Document:

Exhibit

Exhibit 10.16

SEPARATION AND RELEASE AGREEMENT

This SEPARATION AND RELEASE AGREEMENT (“Separation Agreement”) is made and entered into by and between John Filby (“Filby”) and Deluxe Corporation (“Deluxe”).
WHEREAS, Filby has served as Deluxe’s Senior Vice President, Financial Services since April 30, 2012;
WHEREAS, Filby and Deluxe entered into a Severance Agreement dated April 2, 2012 (the “Severance Agreement”);
WHEREAS, Filby and Deluxe entered into a Retention Agreement dated April 30, 2018 (the “Retention Agreement”);
WHEREAS, Filby’s employment with Deluxe will terminate effective as of the close of business on January 24, 2019;
WHEREAS, Filby and Deluxe wish to fully and finally settle all issues, differences, and claims, whether potential or actual, between Filby and Deluxe, including, but not limited to, any claims that might arise out of Filby’s employment with Deluxe or the termination of Filby’s employment from Deluxe;
WHERAS, based on the foregoing, Deluxe and Filby desire to enter into this Agreement to effect the termination of Filby’s employment with Deluxe on the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1.Separation.  Except as provided in this Separation Agreement, all benefits and privileges of Filby’s employment with Deluxe ended as of the close of business on January 24, 2019 (the “Separation Date”).  

2.Consideration.  As consideration for Filby’s promises and obligations under this Separation Agreement, and pursuant to the terms of the Severance Agreement and the Retention Agreement, Deluxe will provide Filby with the following benefits to which Filby is not otherwise entitled, provided Filby signs and does not revoke or rescind this Separation Agreement as described in Section 5. 
   
a.Severance.  Deluxe will pay Filby an amount equal to twelve (12) months of his base salary of four hundred eighty thousand dollars and NO/100 ($480,000.00) as of the Separation Date, less applicable deductions and withholdings, to be paid in accordance with Deluxe’s regular payroll schedule, beginning on the first regular pay date following the end of the 15-day rescission period described in Section 5.  

b.Additional Payments.  For a period of six (6) months commencing on the first anniversary of the initial payment in Section 2 a., Deluxe will pay Filby each month an amount equal to the amount, if any, that Filby’s base salary as of the Separation Date exceeds his monthly base salary during that month.  Deluxe will pay Filby each of the six (6) such monthly payments within thirty (30) days of Filby providing Deluxe with his pay statement for the month or a written statement that he was not employed during that month.

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c.Outplacement.  Deluxe will pay for executive-level outplacement counseling and support services for Filby, for a period of up to twelve (12) months, to be provided through Deluxe’s then-current provider of such services, beginning after the end of the 15-day rescission period described in Section 6.

d.One-Time Payment.  Deluxe will pay Filby a one-time lump sum payment of Thirteen Thousand Dollars ($13,000), to be paid within thirty (30) days of the end of the 15-day rescission period described in Section 6.

e.Retention Bonus.  Deluxe will pay Filby a one-time lump sum payment of Seven Hundred Twenty Thousand Dollars ($720,000), to be paid within fifteen (15) days of the end of the 15-day rescission period described in Section 6.

3.Filby’s Release of Claims.  As an inducement to Deluxe to enter into this Separation Agreement and in exchange for the consideration provided for in this Separation Agreement, Filby hereby settles any and all claims that he has or may have against Deluxe and its predecessors, successors, assigns, parents, affiliates, subsidiaries, related companies, officers, employees, agents, assigns, insurers, representatives, counsel, administrators, successors, shareholders, and/or directors (collectively, the “Released Parties”) as a result of Deluxe’s hiring of Filby, Filby’s employment with Deluxe, the cessation of Filby’s employment with Deluxe, or any act, occurrence, or omission occurring prior to the date of this Separation Agreement.

