<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
NASHUA CORPORATION
(Name of Registrant as Specified In Its Charter)
NASHUA CORPORATION
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
NASHUA CORPORATION
44 FRANKLIN STREET
NASHUA, NEW HAMPSHIRE 03060
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1998
Notice is hereby given that the Annual Meeting of Stockholders of Nashua
Corporation will be held at the Crowne Plaza, 2 Somerset Parkway, Nashua, New
Hampshire, on April 24, 1998 at 10:00 a.m., for the following purposes:
1. To elect a Board of Directors for the ensuing year.
2. To consider and take action upon a proposal made by a
stockholder to request the Board of Directors to redeem the
Preferred Stock Purchase Rights issued in July of 1996
unless said issuance is approved by the affirmative vote of
a majority of the outstanding shares at a meeting of the
shareholders held as soon as practical.
3. To act upon any other business as may properly be brought
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 17, 1998,
as the record date for determining the stockholders having the right to notice
of and to vote at the meeting.
PAUL BUFFUM
Vice President, General
Counsel and Secretary
March 25, 1998
IF YOU ARE ENTITLED TO VOTE AT THE MEETING,
KINDLY EXECUTE AND MAIL THE ENCLOSED PROXY.
<PAGE> 3
PROXY STATEMENT
GENERAL
The accompanying proxy is solicited on behalf of the Board of Directors of
Nashua Corporation ("Nashua" or the "Company"), a Delaware corporation, whose
principal executive offices are located at 44 Franklin Street, Nashua, New
Hampshire 03060, for use at the annual meeting of the stockholders of Nashua to
be held on April 24, 1998, and at any adjournment thereof. Each proxy executed
and returned by a stockholder may be revoked by delivering written notice of
such revocation to the Secretary of Nashua or by executing and delivering to the
Secretary a proxy bearing a later date at any time at or before the meeting
except as to any matters upon which, prior to such revocation, a vote shall have
been cast pursuant to the authorization conferred by such proxy. This proxy
statement is being mailed to stockholders on or about March 25, 1998.
VOTING SECURITIES
The only outstanding class of voting securities of Nashua is its common
stock, each share of which entitles the holder thereof to one vote. Only
stockholders of record at the close of business on March 17, 1998, are entitled
to vote at the annual meeting and at any adjournment thereof. As of the close of
business on such date, there were 6,716,931 shares of its common stock
outstanding (excluding 24,064 shares held in Nashua's treasury). The holders of
a majority of the issued and outstanding stock entitled to vote, present in
person or by proxy, constitute a quorum for the transaction of business.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and, except for
the election of directors, will also not be counted as votes cast or shares
voting on such matter. Under Nashua's bylaws, the affirmative vote of the
holders of a majority of the shares of Nashua's common stock entitled to vote
held by stockholders present at the meeting in person or by proxy is required to
approve all matters to be acted upon at the meeting. Accordingly, a vote that is
withheld on a particular matter will be treated as present and entitled to vote
and thus have the effect of a negative vote.
NOMINEES FOR ELECTION AS DIRECTORS
Pursuant to the bylaws of Nashua, the Board of Directors has fixed at seven
the number of directors to be elected at the annual meeting. Nashua's directors
are elected annually by the stockholders and hold office until successors are
elected and qualified or until death, resignation or removal. Vacancies and
newly created directorships resulting from any increase in the authorized number
of directors may be filled until the next annual meeting of stockholders by the
majority of directors then in office.
Each proxy executed and returned by a stockholder will be voted for the
election of the nominees for directors listed below, unless authority to do so
is withheld. If, however, any nominee becomes unavailable (which is not now
anticipated), the persons named as proxies may, in their discretion, vote for
another nominee.
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<PAGE> 4
All of the nominees for directors named below are now directors of Nashua.
The business experience of each nominee for the last five years and the
year he first became a director of Nashua are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE
---- --- -------- -------------------
<S> <C> <C> <C>
Sheldon A. Buckler(a)(c)(d).......... 66 1994 Dr. Buckler has been Chairman of the Board of
Commonwealth Energy System since May 1995. He
was Vice Chairman of the Board of Polaroid
Corporation from prior to 1993 until his
retirement in 1994. He is also a Director of
Aseco Corporation, Parlex Corporation, Spectrum
Information Technologies, Inc. and Cerion
Technologies Inc.
Gerald G. Garbacz.................... 61 1996 Mr. Garbacz has been Chairman of the Board of
Nashua Corporation since June 14, 1996 and
President and Chief Executive Officer since
January 2, 1996. From 1994 through 1995, Mr.
Garbacz was a private investor. He was Chairman
and Chief Executive Officer of Baker & Taylor
Inc. (information distribution) from prior to
1993 to 1994. He is also a Director of Handy &
Harman Inc. and Chairman of the Board of Cerion
Technologies Inc.
Charles S. Hoppin(a)(c).............. 66 1979 Mr. Hoppin has been a partner in the law firm
of Davis Polk & Wardwell since prior to 1993.
John M. Kucharski(a)(b).............. 62 1988 Mr. Kucharski has been Chairman of the Board
and Chief Executive Officer of EG&G, Inc.
(technical and scientific products and
services) since prior to 1993. He was President
from prior to 1993 until February 2, 1998. He
is also a Director of New England Electric
System and State Street Boston Corporation.
David C. Miller, Jr.(b)(c)........... 55 1996 Mr. Miller has been President and Chief
Executive Officer of ParEx, Inc. (privately
held investment company) since December 1994.
From 1994 through 1995, Mr. Miller served as
President of Kennedy International Consulting,
Inc. and from prior to 1993 through December
1993 he served as Executive Vice President of
The Investigative Group Inc. During this
period, Mr. Miller also provided international
business consulting services to U.S.
corporations. He is also President of the
Corporate Council on Africa and a Director of
Georgetown University's Institute for the Study
of Diplomacy.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE
---- --- -------- -------------------
<S> <C> <C> <C>
Peter J. Murphy(a)(b)................ 49 1997 Mr. Murphy has been Chief Executive Officer of
Parlex Corporation (electrical components)
since July 1997, President since July 1995 and
a Director since March 1994. He was Chief
Operating Officer from May 1994 to July 1997,
Executive Vice President from May 1994 to July
1995, Vice President and General Manager,
Flexible Circuit Products Division, from
February 1993 to May 1994 and Assistant to the
President prior to February 1993.
James F. Orr III(b)(c)............... 55 1989 Mr. Orr has been Chairman of the Board, Chief
Executive Officer and President of UNUM
Corporation (insurance) since prior to 1993.
