[NEBS LETTERHEAD]
November 6, 1995
Russell V. Corsini, Jr.
New England Business Service, Inc.
500 Main Street
Groton, Massachusetts 01471
Dear Russ:
New England Business Service, Inc., a Delaware corporation (the "Company"),
considers the establishment and maintenance of a sound and vital management to
be essential to protecting and enhancing the best interests of the Company and
its shareholders. In this connection, the Company recognizes that, as is the
case with many publicly held corporations, the possibility of a change in
control may arise and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and its
shareholders. Accordingly, the Board of Directors of the Company (the "Board")
has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company's
management to their assigned duties without distraction in circumstances
arising from the possibility of a change in control of the Company. In
particular, the Board believes it important, should the Company or its
shareholders receive a proposal for transfer of control of the Company, that
you be able to assess and advise the Board whether such proposal would be in
the best interests of the Company and its shareholders and to take such other
action regarding such proposal as the Board might determine to be appropriate,
without being influenced by the uncertainties of your own situation.
In order to induce you to remain in the employ of the Company, this letter
agreement, which has been approved by the Board, sets forth the severance
benefits which the Company agrees will be provided to you in the event your
employment with the Company is terminated subsequent to a "change in control"
of the Company under the circumstances described below.
1. Agreement to Provide Services; Right to Terminate.
(i) Except as otherwise provided in paragraph (ii) below, the Company or you
may terminate your employment at any time, subject to the Company's providing
the benefits hereinafter specified in accordance with the terms hereof.
(ii) In the event a tender offer or exchange offer is made by a Person (as
hereinafter defined) for more than 25% of the combined voting power of the
Company's outstanding securities ordinarily having the right to vote at
elections of directors ("Voting Securities"), including shares of common stock
($1.00 par value) of the Company (the "Company Shares"), you agree that you
will not leave the employ of the Company (other than as a result of Disability
or upon Retirement, as such terms are hereinafter defined) and will render the
services contemplated in the recitals to this Agreement until such tender
offer or exchange offer has been abandoned or terminated or a change in
control of the Company, as defined in Section 3 hereof, has occurred. For
purposes of this Agreement, the term "Person" shall mean and include any
individual, corporation, partnership, group, association or other "person", as
such term is defined in Section 3(a)(9) and as used in Section 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), other than the Company,
a wholly owned subsidiary of the Company or any employee benefit plan(s)
sponsored by the Company or a subsidiary of the Company.
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2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect until June 30, 1996; provided, however, that this
Agreement shall continue in effect for a period of twenty-four (24) months
after a change in control of the Company, as defined in Section 3 hereof, if
such change in control shall have occurred during the term of this Agreement.
Notwithstanding anything in this Section 2 to the contrary, this Agreement
shall terminate if you or the Company terminate your employment prior to a
change in control of the Company as provided in Section 1(i) above.
3. Change in Control. For purposes of this Agreement, a "change in control"
of the Company shall be deemed to have occurred at such time as (a) any Person
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 50% or more of the combined voting
power of the Company's Voting Securities; or (b) during any period of not more
than two years, individuals who constitute the Board as of the beginning of
the period and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in clause (a) or (c) of this sentence) whose election by the Board
or nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds ( 2/3) of the directors then still in office who
either were directors at such time or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or (c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 50% of the combined voting power of the Voting
Securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or the shareholders of the Company approve
a plan of complete liquidation of the Company or any agreement for the sale or
disposition by the Company or all or substantially all of the Company's
assets. Notwithstanding anything in the foregoing to the contrary, no change
in control shall be deemed to have occurred for purposes of this Agreement by
virtue of any transaction which results in you, or a group of Persons which
includes you, acquiring, directly or indirectly, 50% or more of the combined
voting power of the Company's Voting Securities.
4. Termination Following Change in Control. If any of the events described
in Section 3 hereof constituting a change in control of the Company shall have
occurred, you shall be entitled to the benefits provided in Section 5 hereof
upon the termination of your employment with the Company within twenty-four
(24) months after such event, unless such termination is (a) because of your
death, (b) by the Company for Cause, Disability or Retirement or (c) by you
other than for Good Reason (as all such capitalized terms are hereinafter
defined).
(i) Disability. Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from your
duties with the Company on a full time basis for one hundred twenty (120)
consecutive days as a result of your incapacity due to physical or mental
illness, unless within thirty (30) days after Notice of Termination (as
hereinafter defined) is given to you following such absence you shall have
returned to the full time performance of your duties.
(ii) Retirement. Termination by you or by the Company of your employment
based on "Retirement" shall mean termination on or after your normal
retirement date as defined in the Company's Pension Plan (or any successor
or substitute plan or plans of the Company put into effect prior to a
change in control) (the "Pension Plan").
