Exhibit 10.20
SEPARATION AGREEMENT
This Separation Agreement is made and entered into as of the 2nd day of
February, 1997, between Xxxx X. Xxxxxxx (Employee) and Deluxe Corporation, a
Minnesota corporation having its principal offices at 0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (Deluxe).
WHEREAS, Employee has been employed by Deluxe from May 1, 1972 through
February 28, 1997; and
WHEREAS, the parties agree to set forth herein the terms and conditions
under which such employment is terminated.
NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein the parties agree as follows:
1. Termination. Employee and Deluxe agree that Employee voluntarily
terminates his employment with Deluxe on February 28, 1997 (Termination Date).
2. Payments and Benefits. Deluxe and Employee agree that the following
payments and benefits, less applicable payroll and any supplemental deductions,
shall be provided by Deluxe to Employee:
A. Three Hundred Thousand and 00/100 Dollars ($300,000.00).
B. All accrued vacation pay as of Termination Date.
C. Payment of One Thousand One Hundred and 00/100 Dollars
($1,100.00) per month through February 28, 1998 related
to Employee's automobile expenses.
D. Executive out-placement services to Employee through
Personnel Decisions Career Management Services (PDI) or
its affiliate. Such services shall be paid for by Deluxe
upon receipt of an invoice from the agency.
E. Accrued amount in Employee's Stock Purchase Plan Account
as of Termination Date.
F. Beginning at the time described in the last paragraph of
this Section, upon Employee's payment of premiums for
coverage at employee rates, coverage under the terms of
Deluxe's medical, life, vision and dental plans in which
Employee participated on his own and his family's behalf
as such plans may be changed from time to time through
the earlier of February 28, 1998 or until similar
coverage is provided by employer at similar rates for
full time employees. Beginning March 1, 1998, payment of
premiums for and provision of medical coverage until
Employee is eligible for Medicare coverage as though
Employee were a qualified retiree at 58 years of age
having thirty (30) years of service.
G. Payment of up to One Thousand Dollars and 00/100
($1,000.00) for tax return preparation expenses for
Employee's 1996 tax return upon receipt of an invoice
from the return preparer.
H. Payment of up to Two Thousand Dollars and 00/100
($2,000.00) in legal expenses for Employee's attorney's
review and negotiation of this transaction on Employee's
behalf upon receipt of an invoice from such attorney.
I. The (1) issuance, without restriction, of the remaining
815 share units of Deluxe common stock granted to
Employee on February 9, 1996, under the Stock Incentive
Plan (1994); (2) vesting of the unvested non-qualified
stock options granted to Employee (a) on November 11,
1994 to purchase 4,000 remaining shares under that Plan;
and (b) on February 9, 1996 to purchase 20,000 shares of
Deluxe common stock under that Plan in accordance with
the provisions of the applicable option agreements, as
amended, as if Employee had satisfied the Plan's
requirements for approved retirement and the Termination
Date were the date of Employee's retirement.
J. Payment to Employee of his accrued balance in the
Deferred Compensation Plan and his Supplemental
Retirement Plan Account on September 1, 2003 in
accordance with the terms of the Plans and the payout
option selected by Employee.
K. For a one year period beginning one year after
Termination Date, payment to Employee of the difference
between Employee's base monthly salary of Twenty-Five
Thousand and 00/100 Dollars ($25,000.00) from Deluxe and
his monthly compensation during such period if his
monthly compensation, if any, is less than such base
monthly salary. Employee shall provide Deluxe a copy of
documentation of his monthly compensation, such as his
payroll statement, and within thirty (30) days
thereafter, Deluxe shall make such differential payment,
if any, to Employee.
Except as otherwise provided, the payments and benefits described in this
Section shall be provided by Deluxe to Employee upon receipt of the signed
Separation Agreement and a Release in the form attached as Exhibit A, but no
earlier than five (5) nor later than seven (7) days after the expiration of the
rescission period referred to in Section 8. Such payments shall be reduced by
any amount Employee owes Deluxe for outstanding credit card or other charges.
3. Full Compensation. The payments that will be made to Employee or for
his benefit pursuant to this Separation Agreement shall compensate him for and
extinguish any and all claims he may have arising out of his employment with
Deluxe or his employment termination as of the effective date of the Release,
including but not limited to claims for attorneys' fees and costs, and any and
all claims for any type of legal or equitable relief.
4. Insurance. If Employee rescinds this Separation Agreement pursuant to
Section 7 below, Employee will still have the right to continue his health,
dental, vision and life plans as provided by law.
5. Benefits. Employee is a participant in various employee benefit plans
sponsored by Deluxe. Unless otherwise agreed hereunder, the payment or
cancellation of benefits, including the amounts and the timing thereof, will be
governed by the terms of the employee benefit plans. Deluxe will provide
Employee the same assistance given other participants in employee benefit plans
so long as he is entitled to benefits thereunder.
6. Records, Documents and Property. Employee will return to Deluxe all
of its property including, but not limited to its records, correspondence and
documents as well as all keys and corporate charge cards.
7. Rescission. Employee acknowledges that he has had a period of
twenty-one (21) days in which to consider this Separation Agreement and the
Release referred to in Section 8 and deliver signed originals of them to the
officer and at the address set out below in this Section. Once this Separation
Agreement and the Release are executed, Employee may rescind this Separation
Agreement and the Release within seven (7) calendar days to reinstate federal
claims and fifteen (15) days to release Minnesota claims. To be effective, any
rescission within the relevant time periods must be in writing and delivered to
Deluxe Corporation, in care of Xxxxxxx X. Xxxxxx, Vice President, Deluxe
Corporation, 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, either by
hand or by mail within the respective periods. If sent by mail, the rescission
must be (1) postmarked within the respective periods (2) properly addressed to
Deluxe Corporation; and (3) sent by certified mail, return receipt requested.
8. General Release. In consideration of the payments and other
undertakings stated herein, the parties shall sign a separate Release in the
form attached hereto as Exhibit A at the time each signs this Separation
Agreement.
9. Resignation. Employee agrees that he resigned as an executive officer
of Deluxe and as a member of the board of directors of any affiliate or
subsidiary of Deluxe as of December 31, 1996.
10. Confidential Deluxe Information. Employee agrees that for a period
of two (2) years after execution of this Agreement unless so ordered by a court
or governmental agency, Employee will not use or disclose Confidential
Information of Deluxe.
"Confidential Information" means all confidential or proprietary
information of Deluxe or any affiliate, including without limitation, financial
data, trade secrets, customer and mailing lists, business plans, sales and
marketing plans, business acquisition or divestiture plans, data processing
systems unique to Deluxe, pricing and credit policies and practices unique to
Deluxe, books and records, research and development activities relating to
existing commercial activities and new products, services and offerings under
active consideration, which Employee may have acquired or obtained during the
course of Employee's employment with Deluxe. This confidentiality commitment is
not applicable to information intentionally disclosed to the public by Deluxe or
information received by Employee from third parties not under an obligation of
confidentiality to Deluxe or any of its affiliates or subsidiaries.
11. Nonrecruitment. For a period of two (2) years after Termination
Date, Employee shall not for himself or any other person or entity either,
directly or indirectly, recruit for employment or contract for employment or
contract for the services of any person who at any time during the period March
1, 1996 through Termination Date is or was an employee of Deluxe or any of its
affiliates or subsidiaries.
12. Noncompetition. Employee agrees that for a period of two (2) years
after Termination Date, Employee will not (a) serve as an officer, principal,
advisor, agent, partner, director, stockholder, employee or consultant of any
corporation or other business enterprise that engages in activities, directly or
through an affiliate, that are directly competitive with the commercial
activities of Deluxe from which it derives a significant portion of its revenue
and which were engaged in by Deluxe at the time of the termination of Employee's
employment without the prior written consent of the President and Chief
Executive Officer of Deluxe Corporation; or (b) with respect to such activities
that are directly competitive, cause customers, distributors or suppliers under
contract or doing business with Deluxe at any time within one year prior to and
including the Termination Date to modify their business relationships with
Deluxe in any material respect.
Ownership by Employee of less than one percent (1%) of the outstanding
shares of capital stock of any corporation, for investment purposes, shall not
constitute a breach of this provision.
For commercial activities to be "directly competitive" with those of
Deluxe within the meaning of this Agreement, such activities must consist of
selling or attempting to sell the same types of products or services from which
Deluxe Corporation now derives at least one percent (1%) of its revenue or which
are the subject of business development plans (which the parties agree are the
following general categories: (a) check products used by financial institutions
and their customers; (b) check and check transaction security features; (c)
check related printed forms products; (d) direct marketing services for
financial institutions; (e) market research information services for financial
institutions; (f) electronic funds transfers services of the type provided by
Deluxe or any of its subsidiaries or similar to any payment risk management
services provided by Deluxe or any of its affiliates; and (g) catalog sales of
greeting cards, check products and other paper products by the same methods of
marketing to the same classes of customers).
13. Availability. Employee agrees upon reasonable advance notice to
make himself available to Deluxe as a witness or as otherwise may be reasonably
required by Deluxe in connection with litigation or other third party contested
matters, at its reasonable expense, including any required travel and related
expenses of Employee as substantiated by delivery to Deluxe of bills or other
statements satisfactory to Deluxe.
14. Confidentiality. The terms of this Separation Agreement and the
Release shall be treated as confidential by both Employee and Deluxe and neither
party shall disclose its terms to anyone, except Employee may disclose the terms
of this Separation Agreement and the Release to his immediate family, legal
counsel and accountant and as ordered by a court or governmental agency. Deluxe
may disclose the terms of this Separation Agreement and the Release to its
officers and directors, outside auditors, to employees who have a legitimate
need to know the terms in the course of performing their duties and as required
by law. Each party recognizes and agrees that this confidentiality provision was
a significant inducement for the other to enter into this Separation Agreement
and Release.
15. Reference Letter. In the event the parties agree upon the text of a
reference letter on or before execution of this agreement a copy of it shall be
attached and incorporated by reference as Exhibit B and Employee may provide a
copy of such letter to any prospective employer. Deluxe agrees that any
communication by Xxxx X. Xxxxxxxxx III, or any other representative Deluxe deems
appropriate on behalf of Deluxe, concerning Employee's employment and separation
from Deluxe shall in tone and content not be inconsistent with the statements
contained in any Exhibit B.
16. Nonassignment. The parties agree that this Separation Agreement and
the Release will not be assigned by either party unless the other party agrees
to such assignment in writing.
17. Merger. This Separation Agreement and the Release, and the employee
benefit plans in which Employee is a participant supersede all prior oral and
written agreements and communications between the parties. Employee and Deluxe
agree that any and all claims which either might have had against the other are
fully released and discharged by this Separation Agreement and the Release, and
that the only claims which either may hereafter assert against the other will be
derived only from an alleged breach of the terms of the Separation Agreement,
the Release or, as against Deluxe, or any employee benefit plan in which
Employee is a participant.
18. Entire Agreement. This Separation Agreement and Attachments
constitute the entire agreement between the parties with respect to the
termination of Employee's employment relationship with Deluxe, and the parties
agree that there were no inducements or representations leading to the execution
of this Separation Agreement or any of the Attachments except as herein
contained.
19. Voluntary and Knowing Action. Employee acknowledges that he has been
advised of his right to be represented by his own attorney, that he has read and
understands the terms of this Separation Agreement and the Release, and that he
is voluntarily entering into the Separation Agreement and the Release.
20. Governing Law. This Separation Agreement and the Release will be
construed and interpreted in accordance with the laws of the State of Minnesota.
21. Counterparts. This Separation Agreement and the Release may be
executed simultaneously in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one of the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Separation
Agreement as of the day and year first above written.
DELUXE CORPORATION EMPLOYEE
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx Xxxx X. Xxxxxxx
Title: Vice President
STATE OF MINNESOTA
COUNTY OF XXXXXX
I, Xxxxx Xxxxx, a Notary Public, do hereby certify that Xxxx X. Xxxxxxx
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he signed and delivered the said instrument as his free and voluntary act,
for the uses and purposes therein set forth.
Given under my hand and official seal this 27th day of February, 1997.
/s/ Xxxxx Xxxxx
Notary Public
STATE OF MINNESOTA
COUNTY OF XXXXXX
The foregoing instrument was acknowledged before me this 3rd day of March,
1997 by Xxxxxxx X. Xxxxxx, a Vice President of Deluxe Corporation, a Minnesota
corporation, on behalf of the Corporation.
/s/ X X Xxxx
Notary Public
EXHIBIT A
RELEASE
Definitions. We intend all words used in this Release to have their plain
meaning in ordinary English. Technical legal words are not needed to describe
what we mean. Specific terms we use in this Release have the following meanings:
A. We, as used herein, includes Deluxe Corporation defined at B and
Employee, as defined at C.
B. Deluxe Corporation or Deluxe, as used herein, shall at all times mean
Deluxe Corporation, its subsidiaries, successors and assigns, their affiliated
companies, their successors and assigns, their affiliated and predecessor
companies and the present or former officers, employees and agents of any of
them, whether in their individual or official capacities, and the current and
former trustees or administrators of any profit sharing, pension or other
benefit plan applicable to the employees or former employees of Deluxe, in their
official and individual capacities.
C. Employee, as used herein, means Xxxx X. Xxxxxxx or anyone who has or
obtains any legal rights or claims through him.
D. Employee's Claims means any rights Employee has now or hereafter to
any relief of any kind from Deluxe whether or not Employee knows now about those
rights, arising out of his employment with Deluxe, and his employment
termination, including, but not limited to, claims for breach of contracts;
fraud or misrepresentation; violation of the Minnesota anti-discrimination laws,
the Americans with Disabilities Act, or other federal, state, or local civil
rights laws based on disability or other protected class status; defamation;
intentional or negligent infliction of emotional distress; breach of the
covenant of good faith and fair dealing; promissory estoppel; negligence;
wrongful termination of employment; and any other claims for unlawful employment
practices. However, this Release shall not affect any claims which Employee
could have made under any welfare benefit plan or any profit sharing, pension or
retirement plan through Deluxe or which may arise under the Agreement to which
this Release is attached.
Agreement to Release Claims. Employee agrees that he is receiving a substantial
amount of money paid by Deluxe. Employee agrees to give up all Employee's Claims
against Deluxe in exchange for those payments. Employee will not bring any
lawsuits, file any charges, complaints, or notices, or make any other demands
against Deluxe based on Employee's Claims. Employee agrees that the money and
benefits Employee is receiving are full and fair compensation for the release of
all Employee's Claims. Employee agrees that Deluxe does not owe Employee
anything in addition to what Employee will be receiving.
Employee understands that he may rescind (that is, cancel) this Release
within seven (7) calendar days of signing it to reinstate federal claims and
within fifteen (15) days to reinstate state claims. To be effective, Employee's
rescission must be in writing and delivered to Deluxe Corporation in care of
Xxxxxxx X. Xxxxxx, Vice President, Deluxe Corporation, 0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, either by hand or by mail within the relevant
period. If sent by mail, the rescission must be postmarked within the relevant
period, properly addressed to Deluxe Corporation, and sent by certified mail,
return receipt requested.
Deluxe agrees to give up any claim against Employee that Deluxe may have now or
hereafter arising from Employee's employment with Deluxe, except as may arise
under the Agreement to which this Release is attached.
We acknowledge that we have read this Release carefully and understand all its
terms. In agreeing to sign this Release, we have not relied on any statements or
explanations made by either of us.
We agree that this Release shall be effective as of the last date set out below.
Deluxe and Employee understand and agree that this Release, the Agreement and
the Deluxe employee benefit plans in which Employee is a participant, contain
all of the agreements between Deluxe and Employee. We have no other written or
oral agreements.
Dated: February 27, 1997 /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Witnesses:
/s/ Xxxxx Xxxxx
DELUXE CORPORATION
Dated: March 3, 1997
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Vice President
Witnesses:
/s/ Xxxxxxx X. Xxxxx
/s/ Xxxxx Buytowski
EXHIBIT B
Xxxx Xxxxxxx served Deluxe Corporation for 25 years, rising through the ranks to
very senior positions. Most recently, he served as president of the company's
largest operating unit, the Financial Services Group.
In this capacity, he was responsible for a revenue P&L in excess of $1.2 billion
consisting of the individual business units of Deluxe Check Printers, N.R.C.,
E.T.C., Chex Systems, and, for a period of time, Deluxe Data Systems. Deluxe
Data Systems was subsequently placed in a separate market serving unit to
provide focus on the electronic funds transfer market. In addition to meeting or
exceeding revenue and operating profit objectives, Xxxx also worked to complete
integration of sales and marketing activities across the business units.
Significant positive progress was made with this integration effort during 1996.
Over the years Xxxx has held significant P&L responsibilities, as well as
substantial operational and human resource responsibilities.
Mark's experiences with Deluxe consisted of sales, plant management of three
separate production facilities, regional management of northeast plant
operations, Vice President of Administration for the Corporation, Vice President
of Regional Production Operations, President of the Check Printing Division, and
finally President of the Financial Services Group. Xxxx was also a key member of
the senior group that reviewed and recommended strategic direction for the
company during the past year. His contributions to Deluxe have clearly added to
the success of the company over the years.
Xxxx has contemplated for some time that a change in responsibilities, to
include possible relocation from Minnesota, would be a positive experience
personally and for his family. His last child at home graduates high school in
the spring of 1997, allowing Xxxx and his wife complete flexibility in pursuing
new interests and possible locations.
Mark's broad range of experience and personal abilities should serve him well in
any new opportunities he chooses to pursue.