</TABLE>
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(a) Member of the Audit/Finance and Investment Committee of Nashua's Board of
Directors.
(b) Member of the Leadership and Compensation Committee of Nashua's Board of
Directors.
(c) Member of the Governance Committee of Nashua's Board of Directors.
(d) Lead Director.
BOARD OF DIRECTORS COMMITTEES
Mr. Buckler as Lead Director acts as Chairman in the Chairman's absence,
chairs the Governance Committee and spearheads all activities related to Chief
Executive Officer performance and succession. The committees of the Board of
Directors are:
AUDIT/FINANCE AND INVESTMENT COMMITTEE
The Audit/Finance and Investment Committee is charged to take measures to
protect the assets of the Company. In doing so, the committee supervises the
soundness of the Company's financial records and reporting and its relationship
with its independent accountants and provides the Board, the independent
accountants, and the internal auditors with direct, non-management access to
each other on a regular basis. The Audit/Finance and Investment Committee is
also charged with responsibility for supervising policies and decisions relating
to financing and major cash management, pension fund and capital investment
decisions. The Audit/Finance and Investment Committee held two meetings in 1997.
LEADERSHIP AND COMPENSATION COMMITTEE
The Leadership and Compensation Committee is charged with the
responsibility of screening candidates for the chief executive officer position,
developing performance evaluation criteria, reviewing the caliber of and
succession to key management positions and deciding on top management
compensation. The Leadership and Compensation Committee held two meetings in
1997.
GOVERNANCE COMMITTEE
The Governance Committee is charged with responsibility for recommending to
the entire Board the size and composition of the Board, policies regarding
tenure and retirement of Directors, evaluation of Board and Director performance
and recommendations for improvement on an annual basis, nomination of candidates
for election to the Board, assignments to Board committees, and recommendations
for improving governance processes of the Board. The Governance Committee held
one meeting in 1997.
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<PAGE> 6
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During 1997, the Board of Directors held six regular meetings and one
special meeting. Each of the directors attended at least 75% of the aggregate of
(1) the total number of meetings of the Board of Directors held while he was a
director and (2) the total number of meetings held by all committees of the
Board on which he served.
COMPENSATION OF DIRECTORS
Directors of Nashua, except employees of the Company, receive an annual
retainer payable in shares of Nashua's common stock with a market value of
$15,000. They also receive $1,000 in cash plus expenses for each Board meeting
and Board committee meeting attended and are each year awarded options to
purchase 1,000 shares of common stock having an exercise price equal to the fair
market value for such shares on the date of award under the provisions of
Nashua's 1996 Stock Incentive Plan. The Lead Director is compensated an
additional $7,500 annually in cash.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of reports filed pursuant to Section
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or written representations from persons required to file such reports
("Reporting Persons"), the Company believes that all such filings required to be
made by such Reporting Persons were timely made in accordance with the
requirements of the Exchange Act, except for the following:
Mr. Clabburn, a Vice President of Nashua until September 1997, made a
late filing on June 20, 1997 of a Form 4 with respect to a certain
non-exempt transaction in shares of Nashua common stock during May 1997.
The due date of this Form 4 was June 10, 1997. The reported transaction was
a purchase of Nashua stock.
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<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the annual and long-term compensation paid
to Nashua's seven most highly paid executive officers in 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
----------------------------------- -----------------------------
PERFORMANCE SHARES
OTHER ANNUAL BASED RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK AWARDS(1) OPTIONS COMPENSATION(2)
- --------------------------- ---- ------ ----- ------------ ---------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerald G. Garbacz(3)....... 1997 $410,000 -- -- -- 90,000 $ 16,262
Chairman, President and 1996 $400,538 $240,000 $173,920(4) $1,680,000(5) -- $ 10,831
Chief Executive Officer
Michael D. Jeans(6)........ 1997 $250,000 -- $262,266(4) -- 60,000 $ 4,566
Vice President 1996 $193,269 -- $106,999(4) $ 337,500(7) 40,000 $ 3,272
Photo Group
Robin J. T. Clabburn(8).... 1997 $237,563 -- -- -- -- --
Former Vice President 1996 $234,462 $ 87,420 -- -- -- --
1995 $217,607(9) -- $ 277(10) $ 334,375(11) 20,000 --
Charles E. Turnbull(12).... 1997 $202,307 -- $ 18,060(4) -- 40,000 $496,356(13)
Former Vice President 1996 $289,615 $231,473 $147,878(4) -- -- $ 5,541
1995 $ 83,154 $ 47,900 -- $ 334,375(14) 40,000 $ 553
Daniel M. Junius........... 1997 $200,000 -- -- $ 209,063(15) 45,000 $ 4,827
Vice President-Finance, 1996 $199,808 $ 80,000 -- -- 3,000 $ 3,243
Chief Financial Officer 1995 $146,374 -- $ 561(16) $ 334,375(17) 11,500 $ 5,653
and Treasurer
John J. Ireland(18)........ 1997 $190,000 $ 38,000 -- -- 15,000 $ 4,260
Vice President
Specialty Coated Products
Division
Eugene P. Pache (18)....... 1997 $165,000 $ 33,000 $ 10,050(4) $ 62,500(19) 15,000 $ 4,570
Vice President
Label Products Division
</TABLE>
- ---------------
(1) Market value of performance based restricted shares on the date of grant.
As of December 31, 1997, the market value and number of performance based
restricted shares were: Mr. Garbacz - $1,395,000 (120,000 shares); Mr.
Jeans - $290,625 (25,000 shares); Mr. Clabburn - $290,625 (25,000 shares);
Mr. Junius - $465,000 (40,000 shares); and Mr. Pache - $58,125 (5,000
shares).
(2) Except as otherwise noted, the amounts listed are for Company contributions
to the Employees' Savings Plan, life insurance income and cash payments in
lieu of medical benefits. In 1997, these amounts were:
(a) as to the Employees' Savings Plan - Mr. Garbacz, $3,500; Mr. Jeans,
$3,000; Mr. Turnbull, $3,500; Mr. Junius, $3,500; Mr. Ireland,
$3,000 and Mr. Pache, $3,500.
(b) as to life insurance income - Mr. Garbacz, $11,982; Mr. Jeans,
$1,566; Mr. Turnbull, $1,856; Mr. Junius, $1,327; Mr. Ireland,
$1,260 and Mr. Pache, $1,070.
