UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 2)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
NASHUA CORPORATION
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
NASHUA CORPORATION
44 FRANKLIN STREET
NASHUA, NEW HAMPSHIRE 03064
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 2000
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 25, 2000 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 ratify the appointment of Ernst & Young LLP as independent
accountants for the year 2000.
4. 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
14, 2000, as the record date for determining the stockholders having the
right to notice of and to vote at the meeting.
By order of the Board of Directors,
PETER C. ANASTOS
Vice President, General
Counsel and Secretary
Nashua, New Hampshire
March ___, 2000
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD.
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
VOTING SECURITIES
ELECTION OF DIRECTORS
Nominees for Election as Directors
Meetings and Committees of the Board of Directors
Compensation of Directors
STOCK OWNERSHIP
Security Ownership of Certain Beneficial Owners
Security Ownership of Management
Section 16(a) Beneficial Ownership Reporting Compliance
EXECUTIVE COMPENSATION
Summary Compensation Table
Stock Options
Pension Plan - Estimated Pension Benefits
Severance Agreements
Leadership and Compensation Committee Report on Executive Compensation
STOCK PERFORMANCE GRAPH
STOCKHOLDER PROPOSAL TO REDEEM THE 1996 SHAREHOLDER RIGHTS PLAN
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
SUBMISSION OF STOCKHOLDER PROPOSALS - 2001 ANNUAL MEETING
PARTICIPANTS IN THE SOLICITATION
DISSIDENT SHAREHOLDER SOLICITATION
SOLICITATION OF PROXIES
OTHER MATTERS
NASHUA CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by 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
03064, for use at the Annual Meeting of Stockholders of Nashua to be held
on April 25, 2000, 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 of Nashua a proxy bearing a later date at any time at or
before the annual 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 ___, 2000.
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 14, 2000 are
entitled to vote at the annual meeting and at any adjournment thereof. As
of the close of business on such date, there were __________ shares of its
common stock outstanding (excluding _____ 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, will constitute a quorum
for the transaction of business at the annual meeting. Abstentions and
broker non-votes are treated in the same manner as shares present or
represented at the annual meeting for purposes of determining the existence
of a quorum.
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 annual meeting in person or by proxy is
required to approve all matters to be acted upon at the annual meeting. The
proxy holders will vote all proxies in accordance with the instructions
contained in the proxy card and, if no choice is specified, the proxy
holders will vote in favor of the proposal to elect directors, abstain from
voting with respect to the stockholder proposal, will vote in favor of the
ratification of the engagement of Ernst & Young LLP as the Company's
independent accountants and use their discretion with respect to any other
business properly brought before the annual meeting. The total number of
votes cast "for" a proposal will determine whether a proposal is adopted.
Abstentions are counted in determining the number of votes cast
and while not counted as votes "for" or "against" a proposal, abstentions
have the same effect as votes against a proposal. Broker non-votes are not
counted for any purpose in determining whether a proposal has been
approved. A broker non-vote occurs when a registered broker holding a
customer's shares in the name of the broker has not received voting
instructions on a matter from the customer and is barred by stock exchange
rules from exercising discretionary authority to vote on the matter. Under
rules of the New York Stock Exchange, brokers who hold shares in street
name for customers are prohibited from giving a proxy to vote such shares
without specific instructions from such customers for "non-discretionary"
or "non-routine" proposals. The shareholder proposal is considered a
"non-discretionary" matter under the rules of the New York Stock Exchange.
Accordingly, broker non-votes will be excluded and considered not cast for
purposes of determining whether the proposal has been approved.
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. All of the nominees for
directors are now directors of Nashua. Background information about the
Board's nominees for election is set forth below.
<TABLE>
<CAPTION>
Director
Name Age Since Business Experience
---- --- ----- -------------------
<S> <C> <C>
Sheldon A. Buckler 68 1994 Dr. Buckler has been Chairman of the Board of Lord Corporation
(technology based manufacturing company) since January 1, 2000. He also
has been Chairman of the Board of the Massachusetts Eye and Ear
Infirmary (a Harvard Medical School teaching hospital) since December
1996. Dr. Buckler was Chairman of the Board of Commonwealth Energy
System (a supplier of energy products) from May 1995 through 1999. Dr.
Buckler is a Director of Parlex Corporation and NSTAR Corporation.
Gerald G. Garbacz 63 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 1992 to 1994. Mr. Garbacz is a Director of
Hollingsworth & Vose Company.
Charles S. Hoppin 68 1979 Mr. Hoppin has been Senior Counsel to the law firm of Davis Polk &
Wardwell since January 1999. He was a partner of Davis Polk & Wardwell
from prior to 1995 through December 1998.
John M. Kucharski 64 1988 On February 1, 1999, Mr. Kucharski retired as Chairman of the Board of
EG&G, Inc. (technical and scientific products and services), a position
which he had held from 1988. He was Chief Executive Officer of EG&G,
Inc. from 1987 through 1998 and President from 1986 until February 1998.
Mr. Kucharski is a Director of New England Electric System and State
Street Boston Corporation.
David C. Miller, Jr. 57 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 also served as President of Kennedy
International Consulting, Inc. He is also Chairman and President,
Special Operations Fund, and a Director of Georgetown University's
Institute for the Study of Diplomacy.
Peter J. Murphy 51 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 and Executive
Vice President of Parlex Corporation from May 1994 to July 1995. Prior
to his employment with Parlex Corporation, Mr. Murphy was President of
Teledyne Electro-Mechanisms, a manufacturer of flexible circuits.
James F. Orr III 57 1989 Mr. Orr retired as Chairman, Chief Executive Officer and President of
UNUM Corporation (insurance) in November 1999. He had been Chairman
since February 1988, and Chief Executive Officer and President since
September 1987.
</TABLE>
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES FOR DIRECTOR NAMED ABOVE.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1999, the Board of Directors held six regular meetings and
four special meetings. 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.
Dr. 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 the Audit/Finance and
Investment Committee, the Leadership and Compensation Committee and the
Governance 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 three meetings in 1999. The
members of the Audit/Finance and Investment Committee are Messrs. Buckler,
Hoppin, Kucharski (Chairman) and Murphy.
