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ADDENDUM
TO EXECUTIVE RETENTION AND SEVERANCE AGREEMENTS
RELATING TO SECTION 409A OF THE INTERNAL REVENUE CODE
Deluxe
Corporation, a Minnesota corporation (the “Company”)
and the executive named below (the “Executive”) are
parties to an Executive Retention Agreement (the “Retention
Agreement”) dated
, 200 .
The
Compensation Committee of the Company has approved this Addendum to
each of the Retention Agreements for the purpose of insuring that
the benefits provided under the Retention Agreement will be paid in
a manner that complies with Section 409A of the Internal
Revenue Code and the IRS regulations thereunder
(“Section 409A”). If this Addendum is accepted by
the Executive, it shall become part of the Retention Agreement.
Acceptance of the Addendum is completely voluntary on the part of
each Executive, and an Executive’s failure to accept the
Addendum will not in any way affect his rights under the Retention
Agreement. However, an Executive who fails to accept the Addendum
by December 31, 2008, may be subject to tax penalties under
Section 409A, for which the Company will have no
responsibility.
If
the Company and the Executive are parties to more than one
Executive Retention Agreement, this Addendum, if accepted by the
Executive, shall apply to each such Executive Retention Agreement.
In addition, if the Company and the Executive are parties to either
an employment agreement or a letter agreement (a “Severance
Agreement”) providing for the payment of severance to the
Executive if the Executive’s employment is terminated under
certain circumstances prior to the Effective Date as defined in the
Retention Agreement, certain provisions of this Addendum shall also
apply to the Severance Agreement.
The
Company and the Executive agree that the payment of the benefits
provided in the Retention Agreement shall be governed by the
following rules:
1. If
the Executive wishes to elect to defer the receipt of any Annual
Incentive Payment pursuant to the last sentence of
Section III.B.2, such election shall be made prior to the
beginning of the fiscal year for the Annual Incentive Payment in
accordance with the Deluxe Corporation Deferred Compensation Plan
(2008 Restatement) (the “Deferred Compensation Plan”),
and such deferral election shall be otherwise governed by the terms
of the Deferred Compensation Plan.
2. Any
reimbursement of medical expenses (including dental, prescription,
vision, or similar expenses) incurred by the Executive or his
dependents pursuant to continued coverage of the Executive after
the Date of Termination pursuant to Section V.A.2, V.B. or V.C
shall be paid to the Executive or dependent not later than the end
of the year following the year in which such expense is incurred.
This provision is intended to establish the latest possible date
for payment as required by Section 409A, and shall not be
interpreted to justify delaying any reimbursement beyond the date
it would normally have been paid.
3. If
there is a dispute concerning the reason for a termination of
employment pursuant to Section IV. F. the following rules
shall apply:
(a) The
Executive shall take prompt and reasonable, good faith efforts to
collect the amount of benefits that the Executive claims under the
Retention Agreement. The Executive shall accept any partial payment
offered by the Company, but only if such payment may be accepted
without prejudicing the Executive’s claim to the balance of
the amount claimed. The Executive shall commence appropriate action
to collect the amount claimed not later than 180 days after
the date the notice is given that a dispute exists. The failure of
the Executive to take any such enforcement action shall not
prejudice the Executive’s right to the benefits claimed under
the Retention Agreement, but may result in adverse tax consequences
for the Executive pursuant to Section 409A.
(b) Any
benefit the payment of which was delayed beyond the date
on
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