(c) as to cash payments in lieu of medical benefits - Mr. Garbacz, $780
and Mr. Turnbull, $615.
(3) Mr. Garbacz became an executive officer on January 2, 1996.
(4) Includes moving expense reimbursement and tax equalization payments.
(5) Includes 120,000 shares of performance based restricted stock (granted when
the price of Nashua shares was $14.00), 60,000 shares of which will vest
when the average closing price over a ten trading
5
<PAGE> 8
day period of Nashua shares (the "Ten Day Average Closing Price") reaches
$20.00; and 60,000 shares of which will vest when the Ten Day Average
Closing Price reaches $25.00. However, any shares which have not vested
upon the earlier of (i) October 24, 2002 or (ii) termination of employment,
will be forfeited. Dividends, if any, will accumulate on such performance
based restricted stock and be paid when and if the underlying shares vest.
(6) Mr. Jeans became an executive officer on April 22, 1996. On an annualized
basis, Mr. Jeans' 1996 salary compensation would have been $250,000.
(7) Includes 25,000 shares of performance based restricted stock (granted when
the price of Nashua shares was $13.50), 12,500 shares of which will vest
when the Ten Day Average Closing Price reaches $20.00; and 12,500 shares of
which will vest when the Ten Day Average Closing Price reaches $25.00.
However, any shares which have not vested upon the earlier of (i) October
24, 2002 or (ii) termination of employment, will be forfeited. Dividends,
if any, will accumulate on such performance based restricted stock and be
paid when and if the underlying shares vest.
(8) Mr. Clabburn ceased being an executive officer of Nashua on September 26,
1997 and became a part-time employee.
(9) Mr. Clabburn received an additional $31,674 for consulting services
performed in 1995 prior to becoming an employee of Nashua.
(10) Tax equalization payments.
(11) Includes 25,000 shares of performance based restricted stock (granted when
the price of Nashua shares was $13.375), 8,333 shares of which will vest
when the average closing price over a thirty trading day period of Nashua
shares (the "Thirty Day Average Closing Price") reaches $20.00; 8,333
shares of which will vest when the Thirty Day Average Closing Price reaches
$25.00; and 8,334 shares of which will vest when the Thirty Day Average
Closing Price reaches $30.00. However, any shares which have not vested
upon the earlier of (i) December 15, 2000 or (ii) termination of
employment, will be forfeited. Dividends, if any, will accumulate on such
performance based restricted stock and be paid when and if the underlying
shares vest.
(12) Mr. Turnbull was employed by the Company from August 1995 to October 1997.
(13) Includes severance payments of $490,385 paid to Mr. Turnbull in connection
with the termination of his employment.
(14) Mr. Turnbull forfeited the shares of restricted stock representing the
amount shown as a result of the termination of his employment with the
Company.
(15) Includes 15,000 shares of performance based restricted stock (granted when
the price of Nashua shares was $13.9375), 7,500 shares of which will vest
when the Ten Day Average Closing Price reaches $20.00; and 7,500 shares of
which will vest when the Ten Day Average Closing Price reaches $25.00.
However, any shares which have not vested upon the earlier of (i) October
24, 2002 or (ii) termination of employment, will be forfeited. Dividends,
if any, will accumulate on such performance based restricted stock and be
paid when and if the underlying shares vest.
(16) Includes executive medical reimbursement income and tax equalization
payments relating thereto.
(17) Includes 25,000 shares of performance based restricted stock (granted when
the price of Nashua shares was $13.375), 12,500 shares of which will vest
when the Ten Day Average Closing Price reaches $20.00; and 12,500 shares of
which will vest when the Ten Day Average Closing Price reaches $25.00.
However, any shares which have not vested upon the earlier of (i) October
24, 2002 or (ii) termination of employment, will be forfeited. Dividends,
if any, will accumulate on such performance based restricted stock and be
paid when and if the underlying shares vest.
6
<PAGE> 9
(18) Messrs. Ireland and Pache became executive officers in September 1997.
(19) Includes 5,000 shares of performance based restricted stock (granted when
the price of Nashua shares was $12.50), 2,500 shares of which will vest
when the Ten Day Average Closing Price reaches $18.00; and 2,500 shares of
which will vest when the Ten Day Average Closing Price reaches $20.00.
However, any shares which have not vested upon the earlier of (i) December
16, 2002 or (ii) termination of employment, will be forfeited. Dividends,
if any, will accumulate on such performance based restricted stock and be
paid when and if the underlying shares vest.
STOCK OPTIONS
The following table sets forth certain information as to options granted
during 1997 to the individuals listed in the Summary Compensation Table. In
accordance with SEC rules, also shown are the hypothetical gains or "option
spreads", on a pretax basis, that would exist for the respective options. These
gains are based on assumed rates of annual compound stock price appreciation of
5% and 10% from the date the options were granted over the full option term. To
put this data into perspective, the resulting Nashua stock prices for the grant
expiring on 3/1/2007 would be $20.17 at a 5% rate of appreciation and $32.11 at
a 10% rate of appreciation, and for the grant expiring on 12/17/2007, $20.36 at
a 5% rate of appreciation and $32.42 at a 10% rate of appreciation.
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION
OPTIONS % OF TOTAL OPTIONS EXERCISE OR FOR OPTION TERM
GRANTED GRANTED TO EMPLOYEES BASE PRICE EXPIRATION --------------------------
NAME (#) IN 1997 ($/SHARE) DATE 5% 10%
---- ------- -------------------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald G. Garbacz......... 60,000(1) 13.1% $12.38 3/1/2007 $467,143 $1,183,832
30,000(2) 6.5% $12.50 12/17/2007 $235,835 $ 597,653
Michael D. Jeans.......... 40,000(1) 8.7% $12.38 3/1/2007 $311,429 $ 789,221
20,000(2) 4.4% $12.50 12/17/2007 $157,224 $ 398,436
Robin J. T. Clabburn...... 0 -- -- -- -- --
Charles E. Turnbull....... 40,000(3) 8.7% $12.38 5/4/98 $311,429 $ 789,221
Daniel M. Junius.......... 30,000(1) 6.5% $12.38 3/1/2007 $233,571 $ 591,916
15,000(2) 3.3% $12.50 12/17/2007 $117,918 $ 298,827
John J. Ireland........... 15,000(1) 3.3% $12.38 3/1/2007 $116,786 $ 295,958
Eugene P. Pache........... 15,000(1) 3.3% $12.38 3/1/2007 $116,786 $ 295,958
</TABLE>
- ---------------
(1) These options became exercisable on February 28, 1998.