(iii) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (a) the willful and continued failure by you to
perform substantially your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness)
after a demand for substantial performance is delivered to you by the
Chairman of the Board or President of the Company which specifically
identifies the manner in which such executive believes that you have not
substantially performed your duties, or (b) the willful engaging by you in
illegal conduct which is materially and demonstrably injurious to the
Company. For purposes of this paragraph (iii), no act, or failure to act,
on your part shall be considered "willful" unless done, or omitted to be
done, by you without reasonable belief that your action or omission was in,
or not opposed to, the best interests of the Company. Any act, or failure
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to act, based upon authority given pursuant to a resolution duly adopted by
the Board or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by you in good
faith and in the best interests of the Company. It is also expressly
understood that your attention to matters not directly related to the
business of the Company shall not provide a basis for termination for Cause
so long as the Board has approved your engagement in such activities.
Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to
you a copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds of the entire membership of the Board at a meeting of the
Board called and held for the purpose (after reasonable notice to you and
an opportunity for you, together with your counsel, to be heard before the
Board), finding that in the good faith opinion of the Board you were guilty
of the conduct set forth above in (a) or (b) of this paragraph (iii) and
specifying the particulars thereof in detail.
(iv) Good Reason. Termination by you of your employment for "Good Reason"
shall mean termination based on:
(A) a determination by you, in your reasonable judgment, that there
has been an adverse change in your status or position(s) as an officer
of the Company as in effect immediately prior to the change in control,
including, without limitation, any adverse change in your status or
position as a result of a diminution in your duties or responsibilities
(other than, if applicable, any such change directly attributable to
the fact that the Company is no longer publicly owned) or the
assignment to you of any duties or responsibilities which are
inconsistent with such status or position(s), or any removal of you
from or any failure to reappoint or reelect you to such position(s)
(except in connection with the termination of your employment for
Cause, Disability or Retirement or as a result of your death or by you
other than for Good Reason);
(B) a reduction by the Company in your base salary as in effect
immediately prior to the change in control;
(C) the failure by the Company to continue in effect any Plan (as
hereinafter defined, excluding any stock option plan) in which you are
participating at the time of the change in control of the Company (or
Plans providing you with at least substantially similar benefits) other
than as a result of the normal expiration of any such Plan in
accordance with its terms as in effect at the time of the change in
control, or the taking of any action, or the failure to act, by the
Company which would adversely affect your continued participation in
any of such Plans on at least as favorable a basis to you as is the
case on the date of the change in control or which would materially
reduce your benefits in the future under any of such Plans or deprive
you of any material benefit enjoyed by you at the time of the change in
control;
(D) the failure by the Company to provide and credit you with the
number of paid vacation days to which you are then entitled in
accordance with the Company's normal vacation policy as in effect
immediately prior to the change in control;
(E) the Company's requiring you to be based at an office that is
greater than 50 miles from where your office is located immediately
prior to the change in control except for required travel on the
Company's business to an extent substantially consistent with the
business travel obligations which you undertook on behalf of the
Company prior to the change in control;
(F) the failure by the Company to obtain from any Successor (as
hereinafter defined) the assent to this Agreement contemplated by
Section 6 hereof;
(G) any purported termination by the Company of your employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (v) below (and, if applicable, paragraph
(iii) above); and for purposes of this Agreement, no such purported
termination shall be effective; or
(H) any refusal by the Company to continue to allow you to attend to
matters or engage in activities not directly related to the business of
the Company which, prior to the change in control, you were permitted
by the Board to attend to or engage in.
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For purposes of this Agreement, "Plan" shall mean any compensation plan
such as an incentive, stock option or restricted stock plan or any employee
benefit plan such as a thrift, pension, profit sharing, medical,
disability, accident, life insurance plan or a relocation plan or policy or
any other plan, program or policy of the Company intended to benefit
employees.
(v) Notice of Termination. Any purported termination by the Company or by
you following a change in control shall be communicated by written Notice
of Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon.
