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                                                                   Exhibit 10.07

                    CHANGE OF CONTROL AND SEVERANCE AGREEMENT

AGREEMENT by and between NASHUA CORPORATION, a Massachusetts corporation (the
"Company") and THOMAS R. PAGEL (the "Executive"), dated as of the 15th day of
June, 2004.

RECITALS:

WHEREAS, the Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company or other reasons of uncertainty;

WHEREAS, the Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and business concerns and
to encourage the Executive's full attention and dedication to the Company;

WHEREAS, the Board is implementing a value creation incentive plan to provide
the Executive and other members of management of the Company with additional
equity incentives;

WHEREAS, in order to accomplish these objectives, the Board believes it is in
the best interests of the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.   CERTAIN DEFINITIONS.

     (a)  The "Effective Date" shall be the first date during the "Change of
          Control Period" (as defined in Section 1(b)) on which a Change of
          Control occurs. Anything in this Agreement to the contrary
          notwithstanding, if the Executive's employment with the Company is
          terminated or the Executive ceases to be an officer of the Company
          prior to the date on which a Change of Control occurs, and it is
          reasonably demonstrated that such termination of employment (1) was at
          the request of a third party who has taken steps reasonably calculated
          to effect the Change of Control or (2) otherwise arose in connection
          with or anticipation of the Change of Control, then for all purposes
          of this Agreement the "Effective Date" shall mean the date immediately
          prior to the date of such termination of employment.

     (b)  The "Change of Control Period" is the period commencing on the date
          hereof and ending on the third anniversary of such date; provided,
          however, that commencing on such third anniversary, and on each annual
          anniversary of such date (such date and each annual anniversary
          thereof is hereinafter referred to as the "Renewal Date"), the Change
          of Control Period shall be automatically extended so as to terminate
          one year from such Renewal Date, unless at least 60 days prior to the
          Renewal Date the Company shall give notice to the Executive that the
          Change of Control Period shall not be so extended.

     2.   CHANGE OF CONTROL.  For the purpose of this Agreement, a "Change of
          Control" shall mean:

     (a)  The acquisition, other than from the Company, by any individual,
          entity or group (within
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          the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
          Act of l934, as amended (the "Exchange Act")) of beneficial ownership
          (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
          (a "Person") of 50% or more of either (i) the then outstanding shares
          of common stock of the Company (the "Outstanding Company Common
          Stock") or (ii) the combined voting power of the then outstanding
          voting securities of the Company entitled to vote generally in the
          election of directors (the "Company Voting Securities"), provided,
          however, that any acquisition by (x) the Company or any of its
          subsidiaries, or any employee benefit plan (or related trust)
          sponsored or maintained by the Company or any of its subsidiaries, or
          (y) any corporation with respect to which, following such acquisition,
          more than 60% of, respectively, the then outstanding shares of common
          stock of such corporation and the combined voting power of the then
          outstanding voting securities of such corporation entitled to vote
          generally in the election of directors is then beneficially owned,
          directly or indirectly, by all or substantially all of the individuals
          and entities who were the beneficial owners, respectively, of the
          Outstanding Company Common Stock and Company Voting Securities
          immediately prior to such acquisition in substantially the same
          proportion as their ownership, immediately prior to such acquisition,
          of the Outstanding Company Common Stock and Company Voting Securities,
          as the case may be, or (z) Gabelli Funds, LLC, GAMCO Investors, Inc.,
          Gabelli Advisers, Inc., MJG Associates, Inc., Gabelli Group Capital
          Partners, Inc., Gabelli Asset Management Inc., Marc J. Gabelli and/or
          Mario J. Gabelli and/or any affiliate of any of the foregoing, in the
          case of each of such clauses (x), (y) and (z), shall not constitute a
          Change of Control; or

     (b)  Individuals who, as of the date hereof, constitute the Board (the
          "Incumbent Board") cease for any reason to constitute at least a
          majority of the Board, provided that any individual becoming a
          director subsequent to the date hereof whose election or nomination
          for election by the Company's shareholders, was approved by a vote of
          at least a majority of the directors then comprising the Incumbent
          Board shall be considered as though such individual were a member of
          the Incumbent Board, but excluding, for this purpose, any such
          individual whose initial assumption of office is in connection with an
          actual or threatened election contest relating to the election of the
          Directors of the Company (as such terms are used in Rule 14a-11 of
          Regulation 14A promulgated under the Exchange Act); or

