Restricted Stock Agreement
Granted Under
2008 Value Creation Incentive Plan
This Restricted
Stock Agreement (this “Agreement”) is made this
day of
, 2008 (the “Grant Date”), between Nashua
Corporation , a Massachusetts corporation (the
“Company”), and
(the “Participant”).
For valuable
consideration, receipt of which is acknowledged, the parties hereto
agree as follows:
1. Grant
and Issuance of Shares .
The Company shall
issue to the Participant, and the Participant shall acquire and
accept from the Company, subject to the terms and conditions set
forth in this Agreement and in the Company’s 2008 Value
Creation Incentive Plan (the “Plan”),
shares (the “Shares”) of common stock, par value $1.00
per share, of the Company (“Common Stock”). The Company
shall issue to the Participant one or more certificates in the name
of the Participant for that number of Shares issued to the
Participant. The Participant agrees that the Shares shall be
subject to (without limitation) the forfeiture provisions set forth
in Section 2 of this Agreement and the restrictions on
transfer set forth in Section 4 of this Agreement. The
Participant agrees to the provisions set forth herein and
acknowledges that each such provision is a material condition to
the Company’s agreement to grant the Shares to the
Participant.
2.
Forfeiture of Unvested Shares .
(a) Notwithstanding
any other provision of this Agreement, upon the earlier of
(i) the termination of the Participant’s employment with
the Company for any reason or no reason, with or without cause, or
upon death or disability, and (ii) the third anniversary of
the Grant Date, all Unvested Shares (as defined below) shall,
without further action of any kind by the Company, be forfeited to
the Company as of the date of such termination of employment or the
third anniversary of the Grant Date, as the case may be.
“Unvested
Shares” at any time means the total number of Shares
multiplied by the Applicable Percentage at such time. The
“Applicable Percentage” shall, at any time, be 100%
less the following applicable percentage, if any:
(i) 33% if
the average of the last reported sales price per share of the
Common Stock on the NASDAQ Global 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 Grant 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;
provided,
however, that in the event the Participant’s employment with
the Company is terminated by the Company without
“Cause” during the one-year period beginning on the
second anniversary of the Grant Date and ending on the third
anniversary of the Grant Date, then in the event one of the 40-Day
Average Closing Price targets is thereafter met as of the third
anniversary of the Grant Date, the Participant’s Shares shall
vest as to a percentage of such Shares equal to the number of days
during such one-year period that the Participant was employed by
the Company divided by 365, provided that in no such event shall
the number of Shares to so vest exceed the number that would have
otherwise vested had the Participant been employed as of such third
anniversary of the Grant Date.
(b) Notwithstanding
any other provision of this Agreement, if, on the first anniversary
of the Grant Date, the Participant is not in compliance with any
portion of the “Front-End Ownership Requirement” set
forth in the Company’s Executive Stock Ownership Guidelines
as in effect as of the Grant Date, a copy of which are attached to
this Agreement as Exhibit A , then all of the Shares
shall, without further action of any kind by the Company, be
forfeited to the Company as of the first anniversary of the Grant
Date and thereafter all calculations in this Agreement based on the
defined term “Shares” shall be based on the number of
such Shares as reduced by this provision. If the Participant
achieves a portion, but not all, of the Front-End Ownership
Requirement on the first anniversary of the Grant Date, a pro rata
portion of the Shares, equal to the pro rata portion of the
Front-End Ownership Requirement that is not achieved, shall,
without further action of any kind by the Company, automatically be
forfeited to the Company as of the first anniversary of the Grant
Date and thereafter all calculations in this Agreement based on the
defined term “Shares” shall be based on the number of
such Shares as reduced by this provision.
(c) For
purposes of this Agreement, employment with the Company shall
include employment with a parent or subsidiary of the
Company.
(d) For
the purposes hereof, “Cause” shall mean (i) the
Participant’s continued failure to perform his reasonably
assigned duties (other than any such failure resulting from
incapacity due to physical or mental illness), which failure is not
cured within 60 days after written notice for substantial
performance is received by the Participant from the Board which
identifies the manner in which the Board believes the Participant
has not substantially performed the Participant’s duties,
(ii) the Participant being convicted of a felony, or
(iii) the Participant’s engagement in illegal conduct or
gross misconduct injurious to the Company.
3.
Forfeiture Procedures .
(a) In
the event any Shares are forfeited by the Participant pursuant to
Section 2(a) or (b) above, the Participant (or the
Participant’s estate) shall, pursuant to the provisions of
the Joint Escrow Instructions referred to in Section 5 below,
tender to the Company at its principal offices the certificate or
certificates representing the Shares so forfeited, duly endorsed in
blank or with duly endorsed stock powers attached thereto, all in
form suitable for the transfer of such Shares to the
Company.
(b) After
the time at which any Shares are required to be delivered to the
Company for transfer to the Company pursuant to Section 3(a)
above, the Company shall not pay
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any dividend to
the Participant on account of such Shares or permit the Participant
to exercise any of the privileges or rights of a stockholder with
respect to such Shares, but shall, in so far as permitted by law,
treat the Company as the owner of such Shares.