(2) These options will become exercisable on December 16, 1998 or upon
involuntary termination.
(3) These options became exercisable on October 3, 1997.
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<PAGE> 10
The following table sets forth information regarding options held at the
end of 1997 by the individuals listed in the Summary Compensation Table:
OPTION EXERCISES IN 1997 AND
VALUE OF OPTIONS AT END OF 1997
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED,
NUMBER OF UNEXERCISED IN-THE-MONEY, OPTIONS AT
OPTIONS HELD AT YEAR END YEAR END(2)
--------------------------- ---------------------------
NAME(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gerald G. Garbacz................................ 0 90,000 $0 $0
Michael D. Jeans................................. 40,000 60,000 $0 $0
Robin J. T. Clabburn............................. 20,000 0 $0 $0
Charles E. Turnbull.............................. 80,000 0 $0 $0
Daniel M. Junius................................. 24,300 45,000 $0 $0
John J. Ireland.................................. 18,500 15,000 $0 $0
Eugene P. Pache.................................. 18,500 15,000 $0 $0
</TABLE>
- ---------------
(1) No options were exercised during 1997 by any of the persons listed below.
(2) Represents the difference between the closing price on the New York Stock
Exchange of Nashua's common stock on December 31, 1997 ($11.625) and the
exercise price of the options. The exercise price of each such option was
more than the closing price on December 31, 1997.
PENSION PLAN
The following table shows estimated annual benefits payable upon retirement
under the Nashua Corporation Retirement Plan for Salaried Employees (the
"Retirement Plan"), which includes the individuals listed in the Summary
Compensation Table except for Mr. Clabburn who is not eligible to receive
benefits under the Retirement Plan and Mr. Turnbull whose employment with the
Company terminated before he became vested in the Retirement Plan:
ESTIMATED PENSION BENEFITS
<TABLE>
<CAPTION>
AVERAGE ANNUAL YEARS OF SERVICE
COMPENSATION FROM ------------------------------------------------------
JANUARY 1, 1994 25 OR
TO RETIREMENT 5 YEARS 10 YEARS 15 YEARS 20 YEARS MORE YEARS
----------------- ------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
$ 125,000............................. $ 13,750 $ 27,500 $ 41,250 $ 55,000 $ 68,750
250,000............................. 27,500 55,000 82,500 110,000 137,500
375,000............................. 41,250 82,500 123,750 165,000 206,250
500,000............................. 55,000 110,000 165,000 220,000 275,000
625,000............................. 68,750 137,500 206,250 275,000 343,750
750,000............................. 82,500 165,000 247,500 330,000 412,500
875,000............................. 96,250 192,500 288,750 385,000 481,250
1,000,000............................. 110,000 220,000 330,000 440,000 550,000
</TABLE>
Compensation covered by the Retirement Plan generally refers to total
annual cash compensation, including salary and bonus, but excluding certain
items such as the value of stock option awards and employer allocations to the
Employees' Savings Plan. As of December 31, 1997, the individuals named in the
Summary Compensation Table had the following years of service credited under the
Retirement Plan: Mr. Garbacz, 2 years; Mr. Jeans, 1.5 years; Mr. Junius, 13
years; Mr. Ireland, 3.5 years and Mr. Pache, 3.5 years.
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<PAGE> 11
The estimated annual benefits shown above are subject to an offset for 50%
of a participant's primary Social Security benefit. Benefits as shown above,
minus the 50% offset for Social Security benefit, are available for participants
whose pensions start after reaching age 65. Participants who have five or more
years of service are eligible to receive pensions after reaching age 60 and
participants who have ten or more years of service are eligible to receive
pensions after reaching age 55, but payments are reduced 4.2% per year for each
year that a recipient starts receiving benefits earlier than at age 65. Payments
are further reduced for participants whose credited service began before age 40
and terminate employment with Nashua prior to reaching age 55.
The Employee Retirement Income Security Act of 1974 places limitations on
pensions which may be paid under plans qualified under the Internal Revenue
Code. Amounts exceeding such limitations may be paid outside of qualified plans.
Nashua has a Supplemental Unfunded Excess Retirement Benefit Plan providing for
such amounts for its employees including Messrs. Garbacz, Jeans, Junius, Ireland
and Pache.
CERTAIN TRANSACTIONS AND INDEBTEDNESS
In conjunction with Mr. Jeans' relocation from California to New England,
the Company granted to Mr. Jeans an interest free residential bridge loan in the
amount of $395,000 pending the sale of Mr. Jeans' California home. Mr. Jeans
repaid the loan on May 7, 1997.
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with Messrs. Garbacz,
Jeans, Junius, Ireland and Pache in order to ensure their continued service to
Nashua in the event of a change in control of Nashua or, with respect to Messrs.
Ireland and Pache, the divisions for which they have operating responsibility.
Such severance agreements provide that upon termination of employment under
certain circumstances within three years of a change in control of Nashua, the
employee would receive severance pay equal to three times the sum of his annual
salary and bonus in the case of Messrs. Garbacz, Jeans and Junius or the sum of
one year's annual salary and bonus in the case of Messrs. Ireland and Pache. In
addition, each of Messrs. Garbacz, Jeans and Junius can terminate his employment
after a change in control of Nashua and receive his severance pay if the Board
determines that he has substantially completed his duties with respect to a
restructuring program and the Company's needs for his services have been
substantially diminished. In the event of a sale of their divisions, Messrs.
Ireland and Pache would receive severance pay equal to one year's annual salary
and bonus under certain circumstances. If the employment of any of Messrs.
Garbacz, Jeans or Junius is terminated by the Company apart from the
circumstances above for reasons other than misconduct, the executive would
receive one year's salary. In addition, the agreements provide for the
continuation for specified periods of certain other benefits.
THE LEADERSHIP AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Leadership and Compensation Committee is composed of non-employee
directors and is charged with the responsibility of screening candidates for the
chief executive officer position, developing performance evaluation criteria,
reviewing the caliber of and succession to key management positions and deciding
on top management compensation. The Committee administers the Management
Incentive Plan and the Company's stock option and stock incentive plans. Each
year the Committee reviews the performance of the Chief Executive Officer
against objectives and sets the Chief Executive Officer's base salary. The
Committee also reviews the performance and the salary levels of other executive
officers including the executives listed in the compensation table and makes
decisions regarding the above plans.