For the consideration expressed herein, Filby, on behalf of himself and his heirs, successors, representatives, and assigns, hereby releases and discharges the Released Parties from any and all claims, causes of action, liabilities, damages, and right to relief of any kind that Filby has or ever had against the Released Parties, known or unknown, by reason of any matter or fact giving rise to this Separation Agreement.  Filby’s release of claims is intended to extend to and includes, among other things, claims of any kind arising under or based upon the Age Discrimination in Employment Act, 29 U.S.C. §§ 621, et seq.; Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.; the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.; the Employment Retirement Income Security Act, 29 U.S.C. § 1001 et seq.; the Minnesota Human Rights Act; the Women’s Economic Security Act; the Minnesota Equal Pay for Equal Work Law, Minn. Stat. §§ 181.66-181.71; Minn. § 181.81; Minn. Stat. § 176.82; Minn. Stat. §§ 181.931, 181.932, 181.935; Minn. Stat. §§ 181.940-181.944; Minn. Stat. §§ 181.950-181.957;  Minn. Stat. §§ 181.961-181.966, and any other federal, state, or local law, rule, or regulation prohibiting employment discrimination or otherwise relating to employment; and any claims based upon any other theory, whether legal or equitable, arising from or related to any matter or fact arising out the events giving rise to this Separation Agreement.  

Filby also agrees and understands that he is giving up any and all other claims, whether grounded in contract or tort theories, including, but not limited to: wrongful discharge; breach of contract (including any claims for unpaid compensation); tortious interference with contractual relations; promissory estoppel; detrimental reliance; breach of the implied covenant of good faith and fair dealing; breach of express or implied promise; breach of manuals or other policies; breach of fiduciary duty; assault; battery; fraud; false imprisonment; invasion of privacy; intentional or negligent misrepresentation; defamation, including libel, slander, discharge defamation and self-publication defamation; discharge in violation of public policy; whistleblower; intentional or negligent infliction of emotional distress; and claims for punitive damages or attorneys’ fees or any other theory, whether legal or equitable.

Additionally, nothing in this Separation Agreement purports to release or waive claims that may not be released or waived as a matter of law; claims based on events, occurrences, or omissions that occur after 

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the date of the Separation Agreement; or claims related to any already vested benefits under the terms of any of Deluxe’s benefit plans.  Similarly, nothing in this Separation Agreement prevents Filby from challenging the validity of this agreement or from filing any non-legally waivable claim with the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”) or comparable state or local agency or participating in any investigation or proceeding conducted by the EEOC, NLRB, or comparable state or local agency; however, Filby agrees and understands that the Separation Agreement waives all claims and rights to monetary or other recovery for any legal claims to the fullest extent permitted by law.
This Release of Claims does not prohibit Filby from reporting possible violations of federal law or regulation to any governmental agency or entity, including, but not limited to, the Department of Justice, the Securities and Exchange Commission (“SEC”), the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation.  Nothing in this Agreement requires Filby to seek prior authorization of Deluxe to make any such reports or disclosures and Filby does not need and is not required to notify Deluxe that he has made any such reports or disclosures.  This Agreement is not intended to and does not restrict Filby from seeking or obtaining an SEC whistleblower award.
Finally, Filby understands that under the U.S. Defend Trade Secrets Act of 2016, he will not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made in confidence to government officials, either directly or indirectly, or to an attorney, in each case solely for the purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a lawsuit or other proceeding, provided such filing is made under seal. Filby hereby represents that he is not aware of any violation of law as outlined in this paragraph.
4.Deluxe’s Release of Claims.  Except with respect to any rights and entitlements arising under this Separation Agreement, Deluxe, for itself and its successors, assigns, parents, affiliates, subsidiaries and related companies, hereby releases and discharges Filby from any and all claims, causes of action, liabilities, damages, and right to relief of any kind that Deluxe has or had against Filby, known or unknown, arising out of or related to Filby’s employment with Deluxe or by reason of any matter or fact giving rise to this Separation Agreement.

5.Consideration Period and Advice to Consult with Counsel.  Filby is hereby informed that the terms of this Separation Agreement shall be open for acceptance and execution by Filby for a period of twenty-one (21) days from Filby’s date of receipt, during which time Filby may consult with an attorney and consider whether to accept this Separation Agreement.  Changes to this Separation Agreement, whether material or immaterial, will not restart the running of this twenty-one (21) day acceptance period.  During this time, Deluxe advises and encourages Filby to consult with an attorney of his choice.  To receive the consideration provided for in this Separation Agreement, Filby must return a signed and dated original copy of this Separation Agreement to: Jeffrey L. Cotter, Senior Vice President, General Counsel, and Corporate Secretary, Deluxe Corporation, 3680 Victoria Street North, Shoreview, MN 55126. 
     