     (c)  Consummation by the Company of a reorganization, merger or
          consolidation (a "Business Combination"), in each case, with respect
          to which all or substantially all of the individuals and entities who
          were the respective beneficial owners of the Outstanding Company
          Common Stock and Company Voting Securities immediately prior to such
          Business Combination do not, following such Business Combination,
          beneficially own, directly or indirectly, more than 60% of,
          respectively, the then outstanding shares of common stock and the
          combined voting power of the then outstanding voting securities
          entitled to vote generally in the election of directors, as the case
          may be, of the corporation resulting from Business Combination in
          substantially the same proportion as their ownership immediately prior
          to such Business Combination of the Outstanding Company Common Stock
          and Company Voting Securities, as the case may be; or

     (d)  (i) a complete liquidation or dissolution of the Company or of (ii)
          sale or other disposition of all or substantially all of the assets of
          the Company other than to a corporation with respect to which,
          following such sale or disposition, more than 60% of, respectively,
          the then outstanding shares of common stock and the combined voting
          power of the then outstanding voting securities entitled to vote
          generally in the election of directors is then owned beneficially,
          directly or indirectly, by all or substantially all of the individuals
          and


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          entities who were the beneficial owners, respectively, of the
          Outstanding Company Common Stock and Company Voting Securities
          immediately prior to such sale or disposition in substantially the
          same proportion as their ownership of the Outstanding Company Common
          Stock and Company Voting Securities, as the case may be, immediately
          prior to such sale or disposition.

3.   EMPLOYMENT PERIOD. The Company hereby agrees to continue the Executive in
     its employ, and the Executive hereby agrees to remain in the employ of the
     Company, for the period commencing on the Effective Date and ending on the
     first anniversary of such date (the "Employment Period").

4.   TERMS OF EMPLOYMENT.

     (a)  Position and Duties.

          (i)     During the Employment Period, (A) the Executive's position
                  (including status, offices, titles and reporting
                  requirements), authority, duties and responsibilities shall be
                  at least commensurate in all material respects with those
                  held, exercised and assigned at any time during the 90-day
                  period immediately preceding the Effective Date and (B) the
                  Executive's services shall be performed at the location where
                  the Executive was employed immediately preceding the Effective
                  Date or any office or location less than 35 miles from such
                  location.

          (ii)    During the Employment Period, the Executive agrees to devote
                  his reasonable full time and attention during normal business
                  hours to the business and affairs of the Company and, to the
                  extent necessary to discharge the responsibilities assigned to
                  the Executive hereunder, to use the Executive's best efforts
                  to perform faithfully and efficiently such responsibilities.
                  During the Employment Period it shall not be a violation of
                  this Agreement for the Executive to (A) serve on civic or
                  charitable boards or committees, (B) serve on corporate boards
                  or committees other than the Company's to the extent approved
                  by the Company's Board, (C) deliver lectures, fulfill speaking
                  engagements or teach at educational institutions and (D)
                  manage personal investments, so long as such activities do not
                  interfere with the performance of the Executive's
                  responsibilities as an employee of the Company in accordance
                  with this Agreement. It is expressly understood and agreed
                  that to the extent that any such activities have been
                  conducted by the Executive prior to the Effective Date, the
                  continued conduct of such activities (or the conduct of
                  activities similar in nature and scope thereto) subsequent to
                  the Effective Date shall not thereafter be deemed to interfere
                  with the performance of the Executive's responsibilities to
                  the Company.


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     (b)  Compensation.

