NASHUA CORPORATION



                           Restricted Stock Agreement

                                  Granted Under

                       2004 Value Creation Incentive Plan



      This Restricted Stock Agreement (this "Agreement") is made this 1st day of

September 2006 (the "Grant Date"), between NASHUA CORPORATION, a Massachusetts

corporation (the "Company"), and THOMAS M. KUBIS (the "Participant").



      For valuable consideration, receipt of which is acknowledged, the parties

hereto agree as follows:



      1. Grant and Issuance of Shares.



      The Company shall issue to the Participant, and the Participant shall

acquire and accept from the Company, subject to the terms and conditions set

forth in this Agreement and in the Company's 2004 Value Creation Incentive Plan

(the "Plan"), 15,000 shares (the "Shares") of common stock, par value $1.00 per

share, of the Company ("Common Stock"). The Company shall issue to the

Participant one or more certificates in the name of the Participant for that

number of Shares issued to the Participant. The Participant agrees that the

Shares shall be subject to (without limitation) the forfeiture provisions set

forth in Section 2 of this Agreement and the restrictions on transfer set forth

in Section 4 of this Agreement. The Participant agrees to the provisions set

forth herein and acknowledges that each such provision is a material condition

to the Company's agreement to grant the Shares to the Participant.



      2. Forfeiture of Unvested Shares.



            (a) Notwithstanding any other provision of this Agreement, upon the

earlier of (i) the termination of the Participant's employment with the Company

for any reason or no reason, with or without cause, or upon death or disability,

and (ii) the third anniversary of the Grant Date, all Unvested Shares (as

defined below) shall, without further action of any kind by the Company, be

forfeited to the Company as of the date of such termination of employment.



      "Unvested Shares" at any time means the total number of Shares multiplied

by the Applicable Percentage at such time. The "Applicable Percentage" shall, at

any time, be 100% less the following applicable percentage, if any:



      (i) 33% if the average of the last reported sales price per share of the

Common Stock on the NASDAQ Global Market (or other national securities exchange

or nationally recognized trading system) for a 40 consecutive trading day period

ending on the third anniversary of the Grant Date (the "40-Day Average Closing

Price") is equal to or greater than $13.00 and less than $14.00;



      (ii) 66% if the 40-Day Average Closing Price is equal to or greater than

$14.00 and less than $15.00; and



      (iii) 100% if the 40-Day Average Closing Price is equal to or greater than

$15.00;



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provided, however, that in the event the Participant's employment with the

Company is terminated by the Company without "Cause" during the one-year period

beginning on the second anniversary of the Grant Date and ending on the third

anniversary of the Grant Date, then in the event one of the 40-Day Average

Closing Price targets is thereafter met as of the third anniversary of the Grant

Date, the Participant's Shares shall vest as to a percentage of such Shares

equal to the number of days during such one-year period that the Participant was

employed by the Company divided by 365, provided that in no such event shall the

number of Shares to so vest exceed the number that would have otherwise vested

had the Participant been employed as of such third anniversary of the Grant

Date.



            (b) For purposes of this Agreement, employment with the Company

shall include employment with a parent or subsidiary of the Company.



            (c) For the purposes hereof, "Cause" shall mean (i) the

Participant's continued failure to perform his reasonably assigned duties (other

than any such failure resulting from incapacity due to physical or mental

illness), which failure is not cured within 60 days after written notice for

substantial performance is received by the Participant from the Board which

identifies the manner in which the Board believes the Participant has not

substantially performed the Participant's duties, (ii) the Participant being

convicted of a felony, or (iii) the Participant's engagement in illegal conduct

or gross misconduct injurious to the Company.



      3. Forfeiture Procedures.



            (a) In the event any Shares are forfeited by the Participant

pursuant to Section 2(a) above, the Participant (or the Participant's estate)

shall, pursuant to the provisions of the Joint Escrow Instructions referred to

in Section 5 below, tender to the Company at its principal offices the

certificate or certificates representing the Shares so forfeited, duly endorsed

in blank or with duly endorsed stock powers attached thereto, all in form

suitable for the transfer of such Shares to the Company.



            (b) After the time at which any Shares are required to be delivered

to the Company for transfer to the Company pursuant to Section 3(a) above, the

Company shall not pay any dividend to the Participant on account of such Shares

or permit the Participant to exercise any of the privileges or rights of a

stockholder with respect to such Shares, but shall, in so far as permitted by

law, treat the Company as the owner of such Shares.



      4. Restrictions on Transfer. The Participant shall not sell, assign,

transfer, pledge, hypothecate or otherwise dispose of, by operation of law or

otherwise (collectively "transfer") any Shares, or any interest therein, that

are subject to the forfeiture provisions under Sections 2 and 3 above, except

that the Participant may transfer such Shares (i) to or for the benefit of any

spouse, children, parents, uncles, aunts, siblings, grandchildren and any other

relatives approved by the Board of Directors (collectively, "Approved

Relatives") or to a trust established solely for the benefit of the Participant

and/or Approved Relatives, provided that such Shares shall remain subject to

this Agreement (including without limitation the restrictions on transfer set

forth in this Section 4 and the forfeiture provisions set forth in Sections 2

and 3 above) and such permitted transferee shall, as a condition to such

transfer, deliver to the Company a written instrument confirming that such

transferee shall be bound by all of the terms and conditions of



                                       -2-

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this Agreement or (ii) as part of the sale of all or substantially all of the

shares of capital stock of the Company (including pursuant to a merger or

consolidation), provided that, in accordance with the Plan, the securities or

other property received by the Participant in connection with such transaction

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