6.Right to Revoke and Rescind.  Filby is hereby informed of his right to revoke this Separation Agreement as far as it extends to potential claims under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621 et seq. by written notice to Deluxe within seven (7) calendar days following Filby’s execution of this Separation Agreement.  Filby is also informed of his right to rescind his release of claims, insofar as it extends to potential claims under the Minnesota Human Rights Act (“MHRA”), by informing Deluxe of Filby’s intent to do so within fifteen (15) calendar days following his signing of this Separation Agreement.  Any such revocation or rescission must be made in writing and delivered by hand 

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or by certified mail, return receipt requested, postmarked on or before the last day of the applicable revocation or rescission period to the representative identified in paragraph 4.
 
If Filby exercises his right to revoke or rescind his release of claims under the MHRA or ADEA, Deluxe may, at its option, either nullify this Separation Agreement in its entirety, or keep it in effect in all respects other than as to that portion of the release of claims that Filby has revoked or rescinded.  Filby agrees and understands that if Deluxe chooses to nullify the Separation Agreement in its entirety, Deluxe will have no obligations under this Separation Agreement.
7.Confidentiality.  Filby and his legal counsel agree not to disclose (in whole or in part) any of the terms or provisions of this Separation Agreement, characterize any of the terms or provisions of this Separation Agreement, or disclose any of the negotiations leading to the making of this Separation Agreement, to any other person or entity, other than Filby’s spouse, attorneys, accountants, or tax advisors.  Notwithstanding this Section, nothing in this Separation Agreement prevents Filby from participating in any investigation or proceeding conducted by the EEOC, NLRB, SEC or comparable state or local agency. 
  
8.Continuation of Benefits.  Beginning on the Separation Date, provided Filby qualifies for COBRA continuation coverage, Filby may elect to continue medical and dental insurance benefits under COBRA at Filby’s own expense by paying the premium for such coverage.  If Filby does not elect or is not eligible for COBRA continuation coverage, Filby’s group health plan coverage will cease as of the Separation Date.  Except as provided in this Separation Agreement, Filby will cease to be and will cease to be treated as an employee of Deluxe for all purposes under all employee retirement and welfare benefit plans and all other plans, programs, policies and arrangements maintained for employees of Deluxe as of the Separation Date. 

9.Post-Employment Restrictions.  Filby acknowledges and agrees that the post-employment restriction provisions of the Non-Competition, Non-Solicitation Confidentiality Agreement entered into between Deluxe and Filby on April 4, 2012, attached hereto as Exhibit A, shall remain in full force and effect according to its terms. 

10.Claims Warranties.  Filby represents and warrants that he is not aware of any facts that would establish, tend to establish or in any way support an allegation that any member of Deluxe has engaged in conduct that Filby believes could violate (1) any provision of federal law relating to fraud, including, but not limited to, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and/or any state or local counterpart; (2) any rule or regulation of the SEC; (3) the federal False Claims Act and/or any state or local or municipal qui tam counterpart (which prohibit the presentation by Deluxe or any affiliate of false claims and statements or the creation of false records or statements in order to obtain payment of federal, state, county or municipal funds, or to avoid refunds of such government funds); and (4) any other federal, state or local law. 

11.Representations and Warranties Regarding the FMLA and FLSA.  Filby represents and warrants that he is not aware of any facts or circumstances that might justify a claim against the Released Parties for any violation of the Family and Medical Leave Act (“FMLA”) or the Fair Labor Standards Act (“FLSA”) or comparable state statutes.  Filby further represents and warrants that he has received any and all wages and/or commissions for work performed and any and all FMLA leave to which Filby may have been entitled.

12.Non-Disparagement.  Except in the context of a proceeding with the EEOC, NLRB, SEC or other comparable state or local government agency; in compelled sworn testimony; or as otherwise as required 

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by law, Filby agrees that he will not disparage or defame Deluxe, any of Deluxe’s current or former employees, directors, officers, agents, or contractors, or Deluxe’s management or services.  Deluxe agrees to instruct the members of its Executive Leadership Team as of the date of Filby’s termination not to disparage or defame Filby, subject to an exception for communications with any federal, state or local government or administrative agency; in compelled sworn testimony; or otherwise as required by law.

13.Cooperation.  For a period of twelve (12) months following Separation Date, Filby agrees to reasonably cooperate with Deluxe with respect to any claims or lawsuits brought or threatened to be brought against the Released Parties, which relate to or involve Filby’s involvement with Deluxe or any transactions, decisions, or actions of Deluxe in which Filby was involved while a Deluxe employee (the “Covered Subjects”).  As part of Filby’s agreement to cooperate, Filby agrees to be available upon reasonable notice at mutually-agreeable times to discuss with Deluxe and its counsel issues related to litigation or potential litigation exposure with respect to the Covered Subjects.  Filby also agrees to appear without subpoena for deposition or testimony at the request of Deluxe in connection with claims or lawsuits relating to Covered Subjects.  Deluxe agrees to reimburse Filby for reasonable and pre-approved expenses incurred by reason of Filby’s cooperation pursuant to this Section.

14.Return of Information and Property.  Filby affirms that all originals and all copies of Deluxe’s records, correspondence and documents, and all other property and assets of Deluxe, created or obtained by Filby as a result of or in the course of or in connection with his employment with Deluxe which are in his possession or control, whether confidential or not, have been returned to Deluxe as of the Separation Date.

15.Passwords and Password-Protected Documents.  Filby agrees that, prior to  the Separation Date, he delivered to Deluxe all passwords in use by Filby at the time of his termination, a list of any documents that Filby has created or of which Filby is otherwise aware are password-protected, and the password(s) necessary to access such password-protected documents.

16.D&O Insurance.  Notwithstanding any other provision of this Agreement, as a former officer of the Company, Filby shall remain covered by Deluxe’s D&O insurance, with respect to acts and omissions undertaken within the scope of his employment with Deluxe, subject to the applicable terms and eligibility requirements thereof.

17.Non-Assignability.  Filby understands and agrees that this Separation Agreement is personal to him.  The duties, rights, and obligations set forth herein may not be delegated or assigned by Filby to any other person without prior written consent of Deluxe.  Deluxe’s rights and obligations hereunder may be assigned to any successor following a sale of Deluxe or of Deluxe’s assets, or any other transaction involving a change in control.

18.Governing Law; Severability.  This Separation Agreement shall be governed by the laws of the State of Minnesota without regard to the choice of law provisions of any jurisdiction.  If any part of this Separation Agreement is construed to be invalid and/or unenforceable, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Separation Agreement shall remain in full force and effect.  The language of all parts of this Separation Agreement shall be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

19.Choice of Venue.  Any action between Filby and Deluxe relating to Filby’s employment or termination of employment with Deluxe, including, without limitation, actions relating to or arising under this Separation Agreement shall be filed and adjudicated exclusively in the state and federal courts of the State of Minnesota, and Filby and Deluxe hereby consent to the jurisdiction of such courts for any such action and further waive any objection to the convenience of the forum or venue.

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20.Entire Agreement.  This Separation Agreement, the documents referenced herein, and the Restricted Stock Award, Non-Qualified Stock Option, and Performance Share Award agreements entered into between Filby and Deluxe contain the entire agreement between Filby and Deluxe with respect to Filby’s employment and separation from employment and there are no promises or understandings outside of this Separation Agreement and the documents referenced herein with respect to Filby’s employment or separation from employment with Deluxe.  Any modification of or addition to this Separation Agreement must be in a writing signed by Filby and an appropriate representative of Deluxe.

21.Waiver.  The waiver by either party of a breach by the other party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

22.Section 409A Compliance.  The right to a series of payments under this Agreement will be treated as a right to a series of separate payments.  Each payment under this Agreement that is made within 2-1/2 months following the end of the year that contains the Separation Date is intended to be exempt from Section 409A of the Internal Revenue Code (“Section 409A”) as a short-term deferral within the meaning of the final regulations under Section 409A. Each payment under this Agreement that is made later than 2-1/2 months following the end of the year that contains the Separation Date is intended to be exempt from Section 409A under the two-times exception of Treasury Reg. § 1.409A-1(b)(9)(iii), up to the limitation on the availability of that exception specified in the regulation. If the timing of any payment subject to Section 409A could occur in one or more tax years depending on Filby’s employment-related actions, such as the signing of a release, then such payment will be made as soon as possible in the later tax year.

