Exhibit 10.22
AGREEMENT
This Agreement is entered into as of the as of the 24th day of October,
1994 by and between Deluxe Corporation ("Deluxe") and Michael R. Schwab
("Executive").
WITNESSETH
WHEREAS, Deluxe desires to employ Executive and Executive desires to
accept employment with Deluxe as Senior Vice President, Chief Information
Officer; and
WHEREAS, Executive and Deluxe wish to agree (i) on certain terms and
conditions of Executive's employment by Deluxe and (ii) in advance of any
separation from employment occurring during the term of this Agreement on the
terms of Executive's severance from employment.
NOW, THEREFORE, in consideration of Executive's acceptance of
employment with Deluxe, and intending to be legally bound, the parties hereto
agree as follows:
1. Term. Unless terminated at an earlier date in accordance with
Section 4, this Agreement shall have a term of three (3) years from the date
hereof ("Term").
2. Service with Deluxe. During the Term, Executive agrees to perform
the employment duties typically assigned to a Corporate Senior Vice President,
Chief Information Officer and such other employment duties as the Board of
Directors, the Chief Executive Officer or the Chief Operating Officer of Deluxe
shall reasonably assign from time to time (the "Employment Duties").
3. Performance of Duties. Executive agrees to serve Deluxe and its
affiliates (together, the "Company") faithfully and to the best of Executive's
ability and to devote full time, attention and efforts to Executive's Employment
Duties during the Term. Executive hereby confirms that Executive is under no
contractual commitment inconsistent with the obligations set forth in this
Agreement, and that during the Term, Executive will not render or perform
services for any other corporation, firm, entity or person which are
inconsistent with the provisions of this Agreement; provided, however, that
nothing in this Agreement shall preclude Executive from engaging in charitable
and community affairs and from managing personal investments, so long as such
activities do not prevent or distract Executive from performing responsibilities
under this Agreement.
4. Termination.
(a) Death or Disability. This Agreement shall terminate upon
Executive's death or disability (as hereinafter defined).
(b) Termination by Deluxe. This Agreement shall terminate on the
date of Executive's termination of employment by Deluxe, if
during the Term:
(i) the Board of Directors, the Chief Executive Officer
or the Chief Operating Officer of Deluxe shall
terminate Executive's employment by Deluxe for
"cause," or
(ii) the Board of Directors, the Chief Executive Officer
or the Chief Operating Officer of Deluxe shall
terminate Executive's employment by Deluxe for any
other reason or no reason.
(c) For purposes of this Agreement, the term "cause" shall mean:
(i) Executive has breached the provisions of Section 6 of
this Agreement, or
(ii) Executive has otherwise failed to perform his
Employment Duties and does not cure such failure
within thirty (30) days after receipt of specific
written notice thereof, or
(iii) Executive commits an act, or omits to take action, in
bad faith which results in material detriment to the
Company, or
(iv) Executive has had excessive absences unrelated to
illness or vacation ("excessive" shall be defined in
accordance with local employment customs), or
(v) Executive has committed fraud, misappropriation,
embezzlement or other act of dishonesty in connection
with the Company or its business, or
(vi) Executive has been convicted or has pleaded guilty or
nolo contendere to criminal misconduct constituting a
gross misdemeanor or a felony, which gross
misdemeanor, or involves a breach of ethics, moral
turpitude, or immoral or other conduct reflecting
adversely upon the reputation or interest of the
Company, or
(vii) Executive's use of narcotics, liquor or illicit drugs
has had a detrimental effect on performance of
employment responsibilities, or
(viii) Executive has breached any other provision of this
Agreement and failed to cure such breach within
thirty (30) days after receipt of specific written
notice thereof.
(d) "Disability" Defined. The Board of Directors, the Chief
Executive Officer or the Chief Operating Officer may determine
that Executive has become disabled, for the purpose of this
Agreement, (i) if Executive shall qualify, because of illness
or incapacity, to begin receiving disability income
continuation payments under Deluxe's current Group Long-Term
Disability Insurance Policy or any long-term disability income
insurance policy or program that Deluxe is then maintaining
for the benefit of its executive-level employees, which
provide for receipt of disability benefits after twenty-six
(26) or more consecutive weeks of total disability of
twenty-six (26) or more cumulative weeks of total disability
due to the same or related causes in any twelve (12)
consecutive months, or (ii) if Deluxe is not then maintaining
such a disability income insurance policy or program for its
executive-level employees, if Executive is unable, because of
illness or incapacity, to render normal employment services
pursuant to this Agreement for a period of twenty-six (26) or
more consecutive weeks of total disability or twenty-six (26)
or more cumulative weeks of total disability due to the same
or related cause in any twelve (12) consecutive months.
