Document:

EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO

DELUXE CORPORATION

NON-EMPLOYEE DIRECTOR STOCK AND DEFERRAL PLAN

     The Deluxe Corporation Non-Employee Director Stock and Deferral Plan (the “Plan”), which
constitutes Annex I to the Deluxe Corporation 2008 Stock Incentive Plan, is hereby amended as
follows, pursuant to a resolution adopted by the Board of Directors of Deluxe Corporation on
December 10, 2008, and the authority reserved by the Board of Directors pursuant to Section 9 of
the Plan.

     1. The following sentence is added to the end of Section 1 of the Plan:

“All provisions of this Plan that govern the time or manner of distribution of a
Participating Director’s Deferred Stock Account, including without limitation the rules
governing changes in the time or manner of distributions pursuant to Section 6.2, the rules
governing distribution in the event of a termination of the Plan pursuant to Section 9 and
the definition of Change of Control contained in Section 12, shall also apply to Deferred
Stock Accounts established pursuant to the Deluxe Corporation Non-Employee Director Stock
and Deferral Plan (the “2000 Plan”) attached as Annex 1 to the Deluxe Corporation 2000 Stock
Incentive Plan that represent amounts credited to such Deferred Stock Accounts after
December 31, 2004, and to the extent that the provisions of this Plan governing the time and
manner of distribution are inconsistent with the provisions of the 2000 Plan, this Plan
shall constitute an amendment to the 2000 Plan in accordance with Section 9 thereof.”

2. The last sentence of Section 6.2 of the Plan is amended to read as follows:

“A Participating Director may change the date upon which he has elected to have his Deferred
Stock Account distributed by filing a new deferral payment election, provided that either
(a) such new deferral payment election is received by the Administrator at least one year
prior to the Participating Director’s separation from service (and, if the separation from
service occurs within one year after the new deferral payment election is filed, it shall be
null and void), the new payment date is not less than five years later than the original
payment date, and the change meets any other requirements imposed by the Administrator in
order to comply with Section 409A of the Internal Revenue Code, or (b) such new election is
received by the Administrator not later than December 31, 2008, in accordance with the
transitional relief provided in Section 3.01(B)(1) of IRS Notice 2007-86; and such new
deferral payment election does not cause any amount that would otherwise have been paid in
2008 to be paid in any later year, or cause any amount that would otherwise have been paid
in a later year to be paid in 2008.

3. The last sentence of Section 7 of the Plan is amended to read as follows:

 

 

“The Administrator may, in his or her discretion, (a) reduce the six month holding period
requirement, or eliminate the requirement entirely, if the Administrator determines that
such action is consistent with the requirements of Rule 16b-3, or (b) require that shares of
Common Stock issued pursuant to this Plan contain a suitable legend restricting trading in
such shares during such holding period.”

     IN WITNESS WHEREOF, Deluxe Corporation has caused this Amendment to be executed on its behalf
this 10th day of December, 2008.

	 	 	 	 	 
	 	DELUXE CORPORATION

 	 
	 	By:  	 	 
	 	 	Anthony C. Scarfone 	 
	 	 	Secretary 	 

2EX-10.5

	 	 	 	 	 

Exhibit 10.5

DELUXE CORPORATION

DEFERRED COMPENSATION PLAN

(2008 Restatement)

 

 

DELUXE CORPORATION

DEFERRED COMPENSATION PLAN

(2008 Restatement)

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 1	 	RESTATEMENT AND PURPOSE
	 	 	1	 
	 	 	 
	 	 	 	 
	 	 	1.1. Restatement
	 	 	1	 
	 	 	1.2. Purpose
	 	 	1	 
	 	 	1.3. Effective Date
	 	 	1	 
	 	 	 
	 	 	 	 
	SECTION 2	 	DEFINITIONS
	 	 	1	 
	 	 	 
	 	 	 	 
	 	 	2.1. Definitions
	 	 	1	 
	 	 	2.2. Transition Rule
	 	 	5	 
	 	 	 
	 	 	 	 
	SECTION 3	 	ELIGIBILITY FOR PARTICIPATION
	 	 	5	 
	 	 	 
	 	 	 	 
	SECTION 4	 	ENROLLMENT AND ELECTIONS
	 	 	6	 
	 	 	 
	 	 	 	 
	 	 	4.1. Initial Enrollment
	 	 	6	 
	 	 	4.2. Election to Defer
	 	 	6	 
	 	 	4.3. Special Rule for New Hires
	 	 	7	 
	 	 	4.4. 409A Transition Rule
	 	 	8	 
	 	 	 
	 	 	 	 
	SECTION 5	 	DEFERRAL ACCOUNTS
	 	 	8	 
	 	 	 
	 	 	 	 
	 	 	5.1. Participant Deferral Accounts
	 	 	8	 
	 	 	5.2. Employee Benefit Plan Equivalent
	 	 	8	 
	 	 	5.3. Investment Options
	 	 	8	 
	 	 	5.4. Charges Against Deferral Accounts
	 	 	9	 
	 	 	5.5. Contractual Obligation
	 	 	9	 
	 	 	5.6. Unsecured Interest
	 	 	9	 
	 	 	 
	 	 	 	 
	SECTION 6	 	PAYMENT OF DEFERRED AMOUNTS
	 	 	9	 
	 	 	 
	 	 	 	 
	 	 	6.1. Event of Maturity
	 	 	9	 
	 	 	6.2. Form of Distribution
	 	 	10	 
	 	 	6.2.1. Form of Payment
	 	 	10	 
	 	 	6.2.2. Time of Payment
	 	 	11	 
	 	 	6.2.3. Default
	 	 	12	 
	 	 	6.2.4. New Designation
	 	 	12	 
	 	 	6.2.5. In-Service Distribution Accounts
	 	 	13	 
	 	 	6.2.6. Code Section 162(m) Delay
	 	 	14	 
	 	 	6.3. Distribution of Taxable Amounts
	 	 	14	 
	 	 	6.4. Tax Withholding
	 	 	14	 
	 	 	6.5. Special Rule for eFunds Participants
	 	 	15	 
	 	 	 
	 	 	 	 
	SECTION 7	 	UNFORESEEABLE EMERGENCY
	 	 	16	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 8	 	BENEFICIARY
	 	 	17	 
	 	 	 
	 	 	 	 
	SECTION 9	 	NONTRANSFERABILITY
	 	 	17	 
	 	 	 
	 	 	 	 
	SECTION 10	 	DETERMINATIONS — RULES AND REGULATIONS
	 	 	17	 
	 	 	 
	 	 	 	 
	 	 	10.1. Determinations
	 	 	17	 
	 	 	10.2. Claims Procedure
	 	 	18	 
	 	 	10.2.1. Initial Claim
	 	 	18	 
	 	 	10.2.2. Notice of Initial Adverse Determination
	 	 	18	 
	 	 	10.2.3. Request for Review
	 	 	18	 
	 	 	10.2.4. Claim on Review
	 	 	18	 
	 	 	10.2.5. Notice of Adverse Determination for Claim on Review
	 	 	19	 
	 	 	10.3. Rules and Regulations 
	 	 	19	 
	 	 	10.3.1. Adoption of Rules
	 	 	19	 
	 	 	10.3.2. Specific Rules
	 	 	20	 
	 	 	10.4. Deadline to File Claim
	 	 	21	 
	 	 	10.5. Exhaustion of Administrative Remedies
	 	 	21	 
	 	 	10.5.1. Deadline to File Legal Action
	 	 	21	 
	 	 	10.6. Knowledge of Fact by Participant Imputed to Beneficiary
	 	 	21	 
	 	 	 
	 	 	 	 
	SECTION 11	 	ADMINISTRATION
	 	 	21	 
	 	 	 
	 	 	 	 
	 	 	11.1. Company
	 	 	21	 
	 	 	11.1.1. Chief Executive Officer
	 	 	21	 
	 	 	11.1.2. Committee
	 	 	21	 
	 	 	11.1.3. Management Committee
	 	 	22	 
	 	 	11.2. Conflict of Interest
	 	 	23	 
	 	 	11.3. Dual Capacity
	 	 	23	 
	 	 	11.4. Administrator
	 	 	24	 
	 	 	11.5. Named Fiduciaries
	 	 	24	 
	 	 	11.6. Service of Process
	 	 	24	 
	 	 	11.7. Administrative Expenses
	 	 	24	 
	 	 	11.8. Rules, Policies and Procedures
	 	 	24	 
	 	 	11.9. Method of Executing Instruments
	 	 	24	 
	 	 	11.10. Information Furnished by Participants
	 	 	24	 
	 	 	 
	 	 	 	 
	SECTION 12	 	AMENDMENT AND TERMINATION
	 	 	24	 
	 	 	 
	 	 	 	 
	SECTION 13	 	LIFE INSURANCE CONTRACT
	 	 	25	 
	 	 	 
	 	 	 	 
	SECTION 14	 	CHANGE IN CONTROL
	 	 	25	 
	 	 	 
	 	 	 	 
	 	 	14.1. Distributions upon Change in Control
	 	 	25	 
	 	 	14.2. Definitions and Special Rules
	 	 	26	 
	 	 	 
	 	 	 	 
	SECTION 15	 	NO VESTED RIGHTS
	 	 	27	 
	 	 	 
	 	 	 	 
	SECTION 16	 	APPLICABLE LAW
	 	 	27	 

- ii -

 

DELUXE CORPORATION

DEFERRED COMPENSATION PLAN

(2008 Restatement)

SECTION 1

RESTATEMENT AND PURPOSE

1.1. Restatement. Deluxe Corporation, a Minnesota corporation (hereinafter called the “Company”),
established, effective as of November 15, 1983, a deferred compensation plan known as the “DELUXE
CORPORATION DEFERRED COMPENSATION PLAN” (hereinafter called the “Plan”). The Plan was subsequently
restated effective as of January 1, 1996, and restated again effective October 26, 2000 (except as
otherwise indicated), and three amendments have subsequently been adopted. The Plan is now again
restated effective January 1, 2009 (the “Effective Date”), except as otherwise indicated herein, in
order to incorporate the previous amendments, amend the Plan to comply with the final regulations
issued pursuant to section 409A of the Code of the Internal Revenue Code (the “Code”), and to make
certain other changes.