9
<PAGE> 12
The Committee's compensation policies applicable to the Company's executive
officers during 1997 are set forth below:
The Committee believes that base salaries should be at competitive
levels so as to attract and retain well qualified executives. With respect
to the Chief Executive Officer's salary, the Committee considered a number
of factors including survey data, the size and performance of the Company,
past practice at the Company, each Committee member's own individual
experiences in compensation matters and the inter-relationship of salary to
cash incentive compensation and long-term equity based compensation. The
Committee set the Chief Executive Officer's salary at essentially the same
level as it had been for chief executive officers at the Company for the
past seven years and tied his overall compensation heavily to stock
performance by awarding him options to purchase 90,000 shares of stock. The
base salaries for the four current Vice Presidents listed in the Summary
Compensation Table are competitive with the base salaries for similar
positions included in the survey data.
The Committee believes that incentive compensation paid in cash should
be awarded to support company objectives based on company, group, division
and personal performance during the preceding year. The Company's
Management Incentive Plan provides that cash awards may be granted each
year by the Committee based on corporate, group, division and personal
performance. For the individuals who served as Chief Executive Officer and
principal corporate staff officers, award targets for 1997 were based on
the Company's pretax operating income budget and personal performance
objectives. For the Vice Presidents in charge of operating units, award
targets were based on the respective unit's pretax operating income budget
and personal performance objectives. Bonus payments were authorized by the
Committee to be paid to two of the officers listed in the compensation
table (Messrs. Ireland and Pache) for performance in 1997, since their
predetermined divisional targets had been exceeded.
The Committee believes that long-term equity-based compensation should
be awarded to provide incentive to executives to create value for
stockholders and give the executives a substantive ownership interest in
the Company's success. The Committee's policy has been to award
performance-based restricted stock and stock option grants in order to more
closely align the interests of management with those of stockholders and to
attract and retain executives during a period when the Company has been
undergoing significant operational changes.
The Committee has not adopted a policy on the tax law disallowing
deductions on compensation in excess of $1 million for certain executives of
public companies. The Company believes that options and performance-based
restricted stock awards granted under its stock incentive plans are exempt from
the limitation and that other compensation expected to be paid during 1998 will
be below the compensation limitation.
Leadership and Compensation
Committee
James F. Orr III, Chairman
John M. Kucharski
David C. Miller, Jr.
Peter J. Murphy
10
<PAGE> 13
PERFORMANCE GRAPHS
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's common stock against
the cumulative total return of the S&P 500 Index and a composite peer group for
the five years commencing December 31, 1992 and ending December 31, 1997. A peer
group comparison is used because, offering a diverse mix of products and
services, the Company did not believe that a single industry or line-of-business
index provided an adequate measure for comparison to the Company as a whole.
The Company's products and services include facsimile and thermal papers,
pressure sensitive labels, specialty papers, copier and laser printer supplies
and photofinishing services. In constructing a composite peer group, the Company
selected published indices to represent various products and, because no
published photofinishing index was available, has selected a peer group for that
segment. The indices are: for facsimile and thermal papers, pressure sensitive
labels and specialty papers -- the S&P Paper and Forest Products Index and for
copier and laser printer supplies -- the S&P Office Equipment & Supplies Index.
As peer companies in the photofinishing segment, the Company selected Eastman
Kodak Company and Seattle Filmworks, Inc. and weighted them by market
capitalization. The Company then weighted the two indices and photofinishing
peer group in proportion to the 1997 revenues of Nashua's products and services
represented by the respective indices and peer group.
[GRAPH]
<TABLE>
<CAPTION>
Measurement Period Nashua S&P 500 Composite
(Fiscal Year Covered) Corporation Index Peer Group
<S> <C> <C> <C>
1992 $100.00 $100.00 $100.00
1993 99.49 110.08 126.37
1994 76.45 111.53 135.90
1995 52.37 153.45 183.10
1996 46.13 188.68 220.92
1997 44.68 251.62 219.97
</TABLE>
11
<PAGE> 14
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares and percentage of Nashua's
common stock deemed to be beneficially owned by each director and nominee for
director, each executive officer named in the Summary Compensation Table above
and by all directors and officers of Nashua as a group, as of March 17, 1998:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF SHARES
NAME BENEFICIAL OWNERSHIP(1) OUTSTANDING
---- ----------------------- -----------------
<S> <C> <C>
Sheldon A. Buckler................................... 8,227(2) *
Robin J. T. Clabburn................................. 49,814(3) *
Gerald G. Garbacz.................................... 198,428(4)(11) 3.0
Charles S. Hoppin.................................... 9,227(2) *
John J. Ireland...................................... 34,146(5)(11) *
Michael D. Jeans..................................... 105,000(6) 1.6
Daniel M. Junius..................................... 98,289(7)(11) 1.5
John M. Kucharski.................................... 9,727(2) *
David C. Miller, Jr.................................. 4,227(2) *
Peter J. Murphy...................................... 2,290(2) *
James F. Orr III..................................... 11,227(2) *
Eugene P. Pache...................................... 38,500(8) *
Charles E. Turnbull.................................. 84,000(9) 1.3
Directors and Officers as a group (22 persons)....... 934,127(10)(11)(12) 13.9
</TABLE>
- ---------------
*Less than 1%
(1) Information as to the interests of the respective nominees has been
furnished in part by them. The inclusion of information concerning shares
held by or for their spouses or children or by corporations in which they
have an interest does not constitute an admission by such nominees of
beneficial ownership thereof. Unless otherwise indicated, all persons have
sole voting and dispositive power as to all shares they are shown as
owning.
(2) Includes shares each non-employee director has a right to acquire through
the exercise of stock options as of May 31, 1998 -- Mr. Buckler, 3,000
shares; Mr. Hoppin, 5,000 shares; Mr. Kucharski, 5,000 shares; Mr. Miller,
2,000 shares; Mr. Murphy, 1,000 shares; and Mr. Orr, 5,000 shares.
(3) Includes 20,000 shares Mr. Clabburn has a right to acquire through the
exercise of stock options as of May 31, 1998. Also includes 25,000 shares
of performance based restricted stock, 8,333 shares of which will vest when
the average closing price over a thirty trading day period of Nashua shares
(the "Thirty Day Average Closing Price") reaches $20.00; 8,333 shares of
which will vest when the Thirty Day Average Closing Price reaches $25.00;
and 8,334 shares of which will vest when the Thirty Day Average Closing
Price reaches $30.00. However, any shares which have not vested upon the
earlier of (i) December 15, 2000 or (ii) termination of employment, will be
forfeited.
