Exhibit 10.6
August 19, 1998
Ronald E. Eilers
4920 Neal Avenue North
Stillwater, MN 55082
Dear Ron:
In order to facilitate your orderly attention to the affairs of Deluxe
Corporation and its Affiliates (as defined below), you will be provided certain
separation benefits in the event of your employment separation due to a Business
Reorganization (as defined below), subject to the terms and conditions described
below.
Beginning August 1, 1998 through July 31, 2001, if, at the time of your
employment separation, you sign a separation agreement and release and if you
are not offered a position having an equal or greater base salary and Deluxe
Annual Incentive Plan (or equivalent) bonus target, then you will receive:
A. Twelve (12) months of severance pay at your then-current level
of base monthly salary in accordance with regular Deluxe
Corporation (Deluxe) payroll practices;
B. For a period of six (6) months commencing on the first
anniversary of the initial payment in paragraph A, a monthly
payment during each month in such six (6) month period equal
to the amount, if any, that your monthly base salary at the
time of your separation exceeds your monthly compensation
during that month in such six (6) month period. In order to be
eligible to receive any such payment, you agree to provide
Deluxe a copy of documentation concerning your monthly
compensation, such as your payroll statement or, if
applicable, your written statement that you are not then
employed, and within thirty (30) days thereafter, Deluxe will
make such differential payment to you; and
C. Continuation of the medical, life, vision and dental plan
coverage in which you were a participant, if any, at the time
of your separation for the subsequent twelve (12) month period
at employee rates as such plan terms and rates may change from
time to time.
"Affiliate" means a company which is directly, or indirectly through one or more
intermediaries, controlled by or under common control with another company where
control shall mean the right, either directly or indirectly, to elect the
majority of the directors thereof without the consent or acquiescence of any
third party.
"Business Reorganization" means a change in the structure of Deluxe or any
Affiliate that results in the elimination or material reduction of your job
responsibilities.
You also agree that during the term of your employment by Deluxe or any of its
Affiliates and for a period of two (2) years thereafter, you shall retain in
confidence all proprietary and confidential information concerning Deluxe or any
of its Affiliates, including, without limitation, customer and mailing lists,
cost and pricing information, employee data, financial data, business plans,
sales and marketing plans, business acquisition or divestiture plans, research
and development activities relating to existing commercial activities and new
products, services and offerings under active consideration, trade secrets and
software which you may have acquired during the course of your employment with
Deluxe or its Affiliates and, notwithstanding the exceptions contained in the
next sentence, shall return all copies and extracts thereof (however and on
whatever medium recorded, to Deluxe, or as otherwise requested by Deluxe,
without keeping any copies thereof). The foregoing obligation does not apply to
(i) any information which was known to you prior to disclosure to you by Deluxe
or any of its Affiliates; (ii) any information which was in the public domain
prior to its disclosure to you; (iii) any information which comes into the
public domain through no fault of yours; (iv) any information which you are
required to disclose by a court or similar authority or under subpoena, provided
that you provide Deluxe with notice thereof and assist, at Deluxe's or its
Affiliates sole expense, any reasonable Deluxe or Affiliate endeavor by
appropriate means to obtain a protective order limiting the disclosure of such
information; and (v) any information which is disclosed to you by a third party
which has a legal right to make such disclosure.
You may not assign or delegate any of your rights or obligations in respect of
this agreement and any attempted assignment or delegation shall be void and of
no effect. This agreement is binding upon Deluxe Corporation and your affiliated
employer and its successors and assigns and inures to the benefit of you, your
heirs and executors. You acknowledge that you are an employee at will and agree
that your employment may be terminated, by Deluxe or any of its Affiliates of
which you were an employee, at any time for any reason or no reason. This
agreement is governed by the substantive laws of the State of Minnesota.
This agreement is not intended to provide you with payments or benefits that are
duplicative or overlap payments or benefits that will be paid or provided to you
under other agreements between you and Deluxe or its Affiliates. Accordingly,
except as provided herein, you acknowledge that there are no other agreements to
which you and Deluxe or any of its Affiliates are a party that provide severance
or continuation of income payments or welfare benefits to you or your family
following the termination of your employment, except:
Executive Retention Agreement dated as of the 9th day of January, 1998
("Retention Agreement")
This agreement will be superceded and replaced in its entirety by the Retention
Agreement on the Effective Date thereof or upon the termination prior to the
Effective Date of your employment by (i) the Company without Cause or (ii) you
for Good Reason,
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where the effect of such termination is to entitle you to receive the benefits
described in Section V.A as a result of the occurrence of event or circumstances
described in Section IV. H of the Retention Agreement. The capitalized terms
used in this paragraph will have the meanings ascribed to them in the Retention
Agreement.
We look forward to your continued contributions to Deluxe or its Affiliates
under these circumstances which we hope will provide you a greater degree of
assurance concerning your livelihood. Please contact Sonia St. Charles if you
have any questions about this letter.
With kindest regards,
/s/ J.A. Blanchard III
J.A. Blanchard III /s/ Ronald E. Eilers
Chairman, President and -----------------------------------------
Chief Executive Officer Employee
8/22/98
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Date
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