(vi) Date of Termination. "Date of Termination" following a change in
control shall mean (a) if your employment is to be terminated for
Disability, thirty (30) days after Notice of Termination is given (provided
that you shall not have returned to the performance of your duties on a
full-time basis during such thirty (30) day period), (b) if your employment
is to be terminated by the Company for Cause or by you pursuant to Sections
4(iv)(F) and 6 hereof or for any other Good Reason, the date specified in
the Notice of Termination, or (c) if your employment is to be terminated by
the Company for any reason other than Cause, the date specified in the
Notice of Termination, which in no event shall be a date earlier than
ninety (90) days after the date on which a Notice of Termination is given,
unless an earlier date has been expressly agreed to by you in writing
either in advance of, or after, receiving such Notice of Termination. In
the case of termination by the Company of your employment for Cause, if you
have not previously expressly agreed in writing to the termination, then
within thirty (30) days after receipt by you of the Notice of Termination
with respect thereto, you may notify the Company that a dispute exists
concerning the termination, in which event the Date of Termination shall be
the date set either by mutual written agreement of the parties or by the
arbitrators in a proceeding as provided in Section 13 hereof. During the
pendency of any such dispute, the Company will continue to pay you your
full compensation in effect just prior to the time the Notice of
Termination is given (or, if higher, as in effect immediately prior to the
change in control) and until the dispute is resolved in accordance with
Section 13.
5. Compensation Upon Termination or During Disability; Other Agreements.
(i) During any period following a change in control of the Company that you
fail to perform your duties as a result of incapacity due to physical or
mental illness, you shall continue to receive your salary at the rate then in
effect and any benefits or awards under any Plans shall continue to accrue
during such period, to the extent not inconsistent with such Plans, until your
employment is terminated pursuant to and in accordance with paragraphs 4(i)
and 4(vi) hereof. Thereafter, your benefits shall be determined in accordance
with the Plans then in effect.
(ii) If your employment shall be terminated for Cause following a change in
control of the Company, the Company shall pay you your salary through the Date
of Termination at the rate in effect just prior to the time a Notice of
Termination is given plus any benefits or awards (including both the cash and
stock components) which pursuant to the terms of any Plans have been earned or
become payable, but which have not yet been paid to you. Thereupon the Company
shall have no further obligations to you under this Agreement.
(iii) Subject to Section 8 hereof, if, within twenty-four (24) months after
a change in control of the Company, as defined in Section 3 above, shall have
occurred, your employment by the Company shall be terminated (a) by the
Company other than for Cause, Disability or Retirement or (b) by you for Good
Reason, then the Company shall pay to you, no later than the fifth day
following the Date of Termination, without regard to any contrary provisions
of any Plan, the following:
(A) (x) your salary through the Date of Termination at the rate in effect
just prior to the time a Notice of Termination is given (or, if higher, as
in effect immediately prior to the change in control) and (y) any benefits
or awards (including both the cash and stock components) which pursuant to
the terms of any Plans have been earned or become payable, but which have
not yet been paid to you; and
(B) as severance pay and in lieu of any further salary for periods
subsequent to the Date of Termination, $604,798 in cash.
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(iv) If, within twenty-four (24) months after a change in control of the
Company, as defined in Section 3 above, shall have occurred, your employment
by the Company shall be terminated (a) by the Company other than for Cause,
Disability or Retirement or (b) by you for Good Reason, then the Company shall
maintain in full force and effect, for the continued benefit of you and your
dependents for a period terminating on the earliest of (a) thirty months after
the Date of Termination, (b) the commencement date of equivalent benefits from
a new employer or (c) your normal retirement date under the terms of the
Retirement Plan, all insured and self-insured employee welfare benefit Plans
in which you were entitled to participate immediately prior to the Date of
Termination, provided that your continued participation is possible under the
general terms and provisions of such Plans (and any applicable funding media)
and you continue to pay an amount equal to your regular contribution under
such plans for such participation. In the event that your participation in any
such Plan is barred, the Company, at its sole cost and expense, shall arrange
to have issued for the benefit of you and your dependents individual policies
of insurance providing benefits substantially similar (on an after-tax basis)
to those which you otherwise would have been entitled to receive under such
Plans pursuant to this paragraph (iv) or, if such insurance is not available
at a reasonable cost to the Company, the Company shall otherwise provide you
and your dependents with equivalent benefits (on an after-tax basis). You
shall not be required to pay any premiums or other charges in an amount
greater than that which you would have paid in order to participate in such
Plans. If, at the end of three years after the Termination Date, you have not
reached your normal retirement date, you are participating in any of such
Plans and you have not previously received or are not then receiving
equivalent benefits from a new employer, the Company shall arrange, at its
sole cost and expense, to enable you to convert your and your dependents'
coverage under such Plans to individual policies or programs upon the same
terms as employees of the Company may apply for such conversions.
(v) Except as specifically provided in paragraph (iv) above, the amount of
any payment provided for in this Section 5 shall not be reduced, offset or
subject to recovery by the Company by reason of any compensation earned by you
as the result of employment by another employer after the Date of Termination,
or otherwise.