1.2. Purpose. The purpose of the Plan is to provide a means whereby amounts payable by the Company
to Participants (as hereinafter defined) may be deferred to some future period. It is also the
purpose of the Plan to attract and retain as employees persons whose abilities, experience and
judgment will contribute to the growth and profitability of the Company.

1.3. Effective Date. This restatement of the Plan is generally effective as of January 1, 2009.
Certain provisions of the Plan, as set forth herein, are effective as of January 1, 2005, and any
other provision of the Plan that is required to be effective as of January 1, 2005, in order to
comply with section 409A of the Code shall be effective as of such date. Anything else contained
herein to the contrary notwithstanding, the amendments to the Plan made by this restatement (with
the exception of the amendments made to Sections 10 and 11 that are administrative in nature) shall
not apply to the portion of a Participant’s Deferral Account that consists of amounts credited to
the Deferral Account prior to January 1, 2005 and the earnings thereon, and such portion shall be
distributed in accordance with the terms of the Plan as in effect prior to this restatement.

SECTION 2

DEFINITIONS

2.1. Definitions. Whenever used in this Plan, the following terms shall have the meanings set
forth below:

	 	(a)	 	“Affiliate” means a business entity which is a member of the Controlled Group
and is recognized as an Affiliate by the Management Committee for the purposes

 

 

	 	 	 	of this Plan.
	 
	 	(b)	 	“Base Salary” means the base salary scheduled to be paid to a Participant
during a Plan Year without regard to any Incentive Compensation, or any portion
deferred under this Plan.
	 
	 	(c)	 	“Change in Control” is defined in Section 14.
	 
	 	(d)	 	“Code” means the Internal Revenue Code of 1986, and all regulations, revenue
rulings, and other forms of authoritative guidance issued pursuant thereto.
	 
	 	(e)	 	“Controlled Group” means the Company and all other business entities, whether
or not incorporated, which, together with the Company, would be considered a single
employer under section 414(b) or (c) of the Code.
	 
	 	(f)	 	“Committee” means the Compensation Committee of the Board of Directors of the
Company.
	 
	 	(g)	 	“Deferral Account” means the separate bookkeeping account representing the
unfunded and unsecured general obligation of Company established with respect to each
Participant to which is credited the dollar amounts specified in Section 5 and from
which are subtracted payments made pursuant to Sections 6 and 7.
	 
	 	(h)	 	“Disability” means, as to a Participant who is an employee of the Company, a
determination of disability under Company’s Long Term Disability Plan. If the
Participant is an employee of an Affiliate, “Disability” means as to such Participant,
a determination of disability under the Long Term Disability Plan of such Affiliate,
or, if no such Plan exists, then under the Long Term Disability Plan of the Company as
if such Participant were a participant in such plan. If the Company discontinues its
Long Term Disability Plan, then “Disability” shall mean long term disability as defined
in any other Plan of the Company which generally defines long term disability for
purposes of such other plan. In no event, however, shall a Participant be considered to
have a Disability for purposes of this Plan until such time as such Participant is
entitled to begin (or would be entitled to begin, if such Participant were a
participant in the relevant plan) receipt of benefits under such long term disability
or other relevant plan. Effective January 1, 2009, a Participant shall not be
considered to have a Disability unless the condition constituting Disability is a
medically determinable physical or mental impairment that can be expected to result in
death or to last for a continuous period of not less than twelve months, and the
Participant either has been receiving disability payments under any plan (including a
short-term disability plan or practice) of the Company or an Affiliate for at least
three months, or, if he or she is not eligible to participate in any disability plan,
is unable to engage in any substantial gainful activity.
	 
	 	(i)	 	“Eligible Employee” means an employee of the Company or its Affiliates who (i)
is an officer or assistant officer, or (ii) has significant management or professional
responsibilities, and (iii) who is highly compensated. Subject to the limitations

- 2 -

 

	 	 	 	contained in Section 3, the Management Committee from time to time may (i) establish
rules governing the eligibility of employees of the Company and its Affiliates to
participate in the Plan and, such rules, if adopted, shall be deemed to further
define or amend, as the case may be, the definition of “Eligible Employee” herein,
and (ii) permit certain employees of the Company and its Affiliates, who would not
otherwise be eligible to participate in the Plan, to participate in the Plan.
	 
	 	(j)	 	“ERISA” means the Employee Retirement Income Security Act of 1974, and all
regulations and other forms of authoritative guidance issued pursuant thereto.
	 
	 	(k)	 	“Event of Maturity” means any of the occurrences described in Section 6.1 by
reason of which a Participant or Beneficiary may become entitled to a distribution from
the Plan.
	 
	 	(l)	 	“Incentive Compensation” means the incentive, bonus, and similar compensation
that is paid to a Participant based on performance or other factors during a Plan Year
without regard to any portion deferred under this Plan. Incentive Compensation shall
not include any awards made under the 2000 Stock Incentive Plan, or any subparts
thereof, until such time as the Management Committee determines that all or a portion
of such compensation is Incentive Compensation.
	 
	 	(m)	 	“In-Service Distribution Account” means an account to which a Participant
allocates a portion of his or her Deferral Account in accordance with Section 6.2.5.
Except for distribution in Section 6.2.5, or as otherwise provided in this Plan, an
In-Service Distribution Account shall be treated as part of the Participant’s Deferral
Account for all purposes of the Plan.
	 
	 	(n)	 	“Installment Amount” means the portion of a Participant’s Deferral Account that
is to be paid during a period designated pursuant to Section 6.2.1 by the Participant
in writing at the time of his or her enrollment or otherwise made in accordance with
this Plan. Installment Amounts may, with the consent of the Management Committee, be
expressed either in dollars or as a percentage of the Participant’s total Deferral
Account, and if the Installment Amount is expressed in dollars and is less than the
total Deferral Account, the Installment Amount shall be equal to the Deferral Account.
	 
	 	(o)	 	“Management Committee” means the Management Committee formed by the Chief
Executive Officer pursuant to Section 11 of the Plan.
	 
	 	(p)	 	“Participant” means any Eligible Employee who is affirmatively selected by the
Management Committee and who elects to participate in the Plan.
	 
	 	(q)	 	“Plan Year” means the twelve-month period coinciding with the Company’s fiscal
year and ending on each December 31.
	 
	 	(r)	 	“Selected Distribution Date” shall mean the date that is designated in
accordance with this Plan by the Participant in writing at the time of his or her
enrollment as

- 3 -

 

	 	 	 	the date for the payment or commencement of payments of his or her Deferral Account.
To the extent permitted by the Management Committee, a Participant may designate
either the date of his Termination of Employment, January 1 of the year following
his or her Termination of Employment as the Selected Distribution Date, January 1 of
a specified year (whether or not Termination of Employment has occurred), or any
other date permitted by the Management Committee that complies with section 409A of
the Code. In the absence of an effective election of any other date, a
Participant’s Selected Distribution Date shall be the date of his or her Termination
of Employment.
	 
	 	(s)	 	“Termination of Employment” means a complete severance of a Participant’s
employment relationship with the Company and all Affiliates. Effective January 1,
2009, a Participant shall not be considered to have incurred a Termination of
Employment until the Participant has incurred a separation from service as determined
in accordance with section 409A of the Code. By way of illustration, and without
limiting the generality of the foregoing, the following principals shall apply in
determining whether a Participant has incurred a separation from service:

	 	(i)	 	The Participant shall not be considered to have separated from
service so long as the Participant is on military leave, sick leave, or other
bona fide leave of absence if the period of such leave does not exceed six
months, or if longer, so long as the Participant retains a right to
reemployment with the Company under an applicable statute or by contract.
	 
	 	(ii)	 	Regardless of whether his or her employment has been formally
terminated, the Participant will be considered to have separated from service
as of the date it is reasonably anticipated that no further services will be
performed by the Participant for the Company, or that the level of bona fide
services the Participant will perform after such date will permanently decrease
to less than 50 percent of the average level of bona fide services performed
over the immediately preceding 36-month period (or the full period of
employment if the Participant has been employed for less than 36 months). For
purposes of the preceding test, during any paid leave of absence the
Participant shall be considered to have been performing services at the level
commensurate with the amount of compensation received, and unpaid leaves of
absence shall be disregarded.
	 
	 	(iii)	 	For purposes of determining whether the Participant has
separated from service, all services provided for the Company, or for any
entity that is a member of the Controlled Group (including any Affiliate),
shall be taken into account, whether provided as an employee or as a consultant
or other independent contractor; provided that the Participant shall not be
considered to have not separated from service solely by reason of service as a
non-employee director of the Company or any other such entity. Solely for
purposes of this Section 2.1(r), the term “Controlled Group” shall be modified
by substituting “50 percent” for “80 percent” for all

- 4 -

 

	 	 	 	purposes of section 414(b) and (c) of the Code (and section 1563 to the
extent incorporated therein).
	 
	 	(iv)	 	A Participant who is employed by an Affiliate, and continues to
be employed by the Affiliate following a stock sale, spin-off, or other
transaction that causes the Participant’s employer to cease to be a member of
the Controlled Group, shall not be considered to have incurred a Termination of
Employment as a result of such transaction. A Participant who ceases to be
employed by the Company or any member of the Controlled Group as a result of a
sale of substantially all of the assets constituting a division, facility, or
separate line of business, shall be considered to have incurred a Termination
of Employment unless the Company (or Affiliate selling such assets) and the
purchaser agree in writing, not later than the closing date of such
transaction, that all Participants affected by such transaction shall not be
considered to have incurred a Termination of Employment, and that the purchaser
agrees to assume the obligation for payment of the Deferral Accounts of all
such Participants in accordance with the Plan, unless the transaction
constitutes a Change in Control with respect to such Participants and Section
14.1 applies.

2.2. Transition Rule. Subject to rules and deadlines established by the Management Committee,
Participants with Deferral Accounts as of December 31, 2008, who have not commenced receiving
payments under Section 5 shall have an opportunity to change the deferral election(s) for their
Deferral Accounts and elect a new designation of a time and form of payment pursuant to
Section 6.2.4 as in effect prior to January 1, 2005. No change in a deferral election shall cause
an amount that would otherwise have been paid in the year in which the election is made to be paid
in a later year, or cause an amount that would have been paid in a later year to be paid in the
year in which the election is made. Such new designation must, however, apply to the entire
Deferral Account such that after the new designation, the Participant shall have one Selected
Distribution Date and one form of payment under Section 6 for his or her entire Deferral Account.
Participants failing to make an effective new designation or not eligible for a new designation
pursuant to this transition rule shall receive their distribution by giving effect to the prior
effective election(s) under the Plan.

SECTION 3

ELIGIBILITY FOR PARTICIPATION

Each Eligible Employee of the Company and its Affiliates shall be eligible to participate in the
Plan and shall become a Participant upon selection by the Management Committee. In the event a
Participant ceases to be an Eligible Employee, he or she shall become an inactive Participant,
retaining all the rights described under the Plan, except the right to elect any further deferrals.
Notwithstanding anything apparently to the contrary in this Plan or in any written communication,
summary, resolution or document or oral communication, no individual shall be

- 5 -

 

a Participant in this Plan, develop benefits under this Plan or be entitled to receive benefits
under this Plan (either for himself or herself or his or her survivors) unless such individual is a
member of a select group of management or highly compensated employees (as that expression is used
in ERISA).

SECTION 4

ENROLLMENT AND ELECTIONS

4.1. Initial Enrollment. Prior to the first Plan Year that an employee selected for participation
becomes a Participant, such employee shall complete such forms and make such elections as required
by the Company for effective administration of the Plan. Such initial enrollment:

	 	(a)	 	Shall specify the form in which distribution of the Deferral Account
attributable to that enrollment shall be made under Section 6 (and if such designation
is not clearly made to the contrary, shall be deemed to have been an election of a
single lump sum distribution).
	 
	 	(b)	 	Shall specify the time at which distribution shall be made which shall, subject
to Section 6 hereof, be the later of such Participant’s Selected Distribution Date or
such Participant’s Termination of Employment.
	 
	 	(c)	 	Shall be made upon forms furnished by the Company, shall be made at such time
as the Company shall determine and shall conform to such other procedural and
substantive rules as the Company shall prescribe from time to time.
	 
	 	(d)	 	Shall be irrevocable once it has been accepted by the Chief Executive Officer
of the Company pursuant to Section 4.2(a), except to the extent that a new designation
is made effective in accordance with Section 2.2 or 6.2.4.
	 
	 	(e)	 	Shall contain a deferral election made in accordance with Section 4.2.

4.2. Election to Defer. Prior to the first day of any Plan Year, a Participant may make a deferral
election for that Plan Year. A separate election shall be made for each Plan Year, subject to the
authority of the Management Committee to provide for elections that renew automatically unless
changed or revoked prior to the beginning of a subsequent Plan Year. Each such deferral election:

	 	(a)	 	Shall be irrevocable for the Plan Year with respect to which it is made once it
has been accepted by the Chief Executive Officer of the Company or his or her designee;
provided that an election for a Plan Year that has not been accepted by the last day of
the last day of the preceding Plan Year shall be void.
	 
	 	(b)	 	Shall designate the amount or portion of the Participant’s Incentive
Compensation which is earned during that Plan Year (without regard to whether it would
be paid

- 6 -

 

	 	 	 	during that or a subsequent Plan Year) which shall not be paid to the Participant
but instead shall be accumulated in this Plan under Section 5 and distributed from
this Plan under Section 6. Such designation shall be in a minimum amount of $1,000.
If expressed as a percentage, such percentage shall not exceed fifty percent (50%)
of such Participant’s Incentive Compensation. If expressed as a dollar amount, such
dollar amount shall not exceed the dollar amount equivalent of fifty percent (50%)
of such Participant’s targeted Incentive Compensation. If a dollar amount is
elected, such election shall be reduced dollar for dollar if the Incentive
Compensation declared, net of any applicable tax withholding, is less than the
election.
	 
	 	(c)	 	Shall designate the amount or portion of the Participant’s Base Salary which is
earned during that Plan Year (without regard to whether it would be paid during that or
a subsequent Plan Year) which shall not be paid to the Participant but instead shall be
accumulated in this Plan under Section 5 and distributed from this Plan under
Section 6. Such designation shall be in a minimum amount of $1,000, and may be up to
100 percent (100%) of such Participant’s Base Salary, less (i) all FICA, federal, state
and/or local income tax liabilities, and (ii) all other amounts withheld from the
Participant’s Base Salary, including without limitation elective deferrals and
contributions to any other employee benefit plan, whether before or after tax, and
repayment of any loans. The amount withheld pursuant to clause (ii) shall be
determined as of the last day of the immediately preceding Plan Year, and by making a
deferral election the Participant agrees not to increase the amount of any such
withholding if the effect would be to reduce the portion of his or her Base Salary that
is deferred.
	 
	 	(d)	 	Shall be made upon forms furnished by the Company, shall be made at such time
as the Company shall determine, shall be made before the beginning of the Plan Year
with respect to which it is made and shall conform to such other procedural and
substantive rules as the Company shall prescribe from time to time.

4.3. Special Rule for New Hires. Notwithstanding anything to the contrary in this Plan, the
Management Committee may designate an employee of the Company or its Affiliates as an Eligible
Employee in the employee’s year of hire if the new hire satisfies the eligibility requirements of
Section 3. In such cases, the new hire may, either prior to commencement of employment or within
30 days thereafter, make a deferral election for the current Plan Year as provided in Sections 4.1
and 4.2, except for the requirement that the election be made prior to the first day of the Plan
Year. Such newly hired Participants, however, may defer Base Salary only and may not defer
Incentive Compensation unless permitted by the Management Committee. Such new hires may also defer
any hiring bonus provided by Company, or any other type of compensation approved by the Management
Committee (including Incentive Compensation), provided that any such election shall be made prior
to commencement of employment. The newly hired Participant shall make deferral elections according
to Sections 4.1 and 4.2 for Plan Years after the year of hire, as long as the employee continues to
be an Eligible Employee. Effective January 1, 2009, a newly hired employee shall not be eligible
to make an election under this Section 4.3 if the employee has been eligible to participate in any
account balance deferred compensation plan (as defined in section 409A of the Code) sponsored by
the

- 7 -

 

Company or any member of the Controlled Group within 24 months prior to his or her date of hire
(other than through the accrual of earnings on amounts previously deferred), unless the employee
received a distribution of his or her entire account balance under such other plan within such 24
month period and was not eligible to participate after receiving such distribution.

4.4. 409A Transition Rule. Pursuant to IRS Notice 2005-1, Q&A #20(a) and (c) and for the purpose
of taking advantage of the transition relief afforded thereunder, each Participant was permitted to
revoke in their entirety his or her election or elections to defer payment of (i) Base Salary
earned in 2005 that would otherwise been paid during 2005, (ii) Incentive Compensation earned in
2004 that would have otherwise been paid during 2005, and (iii) Incentive Compensation earned in
2005 whether paid in 2005 or 2006. Such election revocation were required to be made in writing
and filed with the Chief Executive Officer of the Company on or before December 1, 2005.