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 senior
management compensation. The Leadership and Compensation Committee held one
meeting in 1999. The members of the Leadership and Compensation Committee
are Messrs. Kucharski, Miller, Murphy and Orr (Chairman).
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, 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 1999. The members of the
Governance Committee are Messrs. Buckler (Chairman), Hoppin, Miller and
Orr.
COMPENSATION OF DIRECTORS
Non-employee members of the Board of Directors receive an annual
retainer payable in shares of Nashua's common stock with a market value of
$15,000 on the date of grant, effective as of the first day following their
election to the Board. They also receive $1,000 in cash plus expenses for
each Board meeting or Board committee meeting attended and each year are
awarded options to purchase 1,000 shares of common stock having an exercise
price equal to the fair market value of such shares on the date of award
under the provisions of Nashua's 1996 Stock Incentive Plan. The Lead
Director is compensated with an additional $7,500 annually in cash.
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
3, 2000:
<TABLE>
<CAPTION>
Amount and Percent of
Nature of Beneficial Common Stock
Name of Beneficial Owner Ownership (1) Outstanding
------------------------ -------------------- ------------
Gabelli Funds, LLC/GAMCO Investors, Inc./Gabelli
International II Limited/Gabelli Advisers, Inc./
Gabelli Group Capital Partners, Inc./Gabelli Asset
<S> <C> <C>
Management Inc./Marc J. Gabelli/Mario J. Gabelli . . . . . . . 1,055,899 (a) 18.0%
One Corporate Center, Rye, NY 10580
Dimensional Fund Advisors Inc. . . . . . . . . . . . . . . . . . 479,800 (b) 8.2%
1299 Ocean Avenue, Santa Monica, CA 90401
The TCW Group, Inc./Robert Day. . . . . . . . . . . . . . . . . . 434,900 (c) 7.4%
865 South Figueroa Street, Los Angeles, CA 90017
Franklin Resources, Inc./Charles B. Johnson/Rupert H. 429,200 (d) 7.3%
Johnson, Jr./Franklin Advisory Services, LLC . . . . . . . . .
777 Mariners Island Boulevard, San Mateo, CA 94404
David L. Babson and Company Incorporated . . . . . . . . . . . . 382,200 (e) 6.5%
One Memorial Drive, Cambridge, MA 02142-1300
Fleet Boston Corporation . . . . . . . . . . . . . . . . . . . . 346,574 (f) 5.9%
One Federal Street, Boston, MA 02110
</TABLE>
- -----------------
(1) The number of shares beneficially owned is determined under rules
promulgated by the Securities and Exchange Commission, and the
information is not necessarily indicative of beneficial ownership
for any other purpose. Under such rules, beneficial ownership
includes any shares as to which an individual or group has sole or
shared voting power or investment power and also any shares which an
individual or group has the right to acquire within 60 days of March
3, 2000 through the conversion of any convertible note or the
exercise of any stock option, warrant or other right. The inclusion
herein of such shares, however, does not constitute an admission
that the named stockholder is a direct or indirect beneficial owner
of such shares. Unless otherwise indicated, each person or group
named in the table has sole voting or investment power (or shares
power with his or her spouse) with respect to all shares of capital
stock listed as owned by such person or entity.
(a) Information is based on a joint Schedule 13D (Amendment No. 21)
dated March 3, 2000, furnished by such beneficial owners which are
affiliated with one another. Gabelli Funds, LLC owns 278,000 shares
for which it has sole voting power and sole dispositive power. GAMCO
Investors, Inc. owns 756,899 shares, for which it has sole voting
power as to 753,399 shares and sole dispositive power. Gabelli
International II Limited owns 15,000 shares for which it has sole
voting power and sole dispositive power. Gabelli Advisers, Inc. owns
6,000 shares for which it has sole voting power and sole dispositive
power.
(b) Information is based on Schedule 13G dated February 11, 2000,
furnished by such beneficial owner. Dimensional Fund Advisors Inc.
("Dimensional") has sole voting and sole dispositive power with
respect to such shares. Dimensional, an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered
under the Investment Company Act of 1940, and serves as investment
manager to certain other commingled group trusts and separate
accounts. These investment companies, trusts and accounts are the
"Funds". In its role as investment advisor or manager, Dimensional
possesses voting and/or investment power over the securities of
Nashua that are owned by the Funds. All securities reported are
beneficially owned by the Funds. Dimensional disclaims beneficial
ownership of such securities.
(c) Information is based on Schedule 13G (Amendment No. 4), dated
February 11, 2000, furnished by such beneficial owners. The TCW
Group, Inc. and Robert Day have shared voting and shared dispositive
power with respect to such shares.
(d) Information is based on Schedule 13G (Amendment No. 2) dated January
26, 2000, furnished by such beneficial owners. Franklin Advisory
Services, LLC has sole voting and sole dispositive power with
respect to such shares.
(e) Information is based on Schedule 13G (Amendment No. 1) dated
February 4, 2000, furnished by such beneficial owner. David L.
Babson and Company Incorporated has sole voting and sole dispositive
power with respect to such shares.