6. Successors; Binding Agreement.
(i) The Company will seek, by written request at least five business days
prior to the time a Person becomes a Successor (as hereinafter defined), to
have such Person assent to the fulfillment of the Company's obligations under
this Agreement. Failure of such Person to furnish such assent by the later of
(A) three business days prior to the time such Person becomes a Successor or
(B) two business days after such Person receives a written request to so
assent shall constitute Good Reason for termination by you of your employment
if a change in control of the Company occurs or has occurred. For purposes of
this Agreement, "Successor" shall mean any Person that succeeds to, or has the
practical ability to control (either immediately or with the passage of time),
the Company's business directly, by merger or consolidation, or indirectly, by
purchase of the Company's Voting Securities or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or, if
there be no such designee, to your estate.
(iii) For purposes of this Agreement, the "Company" shall include any
corporation or other entity which is the surviving or continuing entity in
respect of any merger, consolidation or form of business combination in which
the Company ceases to exist.
7. Fees and Expenses; Mitigation. (i) The Company shall reimburse you, on a
current basis, for all reasonable legal fees and related expenses incurred by
you in connection with the Agreement following a change in control of the
Company, including, without limitation, (a) all such fees and expenses, if
any, incurred in contesting or disputing any termination or your employment or
incurred by you in seeking advice with respect to the matters set forth in
Section 8 hereof or (b) your seeking to obtain or enforce any right or benefit
provided by
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this Agreement, in each case, regardless of whether or not your claim is
upheld by a court of competent jurisdiction; provided, however, you shall be
required to repay any such amounts to the Company to the extent that a court
issues a final and non-appealable order setting forth the determination that
the position taken by you was frivolous or advanced by you in bad faith.
(ii) You shall not be required to mitigate the amount of any payment the
Company becomes obligated to make to you in connection with this Agreement, by
seeking other employment or otherwise.
8. Taxes.
(i) All payments to be made to you under this Agreement will be subject to
required withholding of federal, state and local income and employment taxes.
(ii) Notwithstanding anything in the foregoing to the contrary, if any of
the payments provided for in this Agreement, together with any other payments
which you have the right to receive from the Company or any corporation which
is a member of an "affiliated group" (as defined in Section 1504(a) of the
Internal Revenue Code of 1986 (the "Code") without regard to Section 1504(b)
of the Code) of which the Company is a member, would constitute a "parachute
payment" (as defined in Section 280G(b)(2) of the Code), the payments pursuant
to this Agreement shall be reduced (reducing first the payments under Section
5(iii)(B)) to the largest amount as will result in no portion of such payments
being subject to the excise tax imposed by Section 4999 of the Code; provided,
however, that the determination as to whether any reduction in the payments
under this Agreement pursuant to this proviso is necessary shall be made by
you in good faith, and such determination shall be conclusive and binding on
the Company with respect to its treatment of the payment for tax reporting
purposes.
9. Survival. The respective obligations of, and benefits afforded to, the
Company and you as provided in Sections 5, 6(ii), 7, 8, 13 and 14 of this
Agreement shall survive termination of this Agreement.
10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid and addressed, in
the case of the Company, to the address set forth on the first page of this
Agreement or, in the case of the undersigned employee, to the address set
forth below his signature, provided that all notices to the Company shall be
directed to the attention of the Chairman of the Board of the Company, with a
copy to Joseph R. Ramrath, Hill & Barlow, One International Place, Boston, MA
02110, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
11. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in a
writing signed by you and the Chairman of the Board or President of the
Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or of compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Massachusetts.
12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts by three arbitrators in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrators' award in any court having jurisdiction; provided, however,
that you shall be entitled to seek specific performance of your right
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to be paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement. The Company
shall bear all costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 13.
14. Employee's Commitment. You agree that subsequent to your period of
employment with the Company, you will not at any time communicate or disclose
to any unauthorized person, without the written consent of the Company, any
proprietary processes of the Company or any subsidiary or other confidential
information concerning their business, affairs, products, suppliers or
customers which, if disclosed, would have a material adverse effect upon the
business or operations of the Company and its subsidiaries, taken as a whole;
it being understood, however, that the obligations of this Section 14 shall
not apply to the extent that the aforesaid matters (a) are disclosed in
circumstances where you are legally required to do so or (b) become generally
known to and available for use by the public otherwise than by your wrongful
act or omission.
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
If this letter correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter
which will then constitute our agreement on this subject.
Sincerely,
New England Business Service, Inc.
/s/ William C. Lowe
By __________________________________
William C. Lowe
President, Chief Executive Officer
Agreed to this 8th day of November, 1995.
/s/ Russell V. Corsini, Jr.
_____________________________________
Russell V. Corsini, Jr.
19 Lincoln Road
Wellesley Hills, Massachusetts 02181
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