Exhibit 10.19
EXECUTIVE RETENTION AGREEMENT
AGREEMENT by and between Deluxe Corporation, a Minnesota corporation
(the "Company") and EXECUTIVE (the "Executive") dated as of the 18th day of
December, 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 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).
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 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
Change of Control 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. "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 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, from the
calculation of securities beneficially owned 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 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 of 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.
D. "Change of Control 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
Change of Control 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 Change of Control Period
shall not be so extended.
E. "Effective Date" shall mean the first date during the Change
of Control Period on which a Change of Control occurs.
F. "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
second 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 50 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.
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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, provided, however, that Annual
Base Salary may be reduced to an amount not less than
ninety percent (90%) of the Annual Base Salary in
effect on the Effective Date pursuant to a general
(across-the-board) reduction of base salary 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.
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. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to
the Executive under this Agreement. Except as set
forth in the first sentence of this paragraph, 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 on 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 greater of (a) the average of
Executive's Annual Incentive Payments for the last
three full fiscal years prior to the Effective Date
or, if 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 and (b)
the Executive's annual target incentive or bonus
opportunity as in effect under the Company's 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 (such greater amount being
hereinafter referred to as the "Recent Annual
Incentive Payment"). Each such Annual Incentive
Payment shall be paid no later than the end of the
third month
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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, and
all senior officers of any Person in control of the
Company.
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.
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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, as provided generally at any
time thereafter with respect to other peer executives
of the Company and its Affiliates, as the case may
be, and to similarly situated senior officers of any
Person in control of the Company.
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 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
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2. the Executive's conviction of a felony or the willful
engaging by the Executive in (a) other illegal
conduct relating to the business or assets of the
Company, or (b) gross misconduct which is materially
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, (a) the assignment to the
Executive of any duties materially inconsistent 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 (b) any other action by the
Company which results in a material diminution in the
Executive's position (or positions) with the Company
or its Affiliates, 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 and excluding any diminution
attributable to the fact that the Company is no
longer a public company;
2. any material reduction in the Executive's aggregate
compensation and incentive opportunities, or 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;
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.
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.
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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 reasonable 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 as 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 Change of
Control ever occurs) and such termination was at the request
or direction of a Person who has entered into an agreement
with the
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Company the consummation of which would constitute a Change of
Control, (ii) the Executive terminates his employment for Good
Reason prior to the Effective Date (whether or not a Change of
Control 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 Change of Control (whether or not a Change
of Control ever occurs).
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 greater of (I) the
Executive's target bonus under the Company's
annual incentive plan in respect of the year
in which the Date of Termination occurs or,
if greater, for the year in which the Change
of Control occurs (the "Target Bonus") and
(II) the Annual Incentive Payment that the
Executive would have earned for the year in
which the Date of Termination occurs based
upon projecting to the end of such year the
Company's actual performance through the
Date of Termination with respect to the
performance measures on which such payment
would have been based 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 greater of
(I) the Executive's Target Bonus and (II)
the average of Executive's Annual Incentive
Payments for the last three full fiscal
years prior to the Effective Date or, if
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;
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 by
the Company or any Affiliate based on the
Reference Amount (defined below) to the
Executive's account under (x) all of the
retirement plans of the Company and its
Affiliates 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 as such 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 by the Company or any
Affiliate based on the Reference Amount to
the Executive's account under (x) all of the
retirement plans of the Company and its
Affiliates in which the Executive was
eligible to participate immediately prior to
the Date of Termination and (y) any excess
or supplemental retirement plan in which the
Executive was eligible to participate
immediately prior
8
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) without adjustment in
the case of death or Disability.
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. the Company shall pay to the Executive in a lump sum
in cash within 5 days after the Date of Termination
an amount equal to the sum of a pro rata portion to
the Date of Termination of the aggregate value of all
contingent incentive compensation awards to the
Executive for all then uncompleted periods under the
Deluxe Value Growth Plan (if such plan is adopted by
the Board) or any successor plan of the Company in
which the Executive participates, calculated as to
each such award by multiplying (i) the greater of (a)
the award that the Executive would have earned on the
last day of the performance award period, assuming
the achievement, at the target level, of the
individual and corporate performance goals
established with respect to such award and (b) the
award that the Executive would have earned on the
last day of the performance award period, assuming
the achievement of the individual and corporate
performance goals established with respect to such
award at the level that would have been achieved had
performance for the portion of the performance award
period preceding the date of termination been
projected for the entire performance award period, by
(ii) the fraction obtained by dividing the number of
full months and any fractional portion of a month
during such performance award period through the Date
of Termination by the total number of months
contained in such performance award period;
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, provided,
however, that the amount paid by the Company pursuant
to this paragraph shall in no event exceed $25,000;
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
9
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.
10
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 Change of Control 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
the accounting firm that was, immediately prior to the Change
of Control the Company's independent auditors (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. 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.
11
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
▇▇▇ 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 ▇▇▇ 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.
12
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 at all
times 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"
13
shall mean the Company as hereinbefore defined and, except for
purposes of determining whether a Change of Control has
occurred, shall include 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 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:
If to the Company:
Deluxe Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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 benefits accruing to the Executive
upon termination of employment following a Change of Control,
recapitalization or other business combination, restructuring
or reorganization.
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.
14
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 Change of Control, 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:
------------------------------- -------------------------------
Its:
15
