Exhibit 10.3
EXECUTIVE RETENTION AGREEMENT
AGREEMENT by and between Deluxe Corporation, a Minnesota corporation (the
"Company") and Xxxx X. Xxxxxxxxx III (the "Executive") dated as of the 9th day
of January, 1998.
The Board of Directors of the Company (the "Board") has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company and to encourage the Executive's full support of and participation
in implementing the Company's business strategy involving one or more
significant acquisitions. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks associated with a Change of Control and by such acquisitions and to
encourage the Executive's full attention and dedication to the Company and its
business strategies and to provide the Executive with compensation and benefits
arrangements upon the occurrence of a Business Combination (as defined below)
which ensure that the compensation and benefits expectations of the Executive
will be satisfied in that event and which are 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.
A. "Affiliate" shall mean a company controlled directly or indirectly
by the Company where "control" shall mean the right, either directly
or indirectly, to elect a majority of the directors thereof without
the consent or acquiescence of any third party.
B. "Beneficial Owner" shall have the meaning defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended.
C. "Business Combination" shall mean the occurrence of either a Change
of Control or an Other Business Combination.
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 Renewal
Date the Company shall give notice to the Executive that the
Business Combination Period shall not be so extended.
E. "Change of Control" 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 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, excluding, at the time of their
original acquisition, in the securities acquired directly or
beneficially by such Person any securities acquired directly
from the Company or its Affiliates or in connection with a
transaction described in clause (a) of paragraph 3 below; 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 consent, 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 or consolidation of the Company
or any Affiliate with any other company, other than (a) a
merger or consolidation 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 entity 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, at least 65% of the combined voting power of
the voting securities of the Company or such surviving entity
or any parent thereof outstanding immediately after such
merger or consolidation, or (b) a merger or consolidation
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; or
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 the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, 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.
5. Notwithstanding the foregoing, a "Change in Control" shall not
be deemed to have occurred by virtue of the consummation of
any transaction or series of integrated transactions
immediately following which the record holders of the common
stock of the Company immediately prior to such transaction or
series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately
following such transaction or series of transactions.
F. "Effective Date" shall mean the first date during the Business
Combination Period on which a Business Combination occurs.
G. Other Business Combination" shall mean the occurrence of:
1. any merger, exchange, transfer, or other form of business
combination or acquisition (but not including dispositions),
whether involving assets, shares or any other form of
ownership interest, by the Company or any of its Affiliates of
or with one or more other corporations, partnerships or other
entities in a single transaction or a series of related
transactions for consideration aggregating $500 million or
more (regardless of the form of consideration or the method or
time of payment), or
2. a sale or other similar divestiture for consideration by the
Company of all or a substantial portion of its non-check
printing assets, business units and/or Affiliates (excluding
those assets, business units and Affiliates that have been
offered for sale prior to the date of this Agreement) or the
sale or other similar divestiture for consideration by the
Company of all or a substantial portion of its check printing
assets, business units and/or Affiliates.
H. "Person" shall have the meaning defined in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934, as amended, 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, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of
the Company.
II. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions of
this Agreement, for the period commencing on the Effective Date and
ending on the third anniversary of such date (the "Employment
Period").
III. Terms of Employment.
A. Position and Duties.
1. Except with 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 at any time
during the 180-day period immediately preceding the Effective
Date and (b) the Executive's services shall be performed at
the location where the Executive was employed immediately
preceding the Effective Date or at a location less than 35
miles from such location.
2. 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 ("Annual Base Salary"), which
shall be paid not less often than monthly, at least equal to
twelve times the highest 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 in
respect to the twelve-month period 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 Executive's
Annual Base Salary, Executive will be treated in the same
manner as other peer executives. For example, if the Company
establishes the annual base salaries of other peer executives
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. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement. Annual Base Salary
shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer
to Annual Base Salary as so increased.
2. Annual Incentive Payment or Bonus. In addition to 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 included within the Employment
Period but which does not end within the Employment Period),
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 paid to other peer executives
under the Company's annual incentive plan, 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, (a) 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 three full fiscal years
prior to the Effective Date or, if the Executive was not in
the employment of the Company or its Affiliates during one or
more of the last three full fiscal years, the average of
Executive's Annual Incentive Payments during the number of
full fiscal years prior to the Effective Date that the
Executive was so employed (annualized, in either case, in the
event that the Executive was not employed by the Company for
the whole of any such fiscal year), provided that any special
or one-time awards (such as those associated with a new hire
or promotion) shall not be taken into account (the "Recent
Annual Incentive Payment") and (b) 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 and its Affiliates to the Executive under its annual
incentive or bonus plans during the last fiscal year
immediately preceding the Effective Date, provided that any
special or one time awards (such as those associated with a
new hire or promotion) 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 for 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 the Company's
stock incentive, 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 performance 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 under such plans during the
fiscal year immediately preceding the Effective Date, provided
that any special or one-time awards (such as those associated
with a new hire or promotion) shall not be taken into account.