(e) Termination by Executive. Executive may terminate his
employment by Deluxe at any time during the Term for "good
reason" or for any other reason, whereupon this Agreement
shall terminate. For purposes of this Agreement, "good reason"
is: (i) a material and long-term change in Executive's office,
title, reporting relationship, authority, or Employment
Duties; or (ii) relocation of Executive to a location other
than the greater Minneapolis, St. Paul area, unless Deluxe's
corporate headquarters is relocated, then in that event if
Executive is relocated to a location other than the area of
Deluxe's headquarters. In order for Executive to terminate his
employment relationship for good reason, Executive shall
provide Deluxe with written notice stating the good reason(s)
for terminating the employment relationship. If Deluxe does
not, within thirty (30) days of having received such written
notice, cure such treatment of Executive, Executive may resign
his position for good reason within the meaning of this
Agreement.
5. If Executive's employment relationship with Deluxe is terminated
during the Term by Executive for good reason or by Deluxe for other than cause,
the agreed severance payments and benefits to Executive, which shall be
Executive's exclusive remedy for such termination, shall be as follows:
(a) Deluxe shall pay to Executive continuation of salary for one
(1) year at Executive's then current salary (which salary
shall not be less than Executive's salary upon acceptance of
employment), to be paid on Executive's regular pay days,
together with payment to Executive of an amount equal to the
target annual incentive bonus for the year in which the
termination occurs. If the target annual incentive bonus for
that year has not been set, the previous year's target annual
incentive bonus shall be used. Payment of the target annual
incentive bonus as set forth herein shall be made at the same
time as Executive's first salary continuation payment is due,
unless Executive shall elect a later payment, without
interest. In the event that Executive obtains other employment
("New Position") during such one year period, Executive will
promptly notify Deluxe of his employment commencement date and
base rate of compensation for the New Position, and Deluxe
shall be entitled to set off against any salary continuation
payments to be made from and after such employment
commencement date, an amount equal to Executive's base rate of
compensation for the New Position for the remainder of such
one year period.
(b) Deluxe shall provide for full (100%) vesting of all of
Executive's pension rights, if any, under Deluxe's Profit
Sharing Trust, Pension and Supplemental Retirement Plans
through the date of his separation from employment pursuant to
this Agreement.
(c) Deluxe shall provide Executive additional retirement income
equivalent to that available from purchasing a single-premium
retirement annuity in the amount of $45,000.00.
(d) Executive shall be provided a period of at least one hundred
eighty (180) days from the date of his separation in which to
exercise any then outstanding, vested non-qualified stock
options.
(e) Executive may request an immediate distribution of any
deferred compensation account maintained for Executive at
Deluxe by submitting such request in writing to Deluxe's Chief
Executive Officer or Chief Operating Officer and such officer
shall present such request together with such officer's
recommendation for approval to Deluxe's Board of Directors or
any committee thereof charged with administering such deferred
compensation program.
(f) Deluxe shall continue to make available to Executive medical,
dental, long-term disability and life insurance benefit plans
on such terms and at such costs as such benefits are from time
to time offered to Deluxe's senior executives and eligible
spouses, if and to the extent that Executive participated in
such plans immediately prior to his separation (i) for a
period of one (1) year from the date of Executive's separation
from employment in the case of dental, long-term disability
and life insurance and (ii) until Executive becomes eligible
for Medicare in the case of medical insurance. Deluxe shall
not be required to continue Executive's eligibility for a
particular employee benefit beyond the date when Executive
obtains comparable employment by or comparable benefits from
another employer.
(g) Executive shall be provided at Deluxe's expense, Senior
Executive outplacement services from a national outplacement
firm of his choosing, provided that the cost of such services
does not exceed $30,000.
6. Confidential Information. Except as permitted or directed by the
Deluxe's Board of Directors, Chief Executive Officer or Chief Operating Officer
in writing or as required by law, during the Term or at any time thereafter,
Executive shall not divulge, furnish or make accessible to anyone or use in any
way (other than in the ordinary course of business of the Company) any
confidential or secret knowledge or information of the Company which Executive
has acquired or become acquainted with or will acquire or become acquainted with
prior to the termination of Executive's employment by the Deluxe, whether
developed by Executive or by others, including, without limitation, any trade
secrets, confidential or secret designs, processes, formulae, plans, devices or
materials (whether or not patented or patentable) directly or indirectly useful
in any aspect of the business of the Company, any customer or supplier lists of
the Company, any confidential or secret development or research work of the
Company, or any other confidential information or secret aspects of the
business, strategy or business methods of the Company. Executive acknowledges
that the above-described knowledge or information constitutes and will
constitute a unique and valuable asset of the Company and represents a
substantial investment of time and expense by the Company, and that any
disclosure or other use of such knowledge or information other than for the sole
benefit of the Company would be wrongful and would cause irreparable harm to the
Company. Both during and after the Term, Executive will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company. The foregoing obligations of confidentiality, however, shall not apply
to any knowledge or information which is or subsequently becomes generally
publicly known in the form in which it was obtained from the Company, other than
as a direct or indirect result of the breach of this Agreement by Executive.
