Exhibit 10.19
SEPARATION AGREEMENT
This Separation Agreement is made and entered into as of the 8th day of
November, 1996, between Xxxxx X. Xxxxxxx (Employee) and Deluxe Corporation, a
Minnesota corporation having its principal offices at 0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (Deluxe).
WHEREAS, Employee has been employed by Deluxe from July 20, 1959 through
January 3, 1997; and
WHEREAS, the parties agree to set forth herein the terms and conditions
under which such employment is terminated.
NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein the parties agree as follows:
1. Termination. Employee and Deluxe agree that Employee voluntarily
retires from Deluxe on January 3, 1997 (Termination Date).
2. Payments and Benefits. Deluxe and Employee agree that the following
payments and benefits, less applicable payroll and any supplemental deductions,
shall be provided by Deluxe to Employee:
A. Six Hundred Seventy-Five Thousand and 00/100 Dollars
($675,000.00) payable on Termination Date.
B. Full salary at an annual base rate of $450,000, paid
on regular pay dates, through and including December
31, 1996.
C. All accrued vacation pay as of Termination Date.
D. Executive out-placement services to Employee through
Personnel Decisions, Inc. Career Management Services
(PDI) or its affiliate. Such services shall be paid
for by Deluxe upon receipt of an invoice from the
agency.
E. Accrued amounts in Employee's Stock Purchase Plan
Account as of Termination Date.
F. Forgiveness as of Termination Date of Employee's loan
from Deluxe related to the purchase of Employee's
automobile, the discharge of Employee's obligations
under the loan agreement, as soon thereafter as
practicable, delivery to Employee of documentation
necessary to discharge any security interest of
Deluxe in the automobile and to assign title to
Employee in the phone and extended warranty
associated with his automobile.
G. Payment of premiums at employee rates for and
provision of medical coverage as though Employee were
a qualified retiree at 58 years of age and at maximum
length of service (35 years) until Employee is
eligible for Medicare coverage and if Employee so
chooses, and upon his payment of premiums for
coverage at employee rates, coverage under the terms
of Deluxe's life, vision and dental plans in which
Employee participated on his own and his family's
behalf as any of the foregoing plans referred to in
this subsection may be changed from time to time
through the earlier of June 30, 1998 or, with respect
to the life, dental and vision plans until similar
coverage is provided by another employer at similar
rates for full-time employees.
H. An opportunity to exercise any unexercised options
granted to Employee under the 1984 Deluxe Corporation
Stock Option Plan during the two (2) year period
following Termination Date in accordance with the
terms of the Plan and each grant.
I. With respect to any options referred to in subsection
2H that are unexpired and unexcercized as of the end
of the two (2) year period following the two (2) year
period described in subsection 2H , an opportunity to
enter into a Stock Appreciation Rights Agreement on
January 3, 1999 in the form attached as Exhibit A.
J. Vesting of the unvested non-qualified stock options
granted to Employee (1) on November 11, 1994 to
purchase 25,000 shares thereunder; and (2) on
February 9, 1996 to purchase 18,750 shares thereunder
of Deluxe common stock in accordance with the terms
of the applicable option agreements, as amended.
K. Issuance, without restriction, of the remaining 2,326
shares of Deluxe common stock granted to Employee on
January 3, 1994 under the Stock Incentive Plan
(1994).
L. Continuation of Employee's rights to earn shares of
the Corporation's common stock arising from the award
of 10,000 stock units (up to a maximum of 15,000
shares) granted on May 31, 1994 under the Deluxe
Corporation Performance Share Plan and the award of
7,500 stock units (up to a maximum of 11,250 shares)
granted on February 9, 1996.
M. Employee acknowledges that his rights under the
Deluxe Corporation Annual Incentive Plan terminate on
Termination Date. In lieu of any payment under the
Plan, Deluxe agrees to pay to Employee, at the time
Employee would have received the payment had he
continued as an employee, an amount equivalent to the
amount of incentive compensation Employee would have
received for 1996 had he continued as an
employee,based upon the formula applicable to
Employee under the Deluxe Corporation Annual
Incentive Plan for 1996.