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 of the Company and its Affiliates,
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 by the Company and
its Affiliates for the Executive under such plans, practices,
policies and programs as in effect 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 of
the Company and its Affiliates, provided, however, that such
benefits may be reduced pursuant to a general
(across-the-board) reduction of such benefits similarly
affecting all senior officers of the Company or its
Affiliates, as the case may be.
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 provided by the Company and its Affiliates
(including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and
travel accident insurance plans and programs) to the Executive
and/or the Executive's family, to the extent applicable
generally to other peer executives of the Company and its
Affiliates, as the case may be, 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
of the Company and its Affiliates, as the case may be,
provided, however, that such benefits may be reduced pursuant
to a general (across-the-board) reduction of such benefits
similarly affecting all senior officers of the Company or its
Affiliates, as the case may be, and all senior officers of any
Person in control of the Company.
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 of the Company and its Affiliates, as the case may
be.
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, as the case may
be, 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 of the Company and its Affiliates, as the case
may be, provided, however, that such benefits may be reduced
pursuant to a general (across-the-board) reduction of such
benefits similarly affecting all senior officers of the
Company or its Affiliates, as the case may be, and all senior
officers of any
Person in control of the Company.
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 exclusive
personal secretarial and other assistance, not materially less
favorable with respect to the foregoing 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
of the Company and its Affiliates, as the case may be.
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 of the Company and its Affiliates, as the case
may be.
IV. Termination of Employment.
A. Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may, give a
Notice of Termination to the Executive in accordance with Section
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, within the 30 days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" 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 business days
as a result of incapacity due to mental or physical illness which is
determined to be total and 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 for 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 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 or a senior
officer of the Company or based upon the advice of counsel for the
Company (or if the Executive is counsel to the Company, based upon
such 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 for 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 any other
action by the Company 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 by the Company
promptly after receipt of notice thereof given by the
Executive;
2. any failure by the Company 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 by the Company promptly
after receipt of notice thereof given by the Executive;
3. the Company's requiring the Executive to be based at any
location other than as provided in clause III.A.1(b) hereof or
the Company's requiring the Executive to travel on Company
business to a substantially greater extent than required
immediately prior to the Effective Date;
4. any purported termination by the Company 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 by the Company of its Affiliates
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 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 Notice of Termination to the other
party hereto 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, (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 Board at a
meeting of the 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
Board), finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in subparagraph B.1. or
B.2. above, and specifying the particulars thereof in detail. The
failure by the Executive or the Company 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
right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting
such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder;
E. Date of Termination. "Date of Termination" means (1) if the
Executive's employment is terminated by the Company 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, (2) if the Executive's employment is
terminated during the Employment Period by the Company other than
for Cause or Disability, the Date of Termination shall be the date
on which the Company notifies the Executive of such termination, (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 by the Company for Disability, the date Executive's
employment is terminated as provided in Section IV.A., provided,
however, the Date of Termination specified in this Section E. may be
extended to the date of termination (if applicable) provided in
Section IV.F.
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 the termination, 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, the Company shall continue
to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to,
salary) and continue the Executive 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. Amounts paid under this Section IV.G. are in
addition to all other amounts due under this Agreement and shall not
be offset against or reduce any other amounts due under this
Agreement.
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 with the Company the consummation of which
would constitute a Business Combination, (ii) the Executive
terminates his 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 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. Obligations of the Company upon Termination.
A. Good Reason; Other Than for Cause. If, during the Employment Period,
the Company shall terminate the Executive's employment other than
for Cause or Disability or the Executive shall terminate employment
for Good Reason:
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) the product of (x) the higher of
(I) the Recent Annual Incentive Payment and (II) the
Annual Incentive Payment paid or payable, including any
portion thereof which has been earned but deferred (and
annualized for any fiscal year consisting of less than
twelve full months or during which the Executive was
employed for less than twelve full months), for the most
recently completed fiscal year during the Employment
Period, if any (such higher amount being referred to as
the "Highest Annual Bonus") and (y) a fraction, the
numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the
denominator of which 365 and (iii) 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"); and
(b) the amount equal to the product of (i) three and (ii)
the sum of (x) the Executive's Annual Base Salary and
(y) the Highest Annual Bonus; and
(c) an amount equal to the excess, if any, of (i) the
actuarial equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight life
annuity commencing at the date (but in no event earlier
than the third anniversary of the Date of Termination)
as of which the actuarial equivalent of such annuity is
greatest) which the Executive would have accrued under
the terms of all Pension Plans (without regard to any
amendment to any Pension Plan made subsequent to the
Effective Date and on or prior to the Date of
Termination, which amendment adversely affects in any
manner the computation
of retirement benefits thereunder), determined as if the
Executive were fully vested thereunder and had
accumulated (after the Date of Termination) thirty-six
(36) additional months of service credit thereunder and
had been credited under each Pension Plan during such
period with compensation equal to the Executive's
compensation (as defined in such Pension Plan) during
the twelve (12) months immediately preceding the Date of
Termination or, if higher, during the twelve months
immediately prior to the Effective Date, over (ii) the
actuarial equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight life
annuity commencing at the date (but in no event earlier
than the Date of Termination) as of which the actuarial
equivalent of such annuity is greatest) which the
Executive had accrued pursuant to the provisions of the
Pension Plans as of the Date of Termination. For
purposes of this Section V.A.1.(c), (a) "Pension Plan"
shall mean any tax-qualified, supplemental or excess
benefit pension plan maintained by the Company and any
other plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits
(including, but not limited to the memorandum from the
Company to the Executive dated October 11, 1995 (the
"Memorandum")) and (b) "actuarial equivalent" shall be
determined using the same assumptions utilized under the
Memorandum immediately prior to the Date of Termination
or, if more favorable to the Executive, immediately
prior to the Effective Date.
