EXHIBIT 10.20
FORM OF CHANGE IN CONTROL AGREEMENT
AGREEMENT by and between eFunds Corporation, a Delaware corporation (the
"Company"), and (the "Executive") dated as of _________________, 2000.
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 ensure that the
Company will have the continued dedication and service of the Executive,
notwithstanding the possibility, threat or occurrence of a Business Combination
(as defined below) and to encourage the Executive's full support of and
participation in implementing the Company's business strategy involving one or
more significant transactions. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks associated with these types of strategic initiatives, to
encourage the Executive to provide his or her full attention and dedication to
the Company and its business strategies notwithstanding such personal
uncertainty and to provide the Executive with compensation and benefits
arrangements upon the occurrence of a Business Combination which ensure that the
compensation and benefits expectations of the Executive will be satisfied and
that the Executive will continue to receive compensation and benefits
competitive with those of other corporations. Therefore, in order to accomplish
these objectives, the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
I. Certain Definitions.
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A. "Affiliate" shall have the meaning defined in Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The "Affiliates" of a Person shall also include such
Person's "Associates," as such term is defined in Rule 12b-2
promulgated under the Exchange Act.
B. "Beneficial Owner" shall have the meaning defined in Rule
13d-3 promulgated under the Exchange Act.
C. "Business Combination" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
1. any Person or group (as defined in Rule 13d-5 promulgated
under the Exchange Act) of Persons, other than a Person or group
of Persons who are, or would be if the securities of the Company
were registered pursuant to Section 12 of the Exchange Act,
entitled to report their ownership of the Company's securities on
a Schedule 13G in lieu of a Schedule 13D (but only during such
time as such Person or group of Persons remain eligible to use
such Schedule 13G), is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding
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securities, excluding, at the time of their original acquisition,
from the securities acquired directly or beneficially by any such
Person or group of Persons any securities acquired directly from
the Company or in connection with a transaction described in
clause (a) of paragraph 3 below (it being understood and agreed
that, during the period preceding the Split-Off Date, the
ownership by Deluxe and any Person Controlled by Deluxe of more
than 20% of the combined voting power of the Company's then
outstanding securities shall not constitute a "Business
Combination" pursuant to this Section I.C.1.); or
2. the individuals who at the date of this Agreement
constitute the Board and any new director (other than a director
whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited
to a consent solicitation, relating to the election of directors
of the Company) whose appointment or election by the Board or
nomination for election by the Company's shareholders was
approved or recommended by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors as
of the date of this Agreement or whose appointment, election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
3. there is consummated a merger, share exchange,
consolidation or similar transaction (each, a "Transaction")
involving the Company or any Affiliate of the Company with any
other Person, other than (a) a Transaction which would result in
the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving Person or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Affiliate of
the Company, at least 65% of the combined voting power of the
voting securities of the Company or such surviving Person or any
parent thereof outstanding immediately after such merger or
consolidation, or (b) a Transaction effected to implement a
recapitalization of the Company (or similar transaction) in which
no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
securities (it being understood and agreed that, during the
period preceding the Split-Off Date, the ownership by Deluxe and
any person Controlled by Deluxe of more than 20% of the combined
voting power of the Company's then outstanding securities a
result of any such recapitalization (or similar transaction)
shall not constitute a "Business Combination" pursuant to this
Section I.C.3);
4. the shareholders of the Company approve a plan of
complete liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the assets of the Company and its
subsidiaries, other than a sale or disposition of all or
substantially all of the assets of the Company and its
subsidiaries to a Person, at least 65% of the combined voting
power of the voting securities of which are owned by shareholders
of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale or
disposition; or
5. if, prior to the Split-Off Date, any of the transactions
described in the foregoing clauses (1), (2), (3) or (4) should
occur with regard to Deluxe (in making such determination, the
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word "Deluxe shall be substituted for the words "the Company" in
such clauses and the reference to the "Board" in clause 2 shall
be deemed to refer to the Board of Directors of Deluxe).
