Company: DLX
Filing Date: 2025-03-10
Form Type: DEF 14A
Source: 0000027996-25-000107
Chunk: 60

Company: DELUXE CORP
Filing Date: 2025-03-10
Form: DEF 14A
Chunk 60
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2022 Stock Incentive Plan (the Stock Plan), which was initially approved at our 2022 Annual Meeting of Shareholders, and amended at our 2023 Annual Meeting of Shareholders. On February 20, 2025, upon recommendation of the Compensation and Talent Committee (referred to as the Committee throughout this Agenda Item 3) and subject to shareholder approval, our board adopted Amendment No. 2 to the Stock Plan (Amendment No. 2). Amendment No. 2 increases the maximum number of shares of common stock available for grant under the Stock Plan by 2,200,000 shares. As of February 20, 2025, 68,807 shares are available for grant under the Stock Plan (excluding the 2,200,000 additional shares that would be available if shareholders approve Amendment No. 2). The complete text of Amendment No. 2 is attached as Annex B to this Proxy Statement.

#### Reasons for Amendment No. 2
When the Stock Plan was amended in 2023, the Committee anticipated that the number of authorized shares would be sufficient to grant share-based compensation awards for one to three fiscal years. This estimation accounted for various factors, including future stock prices, competitive market practices for award sizes, and considerations related to attracting and retaining employee talent. The authorized shares lasted for two years, which was within the expected range. This outcome resulted from managing our burn rate and customary recycling of forfeited shares (i.e., non-liberal recycling policy).

Our board believes that the Stock Plan and our overall stock-based compensation program is essential in attracting, retaining and motivating highly qualified executive officers and other employees and non-employee directors to enhance the success of the company. Our board believes that the proposed increase in the maximum number of shares of common stock to be available under the Stock Plan is necessary for the company to continue to access these benefits. Further, unless Amendment No. 2 is adopted, we will need to curtail grants of stock incentive awards to executive officers, other employees and non-employee directors, which would put us at a competitive disadvantage in recruiting and retaining talent, and also make it more difficult for us to align employee interests with our shareholders. Accordingly, the board recommends adoption of Amendment No. 2 in order to continue granting awards at market-competitive levels to our executive officers, other employees, and to non-employee directors.

Historical Equity Granting Practices and Voting Power Dilution

The Stock Plan is an omnibus stock incentive plan that allows us to