CHANGE OF CONTROL AND
SEVERANCE AGREEMENT
This AMENDED
AND RESTATED CHANGE OF CONTROL AND SEVERANCE AGREEMENT by and
between Nashua Corporation, a Massachusetts corporation (the
“Company”) and Thomas Brooker (the
“Executive”), is dated as of the 23rd day of December,
2008.
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:
(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., Marc J.
Gabelli and/or Mario J. Gabelli 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”).
(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.
(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 provi
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