          (i)     Base Salary. During the Employment Period, the Executive shall
                  receive an annual base salary ("Annual Base Salary"), which
                  shall be paid at a monthly rate, at least equal to twelve
                  times the current monthly base salary being paid to the
                  Executive by the Company and its affiliated companies as of
                  the date of this Agreement. During the Employment Period, the
                  Annual Base Salary shall be reviewed at least annually and may
                  be increased at any time and from time to time in the sole
                  discretion of the Board. Any increase in Annual Base Salary
                  shall not serve to limit or reduce any other obligation to the
                  Executive under this Agreement. Annual Base Salary shall not
                  be reduced after any such increase and the term Annual Base
                  Salary as utilized in this Agreement shall refer to Annual
                  Base Salary as so increased. As used in this Agreement, the
                  term "affiliated companies" includes any company controlled
                  by, controlling or under common control with the Company.

          (ii)    Annual Bonus. In addition to Annual Base Salary, the Executive
                  may be awarded, for each fiscal year beginning or ending
                  during the Employment Period, an annual bonus (the "Annual
                  Bonus") in cash as determined by the Board of Directors, in
                  its sole discretion.

          (iii)   Incentive, Savings and Retirement Plans. In addition to Annual
                  Base Salary and Annual Bonus payable as hereinabove provided,
                  the Executive shall be entitled to participate during the
                  Employment Period in all incentive, savings and retirement
                  plans, practices, policies and programs applicable generally
                  to other peer executives of the Company and its affiliated
                  companies.

          (iv)    Welfare Benefit Plans. During the Employment Period, the
                  Executive and/or the Executive's family, as the case may be,
                  shall be eligible for participation in and shall receive all
                  benefits under welfare benefit plans, practices, policies and
                  programs provided by the Company and its affiliated companies
                  (including, without limitation, medical, prescription, dental,
                  disability, salary continuance, employee life, group life,
                  accidental death and travel accident insurance plans and
                  programs) to the extent generally applicable to other peer
                  executives of the Company and its affiliated companies.

          (v)     Expenses. During the Employment Period, the Executive shall be
                  entitled to receive reimbursement for all reasonable
                  documented expenses incurred by the Executive in accordance
                  with the policies, practices and procedures of the Company and
                  its affiliated companies.

          (vi)    Fringe Benefits. During the Employment Period, the Executive
                  shall be entitled to fringe benefits in accordance with the
                  plans, practices, programs and policies of the Company and its
                  affiliated companies in effect.

          (vii)   Vacation. During the Employment Period, the Executive shall be
                  entitled to paid vacation in accordance with the plans,
                  policies, programs and practices of the Company and its
                  affiliated companies as in effect.


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5.   TERMINATION OF EMPLOYMENT.

     (a)  Death or Disability. The Executive's employment shall terminate
          automatically upon the Executive's death during the Employment Period.
          If the Company determines in good faith that the Disability of the
          Executive has occurred during the Employment Period (pursuant to the
          definition of Disability set forth below), it may give to the
          Executive written notice in accordance with Section 15(b) of this
          Agreement of its intention to terminate the Executive's employment. In
          such event, the Executive's employment with the Company shall
          terminate effective on the 30th day after receipt of such notice by
          the Executive (the "Disability Effective Date"), provided that, within
          the 30 days after such receipt, the Executive shall not have returned
          to full-time performance of the Executive's duties. For purposes of
          this Agreement, "Disability" means the absence of the Executive from
          the Executive's duties with the Company on a full-time basis for 120
          consecutive business days as a result of incapacity due to mental or
          physical illness determined by a physician selected by the Company or
          its insurers and acceptable to the Executive or Executive's legal
          representative (such agreement as to acceptability not to be withheld
          unreasonably).

     (b)  Cause. The Company may terminate the Executive's employment during the
          Employment Period for Cause. For purposes of this Agreement, "Cause"
          means (i) the Executive's continued documented failure to perform his
          reasonably assigned duties (other than any such failure resulting from
          incapacity due to physical or mental illness or any failure after the
          Executive gives notice of termination for Good Reason), which failure
          is not cured within 60 days after written notice for substantial
          performance is received by the Executive from the Board which
          identifies the manner in which the Board believes the Executive has
          not substantially performed the Executive's duties, (ii) the Executive
          being convicted of a felony, or (iii) the Executive's engagement in
          illegal conduct or gross misconduct injurious to the Company.