SECTION 5

DEFERRAL ACCOUNTS

5.1. Participant Deferral Accounts. The Company shall establish and maintain a bookkeeping
Deferral Account for each Participant. At its discretion the Company may obtain life insurance on
the life of any or all Participants to provide all or a substantial portion of the money needed to
pay the amounts deferred under the Plan. Each Participant’s Deferral Account shall be credited, as
appropriate, with one or more of the following:

	 	(a)	 	Base Salary deferrals and Incentive Compensation deferrals made pursuant to
Section 4, above;
	 
	 	(b)	 	Employee Benefit Plan Equivalents as provided by Section 5.2 below; and
	 
	 	(c)	 	Gains or losses on deemed investment options as provided by Section 5.3 below.

5.2. Employee Benefit Plan Equivalent. To the extent the Company’s contributions under its
compensation-based benefit plans (including the Deluxe Corporation Supplemental Benefit Plan) are
reduced as a result of the Participant’s deferral of compensation under the Plan, the amount of
such reduction shall be credited to the Participant’s Deferral Account. Any amount credited under
this procedure shall be credited as of the last day of the Plan Year during which such compensation
was earned without regard to whether it is paid in a subsequent year. Any amount credited to a
Deferral Account of a Participant under this Plan shall not be duplicated, directly or indirectly,
under any other plan of the Company.

5.3. Investment Options. The Management Committee shall permit a Participant to allocate the
Participant’s Deferral Account among one or more investment options for purposes of measuring the
value of the benefit. That portion of the Deferral Account allocated to an investment option shall
be deemed to be invested in such investment option and shall be valued as if so invested,
reflecting all earnings, losses and other distributions or charges and changes in

- 8 -

 

value which would have been incurred through such an investment. Neither the Company nor the Plan
nor any trust established under the Plan shall have any obligation to invest in any such investment
option. The determination of which investment options to make available (each of which shall be
either a predetermined actual investment or a reasonable rate of interest as defined for purposes
of section 3121(v)(2) of the Code) and the continued availability of selected investment options
rests in the Management Committee’s sole discretion. A Participant’s request to allocate or
reallocate among investment options must comply with any procedures established by the Management
Committee, which procedures may specify a default investment option for Participants who fail to
make an effective election, and must be in such increments as the Management Committee may
require. The Participant may reallocate the Participant’s Deferral Account among investment
options as of any day that the U.S. securities markets are open and conducting business. All
requests for allocation or reallocation are subject to acceptance by the Management Committee, at
its discretion. If accepted by the Management Committee, an allocation request will be effective
as soon as reasonably administratively practicable.

5.4. Charges Against Deferral Accounts. There shall be charged against each Participant’s account
any payments made to the Participant or his or her Beneficiary in accordance with Sections 6 or 7
of the Plan.

5.5. Contractual Obligation. It is intended that the Company or Affiliate by whom the Participant
is employed is under a contractual obligation to make payments to a Participant when due. Such
payments shall be made out of the general funds of the Company or Affiliate.

5.6. Unsecured Interest. The obligation of the Company to make payments under this Plan
constitutes only the unsecured (but legally enforceable) promise of the Company to make such
payments. The Participant shall have no lien, prior claim or other security interest in any
property of the Company. The Company is not required to establish or maintain any fund, trust or
account (other than a bookkeeping account or reserve) for the purpose of funding or paying the
benefits promised under this Plan. If any such fund, trust (including any rabbi trust) or account
is established, no Participant shall have any lien, prior claim, security interest or beneficial
interest in any property therein. The Company will pay the cost of this Plan out of its general
assets. All references to accounts, accruals, gains, losses, income, expenses, payments,
custodial funds and the like are included merely for the purpose of measuring the Company’s
obligation to Participants in this Plan and shall not be construed to impose on the Employers the
obligation to create any separate fund for purposes of this Plan. In the case of a Participant
employed by an Affiliate the provisions of this Section 5.6 shall also apply to such Affiliate.

SECTION 6

PAYMENT OF DEFERRED AMOUNTS

6.1. Event of Maturity. A Participant’s Deferral Account shall mature and shall become
distributable in accordance with Section 6.2 and 6.3 upon the earliest occurrence of any of the
following events:

	 	(a)	 	The Participant’s death;

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	 	(b)	 	The Participant’s Disability; or
	 
	 	(c)	 	The occurrence of the Selected Distribution Date. Notwithstanding the
foregoing, if a Selected Distribution Date that was elected prior to January 1, 2009,
occurs prior to Termination of Employment other than by reason of death or Disability,
the Event of Maturity shall be postponed until the Participant’s Termination of
Employment. Effective for Selected Distribution Dates elected on or after January 1,
2009 (including new Selected Distribution Dates elected pursuant to Section 6.2.4), the
preceding sentence shall not apply, and the Event of Maturity shall be the Selected
Distribution Date even if the Participant is still employed on the Selected
Distribution Date. If the Participant’s Selected Distribution Date occurs while the
Participant is still employed, and if the Management Committee determines that the
Participant is eligible to continue to make deferral elections for Plan Years after the
last Plan Year prior to the Selected Distribution Date, a new Deferral Account shall be
established for the Participant to which all amounts deferred for such Plan Years, and
any earnings thereon, shall be credited, and the Participant may elect a new Selected
Distribution Date, and method of distribution, for such new Deferral Account prior to
the beginning of the Plan Year that includes the original Selected Distribution Date.

6.2. Form of Distribution. Upon the occurrence of an Event of Maturity specified in Section 6.1
effective as to a Participant, the Company shall commence payment of such Participant’s Deferral
Account (reduced by the amount of any applicable payroll, withholding and other taxes) in the form
designated by the Participant in his or her enrollment subject to the rules of this Section 6. A
Participant shall not be required to make application to receive payment.

     6.2.1. Form of Payment. Payment shall be made in whichever of the following forms as the
Participant shall have designated in writing at the time of his or her initial enrollment or
subsequent effective new designation under Section 6.2.4 (to the extent that such election is
consistent with the rules of this Plan):

	 	(a)	 	Term Certain Installments to Participant. Subject to Section 6.2.1(d), below,
if the distributee is a Participant and the Installment Amount on the date of the
applicable Event of Maturity (without giving effect to any gains or losses under
Section 5.1(c) after such date) is at least Fifty Thousand Dollars ($50,000), in a
series of monthly installments payable over a period not less than two (2) years and
not more than ten (10) years, commencing as of the day specified in Section 6.2.2 and
continuing on the first day of each succeeding month until the Installment Amount is
paid in full. If the Participant elects installments, his or her account shall
continue to be credited or charged with investment results pursuant to Section 5.3, and
the amount of each monthly installment during a year shall be equal to (i) the
remaining balance of the Installment Amount on the last day of the preceding year,
divided by the number of years for which installments remain to be paid or, in the case
of installments to be paid in the first year to a Participant whose Selected
Distribution Date was the day of his or her Termination of Employment, the Installment
Amount at the end of the month in which the

- 10 -

 

	 	 	 	Termination of Employment occurs, in either case divided by (ii) the number of
monthly installments to be paid in such year; provided that the final monthly
installment shall be equal to the entire remaining balance of the Installment
Amount. The entire series of installments shall be considered a single payment for
purposes of section 409A of the Code.
	 
	 	(b)	 	Lump Sum. If the distributee is either a Participant or Beneficiary (except as
provided in Section 6.2.1(a)), in a single lump sum payment. Payment to a Beneficiary
shall in all events be made in a lump sum, regardless of whether the Participant
elected payment in installments and regardless of whether installment payments have
begun at the time of death.
	 
	 	(c)	 	Lump Sum Distribution Notwithstanding Designation. If a Participant’s total
Installment Amount is less than Fifty Thousand Dollars ($50,000) on the Event of
Maturity, then, regardless of whether the Participant elected to have his or her
Deferral Account paid in installments pursuant to Section 6.2.1(a), such Participant’s
entire Deferral Account shall be paid in a single lump sum pursuant to the provisions
of Section 6.2.1(b) above.

     6.2.2. Time of Payment. Payment shall be made or commenced to a Participant or Beneficiary in
accordance with the following rules:

	 	(a)	 	Selected Distribution Date. Except as otherwise provided in this Section
6.2.2, payment shall be made or commenced within ninety (90) days after the
Participant’s Selected Distribution Date.
	 
	 	(b)	 	Death. Upon the death of a Participant before his or her entire Deferral
Account has been distributed, payment of the remaining balance of the Deferral Account
shall be made to the Beneficiary within ninety (90) days after the Participant’s death.
	 
	 	(c)	 	Disability. If the payment is made on account of the Participant’s Disability,
payment shall be made in a single lump sum as if the Participant had a Termination of
Employment as provided in paragraph (a) above, within ninety (90) days of the
commencement of such Disability.
	 
	 	(d)	 	Selected Distribution Date Designated Before 2009. If a Selected Distribution
Date elected prior to January 1, 2009, occurs prior to the Participant’s Termination of
Employment, payment shall be made or commenced within ninety (90) days after the
Participant’s Termination of Employment.
	 
	 	(e)	 	Six Month Delay in Distributions to Key Employees. If a Participant’s Event of
Maturity is, or is defined by, the Participant’s Termination of Employment and the
Participant is a “key employee”, as hereinafter defined, then no distribution shall be
made to the Participant until the first business day that is at least six months after
the Termination of Employment. If the distribution is to be made in the form of a lump
sum, then the Participant’s Deferral Account shall continue to be credited with
earnings or losses based upon the investment options elected

- 11 -

 

	 	 	 	(which may be changed during such six month period in accordance with Section 5.3)
until distributed. If the distribution is to be made in installments, then all
installments that would otherwise have been paid during such six month period shall
be accumulated and paid in a lump sum, without interest, at the end of such six
month period. If the Participant dies during the six month period, the delay
required by this Section 6.2.2(e) shall not apply to payments to the Participant’s
Beneficiary. For purposes of this Section 6.2.2(e) a “key employee” shall mean any
Participant who is a key employee as defined by section 416(i) of the Code
(disregarding section 416(i)(5)). Whether a Participant is a key employee shall
determined as of the last day of each Plan Year, based upon the Participant’s total
compensation during the Plan Year then ending and the Participant’s status as an
officer or shareholder at any time during such Plan Year, and a Participant who is
determined to be a key employee on the last day of a Plan Year shall be subject to
this Section 6.2.2(e) if the Participant incurs a Termination of Employment during
the twelve (12) months commencing on April 1 of the following Plan Year. For
purposes of determining a Participant’s status as a key employee, the Participant’s
compensation shall mean total compensation required to be reported as taxable income
in Box 1 of Form W-2 (or its equivalent), increased by all pre-tax deferrals and
contributions pursuant to section 402(g), 125, or 132(f) of the Code, provided that
compensation paid to a nonresident alien which is not effectively connected with the
conduct of a trade or business within the United States shall not be included. For
avoidance of doubt and without limiting the generality of the last sentence of
Section 1.3, this Section 6.2.2(e) shall not apply to the portion of a Participant’s
Deferral Account that consists of amounts credited to the Deferral Account prior to
January 1, 2005 and the earnings thereon, and such portion shall be distributed
without the six month delay required by this Section 6.2.2(e).
	 
	 	(f)	 	No Election of Year of Payment. In any case in which the ninety (90) day
period during which payment is to be made overlaps two calendar years, the Participant
or Beneficiary shall not be permitted to elect, directly or indirectly, the year in
which the payment shall be made.

     6.2.3. Default. If for any reason a Participant shall have failed to make a timely written
designation of the form of distribution or of a Selected Distribution Date for payment (including
reasons entirely beyond the control of the Participant), the payment shall be made in a single lump
sum within ninety (90) days of the Participant’s Termination of Employment. No spouse, former
spouse, Beneficiary or other person shall have any right to participate in the Participant’s
selection of a form of benefit.

     6.2.4. New Designation. At any time and from time to time, each Participant may file with the
Chief Executive Officer of the Company (or as otherwise directed by the Management Committee) a new
designation of a time and form of payment. Each subsequent designation shall supercede all prior
designations and shall be effective as to the Participant’s entire Deferral Account (including the
portions of the Deferral Account attributable to periods before the new designation is filed) as if
the new designation had been made in writing at the time of the Participant’s initial enrollment.
Notwithstanding the foregoing, any new designation shall be disregarded as if it had never been
filed (and the prior effective designation shall be given effect)

- 12 -

 

unless the designation was filed with the Chief Executive Officer of the Company (or as
otherwise directed by the Management Committee) at least twelve (12) months before the
Participant’s Termination of Employment, or before the Participant’s Selected Distribution Date if
other than his or her Termination of Employment. Effective January 1, 2005, (i) if a Participant
designates a new Selected Distribution Date it must be at least five years after the original
Selected Distribution Date, (ii) if a Participant whose prior Selected Distribution Date was or
defaulted to Termination of Employment designates a Selected Distribution Date the Selected
Distribution Date shall be the later of the date so designated or the fifth anniversary of the
Participant’s Termination of Employment, and (iii) if a Participant makes any new designation
(including a new designation that changes the form of payment only), then, unless the Event of
Maturity is the Participant’s death or Disability, the date for commencement of payment shall be
five years after the date specified in Section 6.2.2. For avoidance of doubt and without limiting
the generality of the last sentence of Section 1.3, the preceding sentence shall not apply to the
portion of a Participant’s Deferral Account that consists of amounts credited to the Deferral
Account prior to January 1, 2005 and the earnings thereon, and an election that does not satisfy
the requirements of the preceding sentence shall apply only to such portion of the Participant’s
Deferral Account.

     6.2.5. In-Service Distribution Accounts. At the same time that a Participant makes a deferral
election for any Plan Year pursuant to Section 4.2, the Participant may elect to have a portion of
his or her deferrals for that Plan Year or, to the extent permitted by the Management Committee,
Benefit Plan Equivalents credited to his or her Deferral Account as of the last day of the Plan
Year, credited to an In-Service Distribution Account, which shall be distributed in accordance with
the following provisions.

	 	(a)	 	When a Participant first elects to have an amount credited to an In-Service
Distribution Account, the Participant shall specify a distribution date for the
In-Service Distribution Account (the “In-Service Distribution Date”), which shall be
January 1 of a year that is at least three years after the first amount is credited to
the In-Service Distribution Account.
	 
	 	(b)	 	The balance in an In-Service Distribution Account shall be distributed either
in a lump sum on the In-Service Distribution Date, or, if the Participant so elects at
the same time the In-Service Distribution date is specified, in a series of monthly
installments payable over a period not less than two (2) years and not more than five
(5) years commencing on the In-Service Distribution Date, calculated in accordance with
Section 6.2.1(a) as if the entire balance in the In-Service Distribution Account were
the Installment Amount (without regard to the requirement that the minimum account
balance for installment payments may not be less than $50,000).
	 
	 	(c)	 	If a Participant incurs a Termination of Employment for any reason, including
death or Disability, either prior to the In-Service Distribution Date, or while an
In-Service Distribution Account is being paid in installments, the remaining balance of
the In-Service Distribution Account shall be distributed in the same manner as the
Participant’s Deferral Account.

- 13 -

 

	 	(d)	 	A Participant may not elect to have any portion of the deferrals for any Plan
Year allocated to an In-Service Distribution Account beginning with the Plan Year that
includes the In-Service Distribution Date, and any such election shall be void and the
amount of the deferral shall instead be allocated to the Deferral Account.
	 
	 	(e)	 	A Participant may have up to two separate In-Service Distribution Accounts at
any one time, with different In-Service Distribution Dates and/or distribution methods.
A Participant may change the In-Service Distribution Date, or the method of
distribution of the In-Service Distribution Account, by filing a new designation in
accordance with Section 6.2.4 at least one year prior to the original In-Service
Distribution Date; provided that if any portion of the In-Service Distribution Account
represents amounts deferred on or after January 1, 2005, no change may be made
(including changing the form of payment only) unless the new designation changes the
In-Service Distribution Date to a date that is at least five years later than the
original In-Service Distribution Date.

     6.2.6. Code Section 162(m) Delay. If the Company reasonably anticipates that all or any
portion of a payment to a Participant, if paid at the time otherwise provided in this Section 6.2,
would not be tax deductible by reason of section 162(m) of the Code, then payment of the
nondeductible portion of such payment shall be deferred until either (i) the Company’s first fiscal
year in which the Company reasonably anticipates, or should reasonably anticipate, that
deductibility of the payment will not be limited by section 162(m), or (ii) the period beginning
with the date of the Participant’s Termination of Employment and ending on the later of the last
day of the Company’s fiscal year that includes the Termination of Employment or the fifteenth day
of the third month following the Termination of Employment; provided that all other scheduled
payments of deferred compensation (as defined in section 409A of the Code) to the same Participant
that could be deferred in order to insure their deductibility under section 162(m) are also
deferred. Where the payment is delayed to a date on or after the Participant’s Termination of
Employment, the payment will be considered a payment upon the Participant’s Termination of
Employment for purposes of Section 6.2.2(f), and the date that is six months after the Termination
of Employment of a Participant subject to Section 6.2.2(f) shall be substituted for the date of the
Participant’s Termination of Employment in clause (ii) of the preceding sentence. No election may
be provided a Participant with respect to the timing of any payment that is delayed under this
Section 6.2.5.

6.3. Distribution of Taxable Amounts. Notwithstanding anything to the contrary in this Plan, in
the event that any portion of a Participant’s Deferral Account is ever required to be included in
the Participant’s taxable income prior to its payment to the Participant by reason of section 409A
of the Code, the portion of the Deferral Account determined to be included in taxable income shall
be distributed to the Participant as soon as practical after such determination is made.

6.4. Tax Withholding. All payments under the Plan are subject to, and net of, all applicable
federal, state and local tax withholding. To the extent that amounts credited to a Participant’s
Deferral Account are subject to tax under the Federal Insurance Contributions Act (“FICA”) prior to
distribution, the Management Committee may direct that all or any portion of the

- 14 -

 

employee’s FICA obligation (plus any federal, state or local income tax withholding resulting from
such offset) shall be offset against the Participant’s Deferral Account.

6.5. Special Rule for eFunds Participants. Notwithstanding anything to the contrary in this Plan,
the following provisions shall apply to all Participants who as of the spin off of eFunds
Corporation (“eFunds”) from the Company are employed by eFunds or a subsidiary or affiliated
corporation of eFunds (“eFunds Participant”):

	 	(a)	 	The spin off of eFunds shall not constitute a Termination of Employment for
purposes of this Plan and payment shall not be made or commenced to eFunds Participants
based on the occurrence of the spin off.
	 
	 	(b)	 	Unless eligible for distribution before the spin off, eFunds Participants shall
not be eligible for payments of Deferral Accounts from the Plan until they have an
Event of Maturity occurring after the spin off. Termination of Employment by eFunds
(including all of its affiliates, defined as any business entity which is affiliated in
ownership with eFunds and is recognized as an affiliate of eFunds by the Management
Committee for purposes of this Plan) shall constitute a Termination of Employment for
purposes of this Plan with respect to eFunds Participants.
	 
	 	(c)	 	The deferral elections of eFunds Participants shall immediately and
automatically terminate upon occurrence of the spin off and there shall be no further
deferrals of compensation for such eFunds Participants into this Plan. There shall
also be no further Employee Benefit Plan Equivalents credited to the eFunds
Participants’ Deferral Accounts after the spin off, except any credits reflecting
deferrals occurring before the spin off. Deferrals related to Incentive Compensation
earned before the spin off (even if paid after the spin off) will be credited to the
eFunds Participants’ accounts in accordance with the terms of their deferral elections
for the 2000 Plan Year.
	 
	 	(d)	 	All other provisions of the Plan shall remain in effect as to the eFunds
Participants who shall become inactive Participants, including but not limited to the
ability to allocate Deferral Accounts among Investment Options as provided at
Section 5.3 and the crediting or debiting of such Deferral Accounts to reflect such
Investment Options as provided at Section 5.1(c).
	 
	 	(e)	 	The Company may at any time amend the Plan to terminate the participation of
the eFunds Participants and distribute the account balances of all of the eFunds
Participants in lump sum payments. In the event that any eFunds Participant is
subsequently employed by an Affiliate and becomes a Participant, the balance of his or
her account attributable to his or her prior employment by eFunds shall remain separate
and shall be governed by the provisions of this Section 6.3. It is the intention of
the Company that the accounts of the eFunds Participants, having been fully accrued and
vested prior to January 1, 2005, shall be exempt from Section 409A of the Code.

- 15 -

 

SECTION 7

UNFORESEEABLE EMERGENCY

The Management Committee may alter the manner or timing of payment of a Deferral Account under
Section 6 in the event that the Participant establishes, to the satisfaction of the Management
Committee, financial need resulting from an unforeseeable emergency. In such event, the Management
Committee may:

	 	(a)	 	First, reduce the portion of the Participant’s Base Salary or Incentive
Compensation that the Participant has elected to defer for the Plan Year by the amount
reasonably necessary to satisfy such need.
	 
	 	(b)	 	Second, to the extent that the financial need cannot be satisfied by
terminating the Participant’s deferral election, provide that all or a portion of the
Deferral Account shall be paid immediately in a lump sum payment, in an amount not to
exceed the amount necessary to satisfy the remaining financial need, and any taxes
imposed upon such payment.
	 
	 	(c)	 	In the case of a Participant receiving installment payments, provide for the
present value of all or a portion of such installments to be paid immediately in a lump
sum payment, in an amount not to exceed the amount necessary to satisfy the remaining
financial need, and any taxes imposed upon such payment.

An unforeseeable emergency means a severe financial hardship to the Participant resulting from an
illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or
the Participant’s dependent (as defined in section 152 of the Code, without regard to section
152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s property due to casualty (including
the need to rebuild a home following damage to a home not otherwise covered by insurance, for
example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant. The imminent
foreclosure of or eviction from the Participant’s primary residence, the need to pay for medical
expenses, including nonrefundable deductibles, as well as for the costs of prescription drug
medication, or the need to pay for the funeral expenses of a spouse, a Beneficiary, or a dependent
(as defined above) may constitute an unforeseeable emergency. The purchase of a home and the
payment of college tuition are generally not unforeseeable emergencies. A distribution on account
of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved
through reimbursement or compensation from insurance or otherwise, by liquidation of the
Participant’s assets, to the extent the liquidation of such assets would not cause severe financial
hardship, provided that a Participant shall not be required to first take any loans or make any
hardship withdrawals permitted by an qualified retirement plan maintained by the Company. The
Management Committee’s determination as to the occurrence of an unforeseeable emergency of the
Participant and the manner in which, if at all, the payment of deferred amounts shall be altered or
modified, shall be final.

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SECTION 8

BENEFICIARY

A Participant may designate a Beneficiary or Beneficiaries who, upon his or her death, shall
receive the distributions that otherwise would have been paid to the Participant. All designations
shall be in writing and shall be effective only if and when delivered to the Chief Executive
Officer of the Company during the lifetime of the Participant. If a Participant designates a
Beneficiary without providing in the designation that the Beneficiary must be living at the time of
such distribution, the designation shall vest in the Beneficiary all of the distributions, whether
payable before or after the Beneficiary’s death, and any distributions remaining upon the
Beneficiary’s death shall be paid to the Beneficiary’s estate.

A Participant may, from time to time, change the Beneficiary or Beneficiaries by a written
instrument delivered to the Chief Executive Officer of the Company. In the event a Participant
shall not designate a Beneficiary or Beneficiaries pursuant to this Section, or if for any reason
such designation shall be ineffective, in whole or in part, the distributions that otherwise would
have been paid to such Participant shall be paid to the Participant’s estate (or, if a Beneficiary
dies while receiving installment payments and no contingent beneficiary has been designated, to the
Beneficiary’s estate).

SECTION 9

NONTRANSFERABILITY

In no event shall the Company make any payment under the Plan to any assignee or creditor of a
Participant or a Beneficiary. Prior to the time of payment hereunder, a Participant or Beneficiary
shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any
interest under the Plan nor shall such rights be assigned or transferred by operation of law.

SECTION 10

DETERMINATIONS — RULES AND REGULATIONS

10.1. Determinations. The Management Committee shall make such determinations as may be required
from time to time in the administration of the Plan. The Management Committee shall have the
discretionary authority and responsibility to interpret and construe the Plan and to determine all
factual and legal questions under the Plan, including but not limited to the entitlement of
Participants and Beneficiaries, and the amounts of their respective interests. Each interested
party may act and rely upon all information reported to them hereunder and need not inquire into
the accuracy thereof, nor be charged with any notice to the contrary. The Management Committee
shall make such determinations as may be required from time to time

- 17 -

 

in the administration of the Plan. All determinations by the Management Committee shall be final
and binding on all Participants and Beneficiaries and all persons claiming any benefit under the
Plan, subject only to the claims procedures set forth below.

10.2. Claims Procedure. Until modified by the Management Committee, the claims procedure set forth
in this Section 10 shall be the mandatory claims and review procedure for the resolution of
disputes and disposition of claims filed under the Plan on or after January 1, 2002.

     10.2.1. Initial Claim. An individual may, subject to Section 10.4, file with the Management
Committee a written claim for benefits under the Plan in a form and manner prescribed by the
Management Committee.

	 	(a)	 	If the claim is denied in whole or in part, the Management Committee shall
notify the claimant of the adverse benefit determination within ninety (90) days after
receipt of the claim.
	 
	 	(b)	 	The ninety (90) day period for making the claim determination may be extended
for ninety (90) days if the Management Committee determines that special circumstances
require an extension of time for determination of the claim, provided that the
Management Committee notifies the claimant, prior to the expiration of the initial
ninety (90) day period, of the special circumstances requiring an extension and the
date by which a claim determination is expected to be made.

     10.2.2. Notice of Initial Adverse Determination. A notice of an adverse determination shall
set forth in a manner calculated to be understood by the claimant:

	 	(a)	 	the specific reasons for the adverse determination;
	 
	 	(b)	 	references to the specific provisions of the Plan (or other applicable Plan
document) on which the adverse determination is based;
	 
	 	(c)	 	a description of any additional material or information necessary to perfect
the claim and an explanation of why such material or information is necessary; and
	 
	 	(d)	 	a description of the claims review procedure, including the time limits
applicable to such procedure, and a statement of the claimant’s right to bring a civil
action under section 502(a) of ERISA following an adverse determination on review,
subject to Section 10.6.

     10.2.3. Request for Review. Within sixty (60) days after receipt of an initial adverse
benefit determination notice, the claimant may file with the Management Committee a written request
for a review of the adverse determination and may, in connection therewith submit written comments,
documents, records and other information relating to the claim benefits. Any request for review of
the initial adverse determination not filed within sixty (60) days after receipt of the initial
adverse determination notice shall be untimely.

     10.2.4. Claim on Review. If the claim, upon review, is denied in whole or in part, the

- 18 -

 

Management Committee shall notify the claimant of the adverse benefit determination within
sixty (60) days after receipt of such a request for review.

	 	(a)	 	The sixty (60) day period for deciding the claim on review may be extended for
sixty (60) days if the Management Committee determines that special circumstances
require an extension of time for determination of the claim, provided that the
Management Committee notifies the claimant, prior to the expiration of the initial
sixty (60) day period, of the special circumstances requiring an extension and the date
by which a claim determination is expected to be made.
	 
	 	(b)	 	In the event that the time period is extended due to a claimant’s failure to
submit information necessary to decide a claim on review, the claimant shall have sixty
(60) days within which to provide the necessary information and the period for making
the claim determination on review shall be tolled from the date on which the
notification of the extension is sent to the claimant until the date on which the
claimant responds to the request for additional information or, if earlier, the
expiration of sixty (60) days.
	 
	 	(c)	 	The Management Committee’s review of a denied claim shall take into account all
comments, documents, records, and other information submitted by the claimant relating
to the claim, without regard to whether such information was submitted or considered in
the initial benefit determination.

     10.2.5. Notice of Adverse Determination for Claim on Review. A notice of an adverse
determination for a claim on review shall set forth in a manner calculated to be understood by the
claimant:

	 	(a)	 	the specific reasons for the denial;
	 
	 	(b)	 	references to the specific provisions of the Plan (or other applicable Plan
document) on which the adverse determination is based;
	 
	 	(c)	 	a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits;
	 
	 	(d)	 	a statement describing any voluntary appeal procedures offered by the Plan and
the claimant’s right to obtain information about such procedures; and
	 
	 	(e)	 	a statement of the claimant’s right to bring an action under section 502(a) of
ERISA, subject to Section 10.6.

10.3. Rules and Regulations.

     10.3.1. Adoption of Rules. Any rule not in conflict or at variance with the provisions hereof
may be adopted by the Management Committee.

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     10.3.2. Specific Rules.

	 	(a)	 	No inquiry or question shall be deemed to be a claim or a request for a review
of a denied claim unless made in accordance with the established claim procedures. The
Management Committee may require that any claim for benefits and any request for a
review of a denied claim be filed on forms to be furnished by the Management Committee
upon request.
	 
	 	(b)	 	All decisions on claims and on requests for a review of denied claims shall be
made by the Management Committee unless delegated as provided for in the Plan, in which
case references in this Section 10 to the Management Committee shall be treated as
references to the Management Committee’s delegate.
	 
	 	(c)	 	Claimants may be represented by a lawyer or other representative at their own
expense, but the Management Committee reserves the right to require the claimant to
furnish written authorization and establish reasonable procedures for determining
whether an individual has been authorized to act on behalf of a claimant. A claimant’s
representative shall be entitled to copies of all notices given to the claimant.
	 
	 	(d)	 	The decision of the Management Committee on a claim and on a request for a
review of a denied claim may be provided to the claimant in electronic form instead of
in writing at the discretion of the Management Committee.
	 
	 	(e)	 	In connection with the review of a denied claim, the claimant or the claimant’s
representative shall be provided, upon request and free of charge, reasonable access
to, and copies of, all documents, records, and other information relevant to the
claimant’s claim for benefits.
	 
	 	(f)	 	The time period within which a benefit determination will be made shall begin
to run at the time a claim or request for review is filed in accordance with the claims
procedures, without regard to whether all the information necessary to make a benefit
determination accompanies the filing.
	 
	 	(g)	 	The claims and review procedures shall be administered with appropriate
safeguards so that benefit claim determinations are made in accordance with governing
plan documents and, where appropriate, the plan provisions have been applied
consistently with respect to similarly situated claimants.
	 
	 	(h)	 	For the purpose of this Section, a document, record, or other information shall
be considered “relevant” if such document, record, or other information: (i) was
relied upon in making the benefit determination; (ii) was submitted, considered, or
generated in the course of making the benefit determination, without regard to whether
such document, record, or other information was relied upon in making the benefit
determination; (iii) demonstrates compliance with the administration processes and
safeguards designed to ensure that the benefit claim determination was made in
accordance with governing plan documents and that, where appropriate, the Plan
provisions have been applied consistently with respect to

- 20 -

 

	 	 	 	similarly situated claimants; and (iv) constitutes a statement of policy or guidance
with respect to the Plan concerning the denied treatment option or benefit for the
claimant’s diagnosis, without regard to whether such advice or statement was relied
upon in making the benefit determination.
	 
	 	(i)	 	The Management Committee may, in its discretion, rely on any applicable statute
of limitation or deadline as a basis for denial of any claim.

10.4. Deadline to File Claim. To be considered timely under the Plan’s claim and review procedure,
a claim must be filed with the Management Committee within one (1) year after the claimant knew or
reasonably should have known of the principal facts upon which the claim is based.

10.5. Exhaustion of Administrative Remedies. The exhaustion of the claim and review procedure is
mandatory for resolving every claim and dispute arising under this Plan. In any subsequent legal
action all explicit and all implicit determinations by the Management Committee (including, but not
limited to, determinations as to whether the claim, or a request for a review of a denied claim,
was timely filed) shall be afforded the maximum deference permitted by law.

     10.5.1. Deadline to File Legal Action. No legal action to recover Plan benefits or to enforce
or clarify rights under the Plan under section 502 or section 510 of ERISA or under any other
provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining
to this Plan unless the legal action is commenced in the proper forum not later than six (6) months
following the date of the notice of an adverse determination for a claim on review.

10.6. Knowledge of Fact by Participant Imputed to Beneficiary. For the purpose of applying the
deadlines to file a claim or a legal action, knowledge of all facts that a Participant knew or
reasonably should have known shall be imputed to every claimant who is or claims to be a
Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the
Participant for the purpose of applying the previously specified periods.

SECTION 11

ADMINISTRATION

11.1. Company. Functions generally assigned in this Plan to the Company are delegated to the
Committee, Chief Executive Officer and the Management Committee as follows:

     11.1.1. Chief Executive Officer. Except as otherwise provided by the Plan and as set forth in
Section 11.1.2, below, the Chief Executive Officer of the Company shall delegate to a Management
Committee all matters regarding the administration of the Plan.

     11.1.2. Committee. Notwithstanding the foregoing general delegations to the Chief Executive
Officer and the Management Committee, the Committee shall have the exclusive authority, which may
not be delegated (subject to Section 11.8), to act for the Company:

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	 	(a)	 	to amend or to terminate this Plan; and
	 
	 	(b)	 	to consent to the adoption of the Plan by other business entities; to establish
conditions and limitations upon such adoption of the Plan by other business entities.

     11.1.3. Management Committee.

	 	(a)	 	Appointment and Removal. The Management Committee, subject to the direction of
the Committee and the Chief Executive Officer, shall have all of the functions and
authorities generally assigned in this Plan to the Company. The Management Committee
shall consist of one or members as may be determined and appointed from time to time by
the Chief Executive Officer of the Company and they shall serve at the pleasure of such
Chief Executive Officer and the Committee.
	 
	 	(b)	 	Automatic Removal. If any individual who is a member of the Management
Committee is a director, officer or employee when appointed as a member of the
Management Committee, then such individual shall be automatically removed as a member
of the Management Committee at the earliest time such individual ceases to be a
director, officer or employee. This removal shall occur automatically and without any
requirement for action by the Chief Executive Officer of the Company or any notice to
the individual so removed.
	 
	 	(c)	 	Authority. The Management Committee may elect such officers as the Management
Committee may decide upon. In addition to the other authorities delegated elsewhere in
this Plan to the Management Committee, the Management Committee shall:

	 	(i)	 	establish rules for the functioning of the
Management Committee, including the times and places for holding
meetings, the notices to be given in respect of such meetings and the
number of members who shall constitute a quorum for the transaction of
business,
	 
	 	(ii)	 	organize and delegate to such of its members as
it shall select authority to execute or authenticate rules, advisory
opinions or instructions, and other instruments adopted or authorized
by the Management Committee; adopt such bylaws or regulations as it
deems desirable for the conduct of its affairs; appoint a secretary,
who need not be a member of the Management Committee, to keep its
records and otherwise assist the Management Committee in the
performance of its duties; keep a record of all its proceedings and
acts and keep all books of account, records and other data as may be
necessary for the proper administration of the Plan,
	 
	 	(iii)	 	determine from the records of the Company and
its Affiliates the compensation, service records, status and other
facts regarding Participants and other employees,

- 22 -

 

	 	(iv)	 	cause to be compiled at least annually, from
the records of the Management Committee and the reports and accountings
of the Company and its Affiliates, a report or accounting of the status
of the Plan and the Deferral Accounts of the Participants, and make it
available to each Participant who shall have the right to examine that
part of such report or accounting (or a true and correct copy of such
part) which sets forth the Participant’s benefits,
	 
	 	(v)	 	prescribe forms to be used for applications for
participation, benefits, notifications, etc., as may be required in the
administration of the Plan,
	 
	 	(vi)	 	set up such rules as are deemed necessary to
carry out the terms of this Plan,
	 
	 	(vii)	 	resolve all questions of administration of the
Plan not specifically referred to in this Section,
	 
	 	(viii)	 	delegate or redelegate to one or more persons, jointly or severally,
and whether or not such persons are members of the Management Committee
or employees of the Company, such functions assigned to the Management
Committee hereunder as it may from time to time deem advisable, and
	 
	 	(ix)	 	perform all other acts reasonably necessary for
administering the Plan and carrying out the provisions of this Plan and
performing the duties imposed by the Plan on it.