(f) Information is based on Schedule 13G dated February 14, 2000,
furnished by such beneficial owner. Fleet Boston Corporation has
sole voting power as to 198,400 shares, shared voting power as to
6,374 shares and sole dispositive power as to 340,200 shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares and percentage of
Nashua's common stock beneficially owned by each director and nominee for
director, the Named Executive Officers (as defined in "Compensation of
Executive Officers") and by all directors and executive officers of Nashua
as a group, as of March 3, 2000:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF COMMON
NAME BENEFICIAL OWNERSHIP (1) STOCK OUTSTANDING
---- ------------------------ ------------------
<S> <C> <C>
Sheldon A. Buckler . . . . . . . . . . . . . . 12,589 (2) *
Gerald G. Garbacz . . . . . . . . . . . . . . . 281,612 (3)(10) 4.8%
Charles S. Hoppin . . . . . . . . . . . . . . . 13,589 (2) *
John J. Ireland . . . . . . . . . . . . . . . . 49,142 (4)(10) *
John M. Kucharski . . . . . . . . . . . . . . . 14,089 (2) *
Joseph R. Matson . . . . . . . . . . . . . . . 33,580 (5)(10) *
David C. Miller, Jr. . . . . . . . . . . . . . 8,589 (2)(6) *
Peter J. Murphy . . . . . . . . . . . . . . . . 6,652 (2) *
James F. Orr III . . . . . . . . . . . . . . . 15,589 (2) *
John L. Patenaude . . . . . . . . . . . . . . . 37,110 (7)(10) *
Bruce T. Wright . . . . . . . . . . . . . . . . 52,938 (8)(10) *
Directors and Executive Officers
as a group (12 persons) . . . . . . . . . . . 505,541 (9)(10)(11) 8.6%
</TABLE>
- ------------------
*Less than 1% of outstanding shares of common stock
(1) Information as to the interests of the respective nominees has been
furnished in part by them. The number of shares beneficially owned
is determined under rules promulgated by the Securities and Exchange
Commission, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which an individual
or group has sole or shared voting power or investment power and
also any shares which an individual or group has the right to
acquire within 60 days of March 3, 2000 through the conversion of
any convertible note or the exercise of any stock option, warrant or
other right. The inclusion herein of such shares, however, does not
constitute an admission that the named stockholder is a direct or
indirect beneficial owner of such shares. Unless otherwise
indicated, each person or group named in the table has sole voting
or investment power (or shares power with his or her spouse) with
respect to all shares of capital stock listed as owned by such
person or entity.
(2) Includes shares each non-employee director has a right to acquire
through stock options which are exercisable within 60 days of March
3, 2000 - Mr. Buckler, 5,000 shares; Mr. Hoppin, 7,000 shares; Mr.
Kucharski, 7,000 shares; Mr. Miller, 4,000 shares; Mr. Murphy, 3,000
shares; and Mr. Orr, 7,000 shares.
(3) Includes 90,000 shares Mr. Garbacz has a right to acquire through
stock options which are exercisable within 60 days of March 3, 2000.
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 $19.00; and 60,000 shares of which will vest
when the Ten Day Average Closing Price reaches $21.00. However, any
shares which have not vested upon the earlier of (i) October 24,
2002 or (ii) termination of employment, will be forfeited. 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 $21.00; and 12,500 shares of which will vest when the Ten
Day Average Closing Price reaches $23.00. However, any shares which
have not vested upon the earlier of (i) December 15, 2003 or (ii)
termination of employment, will be forfeited. Also includes 9,000
shares of restricted stock, 4,500 shares of which will vest on
December 31, 2000 if Mr. Garbacz is an employee of the Company at
such time and the remaining 4,500 shares of which will vest on
December 31, 2001 if Mr. Garbacz is an employee of the Company at
such time, provided that 100% will vest in the event of a change of
control as defined in Mr. Garbacz's Change of Control and Severance
Agreement dated June 24, 1998.
(4) Includes 33,500 shares Mr. Ireland has a right to acquire through
stock options which are exercisable within 60 days of March 3, 2000.
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) February 25, 2003 or
(ii) termination of employment, will be forfeited. Also includes
10,000 shares of performance based restricted stock, 5,000 shares of
which will vest when the Ten Day Average Closing Price reaches
$21.00; and 5,000 shares of which will vest when the Ten Day Average
Closing Price reaches $23.00. However, any shares which have not
vested upon the earlier of (i) December 15, 2003 or (ii) termination
of employment, will be forfeited.
(5) Includes 22,700 shares Mr. Matson has a right to acquire through
stock options which are exercisable within 60 days of March 3, 2000.
Also includes 10,000 shares of performance based restricted stock,
5,000 shares of which will vest when the Ten Day Average Closing
Price reaches $20.00; and 5,000 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.
(6) Includes 1,395 shares held by Mr. Miller's spouse.
(7) Includes 14,500 shares Mr. Patenaude has a right to acquire through
stock options which are exercisable within 60 days of March 3, 2000.
Also includes 10,000 shares of performance based restricted stock,
5,000 shares of which will vest when the Ten Day Average Closing
Price reaches $19.00; and 5,000 shares of which will vest when the
Ten Day Average Closing Price reaches $21.00. However, any shares
which have not vested upon the earlier of (i) May 12, 2003 or (ii)
termination of employment, will be forfeited. Also includes 10,000
shares of performance based restricted stock, 5,000 shares of which
will vest when the Ten Day Average Closing Price reaches $21.00; and
5,000 shares of which will vest when the Ten Day Average Closing
Price reaches $23.00. However, any shares which have not vested upon
the earlier of (i) December 15, 2003 or (ii) termination of
employment, will be forfeited.
(8) Includes 50,000 shares Mr. Wright has a right to acquire through
stock options which are exercisable within 60 days of March 3, 2000.
(9) Includes 205,200 shares which the directors and executive officers
of Nashua have the right to acquire through stock options which are
exercisable within 60 days of March 3, 2000.
(10) Includes shares held in trust under the Company's Employees' Savings
Plan under which each participating employee has voting power as to
the shares in his account. As of March 3, 2000, 2,612 shares are
held in trust for Mr. Garbacz's account; 642 shares are held in
trust for Mr. Ireland's account; 1,610 shares are held in trust for
Mr. Patenaude's account; 880 shares are held in trust for Mr.
Matson's account; 2,238 shares are held in trust for Mr. Wright's
account; and 5,744 shares are held in trust for the accounts of all
directors and executive officers as a group. No director other than
Mr. Garbacz participates in the Plan.
(11) Includes 219,000 shares of performance based restricted stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors, executive officers
and holders of more than 10% of the Company's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of the common stock and other equity securities of
the Company. Such persons are required by regulations promulgated by the
Securities and Exchange Commission to furnish the Company with copies of
all Section 16(a) forms filed by such person with respect to the Company.
Based solely on its review of copies of reports filed pursuant to Section
16(a) of 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 during fiscal
1999 were timely made in accordance with the requirements of the Exchange
Act.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation for the fiscal
years ended December 31, 1999, 1998 and 1997 for the Company's Chief
Executive Officer and four most highly compensated executive officers whose
total annual salary and bonus exceeded $100,000 in 1999 (collectively, the
"Named Executive Officers"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
------------------- ----------------------------------
Performance Securities
Based Restricted Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Stock Awards($)(1) Options(#) Compensation ($)(2)
- --------------------------- ---- ---------- --------- ------------------ ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald G. Garbacz . . . . . . 1999 350,000 -- 69,750 (3) 60,000 10,956
Chairman, President 1998 384,596 -- 400,000 (4) -- 20,342
and Chief Executive Officer 1997 410,000 -- -- 90,000 16,262
John J. Ireland . . . . . . . . 1999 230,307 75,738 -- 25,000 4,941
Vice President 1998 199,154 144,520 223,750 (5)(6) -- 5,290
Specialty Coated Products 1997 190,000 38,000 -- 15,000 4,260
Division
John L. Patenaude (7) . . . . . 1999 165,000 20,328 -- 25,000 4,685
Vice President-Finance and 1998 156,058 38,426 (8) 326,250 (6)(9) -- 4,393
Chief Financial Officer
Joseph R. Matson. . . . . . . 1999 150,000 9,600 -- 10,000 5,648
Vice President, 1998 151,038 7,250 -- 5,000 6,211
Corporate Controller 1997 145,000 -- 139,375 (10) 7,000 4,962
Bruce T. Wright (11) . . . . 1999 140,000 13,440 -- 20,000 (12) 4,642
Vice President - 1998 155,204 7,915 -- 10,000 5,567
Human Resources 1997 165,000 -- 209,063 (12) 25,000 4,517
- -------------------------------
</TABLE>
(1) Market value of performance based restricted shares on the date of
grant. As of December 31, 1999, the market value (based on the
closing price on the New York Stock Exchange of Nashua's common
stock on such date -($7.50)) and number of performance based
restricted shares were: Mr. Garbacz - $1,087,500 (145,000 shares,
excluding 9,000 shares granted on February 25, 2000) ; Mr. Ireland -
$112,500 (15,000 shares); Mr. Patenaude - $150,000 (20,000 shares);
Mr. Matson - $75,000 (10,000 shares); and Mr. Wright - $300,000
(40,000 shares).
(2) The amounts listed consist of Company contributions to the
Employees' Savings Plan, life insurance income and cash payments in
lieu of medical benefits. In 1999, these amounts were:
(a) as to the Employees' Savings Plan - Mr. Garbacz, $5,000; Mr.
Ireland, $3,904; Mr. Patenaude, $3,492; Mr. Matson, $4,583;
and Mr. Wright, $4,032.
(b) as to life insurance income - Mr. Garbacz, $5,176; Mr.
Ireland, $1,037; Mr. Patenaude, $1,193; Mr. Matson, $1,065;
and Mr. Wright, $610.
(c) as to cash payments in lieu of medical benefits - Mr. Garbacz,
$780.
(3) Consists of 9,000 shares of restricted stock (granted on February
25, 2000 when the price of Nashua shares was $7.75), 4,500 shares of
which will vest on December 31, 2000 if Mr. Garbacz is an employee
of the Company at such time and the remaining 4,500 shares of which
will vest on December 31, 2001 if Mr. Garbacz is an employee of the
Company at such time, provided that 100% will vest in the event of a
change of control as defined in Mr. Garbacz's Change of Control and
Severance Agreement dated June 24, 1998. Dividends, if any, will
accumulate on such restricted stock and be paid when and if the
underlying shares vest.
(4) Consists of 25,000 shares of performance based restricted stock
(granted when the price of Nashua shares was $16.00), 12,500 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 $21.00; and 12,500 shares of which will vest when the Ten
Day Average Closing Price reaches $23.00. However, any shares which
have not vested upon the earlier of (i) December 15, 2003 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.
(5) Consists of 5,000 shares of performance based restricted stock
(granted when the price of Nashua shares was $12.75), 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) February 25, 2003 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) Consists of 10,000 shares of performance based restricted stock
(granted when the price of Nashua shares was $16.00), 5,000 shares
of which will vest when the Ten Day Average Closing Price reaches
$21.00; and 5,000 shares of which will vest when the Ten Day Average
Closing Price reaches $23.00. However, any shares which have not
vested upon the earlier of (i) December 15, 2003 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.
(7) Mr. Patenaude became an executive officer of the Company in May 1998.
(8) Includes market value of performance based restricted stock as of
the date the performance target was met and such stock was acquired.
(9) Consists of 10,000 shares of performance based restricted stock
(granted when the price of Nashua shares was $16.625), 5,000 shares
of which will vest when the Ten Day Average Closing Price reaches
$19.00; and 5,000 shares of which will vest when the Ten Day Average
Closing Price reaches $21.00. However, any shares which have not
vested upon the earlier of (i) May 12, 2003 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.
(10) Consists of 10,000 shares of performance based restricted stock
(granted when the price of Nashua shares was $13.9375), 5,000 shares
of which will vest when the Ten Day Average Closing Price reaches
$20.00; and 5,000 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.
(11) Mr. Wright left the Company on January 28, 2000.
(12) As a result of Mr. Wright's resignation, these options were
forfeited and the shares of restricted stock representing the amount
shown were forfeited.
STOCK OPTIONS
The following table sets forth certain information as to options
granted during 1999 to the Named Executive Officers. 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 a
grant expiring on 12/17/2009 would be $10.79 at a 5% rate of appreciation
and $17.18 at a 10% rate of appreciation.