(4) Includes 60,000 shares Mr. Garbacz has a right to acquire through the
exercise of stock options as of May 31, 1998. Also includes 120,000 shares
of performance based restricted stock, 60,000 shares of which will vest
when the average closing price over a ten trading day period of Nashua
shares (the "Ten Day Average Closing Price") reaches $20.00; and 60,000
shares of which will vest when the Ten Day Average Closing Price reaches
$25.00. However, any shares which have not vested upon the earlier of (i)
October 24, 2002 or (ii) termination of employment, will be forfeited.
(5) Includes 33,500 shares Mr. Ireland has a right to acquire through the
exercise of stock options as of May 31, 1998.
12
<PAGE> 15
(6) Includes 80,000 shares Mr. Jeans has a right to acquire through the
exercise of stock options as of May 31, 1998. Also includes 25,000 shares
of performance based restricted stock, 12,500 shares of which will vest
when the Ten Day Average Closing Price reaches $20.00; and 12,500 shares of
which will vest when the Ten Day Average Closing Price reaches $25.00.
However, any shares which have not vested upon the earlier of (i) October
24, 2002 or (ii) termination of employment, will be forfeited.
(7) Includes 52,600 shares Mr. Junius has a right to acquire through the
exercise of stock options as of May 31, 1998. Also includes 40,000 shares
of performance based restricted stock, 20,000 shares of which will vest
when the Ten Day Average Closing Price reaches $20.00; and 20,000 shares of
which will vest when the Ten Day Average Closing Price reaches $25.00.
However, any shares which have not vested upon the earlier of (i) October
24, 2002 or (ii) termination of employment, will be forfeited.
(8) Includes 33,500 shares Mr. Pache has a right to acquire through the
exercise of stock options as of May 31, 1998. Also includes 5,000 shares of
performance based restricted stock, 2,500 shares of which will vest when
the Ten Day Average Closing Price reaches $18.00; and 2,500 shares of which
will vest when the Ten Day Average Closing Price reaches $20.00. However,
any shares which have not vested upon the earlier of (i) December 16, 2002
or (ii) termination of employment, will be forfeited.
(9) Includes 80,000 shares Mr. Turnbull has a right to acquire through the
exercise of stock options as of May 31, 1998.
(10) Includes 560,550 shares which the directors and officers of Nashua have the
right to acquire through exercises of stock options as of May 31, 1998.
(11) Includes shares held in trust under the Employees' Savings Plan under which
the participating employee has voting power as to the shares in his
account. As of December 31, 1997, 928 shares are held in trust for Mr.
Garbacz's account; 3,952 shares are held in trust for Mr. Junius' account;
646 shares are held in trust for Mr. Ireland's account; and 16,231 shares
are held in trust for the accounts of all directors and officers as a
group. No director other than Mr. Garbacz participates in the Plan.
(12) Includes 299,000 shares of performance based restricted stock.
13
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows the number of shares and percentage of Nashua's
common stock beneficially owned by all persons known to Nashua to be the
beneficial owners of more than 5% of its common stock, as of March 17, 1998:
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF BENEFICIAL COMMON STOCK
NAME OF BENEFICIAL OWNER OWNERSHIP OUTSTANDING
------------------------ -------------------- ------------
<S> <C> <C>
Gabelli Funds, Inc./GAMCO Investors, Inc./Gabelli........... 660,300(b) 9.8%
International Limited/Gabelli International II Limited/
Gabelli Performance Partnership L.P./Mario J. Gabelli (a)
One Corporate Center, Rye, NY 10580
Pioneering Management Corporation(c)........................ 644,500(d) 9.6%
60 State Street, Boston, MA 02109
Dimensional Fund Advisors Inc............................... 423,500(f) 6.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401(e)
Franklin Resources, Inc./Charles B. Johnson/................ 391,300(h) 5.8%
Rupert H. Johnson, Jr./Franklin Advisory Services, Inc.(g)
777 Mariners Island Boulevard
San Mateo, CA 94404
The TCW Group, Inc./Robert Day(i)........................... 373,300(j) 5.6%
865 South Figueroa Street
Los Angeles, CA 90017
Capital Technology Inc.(k).................................. 336,500(l) 5.0%
8314 Pineville-Matthews Road, Suite 295
Charlotte, NC 28226
</TABLE>
- ---------------
(a) Information is based on a joint Schedule 13D (Amendment No. 11) dated
November 24, 1997, furnished by such beneficial owners which are affiliated
with one another.
(b) Gabelli Funds, Inc. owns 310,000 shares for which it has sole voting power
and sole dispositive power. GAMCO Investors, Inc. owns 308,300 shares, for
which it has sole voting power and sole dispositive power. Gabelli
Performance Partnership L.P. owns 15,000 shares for which it has sole voting
power and sole dispositive power. Gabelli International Limited owns 12,000
shares for which it has sole voting power and sole dispositive power.
Gabelli International II Limited owns 15,000 shares for which it has sole
voting power and sole dispositive power.
(c) Information is based on Schedule 13G (Amendment No. 1), dated January 21,
1998, furnished by such beneficial owner.
(d) Sole voting power and sole dispositive power.
(e) Information is based on Schedule 13G, dated February 9, 1998, furnished by
such beneficial owners.
(f) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 423,500 shares of Nashua
stock as of December 31, 1997, all of which shares are held in portfolios of
DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
14
<PAGE> 17
(g) Information is based on Schedule 13G, dated January 30, 1998, furnished by
such beneficial owners.
(h) Franklin Advisory Services, Inc. has sole voting power and sole dispositive
power.
(i) Information is based on Schedule 13G (Amendment No. 2), dated February 12,
1998, furnished by such beneficial owners.
(j) Sole voting power and sole dispositive power.
(k) Information is based on Schedule 13G, dated February 4, 1998, furnished by
such beneficial owner.
(l) Sole voting power as to 56,700 shares and sole dispositive power as to
336,500 shares.
STOCKHOLDER PROPOSAL TO URGE THE BOARD OF DIRECTORS OF THE
COMPANY TO REDEEM ITS 1996 SHAREHOLDER RIGHTS PLAN
GAMCO Investors, Inc., One Corporate Center, Rye, New York 10580-1434, who
is the owner of record of 308,300 shares of Common Stock, has given notice that
it intends to present the following resolution at the 1998 Annual Meeting of
Stockholders. The proposed resolution and supporting statement for which the
Board of Directors and the Company accept no responsibility are as follows:
STOCKHOLDER PROPOSAL
RESOLVED: That the shareholders of Nashua Corporation (the "Company")
hereby request the Board of Directors to redeem the
Preferred Stock Purchase Rights issued in July of 1996,
unless said issuance is approved by the affirmative vote of
a majority of the outstanding shares at a meeting of the
shareholders held as soon as practical.