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 Company
shall continue benefits to the Executive and/or the
Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs,
practices and policies described in Section 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 of the Company and its Affiliates and their
families, as the case may be, 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 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 of the Company;
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' Stock
Incentive Plan (as amended) and as the same may be
further amended and any successor or replacement plan
(the "SIP") and, upon the Date of Termination (if the
Executive's employment is terminated by the Company
other than for Cause or Disability or by the Executive
for Good Reason), 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) following the Date of Termination (if the Executive's
employment is terminated by the Company other than for
Cause or Disability or by the Executive for Good
Reason), permit the Executive to earn and be awarded
shares of the Company pursuant to awards previously made
to the Executive under the Deluxe Corporation
Performance Share Plan as if Executive had continued as
a participant in such plan and an employee of the
Company or the relevant Affiliate until the expiration
of the performance period or periods applicable to each
such award,
(c) vest all other restricted shares and units theretofore
granted the Executive under the SIP and any other
stock-based compensation plan (other than the
Performance Share Plan), and
(d) in the case that the Company is not a surviving
corporation, to provide the Executive with the economic
equivalent of the value that the Executive would have
received had the Company been the surviving corporation
and taken the actions required in clauses (a) though (c)
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 by the Company and its
Affiliates, as the case may be, to the estates and beneficiaries of
peer executives of the Company or such Affiliates under such 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 of the Company and its Affiliates, as applicable,
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 by the Company and
its Affiliates, as applicable, to disabled 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 of the Company and its
Affiliates, as applicable, 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 the Executive (1) his
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 provided by the Company or any of
its Affiliates and 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 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.
VII. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Agreement 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 by the Company.
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) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to
such excise tax (such excise 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 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 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
individual, entity or group 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.
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, 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 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
or any of its 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 X.
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.
Miscellaneous.
A. This Agreement shall be governed by and construed in accordance with
the laws of the State of Minnesota, without reference to principles
of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective
successors and legal representatives.
B. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Xxxx X. Xxxxxxxxx III
0000 Xxxxxx Xxxxx Xxxx
Xxxxx Xxxx Xxxx, XX 00000
If to the Company:
Deluxe Corporation
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
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 effective when actually received by the addressee.
C. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
D. The Company may withhold from any amounts payable under this
Agreement such Federal, state, 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 and/or this Agreement
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 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. 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), provided, however, in
no event shall this Agreement supersede the provisions of the
Memorandum.
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. In the event that the Company is a party to a transaction which is
otherwise intended to qualify for "pooling of interests" accounting
treatment then (A) this Agreement shall, to the extent practicable,
be interpreted so as to permit such accounting treatment, and (B) to
the extent that the application of clause (A) of this Section XI.H.
does not preserve the availability of such accounting treatment,
then, the Company may modify or limit the effect of the provisions
of this Agreement to the extent necessary to qualify the
transactions as a "pooling transaction" and provide the Executive
with payments or benefits as nearly equivalent as possible to those
the Executive would have received absent such modification or
limitation, provided, however, to the extent that any provision of
the Agreement would disqualify the transaction as a "pooling"
transaction (including, if applicable, the entire Agreement) and
cannot otherwise be modified or limited, such provision shall be
null and void as of the date hereof. All determinations under this
Section XI.H. shall be made by the accounting firm whose opinion
with respect to "pooling of interests" is required as a condition to
the consummation of such transaction.
I. 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.
J. 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, on the date six months before a
Business Combination, were directors of the Corporation ("Incumbent
Directors"), provided 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
(including, for such purpose, by any individual or individuals who
have been appointed to the Committee by the Incumbent Directors);
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 its Board
of Directors, the Company has caused these presents to be executed
in its name on its behalf, all as of the day and year first above
written.
Deluxe Corporation Executive
By: /s/ Xxxx X. XxXxxxx /s/ Xxxx X. Xxxxxxxxx III
Its: General Counsel
Xxxx X. XxXxxxx
(Typed Name)