23.Counterparts and Electronic Signatures.  This Separation Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original, and the counterparts together shall constitute one and the same agreement.  A copied, scanned, or faxed signature shall be treated the same as an original.

24.Filby Representation.  FILBY AFFIRMS THAT HE HAS READ THIS SEPARATION AGREEMENT.  FILBY ACKNOWLEDGES THAT HE WAS PROVIDED WITH A REASONABLE AND SUFFICIENT PERIOD OF TIME TO CONSIDER WHETHER OR NOT TO ACCEPT THIS SEPARATION AGREEMENT PRIOR TO SIGNING IT. FILBY AGREES THAT THE PROVISIONS OF THIS SEPARATION AGREEMENT ARE UNDERSTANDABLE TO HIM, THAT HE HAS ENTERED INTO THIS SEPARATION AGREEMENT FREELY AND VOLUNTARILY, AND THAT HE HEREBY WAS ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS SEPARATION AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Separation Agreement by their signatures below.
	
		
	Dated: February 7, 2019
	/s/ John D. Filby

	 
	John Filby

	
		
	Dated: February 12, 2019
	Deluxe Corporation

	 
	 

	 
	By /s/ Jeffrey L. Cotter

	 
	 

	 
	Its SVP, GC

6Exhibit

Exhibit 10.19

	
		
	DELUXE        
	RESTRICTED STOCK UNIT

	CORPORATION
	AWARD AGREEMENT

	 
	(Bonus Deferral)

	 
	 

	
			
	AWARDED TO
	AWARD DATE
	TOTAL NUMBER OF RESTRICTED STOCK
UNITS

	 
	 
	 

		
	1.
	The Award.  Deluxe Corporation, a Minnesota corporation (“Deluxe“), hereby grants to you as of the above Award Date the above number of restricted stock units (“Units”) on the terms and conditions contained in this Restricted Stock Unit Award Agreement (including the Addendum attached hereto, the “Agreement”),  Deluxe’s 2017 Annual Incentive Plan (the “Annual Plan”) and Deluxe’s 2017 Long Term Incentive Plan (the “LTIP”), a copy of each of which has been provided to you.  Pursuant to and in accordance with the Annual Plan, you have elected to receive all or a portion of your annual incentive award payment for the [    ] plan year (if and when declared and awarded,) in Units.  Each Unit will entitle you to acquire one share of Deluxe common stock, par value $1.00 (“Common Stock”), when the restrictions applicable to each Unit expire or terminate as provided below.  Any capitalized term used but not defined in this Agreement shall have the meaning given to the term in the LTIP as it currently exists or may hereafter be amended.

 
		
	2.
	Restricted Period and Vesting.  The Units are subject to the restrictions contained in this Agreement, the Annual Plan and the LTIP for the Restricted Period (as defined below).  As used herein, “Restricted Period,” shall mean a period commencing on the Award Date and, subject to Section 4, ending on the second anniversary of the Award Date (the “Expiration Date”). Subject to Sections 4 and 5 below, on the Expiration Date the restrictions will lapse and the Units will vest, so long as your service to Deluxe has not previously ended. 

		
	3.
	Restrictions.  The Units shall be subject to the following restrictions during the Restricted Period:

(a)    The Units shall be subject to forfeiture to Deluxe as provided in this Agreement, the Plan and the LTIP.

(b)    The Units may not be sold, assigned, transferred or pledged during the Restricted Period.  You may not transfer the right to receive the Units, other than by will or the laws of descent and distribution, and any such attempted transfer shall be void.

(c)    Shares of Common Stock to be issued in settlement of the Units will not be issued until the restrictions lapse and the Units vest.

(d)    If cash or non-cash dividends or distributions are declared and paid by Deluxe with respect to its Common Stock, then at the same time that such dividends or distributions are paid to the shareholders you will have dividend equivalents credited to your account with respect to your Units.  All such dividend equivalents shall be held by Deluxe until the Expiration Date, at which time Deluxe will pay you all such dividends and other distributions, less applicable income tax and social security tax withholding. Any dividend equivalent payments paid with respect to any Units shall be paid when, and only to the extent that, the underlying Units actually vest and are settled in shares of Common Stock. If the Units are forfeited, then all rights to such dividend and distribution payments shall also be forfeited. If you voluntarily resign or are terminated for Cause prior to the Expiration Date all dividend equivalents credited to your account with respect to your Units will be forfeited.
		
