May 21, 2004
Brad Wheeless
Senior Vice President, Corporate Development
Clarke American
Dear Brad:
This letter is to confirm the agreement between you and Clarke
American
Checks, Inc. ("Clarke American" or "Company") regarding your salary
continuation/separation benefits in connection with your employment
as the
Senior Vice President/Corporate Development, commencing May 16,
2004.
All employees of Clarke American, including you, are hired and
employed
at-will. During your employment, you will be subject to Clarke
American's
policies, rules and procedures in the same manner as other
employees, except as
expressly set forth in this letter. Nothing contained in this
letter will affect
your status as an at-will employee with Clarke American.
I.
Benefits Upon Termination of Employment "Without Cause"
If your employment with Clarke American is terminated without
"Cause" (as
defined below), Clarke American will pay you twelve (12) months of
"salary
continuation" (as defined below) after you cease employment. For
the purpose of
this letter, "salary continuation" will consist of your annualized
base salary
on the date you cease employment. The salary continuation, less
required
payroll/withholding taxes and authorized deductions, will be paid
to you in
substantially equal bi-weekly payments, beginning thirty (30) days
after you
cease employment and the Separation Agreement (as defined below)
between you and
the Company becomes effective. You will also receive payment for
twelve (12)
months of the company portion of premiums for Clarke American's
welfare benefit
plan (excluding further vacation and 401kplan accrual) in effect at
the time of
your termination, subject to the terms and provisions of such plans
and the
requirements of applicable law. Such continued participation will
be concurrent
to, but without limitation of, your rights under COBRA or other
applicable laws.
The employee or ex-employee portion of the premium(s) for such
coverage shall
continue to be your responsibility. In the event that
post-employment
participation in any Clarke American welfare benefit plan is not
permitted by
the Company's standard employment policies applicable to Executives
generally,
or the terms or the plan or applicable law, then Clarke American
would not be
obligated to acquire or provide you with substitute benefits.
Brad Wheeless
May 20, 2004
Page 2
If your employment is terminated without Cause, Clarke American
will also
reimburse you for up to $10,000.00 of professional outplacement
services
provided by a mutually agreed company within 6 months after your
employment
termination date. "Professional outplacement services" shall not
include any
costs of relocating you, your family or personal belongings from
San Antonio,
Texas to any other location.
The salary continuation and benefits set out in this Section I
shall not
be reduced by your earnings from subsequent employment,
self-employment and/or
consulting following the termination of your employment without
Cause.
The salary continuation and benefits provided under this Section I
shall
be in lieu of any other compensation and/or benefits for which you
may be
eligible through any policy, plan or program of Clarke American
including but
not limited to those under Section II of this letter, with the
exception of the
following: 1) any earned and unused vacation plus all accrued
vacation, and 2)
eligibility to exercise previously issued grants under the terms
and provisions
of the Novar Executive Share Option Scheme.
Clarke American shall have no obligation to provide you the salary
continuation or benefits under this Section I if your employment is
terminated
for "Cause." For the purposes of this letter, "Cause" shall mean
any of the
following circumstances: (a) your voluntary resignation from
employment with
Clarke American; (b) your death and/or "permanent disability or
incapacity" (as
defined below); (c) your commission of any act of fraud, personal
dishonesty,
disloyalty or defalcation, or usurpation of a Company opportunity
in the course
of your employment; (d) your conviction, plea of guilty and/or nolo
contendre,
and/or the imposition of any form of deferred adjudication,
probation and/or
court-ordered community supervision program, for a felony or any
crime involving
dishonesty (felony or misdemeanor); (e) any act that has a material
adverse
effect upon the reputation of and/or the public confidence in the
Company; (f)
your failure to perform the duties and responsibilities of your
position in a
timely and professional manner within twenty (20) days after
receipt of a
written warning regarding such non-performance; (g) your failure to
comply with
Clarke American's written policies governing employees and/or your
job duties
within twenty (20) days after receipt of a written warning
regarding such
failure; or (h) your failure or refusal to comply with a reasonable
order,
policy or rule of Clarke American that is not inconsistent with
this letter in a
manner that constitutes material insubordination.
For the purposes of this letter, "permanent disability or
incapacity"
shall mean a substantial physical or mental impairment which
prevents you from
performing one or more of your job duties for a cumulative period
of twenty-six
(26) work weeks within a "rolling" twelve (12) month period
(counted backwards
from the most recent date of absence). The determination regarding
a "permanent
disability or incapacity" shall be made by a qualified and licensed
physician
selected by Clarke American and reasonably acceptable to you. In no
event,
however, shall an inability to perform your job duties
2
Brad Wheeless
May 20, 2004
Page 3
attributable to the use and/or abuse of alcohol or drugs be deemed
a "permanent
disability or incapacity."
II.
Benefits Upon "Change in Control" of Clarke American Within Three
(3)
Years From Commencement of This Agreement
In the event that at any time prior to May 16, 2007, there is a
"change in
control" of Clarke American (as defined below) and either: (i) your
employment
with Clarke American and/or a successor organization terminates due
to a
requested resignation and/or termination without "Cause" or (ii)
you resign
after the position of Senior Vi