7. Arbitration. Any dispute arising out or relating to the meaning,
interpretation or application of this Agreement, including without limitation
any determination of whether Executive's separation from Deluxe's employment was
"for cause" or "for good reason," shall be submitted to arbitration in
accordance with the commercial rules of the American Arbitration Association.
Unless otherwise mutually agreed, arbitration hearings shall be held in St.
Paul, Minnesota. The burden of proof on a party alleging a breach of this
Agreement shall be on the party alleging the breach.
8. Executive's Estate. If Executive dies during the Term while in the
employment of Deluxe and provided that Deluxe is not entitled to terminate
Executive's employment for cause, Deluxe shall provide to the estate of
Executive (a) death benefits on terms and conditions similar to death benefits,
if any, made available to other Deluxe senior executives, without the
application any waiting period, and (b) the annuity described in Section 5 (c)
of this Agreement and the medical benefits described in Section 5(f) of this
Agreement. The benefits conferred in clause (a) hereof are in addition to any
death benefits made available to Executive as a part of a contributory program
in which Executive may participate.
9. Disability. In the event that Executive becomes permanently disabled
as defined herein during the Term while in the employment of Deluxe and provided
that Deluxe is not entitled to terminate Executive's employment for cause,
Deluxe shall provide Executive (a) disability benefits on terms and conditions
similar to disability benefits, if any, made available to other Deluxe senior
executives, without the application of any waiting period, and (b) the annuity
described in Section 5 (c) of this Agreement and the medical benefits described
in Section 5(f) of this Agreement.
10. Ongoing Covenants. Notwithstanding any termination of this
Agreement, the parties, in consideration of the mutual undertakings set forth
herein, shall remain bound by the provisions of this Agreement which
specifically relate to the periods, activities or obligations upon and
subsequent to the termination of Executive's employment.
11. Surrender of Records and Property. Upon termination of employment
with the Deluxe, Executive shall deliver promptly to Deluxe all property of the
Company, including all property which relate in any way to the business,
products, practices or techniques of the Company, and all documents which in
whole or in part contain any trade secrets or confidential information of the
Company.
12. Discoveries and Inventions.
(a) Executive hereby assigns and agrees to assign to Deluxe all
his right, title and interest in and to any and all
inventions, discoveries, developments, modifications,
improvements, ideas, know-how, techniques, designs, data,
programs, processes, formulae and all other work products
related to the Company's business ("Work Product") whether
tangible or intangible, which Executive conceives, reduces to
practice, reduces to writing or other storage media or
otherwise creates either alone or jointly with others in the
course of his employment.
(b) If any of such Work Product is created wholly or in part by
Executive during his hours of actual work for Deluxe, or with
the aid of the Deluxe's materials, equipment or personnel, or
arises out of or relates to the Company's business, then such
creation shall be deemed conclusively to have occurred in the
course of his employment. It is recognized that Executive will
perform the duties assigned to him at times other than his
actual working hours and the Deluxe's rights hereunder shall
not be diminished because Executive's Work Product was created
at such other times.
(c) Executive agrees to perform all acts necessary to enable
Deluxe to learn of and protect the rights it receives
hereunder, including, but not limited to, making full and
immediate disclosure to Deluxe and assisting in the
preparation and execution of all documents required to acquire
and convey to Deluxe patent and copyright protection in the
United States and elsewhere.
13. This Agreement represents the entire understanding of the parties
hereto with respect to the subject matter hereof, including without limitation,
the terms of Executive's separation from employment and supersedes and cancels
any and all prior agreements relating to the subject matter hereof.
14. This Agreement shall be interpreted, in its validity and effect
determined, in accordance the laws of the State of Minnesota.
15. This Agreement shall be binding on Executive, his heirs,
administrators, representatives, executives, successors and assigns, and on
Deluxe and its successors and the assigns.
16. The amendment, alteration or modification of this Agreement shall
only be valid when executed in writing and signed by the Parties hereto.
IN WITNESS WHEREOF, the Parties hereto have set their hands and seals.
DELUXE CORPORATION
_________________________ By: _________________________
Michael R. Schwab Its: