AMENDED AND RESTATED CHANGE OF CONTROL AND SEVERANCE AGREEMENT
Exhibit 10.13
AMENDED AND RESTATED
This AMENDED AND RESTATED CHANGE OF CONTROL AND SEVERANCE AGREEMENT by and between Nashua
Corporation, a Massachusetts corporation (the “Company”) and Xxxxxx Xxxxxxx (the “Executive”), is
dated as of the 23rd day of December, 2008.
RECITALS:
WHEREAS, the Board of Directors of the Company (the “Board”), had previously determined that
it was 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 believed it was 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, in furtherance of the foregoing, the Company and the Executive entered into a Change
of Control and Severance Agreement, dated as of March 12, 2006 (the “Original Agreement”); and
WHEREAS, the Company and the Executive desire to amend and restate the Original Agreement to
provide for certain revisions required by or advisable pursuant to Section 409A of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”).
NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the
Executive hereby agree that the Original Agreement is amended and restated in its entirety 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., Xxxx X. Xxxxxxx and/or Xxxxx X. Xxxxxxx 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
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“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 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 his 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
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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.
(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. Each such Annual Bonus shall be paid no later than the end of the fiscal year
following the fiscal year for which the Annual Bonus is awarded.
(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
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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 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 16(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 his 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 one
or more of the following conditions arising without the consent of the Executive, subject to the
limitations set forth below:
(i) A material diminution in the Executive’s position, authority, duties, or responsibilities;
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(ii) A material diminution 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
(v) any failure by the Company to comply with and satisfy Section 14(c) of this Agreement.
Notwithstanding the foregoing, Good Reason shall not exist unless (a) the Executive provides notice
to the Company of the existence of one or more of the above conditions within 90 days of the
initial existence of the condition(s), (b) the Executive provides the Company a period of at least
30 days after the receipt of such notice during which the Company may remedy the condition(s), and
(c) the Company fails to remedy such condition(s) within such period. Furthermore, Good Reason
shall not exist unless the Executive terminates employment within one year following the initial
existence of the condition(s).
(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 16(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
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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 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) 2 and (y) the sum of (i) Annual Base Salary and (ii) the Annual |
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| Bonus paid or payable (including any bonus or portion thereof that 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 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 salary and
continue medical and dental benefits for a period of one year following such termination (the “Date
of Termination”); provided, however, that the Executive shall not be entitled to
such salary and benefits continuation under this Agreement for any portion of such one year period
(or the entire one year period, if applicable) during which the Executive receives salary
continuation and benefits pursuant to any other agreement or arrangement with the Company. The
Executive shall be entitled to receive payments pursuant to this Section 7 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 7 in accordance with the Company’s
customary payroll practices. The preceding sentence shall not apply to payments made with respect
to terminations of employment occurring after December 31, 2008.
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
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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 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 he ever had or now has against the Company, its officers, directors, stockholders,
corporate affiliates, agents and employees, including, but not limited to, all claims
arising out of his 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. Xxx.. 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 he has been given twenty-one (21) days to consider the terms
of this Release and that the Company advised him to consult with an attorney of his
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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.
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(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. Payments Subject to Section 409A. Subject to the provisions in this Section 15, any
severance payments or benefits under this Agreement shall begin only upon the date of the
Employee’s “separation from service” (determined as set forth below) which occurs on or after the
date of termination of the Employee’s employment. The following rules shall apply with respect to
distribution of the payments and benefits, if any, to be provided to the Employee under this
Agreement:
a. It is intended that each installment of the severance payments and benefits provided under
this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Code
and the guidance issued thereunder (“Section 409A”). Neither the Company nor the Employee shall
have the right to accelerate or defer the delivery of any such payments or benefits except to the
extent specifically permitted or required by Section 409A.
b. If, as of the date of Employee’s “separation from service” from the Company, the Employee
is not a “specified employee” (within the meaning of Section 409A), then each installment of the
severance payments and benefits shall be made on the dates and terms set forth in this Agreement.
c. If, as of the date of the Employee’s “separation from service” from the Company, the
Employee is a “specified employee” (within the meaning of Section 409A), then:
i. Each installment of the severance payments and benefits due under this Agreement that, in
accordance with the dates and terms set forth herein, will in all circumstances, regardless of when
the separation from service occurs, be paid within the Short-Term Deferral Period (as hereinafter
defined) shall be treated as a short-term deferral within the meaning of Treasury Regulation §
1.409A-1(b)(4) to the maximum extent permissible under Section 409A. For purposes of this
Agreement, the “Short-Term Deferral Period” means the period ending on the later of the fifteenth
day of the third month following the end of the Employee’s tax year in which the separation from
service occurs and the fifteenth day of the third month following the end of the Company’s tax year
in which the separation from service occurs; and
ii. Each installment of the severance payments and benefits due under this Agreement that is
not described in paragraph c(i) above and that would, absent this subsection, be paid within the
six-month period following the Employee’s “separation from service” from the Company shall not be
paid until the date that is six months and one day after such separation
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from service (or, if earlier, the Employee’s death), with any such installments that are required
to be delayed being accumulated during the six-month period and paid in a lump sum on the date that
is six months and one day following the Employee’s separation from service and any subsequent
installments, if any, being paid in accordance with the dates and terms set forth herein;
provided, however, that the preceding provisions of this sentence shall not apply
to any installment of severance payments and benefits if and to the maximum extent that such
installment is deemed to be paid under a separation pay plan that does not provide for a deferral
of compensation by reason of the application of Treasury Regulation § 1.409A-1(b)(9)(iii) (relating
to separation pay upon an involuntary separation from service). Any installments that qualify for
the exception under Treasury Regulation § 1.409A-1(b)(9)(iii) must be paid no later than the last
day of the Employee’s second taxable year following the taxable year in which the separation from
service occurs.
d. The determination of whether and when the Employee’s separation from service from the
Company has occurred shall be made and in a manner consistent with, and based on the presumptions
set forth in, Treasury Regulation § 1.409A-1(h). Solely for purposes of this paragraph d,
“Company” shall include all persons with whom the Company would be considered a single employer
under Section 414(b) and 414(c) of the Code.
e. All reimbursements and in-kind benefits provided under this Agreement shall be made or
provided in accordance with the requirements of Section 409A to the extent that such reimbursements
or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that
(i) any reimbursement is for expenses incurred during the Employee’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement
during a calendar year may not affect the expenses eligible for reimbursement in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the
calendar year following the year in which the expense is incurred and (iv) the right to
reimbursement is not subject to set off or liquidation or exchange for any other benefit.
f. This Agreement is intended to comply with the provisions of Section 409A and the Agreement
shall, to the extent practicable, be construed in accordance therewith. The Company makes no
representation or warranty and shall have no liability to the Executive or any other person if any
provisions of this Agreement are determined to constitute deferred compensation subject to Section
409A and do not satisfy an exemption from, or the conditions of, Section 409A.
16. 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.
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(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:
Xxxxxx Xxxxxxx
0000 X. Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxx 00000
0000 X. Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxx 00000
If to the Company:
Nashua Corporation
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: Chief Financial Officer
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: Chief Financial Officer
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
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.
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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/ Xxxx X. Xxxxxxxxx
|
/s/ Xxxxxx Xxxxxxx
|
||||||
| Name: Xxxx X. Xxxxxxxxx | Name: Xxxxxx Xxxxxxx | |||||||
| Title: Vice President-Finance, | ||||||||
| Chief Financial Officer | ||||||||
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