N. Payment to Employee of his accrued balance in the
Deferred Compensation Plan in monthly installments
over a ten (10) year period in accordance with the
terms of the Plan and the payout option selected by
Employee.
O. Payment to Employee of his accrued balance in his
Supplemental Retirement Plan Account over a ten (10)
year period in accordance with the terms of the Plan
and the payout option selected by Employee.
P. Assignment to Employee of Deluxe's equity interest in
a membership at North Oaks Golf Club having a value
of Eight Thousand Five Hundred and 00/100 Dollars
($8,500.00).
Q. Payment of up to Five Thousand and 00/100 Dollars
($5,000.00) in legal expenses for Employee's
attorney's review and negotiation of this transaction
on Employee's behalf upon receipt of an invoice from
such attorney.
R. Payment of up to Two Thousand and 00/100 Dollars
($2,000.00) of Employee's income tax return
preparation expenses for 1996 tax returns upon
receipt of an invoice from the tax return preparer.
Except as otherwise provided, the payments and benefits described in paragraphs
A, D, F, I, L, M,P, Q and R of this Section shall be provided by Deluxe to
Employee upon receipt of the signed Separation Agreement and a Release in the
form attached as Exhibit B, but no earlier than five (5) nor later than seven
(7) days after the expiration of the rescission period referred to in Section 7.
Such payments shall be reduced by any amount Employee owes Deluxe for
outstanding credit card or other charges.
3. Full Compensation. The payments that will be made to Employee or for
his benefit pursuant to this Separation Agreement shall compensate him for and
extinguish any and all claims he may have arising out of his employment with
Deluxe or his employment termination as of the effective date of the Release,
including but not limited to claims for attorneys' fees and costs, and any and
all claims for any type of legal or equitable relief.
4. Insurance. If Employee rescinds this Separation Agreement pursuant
to Section 7 below, Employee will still have the right to continue his health,
dental, vision and life plans as provided by law.
5. Benefits. Employee is a participant in various employee benefit
plans sponsored by Deluxe. Unless otherwise agreed hereunder, the payment or
cancellation of benefits, including the amounts and the timing thereof, will be
governed by the terms of the employee benefit plans. Deluxe will provide
Employee the same assistance given other participants in employee benefit plans
so long as he is entitled to benefits thereunder.
6. Records, Documents and Property. Employee will return to Deluxe all
of its property including, but not limited to its records, correspondence and
documents as well as all computers, keys and corporate charge cards.
7. Rescission. Employee acknowledges that he has had a period of
twenty-one (21) days in which to consider this Separation Agreement and the
Release referred to in Section 8 and deliver signed originals of them to the
officer and at the address set out below in this Section. Once this Separation
Agreement and the Release are executed, Employee may rescind this Separation
Agreement and the Release within seven (7) calendar days to reinstate federal
claims and fifteen (15) days to release Minnesota claims. To be effective, any
rescission within the relevant time periods must be in writing and delivered to
Deluxe Corporation, in care of Xxxxxxx X. Xxxxxx, Vice President, Deluxe
Corporation, 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, either by
hand or by mail within the respective periods. If sent by mail, the rescission
must be (1) postmarked within the respective periods (2) properly addressed to
Deluxe Corporation; and (3) sent by certified mail, return receipt requested.
8. General Release. In consideration of the payments and other
undertakings stated herein, the parties shall sign a separate Release in the
form attached hereto as Exhibit B at the time each signs this Separation
Agreement.
9. Resignation. The parties agree that Employee remains an employee of
Deluxe through January 3, 1997. Effective November 8, 1996, Employee hereby
resigns as a member of the Board of Directors of Deluxe, and effective December
31, 1996 as the Executive Vice President of Deluxe and President of its
manufacturing division.. Employee agrees and acknowledges that he is no longer a
member of the Board of Directors for any of the subsidiaries of Deluxe on which
Employee was a member of the Board, except that Employee agrees to continue as a
member of the Board of Directors of PaperDirect Holdings, Ltd. and PaperDirect
Pacific Pty Limited, the "PDP Companies", until the earlier of their disposition
by Deluxe or December 31, 1997 and to be reasonably available and provide
reasonable assistance at the expense of Deluxe in any matters related thereto.