D. "Business Combination Period" shall mean the period commencing
on the date hereof and ending on the third anniversary of the date
hereof; provided, however, that commencing on the date one year after
the date hereof, and on each annual anniversary of such date (such
date and each annual anniversary thereof shall be hereinafter referred
to as the "Renewal Date"), the Business Combination Period shall be
automatically extended so as to terminate three years from such
Renewal Date, unless at least 120 days prior to the then-current
Renewal Date the Company shall give notice to the Executive that the
Business Combination Period shall not be so extended.
E. "Control" shall mean the right, either directly or indirectly,
to elect a majority of the members of the board of directors (or
similar governing body) of an Person without the consent or
acquiescence of any third party.
F. "Deluxe" shall mean Deluxe Corporation, a Minnesota
corporation.
G. "Effective Date" shall mean the first date during the Business
Combination Period on which a Business Combination occurs.
H. "Person" shall mean any natural person, corporation, limited
liability company, association, partnership (whether general or
limited), joint venture, sole proprietorship, governmental agency,
unit, subdivision or municipality, trust, estate, association,
custodian or any other individual or entity, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, or (iii) an
underwriter temporarily holding securities of the Company as part of a
public offering of such securities.
I. "Split-Off Date" shall mean the date that Deluxe and Persons
Controlled by Deluxe shall cease to own at least 50% of the combined
voting power of the Company's then outstanding securities.
II. Employment Period.
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Subject to the terms and conditions of this Agreement, 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 third anniversary of such date (the "Employment
Period").
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III. Terms of Employment.
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A. Position and Duties.
1. Position. Except with the Executive's written consent given in
his or her discretion, 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 the most significant
of those held, exercised and assigned by the Executive at any time
during the 180-day period immediately preceding the Effective Date and
(b) the Executive's services shall be performed from the location
where the Executive was employed immediately preceding the Effective
Date or at a location less than 50 miles from such location.
2. Attention to the Company's Affairs. During the Employment
Period, and excluding any periods of vacation and sick leave to which
the Executive is entitled, the Executive agrees to devote reasonable
attention and time 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 reasonable 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
corporate, civic or charitable boards or committees, (b) deliver
lectures, fulfill speaking engagements or teach at educational
institutions and (c) manage personal investments, so long as such
activities do not significantly 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.
B. Compensation.
1. Base Salary. During the Employment Period, the Executive shall
receive an annual base salary (the "Annual Base Salary"), which shall
be paid not less often than monthly, at least equal to twelve times
the monthly base salary paid or payable, including any base salary
which has been earned but deferred, to the Executive by the Company
and its Affiliates immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and
thereafter at least annually. In considering any increase to the
Executive's Annual Base Salary, the Executive will be treated in the
same manner as other members of the Company's senior executive team
and all senior officers of any Person in Control of the Company (such
other senior executive team members and senior officers are herein
collectively referred to as "Peer Executives"). For example, if the
annual base salaries of the Peer Executives are established by
reference to a percentile of comparative market data, the increase, if
any, to Executive's Annual Base Salary shall be established in a like
manner. The annual Base Salary shall not be reduced after any such
increase
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and the term Annual Base Salary as utilized in this Agreement shall
refer to Annual Base Salary as so increased. Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement.
2. Annual Incentive Payment or Bonus. In addition to the Annual
Base Salary, the Executive shall be paid, for each fiscal year ending
during the Employment Period (ratably apportioned in the case of any
fiscal year which is not included within the Employment Period in its
entirety), an annual incentive payment or bonus (the "Annual Incentive
Payment") in cash on the same basis as such incentive payments or
bonuses are paid to other Peer Executives. For example, if annual
incentive payments are created for other Peer Executives, the target
award for the Executive shall be established in the same manner as the
target award for the other Peer Executives (e.g. by reference to a
percentile target based on comparative market data) and the
performance criteria and performance measurements governing any
payment earned by Executive shall be based on the same performance
criteria (such as earnings per share or return of average capital
employed) and performance measurements applied to the other Peer
Executives. Notwithstanding the foregoing, if the payment of a bonus
to other Peer Executives is, in whole or part, not based on objective
performance criteria, Executive's Annual Incentive Payment shall be at
least equal to the average of Executive's Annual Incentive Payments
for the last two full fiscal years prior to the Effective Date or, if
Executive was not in the employment of the Company during any portion
of such two full fiscal years, Executive's target Annual Incentive
Payment for the fiscal year in which the Effective Date occurred (such
amount being herein referred to as the "Recent Annual Incentive
Payment"). Special or one-time awards (such as those associated with a
new hire or promotion or relocation bonuses) shall not be taken into
account when computing the Recent Annual Incentive Payment. During the
Employment Period, the Executive's annual target incentive or bonus
opportunity shall in no event be less favorable to the Executive than
that provided by the Company to the Executive under its annual
incentive or bonus plans during the fiscal year in which the Effective
Date occurred, provided that any special or one time awards (such as
those associated with a new hire or promotion or relocation bonuses)
shall not be taken into account. Each such Annual Incentive Payment
shall be paid no later than the end of the third month of the fiscal
year next following the fiscal year in respect of which the Annual
Incentive Payment is awarded, unless the Executive shall elect to
defer the receipt of such Annual Incentive Payment.
