) or July 24, 2003, whichever is earlier, to exercise those
options. Your stock option grants will continue to vest during your
employment.
14. PENSION BENEFITS
----------------
You will receive a retirement benefit in accordance with the NEBS
retirement plans as amended from time to time. According to the plan(s) in
effect at the time of this agreement, your benefit would be based on 21+
years of service with the Company (assuming you remain at NEBS in the
status described above until age 60). Your actual retirement benefit under
this plan would be calculated by averaging your
earnings over the highest
five years of compensation of the last ten years of your employment.
Your estimated retirement benefit is as follows:
---------
* Effective July 25, 2003 you will be eligible for an "early"
retirement benefit of approximately $3,504.21 per month.
* Effective July 25, 2008 you will be eligible for the retirement
benefit of approximately $5,153.00 per month.
Please note that the above figures are used for illustrative purposes only
and that your actual benefits at the time of your retirement may differ.
Should you wish additional information regarding your NEBS' pension
benefits, please contact Xxxx Xxxxxx in the Corporate Compensation and
Benefits Department.
15. VACATION
--------
You will continue to earn vacation time through June 30, 1997. You will be
paid for the vacation time you have accrued as of June 30, 1997 in a
separate check. No vacation time will be accrued after July 1, 1997.
16. FINANCIAL COUNSELING
--------------------
You may continue to use the financial planning services of X. X. Xxxx, Inc.
while you are employed by NEBS.
17. EMPLOYEE ASSISTANCE PROGRAM
---------------------------
You and your eligible dependents may continue to use this benefit during
your separation period. The name and telephone number of the EAP consultant
are as follows:
Xxxxxxxxxx Associates
(000) 000-0000
18. HOME ADDRESS
------------
In order for the Company to distribute income tax statements, Investment
Plus statements, pension benefits, and other distributions, it is essential
for your to keep the Human Resources Department informed of your correct
home address by writing to:
Xxxxxxx X. Xxxxxxx, Xx.
October 25, 1996
Page 6
NEBS, Inc.
Attn: Xxxxxx Xxxxx
Corporate Compensation and Benefits Dept.
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
19. USE AND DISCLOSURE OF TRADE SECRETS AND OTHER CONFIDENTIAL
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INFORMATION.
------------
You represent that to the best of your knowledge, you do not now have, and
you agree that you shall promptly return to NEBS, anything tangible or
electronically kept or stored which constitutes, represents, evidences or
records any trade secret or other confidential information of NEBS,
retaining no copies thereof. You agree that you will not any time after
November 1, 1996, directly or indirectly, use or disclose to any person any
trade secrets or other confidential information of NEBS.
The term "trade secret or other confidential information" shall mean any
secret or confidential scientific, design, process, procedures, formula,
invention or improvement, including without limitation, marketing plans or
strategies, product development plans, business acquisition plans, new
personnel acquisition plans, technical processes, research and development
processes, and each of the Company's customer lists. Also, this includes
and is not limited to any new market development plans and/or plans for
strategic alliances either domestic or international.
If you enter into any employment with a competitor of NEBS prior to June
30, 1998, or if you use or disclose trade secrets or other confidential
information of NEBS as defined in the preceding paragraph at any time, your
severance pay and benefits will be immediately terminated. Companies or
other entities that shall be considered competitors of NEBS for purposes of
this section shall be determined by NEBS in its sole discretion.
If you have any questions regarding your benefits please contact Xxxx Xxxxxx at
Groton ext. 3446.
New England Business Service, Inc.
By: /s/ Xxxxxx X. Xxxxxx Dated: December 5, 1996
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Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx, Xx. Dated: December 10, 1996
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Xxxxxxx X. Xxxxxxx, Xx.