     (c)  Good Reason. The Executive's employment may be terminated during the
          Employment Period by the Executive for Good Reason. For purposes of
          this Agreement, "Good Reason" means:

          (i)     the assignment to the Executive of any duties inconsistent in
                  any material respect with the Executive's position (including
                  offices, titles and reporting requirements), authority or
                  responsibilities as contemplated by Section 4(a) of this
                  Agreement, or any other action by the Company which results in
                  a material diminution in such position, authority or
                  responsibilities;

          (ii)    a reduction in the Executive's Annual Base Salary as in effect
                  on the date of this Agreement or as the same was or may be
                  increased thereafter from time to time;


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          (iii)    the Company's requiring the Executive to be based at any
                   office or location other than that described in Section
                   4(a)(i)(B) hereof;

          (iv)    any purported termination by the Company of the Executive's
                  employment otherwise than as expressly permitted by this
                  Agreement; or

          (v)     any failure by the Company to comply with and satisfy
                  Section 14(c) of this Agreement.

     (d)  Notice of Termination. Any termination by the Company for Cause or by
          the Executive for Good Reason shall be communicated by Notice of
          Termination to the other party hereto given in accordance with Section
          15(b) of this Agreement. For purposes of this Agreement, a "Notice of
          Termination" means a written notice which (i) indicates the specific
          termination provision in this Agreement relied upon, (ii) to the
          extent applicable sets forth in reasonable detail the facts and
          circumstances claimed to provide a basis for termination of the
          Executive's employment under the provision so indicated and (iii) if
          the Date of Termination (as defined below) is other than the date of
          receipt of such notice, specifies the termination date (which date
          shall be not more than fifteen days after the giving of such notice).

     (e)  Date of Termination. "Date of Termination" means the date of receipt
          of the Notice of Termination or any later date specified therein, as
          the case may be; provided, however, that (i) if the Executive's
          employment is terminated by the Company other than for Cause or
          Disability, the Date of Termination shall be the date on which the
          Company notifies the Executive of such termination and (ii) if the
          Executive's employment is terminated by reason of death or Disability,
          the Date of Termination shall be the date of death of the Executive or
          the Disability Effective Date, as the case may be.

6.   OBLIGATIONS OF THE COMPANY UPON TERMINATION.

     (a)  Death. If the Executive's employment is terminated by reason of the
          Executive's death during the Employment Period, this Agreement shall
          terminate without further obligations to the Executive's legal
          representatives under this Agreement, other than the following
          obligations: (i) payment of the Executive's Annual Base Salary through
          the Date of Termination to the extent not theretofore paid, (ii)
          payment of any compensation previously deferred by the Executive
          (together with any accrued interest thereon) and not yet paid by the
          Company and any accrued vacation pay not yet paid by the Company (the
          amounts described in paragraphs (i) and (ii) are hereafter referred to
          as "Accrued Obligations"). All Accrued Obligations shall be paid to
          the Executive's estate or beneficiary, as applicable, in a lump sum in
          cash within 30 days of the Date of Termination. In addition to the
          Accrued Obligations, in the event (A) the Board subsequently approves
          the payment of an annual bonus to members of management for the fiscal
          year in which the Date of Termination occurred and (B) the Executive
          was employed at least one quarter of such fiscal year, then the
          Executive's estate or beneficiary shall be entitled to receive an
          additional payment equal to the bonus that such Executive would have
          received for such fiscal year (as determined by the Board) multiplied
          by a fraction, the numerator of which is the number of days in such
          fiscal year for which the Executive was actually employed and the
          denominator is 365 days.

     (b)  Disability. If the Executive's employment is terminated by reason of
          the Executive's


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          Disability during the Employment Period, this Agreement shall
          terminate without further obligations to the Executive, other than for
          Accrued Obligations. All Accrued Obligations shall be paid to the
          Executive in a lump sum in cash within 30 days of the Date of
          Termination. In addition to the Accrued Obligations, in the event (A)
          the Board subsequently approves the payment of an annual bonus to
          members of management for the fiscal year in which the Date of
          Termination occurred and (B) the Executive was employed at least one
          quarter of such fiscal year, then the Executive shall be entitled to
          receive an additional payment equal to the bonus that such Executive
          would have received for such fiscal year (as determined by the Board)
          multiplied by a fraction, the numerator of which is the number of days
          in such fiscal year for which the Executive was actually employed and
          the denominator is 365 days.