SUPPORTING STATEMENT OF STOCKHOLDER
On July 19, 1996, the Board of Directors adopted a shareholder rights plan,
which declared a dividend distribution of one stock purchase right ("right" or
"rights") for each outstanding share of common stock. These rights are a type of
corporate anti-takeover device, commonly known as a "poison pill". These rights
replace rights that had been outstanding under a similar rights agreement that
was adopted by the Company in August 1986 and expired on September 2, 1996.
The rights are exercisable when a person or group acquires a beneficial
interest in as little as 10% of the common stock of the Company, or announces a
tender or exchange offer that would result in such person or group owning 10% or
more of the Company's common stock. The result of the issuance of the rights is
to vastly increase the cost to a potential bidder of effecting any merger or
tender offer that is not approved by the Board of Directors. Furthermore, we
believe that the 10% threshold is lower than the limit imposed by poison pills
adopted by most other companies, making the Company's poison pill an even
greater impediment to realizing shareholder value. The Company may redeem the
rights for $.01 per right.
The Company's poison pill is particularly unjustified in light of the
long-standing inability of management to bring the value of the Company to the
surface. The performance graph on page 11 of the Company's 1997 proxy statement
vividly displays that since 1991 the Company has substantially underperformed
the S&P 500 Index as well as its composite peer group. However, the poison pill,
which was unilaterally adopted by the Board of Directors, serves to entrench
existing management.
We believe the shareholders are entitled to decide on what is a fair price
for their holdings. However, as a consequence of the poison pill, potential
bidders for the Company's stock are forced to negotiate with management, and are
effectively precluded from taking their offer directly to the shareholders.
15
<PAGE> 18
In the face of significant and continuing declines in the Company's stock
price over the past six years, the Board, in an effort to improve shareholder
value, should redeem the rights or put their continuance to a shareholder vote
as soon as practical.
We urge shareholders to vote for this resolution.
COMPANY'S STATEMENT IN OPPOSITION TO THE PROPOSAL
For the reasons set forth below, the Board unanimously recommends that
shareholders vote AGAINST the adoption of this proposal.
In 1986, the Company's Board of Directors adopted a Shareholder Rights Plan
pursuant to which rights to purchase the Company's Common Stock were distributed
on a pro rata basis to all shareholders. The Plan was thoroughly reviewed,
modified in certain respects and renewed in 1996 (the "Shareholder Rights
Plan"). Like its predecessor, the Shareholder Rights Plan is carefully designed
to safeguard the interests of the Company's shareholders by making it more
difficult for a potential hostile acquirer to gain control of the Company on
inadequate or unfair terms and without first negotiating with the Board.
Significantly, shareholder rights plans appear to increase the premium
received by shareholders if a takeover occurs. A December 1995 study by J.P.
Morgan reported that the median takeover premium paid for firms that have a
rights plan in place is nearly 16% higher than for companies that do not have
one. Similarly, a 1993 study by Professors Comment and Schwert of the University
of Rochester found that rights plans are associated with an added premium of
17.85% for selling shareholders in takeovers.
The Company's Shareholder Rights Plan is substantially similar to plans
that have been adopted by approximately 1,350 publicly traded companies,
including companies in industries similar to Nashua such as Xerox Corporation,
Pitney Bowes Inc., Moore Corporation Ltd., Boise Cascade Corporation, James
River Corp., The Mead Corporation and Westvaco Corporation. Like most
shareholder rights plans, it provides that if the percentage of the Company's
stock held by any single shareholder exceeds a certain threshold, except
pursuant to an offer for all outstanding shares which the Board determines to be
at a fair price to shareholders, all other shareholders would be able to
exercise their rights under the Shareholder Rights Plan and purchase additional
Company shares at a discount. Such purchases would effectively dilute the
hostile acquirer's voting and economic power.
With the Shareholder Rights Plan in place, an otherwise hostile acquirer is
encouraged to negotiate with the Board. The Shareholder Rights Plan enables the
Board to defend the interests of the Company's shareholders in the face of an
unsolicited and inadequate or coercive bid. It, however, does not prevent the
Board from permitting the acquirer to proceed if the Board determines that all
shareholders will in fact receive a fair return on their investment.
The Company's Board is elected by and answerable to the shareholders, and
its primary responsibility is the enhancement of shareholder value. To all of
its decisions, the Board brings a wide range of experience in business and
finance. Six of its seven directors are neither employees nor officers of the
Company, ensuring a high degree of independent oversight and management
accountability. When the Shareholder Rights Plan was first adopted in 1986 and
when it was renewed in 1996, the Board, in accordance with its fiduciary duties
to the shareholders, consulted with outside investment bankers and legal
counsel, and concluded that the interests of the Company's shareholders would
best be served if the Company were not vulnerable to coercive or unfair takeover
tactics. When in 1997 the Board received the shareholder proposal at issue, it
revisited this evaluation in the context of the current merger and acquisition
environment. Hostile takeovers continue to be a strategy used by potential
acquirers in this strong merger and acquisition environment. It is as important
now as ever
16
<PAGE> 19
that the Board be in a position to respond effectively should the Company become
the target of a takeover bid that undervalues the Company and deprives
shareholders of an appropriate premium.
Far from pursuing a course of action directed toward its own
"entrenchment," the Board is committed to increasing shareholder value by
providing the relatively new management the time necessary to rebuild
shareholder value. The Board believes that enhancing shareholder value requires
identifying and focusing on certain strategic businesses to accomplish long-term
goals.
In 1997, the Company retained BT Alex. Brown Incorporated to assist it in
developing and implementing such a program, and BT Alex. Brown is currently
assisting the Company in divesting several non-strategic businesses. A portion
of the proceeds from the sale of assets will be reinvested in growing the
retained businesses, and a portion is expected to be returned to shareholders
through a special dividend and/or share repurchases. Through such sales, the
Board and management believe that the Company's shareholders will be best served
by Nashua becoming more focused in areas where substantial opportunities exist
to allow it to achieve leadership in niche markets. The Company's concentration
on a smaller portfolio of businesses, coupled with overhead reductions which
have been implemented continuously since 1996, should increase Nashua's
profitability and yield substantially improved returns on invested capital.