	4.
	Acceleration of Vesting.  

Except as provided below, your rights in and to the Units shall terminate on the termination date of your employment by any company in a group of companies consisting of Deluxe and its Affiliates, which is not 

Ver. 1/19

followed by your immediate re-employment by any other member of said group, for any reason if that termination occurs prior to the Expiration Date.  If your employment is terminated prior to the Expiration Date by action of Deluxe or any Affiliate other than for Cause (as hereinafter defined), you will receive a payment from Deluxe equal to the portion of your cash incentive award that you elected to apply to the acquisition of Units (“Base Amount”) plus any earned but unpaid dividend equivalents thereon payable in shares of Common Stock, cash, or a combination of the two in the discretion of the Committee (less any applicable tax withholding), made as expeditiously as practicable, but not more than 75 days, following the date of termination.  If you voluntarily resign or are terminated for Cause prior to the Expiration Date, you will receive a payment from Deluxe payable in shares of Common Stock, cash, or a combination of the two in the discretion of the Committee equal to the lesser of (a) the Base Amount or (b) an amount equal to the number of Units attributable to the Base Amount as of the issue date multiplied by the closing price of the Common Stock on the effective date of your resignation or termination for Cause, which payment (less any applicable tax withholding) will be made as expeditiously as practicable, but not more than 75 days, following the effective date of your resignation.  
In order to satisfy the requirements of Section 409A of the Internal Revenue Code and the IRS regulations thereunder (“Section 409A”), the following provisions will apply.  If your employment is terminated prior to the Expiration Date, but the termination does not constitute a “separation from service” as defined in Section 409A, then you will have the right to receive the payment described in the preceding paragraph, but the payment will be deferred until the earliest of the date on which you incur a separation from service as defined in Section 409A, the Expiration Date, or the date on which a change in control event occurs as defined in Section 409A (as described below).  This could occur if, for example, your employment is terminated but you are retained as a consultant or independent contractor to provide services to Deluxe or an Affiliate at a rate which is at least 50% of the rate at which you were providing services as an employee.  It is also possible that you may incur a separation from service as defined in Section 409A even though your employment has not been terminated, for example if you become a part-time employee and are providing services at a rate that is less than 50% of the rate at which you provided services as a full-time employee.  If this were to occur you would receive a payment as described in the preceding paragraph calculated as if your employment had been terminated by Deluxe without Cause.  The provisions of this paragraph shall also apply to the issuance of shares to which you are entitled upon your Approved Retirement as provided in the next paragraph if your Approved Retirement does not constitute a separation from service.  
Prior to the Expiration Date, all restrictions applicable to the Units shall lapse and the Units shall vest fully and the shares of Common Stock represented thereby will be issued to you or your heirs, executors, administrators, estate or representatives, as applicable as expeditiously as practicable, but not more than 75 days, after your death, Disability or Approved Retirement (as such terms are defined in the Addendum).
Prior to the Expiration Date, all restrictions applicable to the Units shall lapse and the Units shall vest fully and the shares of Common Stock represented thereby will be issued to you, subject to the limitations provided herein, if there shall occur a Change of Control (as hereinafter defined) of Deluxe.  Such issuance shall be made as expeditiously as practicable, but not more than 75 days, following the Change of Control, subject to the following.  If the Change of Control does not constitute a “change in control event” as defined in Section 409A, then your right to receive shares of Common Stock described above will become fully vested, but issuance of the shares shall not occur until the earliest of the date on which you incur a separation from service as defined in Section 409A, the Expiration Date, the date of your Disability or the date on which a change in control event as defined in Section 409A occurs.  If as a result of the Change of Control shares of Common Stock are converted into another form of property, such as stock of a company with which Deluxe is merged, or into the right to a cash payment, then in lieu of the shares of Common Stock you will receive the cash or other property that you would have received had you owned the shares of Common Stock immediately prior to the Change of Control.
Notwithstanding any other provision of this Agreement, if you are a “specified employee” as defined in Section 409A at the time any amount would otherwise become payable to you by reason of a separation from service as defined in Section 409A (including any shares of Common Stock that become issuable upon an Approved Retirement, or upon the occurrence of a Change of Control, but the issuance of which is deferred until a separation from service because the Change of Control did not constitute a change in control event), such payment shall not occur until the first business day that is more than six months following the date of such separation from service (or, if earlier, the date of your death).  In general, “specified employees” are the 50 most highly compensated officers and policy making personnel of Deluxe and its Affiliates.