4.
Restrictions on Transfer . The Participant shall not sell,
assign, transfer, pledge, hypothecate or otherwise dispose of, by
operation of law or otherwise (collectively “transfer”)
any Shares, or any interest therein, that are subject to the
forfeiture provisions under Sections 2 and 3 above, except
that the Participant may transfer such Shares (i) to or for
the benefit of any spouse, children, parents, uncles, aunts,
siblings, grandchildren and any other relatives approved by the
Board of Directors (collectively, “Approved Relatives”)
or to a trust established solely for the benefit of the Participant
and/or Approved Relatives, provided that such Shares shall
remain subject to this Agreement (including without limitation the
restrictions on transfer set forth in this Section 4 and the
forfeiture provisions set forth in Sections 2 and 3 above) and
such permitted transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such
transferee shall be bound by all of the terms and conditions of
this Agreement or (ii) as part of the sale of all or
substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation), provided
that, in accordance with the Plan, the securities or other property
received by the Participant in connection with such transaction
shall remain subject to this Agreement.
The Participant
shall, upon the execution of this Agreement, execute Joint Escrow
Instructions in the form attached to this Agreement as
Exhibit B . The Joint Escrow Instructions shall be
delivered to the Clerk/Secretary of the Company, as escrow agent
thereunder. The Participant shall deliver to such escrow agent a
stock assignment duly endorsed in blank, in the form attached to
this Agreement as Exhibit C , and hereby instructs the
Company to deliver to such escrow agent, on behalf of the
Participant, the certificate(s) evidencing the Shares issued
hereunder. Such materials shall be held by such escrow agent
pursuant to the terms of such Joint Escrow Instructions.
All certificates
representing Shares shall have affixed thereto legends in
substantially the following form, in addition to any other legends
that may be required under federal or state securities
laws:
“The
shares of stock represented by this certificate are subject to
restrictions on transfer and an option to purchase set forth in a
certain Restricted Stock Agreement between the corporation and the
registered owner of these shares (or owner’s predecessor in
interest), and such Agreement is available for inspection without
charge at the office of the Clerk/Secretary of the
corporation.”
7.
Provisions of the Plan .
(a) This
Agreement is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this Agreement.
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(b) As
provided in the Plan, upon the occurrence of a Reorganization Event
(as defined in the Plan), the repurchase and other rights of the
Company hereunder shall inure to the benefit of the Company’s
successor and shall apply to the cash, securities or other property
which the Shares were converted into or exchanged for pursuant to
such Reorganization Event in the same manner and to the same extent
as they applied to the Shares under this Agreement. If, in
connection with a Reorganization Event, a portion of the cash,
securities and/or other property received upon the conversion or
exchange of the Shares is to be placed into escrow to secure
indemnification or similar obligations, the mix between the vested
and unvested portion of such cash, securities and/or other property
that is placed into escrow shall be the same as the mix between the
vested and unvested portion of such cash, securities and/or other
property that is not subject to escrow.
8.
Withholding Taxes; Section 83(b) Election .
(a) The
Participant acknowledges and agrees that the Company has the right
to deduct from payments of any kind otherwise due to the
Participant any federal, state or local taxes of any kind required
by law to be withheld with respect to the issuance of the Shares to
the Participant or the lapse of the forfeiture provisions provided
for herein.
(b) The
Participant has reviewed with the Participant’s own tax
advisors the federal, state, local and foreign tax consequences of
this investment and the transactions contemplated by this
Agreement. The Participant is relying solely on such advisors and
not on any statements or representations of the Company or any of
its agents. The Participant understands that the Participant (and
not the Company) shall be responsible for the Participant’s
own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement. The Participant
understands that the Participant may elect to be taxed at the time
the Shares are acquired rather than when and as the forfeiture
provisions provided for herein expire by filing an election under
Section 83(b) of the Code with the I.R.S. within 30 days from
the date of purchase.
THE
PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE
RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE
ELECTION UNDER SECTION 83(b), EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE
PARTICIPANT’S BEHALF.
(a)
No Rights to Employment . The Participant acknowledges and
agrees that the vesting of the Shares under this Agreement is
earned only by continuing service as an employee at the will of the
Company (not through the act of being hired or being issued Shares
hereunder). The Participant further acknowledges and agrees that
the transactions contemplated hereunder and the vesting schedule
set forth herein do not constitute an express or implied promise of
continued engagement as an employee or consultant for the vesting
period, for any period, or at all.
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(b)
Assignment . The Company shall have the right to assign this
Agreement, or any portions thereof, including its rights with
respect to the forfeiture of Shares pursuant to Sections 2 and
3 above, to any person or persons.
(c)
Severability . The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, and each
other provision of this Agreement shall be severable and
enforceable to the extent permitted by law.
(d)
Waiver . Any provision for the benefit of the Company
contained in
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