Deluxe agrees to indemnify Employee as required or permitted by Minnesota State
law for his acts or omissions in such capacities and as a member of the Board of
Directors of Printware, Inc. for the period prior to Termination Date and with
respect to his acts or omissions as a member of the Board of the PDP Companies,
for the period prior to the earlier of their respective dispositions or December
31, 1997.
10. Confidential Deluxe Information. Employee agrees that for a period
of two (2) years after execution of this Agreement, Employee will not use or
disclose Confidential Information of Deluxe.
"Confidential Information" means all confidential or proprietary
information of Deluxe or any affiliate or subsidiary, including without
limitation, financial data, trade secrets, customer and mailing lists, business
plans, sales and marketing plans, business acquisition or divestiture plans,
data processing systems, books and records, research and development activities
relating to existing commercial activities and new products, services and
offerings under active consideration, which Employee may have acquired or
obtained during the course of Employee's employment with Deluxe. This
confidentiality commitment is not applicable to information intentionally
disclosed to the public by Deluxe or information received by Employee from third
parties not under an obligation of confidentiality to Deluxe or any of its
affiliates or subsidiaries.
11. Nonrecruitment. For the period of two (2) years after Termination
Date, Employee shall not for himself or any other person or entity either
directly or indirectly, recruit for employment or contract for the services of
any person who at anytime during the period January 1, 1996 through Termination
Date is or was an employee of Deluxe or any of its affiliates or subsidiaries.
12. Confidentiality. The terms of this Separation Agreement and the
Release shall be treated as confidential by both Employee and Deluxe and neither
party shall disclose its terms to anyone, except Employee may disclose the terms
of this Separation Agreement and the Release to his immediate family, legal
counsel and accountant. Deluxe may disclose the terms of this Separation
Agreement and the Release to its officers and directors, outside auditors, and
to employees who have a legitimate need to know the terms in the course of
performing their duties and either party may disclose the terms of this
Separation Agreement and the Release if requested or ordered by a governmental
agency or court of competent jurisdiction. Each party recognizes and agrees that
this confidentiality provision was a significant inducement for the other to
enter into this Separation Agreement and Release.
13. Non-Assignment. The parties agree that this Separation Agreement
and the Release will not be assigned by either party unless the other party
agrees to such assignment in writing.
14. Merger. This Separation Agreement and the Release and the employee
benefit plans in which Employee is a participant supersede all prior oral and
written agreements and communications between the parties. Employee and Deluxe
agree that any and all claims which either might have had against the other are
fully released and discharged by this Separation Agreement and the Release, and
that the only claims which either may hereafter assert against the other will be
derived only from an alleged breach of the terms of the Separation Agreement or
the Release or, as against Deluxe, or any employee benefit plan in which
Employee is a participant.
15. Entire Agreement. This Separation Agreement and Release constitute
the entire agreement between the parties with respect to the termination of
Employee's employment relationship with Deluxe, and the parties agree that there
were no inducements or representations leading to the execution of this
Separation Agreement or Release except as herein contained.
16. Voluntary and Knowing Action. Employee acknowledges that he has
been advised of his right to be represented by his own attorney, that he has
read and understands the terms of this Separation Agreement and the Release, and
that he is voluntarily entering into the Separation Agreement and the Release.
17. Governing Law. This Separation Agreement and the Release will be
construed and interpreted in accordance with the laws of the State of Minnesota.
18. Counterparts. This Separation Agreement and the Release may be
executed simultaneously in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one of the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Separation
Agreement as of the day and year first above written.
DELUXE CORPORATION EMPLOYEE
By: /s/ X. X. Xxxxxxxxx III By: /s/ Xxxxx X. Xxxxxxx
X. X. Xxxxxxxxx III Xxxxx X. Xxxxxxx
President
STATE OF MINNESOTA
COUNTY OF XXXXXX
I, Xxxxxxxx X. Xxxxx, a Notary Public, do hereby certify that Xxxxx X.