<TABLE>
<CAPTION>
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1999
Number
of Securities Potential Realizable Value
Underlying at Assumed Annual Rates
Options Percent of Total Exercise or of Stock Price Appreciation
Granted Options Granted Base Price Expiration for Option Term
Name (#) (1) to Employees in 1999 ($/Share) Date 5% ($) 10% ($)
---- ------------ --------------------- ------------ ------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald G. Garbacz 60,000 22.3 6.625 12/17/2009 249,986 633,513
John J. Ireland 25,000 9.3 6.625 12/17/2009 104,161 263,964
John L. Patenaude 25,000 9.3 6.625 12/17/2009 104,161 263,964
Joseph R. Matson 10,000 3.7 6.625 12/17/2009 41,664 105,585
Bruce T. Wright 20,000 (2) 7.4 6.625 12/17/2009 83,329 211,171
</TABLE>
- -----------------
(1) 50% of these options become exercisable on 12/17/2000; 50% become
exercisable on 12/17/2001.
(2) As a result of Mr. Wright's resignation on January 28, 2000, these
options were forfeited.
The following table sets forth information regarding stock options
held at the end of fiscal 1999 by the Named Executive Officers:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1999 AND
FISCAL YEAR-END OPTION VALUES
Number of Securities Value ($) of Unexercised,
Underlying Unexercised In-The-Money, Options at
Options at Fiscal Year-End Fiscal Year End (2)
-------------------------- -------------------------
Name (1) Exercisable Unexercisable Exercisable Unexercisable
-------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gerald G. Garbacz . . . . . . . . . . . . 90,000 60,000 0 52,500
John J. Ireland . . . . . . . . . . . . . 33,500 25,000 0 21,875
John L. Patenaude. . . . . . . . . . . . 14,500 25,000 0 21,875
Joseph R. Matson. . . . . . . . . . . . . 24,400 10,000 0 8,750
Bruce T. Wright . . . . . . . . . . . . . 50,000 20,000 (3) 0 17,500
</TABLE>
- ------------------
(1) No options were exercised during 1999 by any of the Named Executive
Officers.
(2) Represents the difference between the closing price on the New York
Stock Exchange of Nashua's common stock on December 31, 1999 ($7.50)
and the exercise price of the options, multiplied by the number of
shares subject to such options.
(3) As a result of Mr. Wright's resignation on January 28, 2000, these
options were forfeited.
PENSION PLAN
The following table shows the estimated annual benefits payable
upon retirement under the Nashua Corporation Retirement Plan for Salaried
Employees (the "Retirement Plan"), which includes the Named Executive
Officers:
<TABLE>
<CAPTION>
ESTIMATED PENSION BENEFITS
AVERAGE ANNUAL Years of Service
COMPENSATION FROM ---------------------------------------------------------------------------
JANUARY 1, 994 25 or
TO RETIREMENT 5 years 10 years 15 years 20 years more years
- ------------------ -------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $ 11,930 $ 23,859 $ 35,789 $ 47,718 $ 56,648
250,000 25,670 51,359 77,039 102,718 128,398
375,000 39,430 78,859 118,289 157,718 197,148
500,000 53,180 106,359 159,539 212,718 265,898
625,000 66,930 137,859 200,789 267,718 334,648
750,000 80,680 161,359 242,039 322,718 403,398
875,000 94,430 188,859 263,289 377,718 472,148
1,000,000 108,180 216,359 324,539 432,718 540,898
</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 Company's Employees' Savings Plan. As of December 31,
1999, the Named Executive Officers had the following years of service
credited under the Retirement Plan: Mr. Garbacz, 3 years; Mr. Ireland, 4.5
years; Mr. Patenaude, 7 years; Mr. Matson, 14 years; and Mr. Wright, 4
years.
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 who began their credited service before age 40 and terminate
employment with Nashua before 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 the payment of such amounts to
certain of its employees, including Messrs. Garbacz, Ireland, Patenaude,
Matson and Wright.
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with Messrs.
Garbacz, Ireland, Patenaude and Matson in order to ensure their continued
service to Nashua in the event of a change in control of Nashua. Such
severance agreements provide that upon termination of employment under
certain circumstances within three years after a change in control of
Nashua, the employee would receive severance pay equal to three times the
sum of his annual salary and bonus plus benefits, totalling an estimated
$1,499,537, $1,298,687, $776,074 and $642,472, respectively for the
individuals named above. In addition, each employee can terminate his
employment after a change in control of Nashua and receive such severance
pay if he determines in good faith that any assignment of duties is
inconsistent with his duties prior to a change of control or certain action
by the Company results in a diminution in position, duties, authority or
responsibilities. If the employment of any of such employees is terminated
by the Company apart from the circumstances above for reasons other than
misconduct, the executive would receive one year's salary and certain other
benefits. The value of this compensation and benefits totals an estimated
$356,000, $256,000, $191,000 and $161,000, respectively for the individuals
named above. The Company had entered into a similar severance agreement
with Mr. Wright, who resigned as an employee of the Company on January 28,
2000.
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 key managers and succession
to their positions and deciding on senior management compensation. The
Committee administers the Company's 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 Named Executive Officers and makes decisions regarding the
above plans.
The Committee's compensation policies applicable to the Company's
executive officers during 1999 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 also further tied his overall compensation heavily
to stock performance by awarding him options to purchase an
additional 60,000 shares of stock and by awarding him 9,000 shares
of restricted stock. The base salaries for the four 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, segment, division and personal performance. For the
individuals who served as Chief Executive Officer and principal
corporate staff officers, award targets for 1999 were based on the
Company's pretax operating income budget, total Company revenues
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, total Company
revenues and personal performance objectives.
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 2000 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
STOCK PERFORMANCE GRAPH
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, 1994 and
ending December 31, 1999. 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 thermal papers,
thermosensitive and pressure sensitive labels, and specialty papers, as
well as toners, developers and remanufactured laser printer cartridges. In
constructing a composite peer group, the Company selected published indices
to represent various products. The indices are: for thermal papers,
thermosensitive and pressure sensitive labels and specialty papers - the
S&P Paper and Forest Products Index, and for toners, developers and
remanufactured laser printer cartridges - the S&P Office Equipment &
Supplies Index. The Company then weighted the two indices in proportion to
the 1999 revenues of Nashua's products and services represented by the
respective indices.
