Exhibit 10.1
DESCRIPTION OF NON-EMPLOYEE DIRECTOR
COMPENSATION ARRANGEMENTS
(Updated as of April 30, 2008)
Directors who are employees of Deluxe do not receive compensation for their
service on the Board other than their compensation as employees. Each
non-employee director of Deluxe currently receives a $50,000 annual Board
retainer, payable quarterly. The Board’s non-executive chairman currently
receives an incremental annual retainer of $100,000, also payable quarterly.
In order to fairly compensate non-employee directors for their service on Board
committees, the elements and responsibilities of which will fluctuate from time
to time, committee members are paid fees for each committee meeting attended,
with the chair of each committee also receiving an annual retainer for serving
as the chair. The committee fee structure currently is as follows:

                                              Other     Audit   Compensation  
Standing     Committee   Committee   Committees
Chair Retainer
  $ 15,000     $ 7,500     $ 5,000  
In-person Meeting Attendance
  $ 2,000     $ 1,500     $ 1,500  
Telephonic Meeting Attendance
  $ 1,000     $ 750     $ 750  

Non-employee directors also receive $1,500 for each approved site visit and
director education program attended, up to a maximum of five per year, and may
receive additional compensation for the performance of duties assigned by the
Board or its committees that are considered beyond the scope of the ordinary
responsibilities of directors or committee members.
Deluxe maintains a Non-Employee Director Stock and Deferral Plan (the “Director
Plan”), which was approved by shareholders as part of Deluxe’s 2008 Stock
Incentive Plan (the “Stock Incentive Plan”). The purpose of the Director Plan is
to provide an opportunity for non-employee directors to increase their ownership
of Deluxe’s common stock and thereby align their interest in the long-term
success of Deluxe with that of the other shareholders. Under the Director Plan,
each non-employee director may elect to receive, in lieu of some or all of their
cash compensation, shares of common stock having an equivalent fair market
value. The shares of common stock receivable pursuant to the Director Plan are
issued quarterly or, at the option of the director, credited to the director in
the form of deferred stock units. These stock units vest and are converted into
shares of common stock on the earlier of the tenth anniversary of February 1st
of the year following the year in which the non-employee director ceases to
serve on the Board or such other date as is elected by the director in his or
her deferral election (for example, upon end of service as a director). Each
stock unit entitles the holder to receive dividend equivalent payments equal to
the dividend payment on one share of common stock. Any

 

--------------------------------------------------------------------------------

 

stock units issued pursuant to the Director Plan will vest and be converted into
shares of common stock in connection with certain defined changes of control of
Deluxe. All shares of common stock issued pursuant to the Director Plan are
issued under Deluxe’s Stock Incentive Plan and must be held by the non-employee
director for a minimum period of six months from the date of issuance.
Under the terms of the Stock Incentive Plan, non-employee directors also are
eligible to receive other equity-based grants, including options to purchase
shares of Deluxe’s common stock. Grants typically will be made to each director
annually upon their election or re-election to the Board by the Company’s
shareholders. The amount, form and terms of such grants are at the discretion of
the Compensation Committee (in consultation with the Corporate Governance
Committee). Any stock options granted to non-employee directors, however, must
have an exercise price at least equal to the fair market value of Deluxe’s
common stock on the date of grant.
Non-employee directors who were elected to the Board prior to October 1997 also
are eligible for certain retirement payments under the terms of a Board
retirement plan that has since been replaced by the Director Plan. Under this
predecessor plan, non-employee directors with at least five years of Board
service who retire, resign or otherwise are not nominated for reelection are
entitled to receive an annual payment equal to the annual Board retainer in
effect on July 1, 1997 ($30,000 per year) for the number of years during which
he or she served on the Board prior to October 31, 1997. In calculating a
Director’s eligibility for benefits under this plan, partial years of service
are rounded up to the nearest whole number. Retirement payments do not extend
beyond the lifetime of the retiree and are contingent upon the retiree’s
remaining available for consultation with management and refraining from
engaging in any activity in competition with Deluxe.

2