Xxxxxxx personally known to me to be the same person whose name is subscribed to
the foregoing instrument, appeared before me this day in person and acknowledged
that he signed and delivered the said instrument as his free and voluntary act,
for the uses and purposes therein set forth.
Given under my hand and official seal this 8th day of November, 1996.
/s/ Xxxxxxxx X. Xxxxx
Notary Public
STATE OF MINNESOTA
COUNTY OF XXXXXX
The foregoing instrument was acknowledged before me this 8th day of November,
1996 by X. X. Xxxxxxxxx III, the President of Deluxe Corporation, a Minnesota
corporation, on behalf of the Corporation.
/s/ Xxxxxxxx X. Xxxxx
Notary Public
EXHIBIT A
STOCK APPRECIATION RIGHTS AGREEMENT
This Stock Appreciation Rights Agreement, made and entered into as of
January 3, 1999, between Deluxe Corporation, a Minnesota Corporation ("Deluxe")
and Xxxxx X. Xxxxxxx, an individual resident of _________________ ("Employee").
WHEREAS, Employee wishes to have the right to extend the pert' Employee
could receive benefits related to certain stock options that will expire; and
WHEREAS Deluxe agrees to provide a qualified means under which E~ could
receive a cash equivalent of the value of certain options after their expiration
date.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy of which are hereby acknowledged, Deluxe and Employee hereby agree as
follows:
1. Certain options granted to Xxxxx X. Xxxxxxx under the 1984 Stock
Option Plan ("Plan") will expire on January 3, 1999.
2. Deluxe hereby grants to Employee stock appreciation rights ("SAR"):
(1) consisting of the number of shares offered by the options as listed on
Exhibit A which remain unexercised as of January 3, 1999; (2) for the-period
January 3, 1999 through the earlier of the date each such option would have
expired under the Plan without regard to Section 8 thereof or January 3, 2001;
(3) at a xxxxx xxxxx equal to the corresponding option exercise price; and (4)
permitting Employee to receive a cash payment from Deluxe upon exercise of a SAR
in accordance with this Agreement.
3. The number of shares as to which a SAR is exercised may not exceed
the number of shares that could have been purchased upon exercising the
unexercised portion of the corresponding option.
4. The per share amount payable to Employee in cash upon the exercise of
a SAR shall be the excess, if positive, of the fair market value of one common
share of Deluxe, on the date of exercise over the option price set forth in each
stock option grant. Such fair market value shall be the closing price of Deluxe
common stock on the New York Stock Exchange ("NYSE") on the date the fair market
value is being determined or, if no sale has been made on the NYSE on such date,
on the last preceding day on which a sale was made.
5. A SAR may be exercised by delivery to Deluxe of a written notice
which shall state that Employee elects to exercise the SAR as to the number of
shares specified in the notice. The date of exercise of the SAR shall be the
date Deluxe receives such notice.
6. Deluxe shall pay Employee amounts due upon exercise of a SAR within
ten (10) days after exercise, except that Deluxe shall withhold or collect from
Employee such amounts as are required by any applicable federal or state income
tax laws or regulations for payroll withholding, income or other tax purposes.
7. No SAR shall be transferable other than by will or by the laws of
descent and distribution and any SAR may be exercised, during the lifetime of
Employee, only by Employee. In the event Employee dies prior to the effective
date of this Agreement, Employee's rights hereunder may be exercised by the
person to whom the SARs would have transferred by will or the applicable law of
descent and distribution and such person shall have a right to exercise any SAR
in accordance with the terms of this Agreement that would have remained in
existence at the time of the effective date of this Agreement but for Employee's
death.
8. Employee shall not disclose either the contents or any of the terms
and conditions of this Agreement to any other person except to his immediate
family, legal counsel and tax advisor.