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<S> <C> <C> <C> <C> <C> <C>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
Nashua Corporation 100.00 68.51 60.34 58.45 66.93 37.71
S&P 500 100.00 137.58 169.17 225.60 290.08 351.11
Composite Peer Group 100.00 120.52 140.57 177.09 216.92 218.70
</TABLE>
STOCKHOLDER PROPOSAL TO URGE THE BOARD OF DIRECTORS OF THE
COMPANY TO REDEEM ITS 1996 SHAREHOLDER RIGHTS PLAN
GAMCO Investors, Inc. ("GAMCO"), One Corporate Center, Rye, New
York 10580-1434, which is the owner of record of 777,099 shares of common
stock (approximately 13.3% of the outstanding shares of common stock), has
given notice that it intends to present the following resolution at the
2000 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."
Under the rights plan, as amended, the rights are exercisable when
a person or group acquires a beneficial interest in 20% of the common stock
of the Company, or announces a tender or exchange offer that would result
in such person or group owning 20% 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. The Company may redeem the rights for
$.01 per right.
A proposal to redeem the rights was submitted by GAMCO Investors,
Inc. and included in the Company's proxy statement for its 1998 annual
meeting. A majority of the shareholders voting at the 1998 meeting voted in
favor of the proposal. However, the Company declined to follow the express
wishes of the shareholders. Instead, in response to the shareholder vote,
the Board of Directors merely increased the threshold at which the rights
become exercisable from 10% to 20%.
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 10 of the Company's 1998
proxy statement vividly displays that since 1993 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.
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 RESPONSE TO THE PROPOSAL
The Board makes no recommendation with respect to 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.
Because this proposal is considered a "non-discretionary" vote under the
New York Stock Exchange rules, broker non-votes will be excluded and
considered not cast for purposes in determining whether this proposal has
been approved. Approval would not, however, require that the requested
action be taken since the proposal is precatory. Nevertheless, the
Company's Board of Directors intends to redeem the rights outstanding under
the Nashua Corporation Shareholder Rights Plan if this proposal is approved
by the stockholders at this annual meeting. Unless otherwise indicated, the
persons named on the proxy will abstain from voting on this proposal.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
On March 13, 2000, with the approval of the Audit/Finance and
Investment Committee and the concurrence of the Board of Directors, the
Company engaged Ernst & Young LLP as its independent auditors for the year
2000. On March 10, 2000, PricewaterhouseCoopers LLP had informed the
Company that they did not intend to stand for reappointment as the
Company's independent public accountants for the year 2000. Prior to the
engagement of Ernst & Young LLP, PricewaterhouseCoopers LLP had served as
the independent auditors of the Company since on or about 1960. Prior to
the engagement there were no consultations between Ernst & Young LLP and
the Company regarding the treatment of accounting, auditing or financial
reporting issues. PricewaterhouseCoopers LLP performed audits of the
Company's financial statements for the years ended December 31, 1998 and
1999, and issued audit reports dated February 5, 1999 for fiscal year 1998,
and dated February 18, 2000 for fiscal year 1999, which contained no
adverse opinion or disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope or accounting principles. There have been no
disagreements between the Company and PricewaterhouseCoopers LLP in
connection with the audit of the Company's financial statements for the
fiscal years ended December 31, 1998 and 1999, on any matter of accounting
principles or practices, financial statement disclosure or auditing scope
or procedure, which disagreements, if not resolved to the satisfaction of
PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to
make reference to the subject matter of the disagreements in its report on
the Company's financial statements for any such periods.
PricewaterhouseCoopers LLP has furnished the Company with a letter
addressed to the SEC stating that it agrees with the above statements.
Although stockholder ratification of the Board of Directors'
selection of Ernst & Young LLP is not required by law, the Board of
Directors believes that it is advisable to give stockholders the
opportunity to ratify this selection. If this proposal is not approved at
the Annual Meeting, the Board of Directors will reconsider its selection of
Ernst & Young LLP. Representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting. They will have the opportunity to make a
statement if they desire to do so and will also be available to respond to
appropriate questions from stockholders. Representatives of the Company's
former independent auditors, PricewaterhouseCoopers LLP, are not expected
to be present at the Annual Meeting.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF ERNST &
YOUNG LLP AS INDEPENDENT ACCOUNTANTS FOR THE YEAR 2000.
SUBMISSION OF STOCKHOLDER PROPOSALS - 2001 ANNUAL MEETING
Any stockholder proposal which is to be included in the proxy
materials for the 2001 annual meeting must be received by Nashua on or
before November __, 2000. Such proposals should be directed to Nashua
Corporation, 44 Franklin Street, P.O. Box 2002, Nashua, New Hampshire
03061-2002, Attention: Suzanne L. Ansara, Assistant Secretary.
PARTICIPANTS IN THE SOLICITATION
Under applicable regulations of the SEC, each member of the Board
of Directors, executive officers of the Company and certain other employees
of the Company may be deemed to be a "participant" in the Company's
solicitation of proxies. The principal occupation and business address of
each person who may be deemed a participant are set forth in Appendix A
hereto. Information about the present ownership by the Board of Directors
and Named Executive Officers of the Company of the Company's securities is
provided in this Proxy Statement and the present ownership of the Company's
securities by other participants is listed in Appendix A.
DISSIDENT SHAREHOLDER SOLICITATION
On February 25, 2000, Nashua received a letter from a stockholder
purporting to nominate himself and three other persons for election to the
Board of Directors at the 2000 annual meeting.
On March 15, 2000, Newcastle Partners' Value Realization Committee
("Newcastle") filed a preliminary proxy statement in which Newcastle stated
its intention to solicit proxies from Nashua's shareholders in connection
with the annual meeting (i) in an effort to elect four of their nominees to
Nashua's Board of Directors, and (ii) in support of a proposal made by
GAMCO to redeem the Company's Preferred Stock Purchase Rights issued in
July 1996.
THE NASHUA BOARD OF DIRECTORS UNANIMOUSLY OPPOSES NEWCASTLE'S
NOMINEES TO THE BOARD OF DIRECTORS AND URGES NASHUA SHAREHOLDERS TO REJECT
THE DISSIDENT NEWCASTLE NOMINEES. THE NASHUA BOARD OF DIRECTORS URGES
NASHUA SHAREHOLDERS NOT TO RETURN OR SIGN ANY BLUE PROXY CARD WHICH MAY BE
FURNISHED BY NEWCASTLE.