For your Company, the Shareholder Rights Plan is a valuable means of
ensuring that this initiative is not cut short by an unsolicited bid from a
potential acquirer which does not reflect the long-term value of the Company. In
the event of a possible offer to acquire your Company, among other things, the
Shareholder Rights Plan provides the Board of Directors with the leverage to
negotiate on your behalf to obtain the highest possible price for your shares.
The proper time to consider redemption of the rights issued under the Plan
is when a specific offer is made to acquire the Company's stock. Should such an
offer be presented, the Board will conscientiously exercise its duty to obtain
the results it believes to be in the best interests of you, our shareholders.
The Board can redeem the rights issued under the Plan at any time. Until then,
the Board remains confident that shareholder interests are best served by
preserving the Shareholder Rights Plan, the very tool that would enable the
Board to negotiate effectively in this situation.
For the reasons above, the Board unanimously recommends that shareholders
vote AGAINST the adoption of this proposal.
The affirmative vote of the holders of a majority of the shares of the
Common Stock entitled to vote held by stockholders present at the meeting in
person or by proxy is required for approval of this proposal. Approval would
not, however, require that the requested action be taken since the proposal is
precatory. Unless otherwise indicated, the persons named on the proxy will vote
all proxies AGAINST the proposal.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, Nashua's independent accountants for the year 1997,
are also Nashua's independent accountants for the year 1998. Representatives of
Price Waterhouse LLP are expected to be present at the stockholders' meeting
with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder proposal which is to be included in the proxy materials for
the 1999 annual meeting must be received by Nashua on or before November 25,
1998. Such proposals should be directed to Nashua
17
<PAGE> 20
Corporation, 44 Franklin Street, P.O. Box 2002, Nashua, New Hampshire
03061-2002, Attention: Suzanne L. Ansara, Assistant Secretary.
MISCELLANEOUS
The Board of Directors does not presently know of any other matters to be
presented to the annual meeting. If any other matters are brought before the
annual meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies on such matters in
accordance with their best judgment, pursuant to the discretionary authority
granted by the proxy.
The cost of solicitation of proxies will be borne by Nashua. In addition to
the use of the mails, proxies may be solicited by officers and regular employees
of Nashua, without extra compensation, by telephone or by other means of
communication. Nashua will reimburse banks, brokers or other similar agents or
fiduciaries for forwarding proxy material to beneficial owners of common stock.
Nashua has also retained Morrow & Co., Inc. to aid in the solicitation of
proxies by personal interview, or by telephone or by other means of
communication. Nashua anticipates that the cost of such service will not exceed
$10,000.
Nashua will provide free of charge to any stockholder from whom a proxy is
solicited pursuant to this proxy statement, upon written request from such
stockholder, a copy of Nashua's annual report filed with the Securities and
Exchange Commission on Form 10-K for Nashua's fiscal year ended December 31,
1997. Requests for such report should be directed to Nashua Corporation, 44
Franklin Street, P.O. Box 2002, Nashua, New Hampshire 03061-2002, Attention:
Suzanne L. Ansara, Assistant Secretary.
PAUL BUFFUM
Vice President, General
Counsel and Secretary
Nashua, New Hampshire
March 25, 1998
18
<PAGE> 21
NASH-PS-98
<PAGE> 22
PROXY
NASHUA CORPORATION
PROXY for Annual Meeting of Stockholders - April 24, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) PAUL BUFFUM, DANIEL M. JUNIUS and BRUCE T.
WRIGHT and each of them attorneys or attorney of the undersigned (with full
power of substitution in them and in each of them), for and in the name(s) of
the undersigned to vote and act at the annual meeting of the stockholders of
Nashua Corporation, to be held at the Crowne Plaza, 2 Somerset Parkway, Nashua,
New Hampshire, on April 24, 1998 at 10:00 a.m., or any adjournment thereof, upon
or in respect of all shares of stock of Nashua Corporation upon or in respect
of which the undersigned would be entitled to vote or act, and with all the
powers the undersigned would possess, if personally present, upon all matters
which may properly come before said meeting, as described in the Proxy
Statement and Notice dated March 25, 1998, receipt of which is hereby
acknowledged.
Unless a contrary direction is indicated, this Proxy will be voted FOR all
nominees listed in Proposal 1 and AGAINST Proposal 2 as more specifically set
forth in the Proxy Statement; if specific instructions are indicated, this
Proxy will be voted in accordance therewith.
The Board of Directors recommends a vote FOR all nominees named in Proposal 1
and a vote AGAINST Proposal 2.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE> 23
Nashua Stockholders:
The Annual Meeting of Stockholders of Nashua Corporation will be held at
10:00 a.m. on Friday, April 24, 1998, at the Crowne Plaza, 2 Somerset Parkway,
Nashua, New Hampshire.
The Proxies will vote your shares in accordance with your directions on this
proxy card. If you sign and return the proxy card and do not indicate your
choices, the Proxies will vote your shares in accordance with the
directors' recommendations.
Please fill in the boxes to indicate how your shares should be voted, sign and
date the proxy card and return it as soon as possible in the enclosed postpaid
envelope. If you do not sign and return the proxy card, the Proxies cannot vote
your shares at the Annual Meeting.
Paul Buffum
Vice President, General
Counsel and Secretary
<TABLE>
<S> <C>
MSH96 3 DETACH HERE
[X] Please mark
votes as in
this example.
NOTE: Signature should be exactly as name appears on imprint. If stock is registered in the names of two or more persons as joint
owners, trustees or otherwise, the proxy should be personally signed by each of them or accompanied by proof of authority of less
than all to act. In the case of executors, administrators, trustees, guardians and attorneys, unless the stock is registered in
their names, proof of authority should accompany this proxy.
------------------------------------------------------------- -----------------------------------------------------------------
The Board of Directors Recommends a Vote FOR Proposal 1. The Board of Directors Recommends a Vote AGAINST Proposal 2.
------------------------------------------------------------- -----------------------------------------------------------------
1. Election of Directors.
Nominees: Sheldon A. Buckler, Gerald G. Garbacz,
Charles S. Hoppin, John M. Kucharski, David C.
Miller, Jr., Peter J. Murphy, James F. Orr III FOR AGAINST ABSTAIN
2. Approval of Stockholder Proposal. [ ] [ ] [ ]
[ ] FOR [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ] ________________________________________
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE FILL IN DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POST PAID RETURN ENVELOPE.
Signature: _____________________________ Date: _______________ Signature: _____________________________ Date: _______________
</TABLE>