9. If there is any change in Deluxe's common stock through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in corporate structure, adjustments will be made in the number of
shares and the price per share subject to the SAR in order to prevent dilution
or enlargement of the SARs granted hereunder.
IN WITNESS WHEREOF, Deluxe and Employee have executed this Agreement
____________________________________________ on the date set forth in the first
paragraph.
Signature: _____________________________
Xxxxx X. Xxxxxxx
Signature: _____________________________
X. X. Xxxxxxxxx III
President
EXHIBIT B
RELEASE
Definitions. We intend all words used in this Release to have their plain
meaning in ordinary English. Technical legal words are not needed to describe
what we mean. Specific terms we use in this Release have the following meanings:
A. We, as used herein, includes Deluxe Corporation defined at B and
Employee, as defined at C.
B. Deluxe Corporation, as used herein, shall at all times mean Deluxe
Corporation, its subsidiaries, successors and assigns, their affiliated
companies, their successors and assigns, their affiliated and predecessor
companies and the present or former officers, employees and agents of any of
them, whether in their individual or official capacities.
C. Employee, as used herein, means Xxxxx X. Xxxxxxx or anyone who has
or obtains any legal rights or claims through him.
D. Employee's Claims means any rights Employee has now or hereafter to
any relief of any kind from Deluxe Corporation whether or not Employee knows now
about those rights, arising out of his employment with Deluxe Corporation, and
his employment termination, including, but not limited to, claims for breach of
contracts; fraud or misrepresentation; violation of the Minnesota
anti-discrimination laws, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, or other federal, state, or local civil rights
laws based on age, disability or other protected class status; defamation;
intentional or negligent infliction of emotional distress; breach of the
covenant of good faith and fair dealing; promissory estoppel; negligence;
wrongful termination of employment; and any other claims for unlawful employment
practices. However, this Release shall not affect any claims which Employee
could have made under any welfare benefit plan or any profit sharing, pension or
retirement plan through Deluxe Corporation or which may arise under the
Agreement to which this Release is attached.
Agreement to Release Claims. Employee agrees that he is receiving a substantial
amount of money and benefits paid or provided by Deluxe Corporation. Employee
agrees to give up all Employee's Claims against Deluxe Corporation in exchange
for those payments and benefits. Employee will not bring any lawsuits, file any
charges, complaints, or notices, or make any other demands against Deluxe
Corporation based on Employee's Claims. Employee agrees that the money and
benefits Employee is receiving are full and fair compensation for the release of
all Employee's Claims. Employee agrees that Deluxe Corporation does not owe
Employee anything in addition to what Employee will be receiving.
Employee understands that he may rescind (that is, cancel) this Release within
seven (7) calendar days of signing it to reinstate federal claims and within
fifteen (15) days to reinstate state claims. To be effective, Employee's
rescission must be in writing and delivered to Deluxe Corporation in care of
Xxxxxxx X. Xxxxxx, Vice President, Deluxe Corporation, 0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, either by hand or by mail within the relevant
period. If sent by mail, the rescission must be postmarked within the relevant
period, properly addressed to Deluxe Corporation, and sent by certified mail,
return receipt requested.
Deluxe Corporation agrees to give up any claim against Employee that Deluxe
Corporation may have now or hereafter arising from or in connection with
Employee's employment with Deluxe Corporation, except as may arise under the
Agreement to which this Release is attached.
We acknowledge that we have read this Release carefully and understand all its
terms. In agreeing to sign this Release, we have not relied on any statements or
explanations made by either of us.
We agree that this Release shall be effective as of the last date set out below.
Deluxe Corporation and Employee understand and agree that this Release, the
Agreement, the Stock Appreciation Rights Agreement and the Deluxe Corporation
employee benefit plans in which Employee is a participant, contain all of the
agreements between Deluxe Corporation and Employee. We have no other written or
oral agreements.
Dated: November 8, 1996 /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Witnesses:
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
DELUXE CORPORATION
Dated: November 8, 1996
By: /s/ X. X. Xxxxxxxxx III
X. X. Xxxxxxxxx III
President
Witnesses:
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