     (c)  Cause; Other than for Good Reason. If the Executive's employment shall
          be terminated for Cause during the Employment Period, this Agreement
          shall terminate without further obligations to the Executive other
          than the obligation to pay to the Executive Annual Base Salary through
          the Date of Termination plus the amount of any compensation previously
          deferred by the Executive, in each case to the extent theretofore
          unpaid. If the Executive terminates employment during the Employment
          Period other than for Good Reason, this Agreement shall terminate
          without further obligations to the Executive, other than for Accrued
          Obligations. In such case, all Accrued Obligations shall be paid to
          the Executive in a lump sum in cash within 30 days of the Date of
          Termination.

     (d)  Good Reason; Other Than for Cause or Disability. If, during the
          Employment Period, the Company shall terminate the Executive's
          employment other than for Cause or Disability, or the Executive shall
          terminate employment during the Employment Period for Good Reason, the
          Company shall pay to the Executive in a lump sum in cash within 60
          days after the Date of Termination, and subject to receiving an
          executed irrevocable Release as described in Section 11, the aggregate
          of the following amounts:

          A.      all Accrued Obligations; and

          B.      the product of (x) one (1) and (y) the sum of (i) Annual Base
                  Salary and (ii) the Annual Bonus paid or payable (including
                  any bonus or portion thereof which has been earned but
                  deferred) for the most recently completed fiscal year.

          In addition, for the remainder of the Employment Period (if the
          termination took place during the Employment Period under this Section
          6), the Company shall continue benefits to the Executive and/or the
          Executive's family at least equal to those which would have been
          provided to them in accordance with the plans, programs, practices and
          policies described in Section 4(b)(iv) of this Agreement if the
          Executive's employment had not been terminated in accordance with the
          most favorable plans, practices, programs or policies of the Company
          and its affiliated companies applicable generally to other peer
          executives and their families during the 90-day period immediately
          preceding the Effective Date or, if more favorable to the Executive,
          as in effect generally at any time thereafter with respect to other
          peer executives of the Company and its affiliated companies and their
          families. For purposes of determining eligibility of the Executive for
          retiree benefits pursuant to such plans, practices, programs and
          policies, the Executive shall be considered to have remained employed
          until the end of the Employment Period and to have retired on the last
          day of such period.


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          Notwithstanding the foregoing, if a Change of Control or other event
          shall have occurred before the Date of Termination that would result
          in the Executive becoming entitled to receive payments under this
          Agreement or any other arrangement that would be "parachute payments",
          as defined in Section 280G of the Internal Revenue Code of 1986, as
          amended from time to time (the "Code"), the Company shall not be
          obligated to make such payments to the Executive to the extent
          necessary to eliminate any "excess parachute payments" as defined in
          said Section 280G; provided, however, that if the Executive would be
          better off by at least $25,000 on an after-tax basis by receiving the
          full amount of the parachute payments as opposed to the cut back
          amount (notwithstanding a 20% excise tax) the Executive shall receive
          the full amount of the parachute payments.

7.   SEVERANCE BENEFITS. Notwithstanding anything contained in this Agreement to
     the contrary, if, before or after the Employment Period, the Executive's
     employment is terminated by the Company for reason other than misconduct,
     the Company shall pay to the Executive one year's salary continuation and
     continue medical and dental benefits during such continuation period.

8.   NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit
     the Executive's continuing or future participation in any benefit, bonus,
     incentive or other plans, programs, policies or practices, provided by the
     Company or any of its affiliated companies and for which the Executive may
     qualify, nor shall anything herein limit or otherwise affect such rights as
     the Executive may have under any other agreements with the Company or any
     of its affiliated companies. Amounts which are vested benefits or which the
     Executive is otherwise entitled to receive under any plan, policy, practice
     or program of the Company or any of its affiliated companies at or
     subsequent to the Date of Termination shall be payable in accordance with
     such plan, policy, practice or program except as explicitly modified by
     this Agreement.

9.   FULL SETTLEMENT. The Company's obligation to make the payments provided for
     in this Agreement and otherwise to perform its obligations hereunder shall
     not be affected by any set-off, counterclaim, recoupment, defense or other
     claim, right or action which the Company may have against the Executive or
     others. In no event shall the Executive be obligated to seek other
     employment or take any other action by way of mitigation of the amounts
     payable to the Executive under any of the provisions of this Agreement. The
     Company agrees to pay, to the full extent permitted by law, all legal fees
     and expenses which the Executive may reasonably incur as a result of any
     contest (but only in the event the Executive is successful on the merits of
     such contest) by the Company, the Executive or others of the validity or
     enforceability of, or liability under, any provision of this Agreement or
     any guarantee of performance thereof, plus in each case interest at the
     applicable Federal rate provided for in Section 7872(f)(2) of the Internal
     Revenue Code of l986, as amended (the "Code").

10.  OTHER AGREEMENTS. The parties agree that this Agreement supersedes and
     replaces any and all other agreements, policies, understandings or letters
     (including but not limited to employment agreements, severance agreements
     and job abolishment policies) between the parties related to the subject
     matter hereof.

11.  RELEASE. Prior to receipt of the payment described in Sections 6(d) or 7,
     the Executive shall execute and deliver a Release to the Company as
     follows:

                  The Executive hereby fully, forever, irrevocably and
                  unconditionally releases, remises and discharges the Company,
                  its officers, directors, stockholders, corporate affiliates,
                  agents and employees from any and all claims, charges,
                  complaints, demands, actions,


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                  causes of action, suits, rights, debts, sums of money, costs,
                  accounts, reckonings, covenants, contracts, agreements,
                  promises, doings, omissions, damages, executions, obligations,
                  liabilities and expenses (including attorneys' fees and
                  costs), of every kind and nature which he ever had or now has
                  against the Company, its officers, directors, stockholders,
                  corporate affiliates, agents and employees, including, but not
                  limited to, all claims arising out of his employment, all
                  employment discrimination claims under Title VII of the Civil
                  Rights Act of 1964, 42 U.S.C. "2000e et seq., the Age
                  Discrimination in Employment Act, 29 U.S.C., "621 et seq., the
                  Americans With Disabilities Act, 42 U.S.C., "12101 et seq.,
                  the New Hampshire Law Against Discrimination, N.H. Rev. Stat.
                  Ann. "354-A:1 et seq. and similar state antidiscrimination
                  laws, damages arising out of all employment discrimination
                  claims, wrongful discharge claims or other common law claims
                  and damages, provided, however, that nothing herein shall
                  release the Company from Executive's Stock Option Agreements
                  or Restricted Stock Agreements.

     The Release shall also contain, at a minimum, the following language:

                  The Executive acknowledges that he has been given twenty-one
                  (21) days to consider the terms of this Release and that the
                  Company advised him to consult with an attorney of his own
                  choosing prior to signing this Release. The Executive may
                  revoke this Release for a period of seven (7) days after the
                  execution of the Release and the Release shall not be
                  effective or enforceable until the expiration of this seven
                  (7) day revocation period.

     At the same time, the Company shall execute and deliver a Release to the
     Executive as follows:

          The Company hereby fully, forever, irrevocably and unconditionally
          releases, remises and discharges the Executive from any and all claims
          which it ever had or now has against the Executive, other than for
          intentional harmful acts.

12.  CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity
     for the benefit of the Company all secret or confidential information,
     knowledge or data relating to the Company or any of its affiliated
     companies, and their respective businesses, which shall have been obtained
     by the Executive during the Executive's employment by the Company or any of
     its affiliated companies and which shall not be or become public knowledge
     (other than by acts by the Executive or representatives of the Executive in
     violation of this Agreement). After termination of the Executive's
     employment with the Company, the Executive shall not, without the prior
     written consent of the Company, communicate or divulge any such
     information, knowledge or data to anyone other than the Company and those
     designated by it. In no event shall an asserted violation of the provisions
     of this Section 12 constitute a basis for deferring or withholding any
     amounts otherwise payable to the Executive under this Agreement.