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5.    Forfeiture.  The awards granted under this Agreement shall be subject to the recoupment provisions of Section 6.4 of the Annual Incentive Plan as well as Section 6(h) of the LTIP (dealing with recoupment of awards made to certain officers of Deluxe), which are incorporated into this Agreement by reference.
		
	6.
	Delivery of Shares of Common Stock.  Subject to Section 5, after any Units vest pursuant to Section 2 or Section 4, as applicable, Deluxe shall, as soon as practicable (but no later than 75 days after the applicable vesting date) cause to be issued and delivered to you (or to your personal representative or your designated beneficiary or estate in the event of your death, as applicable) one share of Common Stock in payment and settlement of each vested Unit.  Delivery of shares of Common Stock shall be effected by the issuance of a stock certificate to you, by an appropriate entry in the stock register maintained by Deluxe’s transfer agent with a notice of issuance provided to you, or by the electronic delivery of the shares of Common Stock to a brokerage account for your benefit, and shall be subject to the tax withholding provisions of Section 8 and compliance with all applicable legal requirements as provided in the LTIP, and shall be in complete satisfaction and settlement of such vested Units.  Deluxe will pay any original issue or transfer taxes with respect to the issue and transfer of shares of Common Stock to you pursuant to this Agreement, and all fees and expenses incurred by it in connection therewith.  If the Units that vest include a fractional Unit, Deluxe shall round the number of vested Units to the nearest whole Unit prior to issuance of shares of Common Stock as provided herein.

		
	7.
	Rights.  The Units subject to this award do not entitle you to any rights of a holder of Common Stock.  You will not have any of the rights of a shareholder of Deluxe in connection with the grant of Units subject to this Agreement unless and until shares of Common Stock are issued to you upon settlement of the Units as provided in Section 2. 

		
	8.
	Income Taxes.  You are liable for any federal and state income or other taxes applicable upon the distribution to you of any shares of Common Stock in settlement of vested Units or other payments under this Agreement, and you acknowledge that you should consult with your own tax advisor regarding the applicable tax consequences.  Upon the distribution of shares of Common Stock, you shall promptly pay to Deluxe the amount of all applicable taxes required by Deluxe to be withheld or collected upon the distribution of the shares of Common Stock in settlement of the vested Units, such amount to be paid in cash or in previously acquired shares of Deluxe common stock having a fair market value equal to the tax withholding amount.  In the alternative, you may direct Deluxe to withhold from shares of Common Stock otherwise to be distributed the number of Deluxe shares having a fair market value equal to the amount of all applicable taxes required by Deluxe to be withheld upon the distribution of the shares of Common Stock You acknowledge that no shares of Common Stock will be distributed to you unless and until you have satisfied any obligation for withholding taxes as provided in this Agreement.  

		
	9.
	Terms and Conditions.  This Agreement and the award of Units and the issuance of shares of Common Stock hereunder are subject to and governed by the provisions of the LTIP and the Annual Incentive Plan.  In the event there are any inconsistencies between this Agreement and those plans, the provisions of the applicable plan shall govern, as it may be amended or interpreted at Deluxe’s discretion, to meet any applicable requirements of Section 409A of the Internal Revenue Code. 

By your acceptance of this restricted stock unit award, you agree to all of the terms and conditions contained in this Agreement and in the LTIP and Annual Incentive Plan documents.  You acknowledge that you have received and reviewed these documents and that they set forth the entire agreement between you and Deluxe regarding the Units.

DELUXE CORPORATION

By: _______________________

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ADDENDUM TO
RESTRICTED STOCK UNIT AWARD AGREEMENT

For the purposes hereof, the terms used herein shall have the following meanings:

“Approved Retirement” shall mean any voluntary termination of employment that occurs on or after the date on which the sum of your age and years of employment with Deluxe and/or its Affiliates equals at least seventy-five (75) and that is approved by the Compensation Committee of the Board.