The Nashua Board of Directors makes no recommendation with respect
to the GAMCO proposal.
SOLICITATION OF PROXIES
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 Corporate Investor Communications, Inc.
to aid in the solicitation of proxies by personal interview, or by
telephone or by other means of communication. Nashua estimates that it will
incur approximately $150,000 in costs in connection with the solicitation
of shareholders. To date, Nashua has expended $6500 in connection with the
solicitation of shareholders.
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, 1999 without exhibits. 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. Exhibits to such Form 10-K will be provided upon request and
payment of an appropriate processing fee.
OTHER MATTERS
If any other matters are properly brought before the annual
meeting or any adjournment thereof, the persons named in the accompanying
form of proxy intend to vote the proxies on such matters in accordance with
their best judgment, pursuant to the discretionary authority granted by the
proxy.
PETER C. ANASTOS
Vice President, General
Counsel and Secretary
Nashua, New Hampshire
March ___, 2000
IMPORTANT
If your shares are held in your own name, please sign, date and
return the enclosed WHITE proxy card today. If your shares are held in
"Street-Name" only, your broker or bank can vote your shares and only upon
receipt of your specific instructions. Please return the enclosed WHITE
proxy card to your broker or bank and contact the person responsible for
your account to ensure that a WHITE proxy card is voted on your behalf.
Do not sign any blue proxy card you may receive from Newcastle,
even as a protest vote against them. If you believe you may previously have
voted on a blue proxy card furnished by Newcastle, you can revoke that
proxy by signing, dating and mailing the enclosed WHITE proxy card in the
enclosed postage-paid envelope.
If you have any questions or need assistance in voting your
shares, please call the firm assisting Nashua in the solicitation of
proxies:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (800) 346-7885
All Others Call Toll Free: (888) 238-1257
APPENDIX A
INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE
OFFICERS AND CERTAIN OTHER EMPLOYEES OF THE COMPANY WHO MAY ALSO SOLICIT PROXIES
The following table sets forth the name, principal business address
and the present office or other principal occupation or employment, and the
name, principal business and the address of any corporation or other
organization in which their employment is carried on, of the directors,
executive officers and certain other employees of the Company
("Participants") who may also solicit proxies from shareholders of the
Company. Unless otherwise indicated, the principal occupation refers to
such person's position with the Company and the business address is Nashua
Corporation, 44 Franklin Street, Nashua, New Hampshire 03064.
DIRECTORS
The principal occupations of the Company's directors who are deemed
Participants in the solicitation are set forth on pages ___ to ___ of this
proxy statement. The principal business address of Mr. Garbacz is that of
the Company. The name, business and address of the other
director-Participants' organization of employment are as follows:
Name Address
---- -------
Sheldon A. Buckler 200 Dudley Road
Newton Centre, MA 02459-2858
Charles S. Hoppin Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
John M. Kucharski 38 Decatur Lane
Wayland, MA 01778
David C. Miller, Jr. ParEx, Inc.
1215 19th Street, N.W.
Washington, DC 20036
Peter J. Murphy Parlex Corporation
145 Milk Street
Methuen, MA 01844-4699
James F. Orr III 74 Waites Landing
Falmouth, ME 04105
EXECUTIVE OFFICERS AND CERTAIN OTHER EMPLOYEES
The principal occupation of the Company's executive officers and
certain other employees who are deemed participants in the solicitation of
proxies are set forth below. Except as otherwise specified below, the
principal business address of each of such persons is that of the Company.
John L. Patenaude Vice President - Finance and Chief Financial Officer
Peter C. Anastos Vice President, General Counsel and Secretary
Joseph R. Matson Vice President, Corporate Controller
John J. Ireland Vice President, Specialty Coated Products Division
59 Daniel Webster Highway, Merrimack, NH 03054
Donna J. DiGiovine Vice President, Toner and Developer Products
Edwin A. Hagstrom General Manager, Label Products Division
3838 South 108th Street, Omaha, NE 68144-4951
INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS
None of the Participants owns any of the Company's securities of
record but not beneficially. The number of shares of Common Stock held by
directors and the Named Executive Officers is set forth on pages ___ to __
of this Proxy Statement. The number of shares of Common Stock held by the
other Participants is set forth below. The information includes shares that
may be acquired through stock options which are exercisable within 60 days
of March 3, 2000:
Name Share Ownership
---- ---------------
Peter C. Anastos 26,000
Donna J. DiGiovine 7,000
Edwin A. Hagstrom 7,500
INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY PARTICIPANTS
The following table sets forth purchases and sales of the Company's
securities by the Participants listed below during the past two years.