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13.  ARBITRATION. Any controversy or claim arising out of this Agreement shall
     be settled by binding arbitration in accordance with the commercial rules,
     policies and procedures of the American Arbitration Association. Judgment
     upon any award rendered by the arbitrator may be entered in any court of
     law having jurisdiction thereof. Arbitration shall take place in Nashua,
     New Hampshire at a mutually convenient location.

14.  SUCCESSORS.

     (a)  This Agreement is personal to the Executive and without the prior
          written consent of the Company shall not be assignable by the
          Executive otherwise than by will or the laws of descent and
          distribution. This Agreement shall inure to the benefit of and be
          enforceable by the Executive's legal representatives.

     (b)  This Agreement shall inure to the benefit of and be binding upon the
          Company and its successors and assigns.

     (c)  The Company will require any successor (whether direct or indirect, by
          purchase, merger, consolidation or otherwise) to all or substantially
          all of the business and/or assets of the Company to assume expressly
          and agree to perform this Agreement in the same manner and to the same
          extent that the Company would be required to perform it if no such
          succession had taken place. As used in this Agreement, "Company" shall
          mean the Company as hereinbefore defined and any successor to its
          business and/or assets as aforesaid which assumes and agrees to
          perform this Agreement by operation of law or otherwise.

15.  MISCELLANEOUS.

     (a)  This Agreement shall be governed by and construed in accordance with
          the laws of the Commonwealth of Massachusetts, without reference to
          principles of conflict of laws. The captions of this Agreement are not
          part of the provisions hereof and shall have no force or effect. This
          Agreement may not be amended or modified otherwise than by a written
          agreement executed by the parties hereto or their respective
          successors and legal representatives.

     (b)  All notices and other communications hereunder shall be in writing and
          shall be given by hand delivery to the other party or by registered or
          certified mail, return receipt requested, postage prepaid, addressed
          as follows:

                  If to the Executive:

                      Thomas R. Pagel
                      2021 Clover Ridge
                      McGregor, Texas 76657


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                  If to the Company:

                      Nashua Corporation
                      11 Trafalgar Square
                      Nashua, New Hampshire 03063
                      Attention:  President

          or to such other address as either party shall have furnished to the
          other in writing in accordance herewith. Notice and communications
          shall be effective when actually received by the addressee.

     (c)  The invalidity or unenforceability of any provision of this Agreement
          shall not affect the validity or enforceability of any other provision
          of this Agreement.

     (d)  The Company may withhold from any amounts payable under this Agreement
          such Federal, state or local taxes as shall be required to be withheld
          pursuant to any applicable law or regulation.

     (e)  The Executive's failure to insist upon strict compliance with any
          provision hereof or the failure to assert any right the Executive may
          have hereunder, including, without limitation, the right to terminate
          employment for Good Reason pursuant to Section 5(c)(i)-(v), shall not
          be deemed to be a waiver of such provision or right or any other
          provision or right thereof.

     (f)  This Agreement contains the entire understanding of the Company and
          the Executive with respect to the subject matter hereof. The Executive
          and the Company acknowledge that the employment of the Executive by
          the Company is "at will" and, prior to the Effective Date, both the
          Executive's employment and this Agreement may be terminated by either
          the Company or the Executive at any time. In the event that this
          Agreement is terminated by the Company prior to the Effective Date and
          the Executive remains employed by the Company, the Executive would be
          entitled to the same severance benefits as set forth in Section 7 of
          this Agreement.

                  [Remainder of Page Intentionally Left Blank]


                                     - 11 -
<PAGE>
     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

NASHUA CORPORATION                             EXECUTIVE



By   /s/ John L. Patenaude                          /s/ Thomas R. Pagel
  ----------------------------------           --------------------------------
Name:  John L. Patenaude                       Thomas R. Pagel
Title: Vice President - Finance and
       Chief Financial Officer


                                     - 12 -