	 	(d)	 	Majority Decisions. If there shall at any time be three (3) or more members of
the Management Committee serving hereunder who are qualified to perform a particular
act, the same may be performed, on behalf of all, by a majority of those qualified,
with or without the concurrence of the minority. No person who failed to join or concur
in such act shall be held liable for the consequences thereof, except to the extent
that liability is imposed under ERISA.

11.2. Conflict of Interest. If any officer or employee of the Company or an Affiliate, any member
of the Committee, or any member of the Management Committee to whom authority has been delegated or
redelegated hereunder shall also be a Participant or Beneficiary in the Plan, the individual shall
have no authority as such officer, employee, Committee or Management Committee member with respect
to any matter specially affecting his or her individual interest hereunder (as distinguished from
the interests of all Participants and Beneficiaries or a broad class of Participants and
Beneficiaries), all such authority being reserved exclusively to the other officers, employees,
Committee or Management Committee members as the case may be, to the exclusion of such Participant
or Beneficiary, and such Participant or Beneficiary shall act only in his or her individual
capacity in connection with any such matter.

11.3. Dual Capacity. Individuals, firms, corporations or partnerships identified herein or
delegated or allocated authority or responsibility hereunder may serve in more than one fiduciary
capacity.

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11.4. Administrator. The Company shall be the administrator for purposes of section 3(16)(A) of
ERISA.

11.5. Named Fiduciaries. The Chief Executive Officer, the Committee and the Management Committee
shall be named fiduciaries for the purpose of section 402(a) of ERISA.

11.6. Service of Process. In the absence of any designation to the contrary by the Company, the
Secretary of the Company is designated as the appropriate and exclusive agent for the receipt of
service of process directed to the Plan in any legal proceeding, including arbitration, involving
the Plan.

11.7. Administrative Expenses. The reasonable expenses of administering the Plan shall be payable
by the Company.

11.8. Rules, Policies and Procedures. Any rule, policy or procedure necessary or convenient for
the administration of the Plan may be adopted by the Management Committee. Any rule, policy or
procedure adopted by the Management Committee in connection with the administration of the Plan
shall be deemed to be a part of the Plan. In the event that any such rule, policy or procedure
conflicts with any provision of this Plan document that is ministerial, procedural or technical in
nature, the Plan shall be deemed amended to the extent of the inconsistency.

11.9. Method of Executing Instruments. Information to be supplied or written notices to be made or
consents to be given by the Management Committee pursuant to any provision of this Plan may be
signed in the name of the Management Committee by any person who has been authorized to make such
certification or to give such notices or consents.

11.10. Information Furnished by Participants. The Company and its Affiliates shall not be liable
or responsible for any error in the computation of the Deferral Account of a Participant resulting
from any misstatement of fact made by the Participant, directly or indirectly, to the Company, and
used by it in determining the Participant’s Deferral Account. The Company shall not be obligated
or required to increase the Deferral Account of such Participant which, on discovery of the
misstatement, is found to be understated as a result of such misstatement of the Participant.
However, the Deferral Account of any Participant which are overstated by reason of any such
misstatement shall be reduced to the amount appropriate in view of the truth.

SECTION 12

AMENDMENT AND TERMINATION

The Company expects the Plan to be permanent but since future conditions affecting the Company
cannot be anticipated or foreseen, the Company reserves the right to amend, modify or terminate the
Plan at any time by action of the Committee. Upon termination of the Plan, all Deferral Accounts
shall remain subject to payment in accordance with Sections 6 and 7 of the Plan, provided that the
Committee may, in connection with such termination, also amend the

- 24 -

 

Plan to provide for payment of all Deferral Accounts in a lump sum to the extent permitted by
section 409A of the Code.

SECTION 13

LIFE INSURANCE CONTRACT

If the Company elects to purchase one or more life insurance contracts to provide it with funds to
make payments under the Plan, the Company shall at all times be the sole and complete owner and
Beneficiary of such contract(s), and shall have the unrestricted right to use all amounts and
exercise all options and privileges under such contract(s) without the knowledge or consent of any
Participant or Beneficiary or any other person; neither Participant, Beneficiary nor any other
person shall have any right, title or interest whatsoever in or to any such contract(s).

SECTION 14

CHANGE IN CONTROL

14.1. Distributions upon Change in Control. Notwithstanding any other provision of this Plan, a
Participant will receive a distribution of his or her entire Deferral Account if a Change in
Control occurs with respect to such Participant. Distribution the entire Deferral Account shall be
made on the date of the Change in Control. Such distribution shall be made in a single lump sum
payment. A “Change in Control” shall be deemed to have occurred with respect to all Participants
on the date that an event set forth in any one of the following paragraphs shall have occurred with
respect to the Company. If such an event occurs with respect to an Affiliate, then a Change in
Control shall occur with respect to all Participants employed by such Affiliate or a direct or
indirect majority owned subsidiary of such Affiliate.

	 	(a)	 	The date on which any one person, or more than one person acting as a group,
acquires ownership of stock of the Company or Affiliate that, together with stock held
by such person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of such corporation. If any one person, or
more than one person acting as a group, is considered to own more than 50 percent of
the total fair market value or total voting power of the stock of the Company or
Affiliate, the acquisition of additional stock by the same person or persons is not
considered to cause a change in the ownership of the corporation (or to cause a change
in the effective control of the corporation pursuant to this paragraph or paragraph
(b)). An increase in the percentage of stock owned by any one person, or persons acting
as a group, as a result of a transaction in which the corporation acquires its stock in
exchange for property will be treated as an acquisition of stock for purposes of this
paragraph. This paragraph applies only when there is a transfer or issuance of stock of
the Company or Affiliate and stock in such corporation remains outstanding after the
transaction.

- 25 -

 

	 	(b)	 	The date any one person, or more than one person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company or Affiliate
possessing 30 percent or more of the total voting power of the stock of such
corporation.
	 
	 	(c)	 	The date a majority of members of the Company’s (but not any Affiliate’s) board
of directors is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the corporation’s board of
directors before the date of the appointment or election.
	 
	 	(d)	 	The date that any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company or Affiliate that
have a total gross fair market value equal to or more than 40 percent of the total
gross fair market value of all of the assets of the corporation immediately before such
acquisition or acquisitions; provided that a Change in Control shall not result from a
transfer of assets by the Company or an Affiliate to (i) a shareholder of the
corporation (immediately prior to the transfer) in exchange for or with respect to the
corporation’s stock, (ii) an entity, 50 percent or more of the total value or voting
power of which is owned, directly or indirectly, by the transferor corporation
immediately following the transfer, (iii) a person, or more than one person acting as a
group, that owns, directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the transferring corporation immediately
following the transfer, or (iv) an entity, at least 50 percent of the total value or
voting power of which is owned, directly or indirectly, by a person or group of persons
described in clause (iii) For this purpose, gross fair market value means the value of
the assets of the corporation, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.

14.2. Definitions and Special Rules. For purposes of Section 14.1, the following definitions and
special rules shall apply.

	 	(a)	 	Persons will not be considered to be acting as a group solely because they
purchase or own stock of the same corporation at the same time, or as a result of the
same public offering. However, persons will be considered to be acting as a group if
they are owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the Company or Affiliate. If
a person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation only with respect to the ownership in that corporation before the
transaction giving rise to the change and not with respect to the ownership interest in
the other corporation.
	 
	 	(b)	 	If any one person, or more than one person acting as a group, owns stock of the

- 26 -

 

	 	 	 	Company or Affiliate possessing 30 percent or more of the total voting power of the
stock of such corporation, the acquisition of additional control of the Company or
Affiliate by the same person or persons will not be considered to cause a Change in
Control pursuant to paragraph (a) or (b) of Section 14.1.
	 
	 	(c)	 	The definition of Change in Control contained in this Section 14 is intended to
conform to the definition of a change in control event as set forth in section 409A and
the regulations thereunder, and shall be so construed. To the maximum extent permitted
by law, a transaction shall not be considered to constitute a Change in Control unless
it also constitutes a change in control event for purposes of section 409A, and a
transaction that constitutes a change in control event for purposes of section 409A
shall be considered a Change in Control.

SECTION 15

NO VESTED RIGHTS

The Plan and the elections exercisable hereunder shall not be deemed or construed to be a written
contract of employment between any Participant and the Company or any of its Affiliates, nor shall
any provision of the Plan restrict the right of the Company or any of its Affiliates to discharge
any Participant, nor shall any provision of the Plan in any way whatsoever grant to any Participant
the right to receive any scheduled compensation, bonus, or other payment of any nature whatsoever.

SECTION 16

APPLICABLE LAW

This Plan shall be construed and this Plan shall be administered to create an unfunded plan
providing deferred compensation to a select group of management or highly compensated employees so
that it is exempt from the requirements of Parts 2, 3 and 4 of Title I of ERISA and qualifies for a
form of simplified, alternative compliance with the reporting and disclosure requirements of Part 1
of Title I of ERISA. Any reference in this Plan to a statute or regulation shall be considered also
to mean and refer to any subsequent amendment or replacement of that statute or regulation. This
Plan has been executed and delivered in the State of Minnesota and has been drawn in conformity to
the laws of that State and shall be construed and enforced in accordance with the laws of the State
of Minnesota.

- 27 -

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