<TABLE>
<CAPTION>
# of Shares of
Common Stock
Date Purchased or (Sold)
---- -------------------
<S> <C> <C>
Sheldon A. Buckler 4/24/98 967 (1)
4/24/98 1,000 (2)
4/30/99 1,395 (1)
4/30/99 1,000 (2)
Gerald G. Garbacz 8/10/98 2,000 (4)
8/12/98 2,000 (4)
8/21/98 2,000 (4)
8/26/98 1,500 (4)
12/15/98 25,000 (5)
2/16/99 5,000 (4)
4/27/99 5,000 (4)
12/17/99 60,000 (2)
2/25/2000 9,000 (5)
Charles S. Hoppin 4/24/98 967 (1)
4/24/98 1,000 (2)
4/30/99 1,395 (1)
4/30/99 1,000 (2)
John M. Kucharski 4/24/98 967 (1)
4/24/98 1,000 (2)
4/30/99 1,395 (1)
4/30/99 1,000 (2)
David C. Miller, Jr. 4/24/98 967 (1)
4/24/98 1,000 (2)
4/30/99 1,395 (1)
4/30/99 (1,395) (3)
4/30/99 1,000 (2)
Peter J. Murphy 4/24/98 967 (1)
4/24/98 1,000 (2)
4/30/99 1,395 (1)
4/30/99 1,000 (2)
James F. Orr III 4/24/98 967 (1)
4/24/98 1,000 (2)
4/30/99 1,395 (1)
4/30/99 1,000 (2)
John J. Ireland 2/25/98 5,000 (5)
12/15/98 10,000 (5)
12/17/99 25,000 (2)
John L. Patenaude 12/15/98 10,000 (5)
12/17/99 25,000 (2)
Joseph R. Matson 5/7/98 3,000 (6)
5/7/98 3,000 (7)
12/15/98 5,000 (2)
12/17/99 10,000 (2)
Peter C. Anastos 12/15/98 10,000 (5)
12/17/99 25,000 (2)
Donna J. DiGiovine 8/26/98 1,500 (5)
12/15/98 2,000 (2)
4/13/99 5,000 (2)
6/30/99 2,500 (2)
12/17/99 15,000 (2)
Edwin A. Hagstrom 12/15/98 1,000 (2)
6/30/99 4,000 (2)
12/17/99 15,000 (2)
</TABLE>
- --------------------
(1) Acquisition of Shares via Director Compensation
(2) Stock Option Grant
(3) Gift to Spouse
(4) Open Market Purchase
(5) Performance Restricted Stock Award
(6) Stock Option Exercise
(7) Open Market Sale
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Appendix A or in the Proxy Statement, to
the knowledge of the Company, none of the Participants nor any of their
respective affiliates or associates (together, the "Participant
Affiliates"), (i) directly or indirectly beneficially owns any shares of
Common Stock of the Company or any securities of any subsidiary of the
Company or (ii) has had any relationship with the Company in any capacity
other than as a shareholder, employee, officer or director. Furthermore,
except as described in this Appendix A or in the Proxy Statement, no
Participant or Participant Affiliate is either a party to any transaction
or series of transactions since February 1, 2000, or has knowledge of any
currently proposed transaction or series of transactions, (i) to which the
Company or any of its subsidiaries was or is to be a party, (ii) in which
the amount involved exceeds $60,000, and (iii) in which any Participant or
Participant Affiliate had, or will have, a direct or indirect material
interest.
Except for the employment agreements described in the Proxy
Statement, no Participant or Participant Affiliate has entered into any
agreement or understanding with any person respecting any future employment
by the Company or its affiliates or any future transactions to which the
Company or any of its affiliates will or may be a party. Except as
described in this Appendix A or in the Proxy Statement, to the knowledge of
the Company, there are no contracts, arrangements or understandings by any
Participant or Participant Affiliate within the past year with any person
with respect to the Company's Common Stock.
NASHUA CORPORATION
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
Nashua Stockholders:
The Annual Meeting of Stockholders of Nashua Corporation will be held at
10:00 a.m. on Tuesday, April 25, 2000, 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.
Peter C. Anastos
Vice President, General
Counsel and Secretary
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, this 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 The Board of Directors makes no
a vote FOR Proposal 1. recommendation with respect to
Proposal 2.
1. Election of Directors. 2. Approval of Stockholder Proposal
Nominees: Sheldon A. Buckler,
Gerald G. Garbacz, For Against Abstain
Charles S. Hoppin,
John M. Kucharski, |_| |_| |_|
David C. Miller, Jr.,
Peter J. Murphy,
James F. Orr III The Board of Directors recommends
a vote FOR Proposal 3.
For All Nominees Withheld From
All Nominees 3. Ratification of Independent
Accountants
|_| |_|
For Against Abstain
|_| _____________________________ |_| |_| |_|
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: ______
DETACH HERE
PROXY
NASHUA CORPORATION
PROXY for Annual Meeting of Stockholders - April 25, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) PETER C. ANASTOS, JOSEPH R. MATSON and
JOHN L. PATENAUDE 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
stockholders of Nashua Corporation, to be held at the Crowne Plaza, 2
Somerset Parkway, Nashua, New Hampshire, on April 25, 2000 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 __, 2000, receipt of which is hereby acknowledged.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1, FOR THE RATIFICATION OF ERNST & YOUNG LLP AS
INDEPENDENT ACCOUNTANTS IN PROPOSAL 3 AND WILL ABSTAIN FROM VOTING ON
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, A VOTE FOR THE RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT
ACCOUNTANTS IN PROPOSAL 3 AND MAKES NO RECOMMENDATION WITH RESPECT TO
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 CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
[Letterhead of Nashua Corporation]
March [__], 2000
IMPORTANT ISSUES TO BE VOTED ON AT THIS MEETING
Dear Nashua Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Nashua Corporation, to be held at the Crowne Plaza, 2
Somerset Parkway, Nashua, New Hampshire, on Tuesday, April 25, 2000 at
10:00 a.m., local time. I look forward to greeting as many of our
stockholders as possible.
Specific details of the business to be conducted at the Annual
Meeting are included in the attached Notice of Annual Meeting and Proxy
Statement. We encourage you to read these materials, as well as the
enclosed 1999 Annual Report.
You may receive proxy solicitation materials from a dissident
stockholder group, headed by Newcastle Partners' Value Realization
Committee, which is seeking to take control of your Company. Specifically,
the dissident group has informed the Company that it intends to proceed
with a disruptive and costly proxy contest in which it is soliciting
proxies to vote your shares at the Annual Meeting, in an effort to have its
own hand-picked slate of nominees elected to your Company's Board of
Directors. Your Board, six of whose seven members are independent
directors, believes that the dissident group's proxy solicitation is not in
the best interests of the Company and its other stockholders and strongly
urges you to REJECT the dissident group's solicitation and NOT sign any of
the dissident group's BLUE proxy cards.
Whether or not you plan to attend the meeting in person, it is
important that your shares be represented and voted. We urge you to sign,
date and return the enclosed WHITE proxy card at your earliest convenience.
Returning the signed and dated WHITE proxy card will not prevent you from
voting in person at the meeting should you later decide to do so.
If you have any questions, or require assistance in voting your
proxy, please call our proxy solicitor, Corporate Investor Communications,
Inc., toll-free at (888) 238-1257.
Thank you for your continued support.
Sincerely,
Gerald G. Garbacz
President and Chief Executive Officer