3. Stock Incentive Plans. During the Employment Period, the
Executive shall be entitled to participate in any stock incentive,
option, performance share and other stock-based incentive plans (if
any) on the same basis as other Peer Executives. For example, if other
Peer Executives are awarded stock options or restricted stock units or
shares based on references to comparative market data, Executive's
awards shall be made on the same basis, and shall, in any event,
contain the same terms and conditions, and if applicable, be subject
to the same performance criteria, as applied to awards to other Peer
Executives. Notwithstanding the foregoing, such long-term incentive
opportunities for the Executive shall in no event be less favorable,
in each case and in the aggregate, than those provided by the Company
and its Affiliates for the Executive during the fiscal year during
which the Effective Date occurs, provided that any special or one-time
awards (such as those associated with a new hire or promotion) shall
not be taken into account.
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4. Savings, Retirement and Other Incentive Plans. During the
Employment Period, the Executive shall be entitled to participate in
all other incentive, savings and retirement plans, practices, policies
and programs applicable generally to other Peer Executives, but in no
event shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any,
that such distinction is applicable), savings opportunities and
retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided for the Executive
at any time during the one year period immediately preceding the
Effective Date or if more favorable to the Executive, those provided
generally at any time after the Effective Date to other Peer
Executives; provided, however, that such benefits may be reduced
pursuant to a general (across-the-board) reduction of such benefits
similarly affecting all Peer Executives.
5. 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 all
welfare benefit plans, practices, policies and programs (including,
without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to
other Peer Executives but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at
any time during the one year period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other Peer
Executives; provided, however, that such benefits may be reduced
pursuant to a general (across-the-board) reduction of such benefits
similarly affecting all Peer Executives.
6. Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its Affiliates
in effect for the Executive at any time during the one year 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.
7. Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, use or reimbursement for the use
of an automobile, and payment of related expenses, in accordance with
the most favorable plans, practices, programs and policies of the
Company and its Affiliates in effect for the Executive at any time
during the one year 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; provided,
however, that such benefits may be reduced pursuant to a general
(across-the-board) reduction of such benefits similarly affecting all
Peer Executives.
8. Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to
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exclusive personal secretarial and other assistance, not materially
less favorable than that provided to the Executive by the Company and
its Affiliates at any time during the one year period immediately
preceding the Effective Date or, if more favorable to the Executive,
as provided generally at any time thereafter with respect to other
Peer Executives.
9. Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation and holidays in accordance with the most
favorable plans, policies, programs and practices of the Company and
its Affiliates as in effect for the Executive at any time during the
one year 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.
IV. Termination of Employment.
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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, it may, give a Notice of
Termination to the Executive in accordance with Sections IV.D. and XI.B. of
this Agreement of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company or its Affiliates,
as the case may be, shall terminate effective on the 30th day after receipt
of the Notice of Termination by the Executive (unless such date is extended
as provided in Section IV.F.), provided that, the Executive shall not have
returned to full-time performance of his or her duties within such 30 day
notice period. For purposes of this Agreement, "Disability" shall mean the
absence of the Executive from the Executive's duties with the Company or
its Affiliates, as the case may be, on a full-time basis for 180
consecutive days as a result of incapacity due to mental or physical
illness which is determined to be permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive's
legal representative.
B. Cause. The Company may terminate the Executive's employment during
the Employment Period with or without Cause. For purposes of this
Agreement, "Cause" shall mean:
1. the willful and continued failure of the Executive to perform
substantially the Executive's material duties with the Company and its
Affiliates (other than any such failure resulting from incapacity due
to physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination for Good Reason
by the Executive pursuant to Section IV.D. hereof), after a written
demand for substantial performance is delivered to the Executive by
the Board which specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the
Executive's duties; or
2. the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company or its Affiliates.
For purposes of this provision, (a) no act or failure to act on
the part of the Executive shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad
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faith or without reasonable belief that the Executive's action or
omission was in the best interests of the Company and (b) in the event
of a dispute concerning the application of this provision, no claim by
the Company that Cause exists shall be given effect unless the Company
establishes to the Committee (as defined in Section XI.J.) by clear
and convincing evidence that Cause exists. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by
the Board or upon the instructions of the Chief Executive Officer of
the Company (if Executive is not the Chief Executive Officer) or based
upon the advice of counsel for the Company (or if the Executive is
counsel to the Company, based upon the Executive's own legal
conclusions) shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of
the Company.
C. Good Reason. The Executive's employment during the Employment
Period may be terminated by the Executive with or without Good Reason. For
purposes of this Agreement, "Good Reason" shall mean:
1. except with Executive's written consent given in his or her
discretion, the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section III.A. of this Agreement,
or the taking of any other action which results in a diminution in
such position, authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial or inadvertent action not
taken in bad faith and which is remedied promptly after receipt of
notice thereof given by the Executive;
2. any failure by the Company (or any successor employer) to
comply with any of the provisions of Section III.B. of this Agreement,
other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied promptly after receipt of
notice thereof given by the Executive;
3. any requirement that Executive perform Executive's duties at
any location other than as provided in clause III.A.1(b) hereof or
that the Executive travel for business purposes to a substantially
greater extent than required immediately prior to the Effective Date;
4. any purported termination of the Executive's employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of Section IV.D hereof and otherwise expressly permitted
by this Agreement. For purposes of this Agreement, no such purported
termination shall be effective;
5. any failure by the Company to comply with and satisfy Section
X.C. of this Agreement; or
6. any request or requirement that the Executive take any action
or omit to take any action that is inconsistent with or in violation
of the Company's ethical guidelines and policies as the same existed
within the 120 day period prior to the Effective Date or any
professional ethical guidelines or principles that may be applicable
to the Executive or, if Executive is counsel to the Company,
requesting or requiring Executive to practice in or under the laws of
any jurisdiction
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or appear before any court or other tribunal to or before which
Executive is not admitted to practice.
For purposes of this Section IV.C., any good faith claim of "Good
Reason" made by the Executive shall be presumed to be correct unless
the Company establishes to the Committee by clear and convincing
evidence that Good Reason does not exist. The Executive's right to
terminate the Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or mental
illness. The Executive's continued employment shall not constitute a
consent to, or a waiver of rights with respect to, any act or failure
to act constituting Good Reason hereunder.
D. Notice of Termination. Any purported termination of the Executive's
employment during the Employment Period (other than by reason of death)
shall be communicated by a Notice of Termination given in accordance with
Section XI.B. of this Agreement. For purposes of this Agreement, a "Notice
of Termination" means a written notice which (1) indicates the specific
termination provision in this Agreement relied upon (or that Executive's
employment is being terminated without Cause or by the Executive without
Good Reason), (2) 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 (3) 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 thirty days after the giving of such notice). Further, a Notice
of Termination for Cause is required to include a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Employer's Board at a meeting of the Employer's
Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Employer's Board), finding that, in the
good faith opinion of the Employer's Board, the Executive is guilty of the
conduct described in subparagraph B.1. or B.2. above, and specifying the
particulars thereof in detail. A failure to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of
Disability, Good Reason or Cause shall not waive any rights hereunder or
preclude the person delivering such from asserting such fact or
circumstance in enforcing rights hereunder;
E. Date of Termination. "Date of Termination" means (1) if the
Executive's employment is terminated for Cause, or by the Executive for
Good Reason or any other reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be
(subject to extension as provided in Section IV.F.), (2) if the Executive's
employment is terminated during the Employment Period other than for Cause
or Disability, the Date of Termination shall be the date on which Executive
is notified of such termination, (3) if the Executive's employment is
terminated by reason of death during the Employment Period, the Date of
Termination shall be the date of death of the Executive and (4) if the
Executive's employment is terminated for Disability, the date Executive's
employment is terminated as provided in Section IV.A.; provided, however,
that the Date of Termination specified in this Section E. may be extended
to the date of termination (if applicable) provided in Section IV.F.
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F. Dispute Concerning Termination. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section IV.F.), the party
receiving such Notice of Termination notifies the other party that a
dispute exists concerning whether a termination has properly been
characterized as for Cause, Good Reason or Disability, the Date of
Termination shall be extended until the earlier of (i) the date on which
the Employment Period ends or (ii) the date on which the dispute is finally
resolved, either by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith
and the Executive pursues the resolution of such dispute with reasonable
diligence.
G. Compensation During Dispute. If a purported termination occurs
during the Employment Period and the Date of Termination is extended in
accordance with Section IV.F. hereof, Executive shall continue to receive
the full compensation in effect when the notice giving rise to the dispute
was given (including, but not limited to, salary) and the Executive shall
continue as a participant in all compensation, benefit and insurance plans
in which the Executive was participating when the notice giving rise to the
dispute was given until the Date of Termination, as determined in
accordance with Section IV.F. hereof.
H. Pre-Effective Date Actions. For purposes of this Agreement, the
Executive's employment shall be deemed to have been terminated during the
Employment Period by the Company without Cause or by the Executive with
Good Reason, if (i) the Executive's employment is terminated by the Company
without Cause prior to the Effective Date (whether or not a Business
Combination ever occurs) and such termination was at the request or
direction of a Person who has entered into an agreement (or a non-binding
letter of intent or similar instrument) with the Company the consummation
of which would constitute a Business Combination, (ii) the Executive
terminates his or her employment for Good Reason prior to the Effective
Date (whether or not a Business Combination ever occurs) and the
circumstance or event which constitutes Good Reason occurs at the request
or direction of such a Person, or (iii) the Executive's employment is
terminated by the Company without Cause or by the Executive for Good Reason
and such termination or the circumstance or event which constitutes Good
Reason is otherwise in connection with or in anticipation of a Business
Combination (whether or not a Business Combination ever occurs). For
purposes of any determination regarding the applicability of the
immediately preceding sentence, any position taken by the Executive shall
be presumed to be correct unless the Company establishes to the Committee
by clear and convincing evidence that such position is not correct.
V. Post-Termination Obligations.
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A. Good Reason; Other Than for Cause. If, during the Employment
Period, Executive's employment shall be terminated other than for Cause,
Disability or by reason of the death of the Executive or if the Executive
shall terminate employment for Good Reason:
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1. the Company shall pay to the Executive in a lump sum in cash
within 5 days after the Date of Termination the aggregate of the
following amounts:
(a) the sum of (i) the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore
paid, (ii) any Annual Incentive Payment paid or payable in
respect of the most recently completed fiscal year of the
Company, to the extent such amount is determinable and not
theretofore paid and (iii), unless otherwise specified by
Executive or prohibited by the terms of any deferral agreement,
any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid
(the sum of the amounts described in clauses (i), (ii) and (iii)
shall be hereinafter referred to as the "Accrued Obligations").
In the event the Executive's Annual Incentive Payment is not
determinable on the Date of Termination, such Annual Incentive
Payment shall be paid to the Executive, in a lump sum in cash,
within five days after the date the amount of such Payment is
determinable; and
(b) an amount equal to the product of (i) three and (ii) the
sum of (x) the Executive's Annual Base Salary as of the Date of
Termination and (y) the higher of (A) the Recent Annual Incentive
Payment and (B) the Executive's target Annual Incentive Payment
for the fiscal year in which the Date of Termination occurs; and
(c) an amount equal to the product of three times the higher
of (i) the sum of the amounts that would have been contributed
based on the Reference Amount (defined below) to the Executive's
account under (x) all retirement plans in which the Executive was
eligible to participate immediately prior to the Effective Date
and (y) any excess or supplemental retirement plan in which the
Executive was eligible to participate as of the Effective Date
(the "ERISA Excess Plan") (the ERISA Excess Plan and such
retirement plans, as amended, and any successor or replacement
plans being referred to as the "Plans") as the Plans were in
effect and funded for the fiscal year immediately preceding the
Effective Date or (ii) the sum of the amounts that would have
been contributed based on the Reference Amount, to the Plans in
which the Executive was eligible to participate immediately prior
to the Date of Termination as those Plans were in effect and
funded for the fiscal year immediately preceding the Date of
Termination. For the purposes hereof, the term "Reference Amount"
shall mean an amount equal to one-third of the amount calculated
in clause V.A.1.(b).
2. for three years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Executive and/or the
Executive's family shall continue to receive benefits at least equal
to those which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section III.B.5.
of this Agreement if the Executive's employment had not been
terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other Peer
Executives; provided, however, that if the Executive becomes
re-employed with another employer and is eligible to receive medical
or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be secondary
and supplemental to those provided under such other plan during such
applicable period of eligibility. For purposes of determining
eligibility (but not the time of
11
commencement of benefits) of the Executive for retiree welfare
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until three
years after the Date of Termination and to have retired on the last
day of such period as a qualified retiree;
3. immediately following the Executive's Date of Termination and,
if a Change of Control shall earlier occur, immediately following the
Change of Control, the Company shall take all such action as may be
required fully and immediately (but without duplication of benefits
under this Section V.A.3.) to:
(a) vest all outstanding, unvested options that may have
been granted to the Executive under the Company's stock incentive
plan or any successor or replacement plan (the "SIP") and permit
the Executive a period equal to the lesser of five years
following that Date of Termination or the remaining term of the
applicable options to exercise such options in accordance with
the provisions of the SIP and any applicable award agreement (as
modified or amended as a result of the actions required by this
clause);
(b) vest all other restricted shares, restricted stock units
or SARs theretofore granted the Executive under the SIP or any
other equity-based compensation plan (except as may be
specifically provided in any given award agreement); and
(c) in the case that the Company is not the surviving
corporation in a Transaction, to provide the Executive with the
economic equivalent of the value that the Executive would have
received had the Company been the surviving corporation of the
Transaction and taken the actions required in clauses (a) and (b)
hereof.
4. the Company shall, at its sole expense as incurred, provide
the Executive with out-placement services the scope and provider of
which shall be selected by the Executive in his or her sole
discretion; and
5. to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided to the Executive or which the
Executive is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its Affiliates
(such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits").
B. 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 for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. 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. With respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section V.B. shall include, without
limitation, and the Executive's estate and/or beneficiaries shall be
entitled to receive, benefits at least equal to the most favorable benefits
provided to the estates and beneficiaries of Peer Executives under such
12
plans, programs, practices and policies relating to death benefits, if any,
as in effect with respect to other Peer Executives and their beneficiaries
at any time during the one year period immediately preceding the Effective
Date or, if more favorable to the Executive's estate and/or the Executive's
beneficiaries, as in effect on the date of the Executive's death with
respect to other Peer Executives and their beneficiaries.
C. Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement
shall terminate without further obligations to the Executive, other than
for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in
this Section V.C. shall include, and the Executive shall be entitled after
the Date of Termination to receive, disability and other benefits at least
equal to the most favorable of those generally provided to disabled Peer
Executives and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, as in effect
generally with respect to other Peer Executives and their families at any
time during the one year period immediately preceding the Effective Date
or, if more favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter generally with respect to other Peer
Executives and their families
D. 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 or provide the Executive with (1) his or her Annual
Base Salary through the Date of Termination, (2) the amount of any
compensation previously deferred by the Executive and (3) Other Benefits,
in each case to the extent theretofore unpaid. If the Executive terminates
employment during the Employment Period, excluding a termination for Good
Reason or Disability, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obligations and the
timely payment or provision of Other Benefits. 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.
VI. Non-exclusivity of Rights.
-------------------------
Nothing in this Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice for which the
Executive may qualify, nor, subject to Section XI.F., shall anything herein
limit or otherwise affect such rights as the Executive may have under any other
contract or agreement with the Company or any of its Affiliates. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contact or agreement with
the Company or any of its Affiliates or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
13
VII. Full Settlement.
---------------
The payment and performance obligations provided for in this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which may be assertable 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 and, except as specifically
provided in Section V.A.2. hereof, such amounts shall not be reduced whether or
not the Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses which
the Executive may incur in good faith as a result of any contest (regardless of
the outcome thereof) 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 (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"). Such payments shall be made within five (5) business days
after delivery of the Executive's written requests for payment accompanied with
such evidence of fees and expenses incurred as the Company reasonably may
require.
VIII. Certain Additional Payments.
---------------------------
A. Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any
payment or benefit received or to be received by the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the
Company, any Person whose actions result in a Business Combination or any
Person Affiliated with the Company or such Person, but determined without
regard to any additional payments required under this Section VIII)
(collectively, a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code (or any successor section) or any interest or
penalties are incurred by the Executive with respect to such excise tax
(any such tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section VIII.A., if it shall be determined
that the Executive is entitled to a Gross-Up Payment, but that the
Executive, after taking into account the Payments and the Gross-Up Payment,
would not receive a net after-tax benefit of at least $50,000 (taking into
account both income taxes and any Excise Tax) as compared to the net
after-tax benefit the Executive would receive if the Gross-Up Payment were
eliminated and the Payments were reduced, in the aggregate, to an amount
(the "Reduced Amount") such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to the
Executive and the Payments, in the aggregate, shall be reduced to the
Reduced Amount. For purposes of determining whether any of the Payments
will
14
be subject to the Excise Tax and the amount of such Excise Tax, (i) all of
the Payments shall be treated as "parachute payments" (within the meaning
of Section 280G(b) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected by the
Accounting Firm (as defined below), such payments or benefits (in whole or
in part) do not constitute parachute payments, including by reason of
Section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments"
within the meaning of Section 280G(b)(1) of the Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the "base amount" (as defined in
Section 280G(b)(3) of the Code) allocable to such reasonable compensation,
or are otherwise not subject to the Excise Tax, and (iii) the value of any
non-cash benefits or any deferred payment or benefit shall be determined by
the Accounting Firm in accordance with the principals of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of
the Gross-Up Payment, the Executive shall be deemed to pay federal income
tax at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and locality of
Executive's residence (or, if higher, the state and locality of Executive's
employment) on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Section VIII.A.), net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.
B. Subject to the provisions of Section VIII.C., all determinations
required to be made under this Section VIII, including whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that a
Payment has been made or will be required, as the case may be, or such
earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the Person or group
of Persons effecting a Business Combination, the Executive shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section VIII., shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made ("Underpayment") consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies
pursuant to Section VIII.C. and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of the
Executive.
15
C. The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which he or she gives such notice to
the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:
1. give the Company any information reasonably requested by the
Company relating to such claim;
2. take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company;
3. cooperate with the Company in good faith in order to
effectively contest such claim; and
4. permit the Company to participate in any proceedings relating
to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing
provisions of this Section VIII.C., the Company shall control all
proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, further, however, that if
the Company directs the Executive to pay such claim and xxx for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder
16
and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.
D. If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section VIII.C., the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section VIII.C.)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of any amount advanced by the Company
pursuant to Section VIII.C., a determination is made that the Executive
shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
E. The Gross-Up Payment shall be made not later than the fifth day
following the Date of Termination; provided, however, that if the amount of
such Gross-Up Payment, and the limitation on such payments set forth in
Section VIII.A. hereof, cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Accounting Firm, of the minimum amount of
such Gross-Up Payment to which the Executive is clearly entitled and shall
pay the remainder of such payments (together with interest on the unpaid
remainder (or on all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined
but in no event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the fifth
(5th) business day after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the Code). At the
time that payments are made under this Agreement, the Company shall provide
the Executive with a written statement setting forth the manner in which
such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company has
received from Tax Counsel, the Accounting Firm or other advisors or
consultants (and any such opinions or advice which are in writing shall be
attached to the statement).
IX. Confidential Information.
------------------------
During the term of this Agreement and for a period of three (3) years
thereafter, Executive will retain in confidence all proprietary and confidential
information concerning the Company and its Affiliates, including, without
limitation, customer lists, cost and pricing information, employee data, trade
secrets and software and, shall return to the Company or destroy all copies and
extracts thereof (however and on whatever medium recorded), without keeping any
copies thereof. The foregoing obligation with respect to the protection of
confidential information shall not apply to (A) any information which was known
to the Executive prior to disclosure to the Executive by the Company, Deluxe or
any of the Company's
17
Affiliates; (B) any information which was in the public
domain prior to its disclosure to the Executive; (C) any information which comes
into the public domain through no fault of the Executive; (D) any information
which the Executive is required to disclose by a court or similar authority or
under subpoena, provided that the Executive provides the Company with notice
thereof and assists, at the Company's sole expense, any reasonable endeavor by
the Company, using appropriate means, to obtain a protective order limiting the
disclosure of such information; and (E) any information which is disclosed to
the Executive by a third party which has a legal right to make such disclosure.
In no event shall an asserted violation of the provisions of this Section IX.
constitute a basis for deferring or withholding any amounts otherwise payable to
the Executive under this Agreement.
X. 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. If the Executive shall die while any
amount would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of
the Executive's estate.
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. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company
in the same amount and on the same terms as the Executive would be entitled
to hereunder if the Executive were to terminate the Executive's employment
for Good Reason after the Effective Date, except that, for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. 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.
XI. Miscellaneous.
-------------
A. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, 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.
18
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 addressed
as follows:
If to the Executive:
If to the Company:
Attn: General Counsel
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be in
writing and shall be effective five days after mailing, if sent by first
class mail, postage prepaid to the address set forth above, two business
days after mailing if sent by priority or overnight courier (next business
day delivery) or upon transmission if sent by telecopy, with receipt of the
correct answer back.
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, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
E. The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for
Good Reason pursuant to Section IV.C. of this Agreement, shall not be
deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
F. The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the
Executive and the Company, the employment of the Executive by the Company
is "at will" and, subject to Section IV.H. hereof, prior to the Effective
Date, the Executive's employment may be terminated by either the Executive
or the Company at any time prior to the Effective Date, in which case the
Executive shall have no further rights under this Agreement, provided that
nothing herein shall be construed to limit or prevent the Executive from
receiving compensation and benefits from the
19
Company or its Affiliates that are customarily paid and provided other Peer
Executives who leave the employment of the Company or any of its Affiliates
or which may be payable to the Executive pursuant to the severance
provisions of any employment offer letter between the Executive and the
Company. From and after the Effective Date, this Agreement shall supersede
any other agreement between the parties with respect to the subject matter
hereof (e.g., benefits accruing to the Executive upon termination of
employment following a Business Combination), including the severance
provisions of any such offer letter.
G. The obligations of the Company and the Executive under this
Agreement which by their nature may require either partial or total
performance after the expiration of the term of this Agreement (including,
without limitation, those under Section V. hereof) shall survive such
expiration.
H. All claims by the Executive for benefits under this Agreement shall
be directed to and determined by the Committee and shall be in writing. Any
denial by the Committee of a claim for benefits under this Agreement shall
be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Committee shall afford a reasonable opportunity to the Executive
for a review of the decision denying a claim and shall further allow the
Executive to appeal to the Committee a decision of the Committee within
sixty (60) days after notification by the Committee that the Executive's
claims has been denied.
I. Notwithstanding any other provision in this Agreement to the
contrary, the Board shall delegate the responsibilities, duties and powers
specified under this Agreement to be observed or performed by the
"Committee" to a committee (the "Committee") consisting of not less than
three individuals who were directors of the Company ("Incumbent Directors")
before any Business Combination; provided, however, that in the event that
fewer than three Incumbent Directors are available at the time of such
delegation or thereafter, the Committee's members may include such
individual or individuals as may be appointed by the Incumbent Directors;
and provided, further, however, the maximum number of individuals
(including directors) appointed to the Committee shall not exceed five.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from the Board, 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.
eFunds Corporation Executive
By:
------------------------------ -----------------------------------------
Xxxx X. Xxxxxxxxx III
Its: Chief Executive Officer
20
