Exhibit 10.18
March 1, 2001
Xxxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxx:
In order to facilitate your attention to the affairs of Deluxe Corporation and
its Affiliates (collectively referred to as the "Company"), and in recognition
of the key role you serve within the Company, the Company has agreed to provide
you with certain separation benefits in the event your employment should ever be
terminated by the Company without Cause (as defined below), or by you for Good
Reason (as defined below), subject to the terms and conditions described below.
If, at the time of your termination of employment by the Company without Cause
or by you with Good Reason, you sign a separation agreement and release, then
you will receive the following benefits:
A. Twelve (12) months of severance pay at your then-current level
of base monthly salary in accordance with regular Deluxe
Corporation (Deluxe) payroll practices;
B. For a period of twelve (12) months commencing on the first
anniversary of the initial payment in paragraph A, a monthly
payment during each month in such twelve (12) month period
equal to the amount, if any, that your monthly base salary at
the time of your termination exceeds your monthly compensation
during that month in such twelve (12) month period. In order
to be eligible to receive any such payment, you agree to
provide Deluxe a copy of documentation concerning your monthly
compensation, such as your payroll statement or, if
applicable, your written statement that you are not then
employed, and within thirty (30) days thereafter, Deluxe will
make such differential payment to you;
C. Executive-level outplacement counseling and support services
for a period of up to twelve (12) months, to be provided
through the Company's then current preferred provider of such
services; and
D. To assist you with other costs and expenses you may incur in
connection with your employment transition, an additional lump
sum payment of Thirteen Thousand Dollars ($13,000), which
shall be paid to you within thirty (30) days of the effective
date of the separation agreement and release referenced above.
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"Affiliate" means a company which is directly, or indirectly through one or more
intermediaries, controlled by or under common control with another company where
control shall mean the right, either directly or indirectly, to elect the
majority of the directors thereof without the consent or acquiescence of any
third party.
"Cause" means your (i) continued failure to perform substantially your duties
with the Company (other than any such failure resulting from incapacity due to
physical or mental illness or any such actual or anticipated failure after your
delivery of a written notice to Deluxe's Chief Executive Officer or General
Counsel that you are terminating your employment for Good Reason), after a
written demand for substantial performance is delivered to you which
specifically identifies the manner in which the Company believes that you have
not substantially performed your duties, (ii) conviction of a felony, or (iii)
willful engagement in (a) other illegal conduct relating to the business or
assets of the Company, or (b) gross misconduct.
"Good Reason" means (i) except with your written consent given in your
discretion, (a) the assignment to you of any position and/or duties which
represent or otherwise entail a material diminution in your position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities, or (b) any other action by the Company which results in a
material diminution in your position (or positions) with the Company, excluding
for this purpose an isolated, insubstantial or inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by you and excluding any diminution attributable to the
fact that Deluxe is no longer a public company; (ii) any material reduction in
your aggregate compensation and incentive opportunities, or any failure by the
Company to comply with any other written agreement between you and the Company,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by you; (iii) the Company's requiring you to be based at
any location more than 50 miles from your then current location; (iv) any
purported termination by the Company of your employment which is not effected
pursuant to a written notice of termination specifying the reasons for your
termination and the manner by which such reasons constitute "Cause" (as defined
herein); or (v) any request or requirement by the Company that you 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 termination date or any professional ethical guidelines
or principles that may be applicable to you.
You also agree that during the term of your employment by Deluxe or any of its
Affiliates and for a period of two (2) years thereafter, you shall retain in
confidence all proprietary and confidential information concerning Deluxe or any
of its Affiliates, including, without limitation, customer and mailing lists,
cost and pricing information, employee data, financial data, business plans,
sales and marketing plans, business acquisition or divestiture plans, research
and development activities relating to existing commercial activities and new
products, services and offerings under active consideration, trade secrets and
software which you may have acquired during the course
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of your employment with Deluxe or its Affiliates and, notwithstanding the
exceptions contained in the next sentence, shall return all copies and extracts
thereof (however and on whatever medium recorded, to Deluxe, or as otherwise
requested by Deluxe, without keeping any copies thereof). The foregoing
obligation does not apply to (i) any information which was known to you prior to
disclosure to you by Deluxe or any of its Affiliates; (ii) any information which
was in the public domain prior to its disclosure to you; (iii) any information
which comes into the public domain through no fault of yours; (iv) any
information which you are required to disclose by a court or similar authority
or under subpoena, provided that you provide Deluxe with notice thereof and
assist, at Deluxe's or its Affiliates sole expense, any reasonable Deluxe or
Affiliate endeavor by appropriate means to obtain a protective order limiting
the disclosure of such information; and (v) any information which is disclosed
to you by a third party which has a legal right to make such disclosure.
You may not assign or delegate any of your rights or obligations in respect of
this agreement and any attempted assignment or delegation shall be void and of
no effect; provided, however, that your right to terminate your employment for
Good Reason shall not be affected by your incapacity due to physical or mental
illness. This agreement is binding upon Deluxe Corporation and your affiliated
employer and its successors and assigns and inures to the benefit of you, your
heirs and executors. You acknowledge that you are an employee at will and agree
that your employment may be terminated, by Deluxe or any of its Affiliates of
which you were an employee, at any time for any reason or no reason. This
agreement is governed by the substantive laws of the State of Minnesota.
This agreement is not intended to provide you with payments or benefits that are
duplicative or overlap payments or benefits that will be paid or provided to you
under other agreements between you and Deluxe or its Affiliates. Accordingly,
except as provided herein, you acknowledge that this agreement shall supersede
and replace in their entirety any and all other policies and/or agreements to
which you and Deluxe or any of its Affiliates are a party that provide severance
or continuation of income payments to you or your family following the
termination of your employment, except:
Executive Retention Agreement dated as of the 18th day of December,
2000 ("Retention Agreement").
This agreement will be superseded and replaced in its entirety by the Retention
Agreement on the Effective Date thereof or upon the termination prior to the
Effective Date of your employment by (i) the Company without Cause or (ii) you
for Good Reason, where the effect of such termination is to entitle you to
receive the benefits described in Section V.A as a result of the occurrence of
event or circumstances described in Section IV. H of the Retention Agreement.
The capitalized terms used in this paragraph will have the meanings ascribed to
them in the Retention Agreement.
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Please sign both copies of this letter agreement and return one to Xxxx Xxxxxxxx
(via hand delivery or confidential courier), retaining the second copy for your
own records.
We look forward to your continued contributions to Deluxe or its Affiliates
under these circumstances which we hope will provide you a greater degree of
assurance concerning your livelihood.
With kindest regards,
Xxxxxx X. Xxxxxx, Xx.
Chairman ----------------------------------------
Compensation Committee Employee
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