“Beneficial Owner” shall have the meaning defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

“Board” means the Board of Directors of the Company.

“Cause” shall mean:
    
		
	(i)
	You have breached your obligations of confidentiality to Deluxe or any of its Affiliates;

		
	(ii)
	You have otherwise failed to perform your employment duties and do not cure such failure within thirty (30) days after receipt of written notice thereof;

		
	(iii)
	You commit an act, or omit to take action, in bad faith which results in material detriment to Deluxe or any of its Affiliates;

		
	(iv)
	You have had excessive absences unrelated to illness or vacation (“excessive” shall be defined in accordance with local employment customs);

		
	(v)
	You have committed fraud, misappropriation, embezzlement or other act of dishonesty in connection with Deluxe or any of its Affiliates or its or their businesses;

		
	(vi)
	You have been convicted or have pleaded guilty or nolo contendere to a felony or a gross misdemeanor, which gross misdemeanor involves a breach of ethics, moral turpitude, or immoral or other conduct reflecting adversely upon the reputation or interest of Deluxe or its Affiliates;

		
	(vii)
	Your unlawful conduct or gross misconduct that is or is reasonably likely to be injurious to the business, finances or reputation of Deluxe; or

		
	(viii)
	You are in default under any agreement between you and Deluxe or any of its Affiliates following any applicable notice and cure period.

A “Change of Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied:

		
	(i)
	any Person becomes the Beneficial Owner, directly or indirectly, of securities of Deluxe representing 30% or more of the combined voting power of Deluxe’s then outstanding securities, excluding, at the time of their original acquisition, from the calculation of securities beneficially owned by such Person any securities acquired directly from Deluxe or its Affiliates or in connection with a transaction described in paragraph (iii) below; or

		
	(ii)
	the individuals who at the date of your award election hereunder constitute the Board and any new director (other than a director whose initial assumption of office occurs within a year of and is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Deluxe) whose appointment or election by the Board or nomination for election by Deluxe’s shareholders was approved or recommended by a vote of a majority of the directors then still in office who either were directors at the date of your award election hereunder or whose appointment, election or nomination for election was previously so approved or recommended, cease for any reason to constitute a majority thereof; or

		
	(iii)
	the shareholders of Deluxe approve a plan of complete liquidation of Deluxe or there is consummated (A) a merger, consolidation, share exchange or similar transaction involving Deluxe, regardless of whether Deluxe is the surviving corporation or (B) the sale or disposition by Deluxe of all or substantially all Deluxe’s assets, other than a sale or disposition by Deluxe of all or substantially all of Deluxe’s assets to an entity, unless, immediately following such corporate 

4

transaction, all or substantially all of the individuals and entities who were the beneficial owners of Deluxe’s voting securities immediately prior to such corporate transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the surviving or acquiring entity resulting from such corporate transaction (including beneficial ownership through any parent of such entity) in substantially the same proportions as their ownership, immediately prior to such corporate transaction, of Deluxe’s voting securities.

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of Common Stock of Deluxe immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Deluxe immediately following such transaction or series of transactions.

“Disability” shall mean that you are suffering from a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, and that as a result of such impairment either: (i) you have received disability benefits for a period of not less than three months under a long or short-term disability plan or policy (or both), and are eligible for benefits under the long-term disability plan of Deluxe or any Affiliate of which you are employed at the time of such disability; or (ii) in the event that your employer does not have a long-term disability plan in effect at such time, you are unable to engage in any substantial gainful activity.

“Person” shall have the meaning defined in Section 3(a)(9) and 13(d) of the Securities Exchange Act of 1934, as amended, except that such term shall not include (i) Deluxe or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Deluxe or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of Deluxe in substantially the same proportions as their ownership of Common Stock of Deluxe.

For all purposes of this Award Agreement “separation from service”, “specified employee”, and “change in control event” shall have the meanings set forth in Treasury Regulations §1.409A-1(h), §1.409A-1(i), and §1.409A-3(i)(5), respectively, without regard to any of the optional provisions set forth in such regulations, except that
		
	(i)
	for purposes of Treas. Reg. §1.409A-1(h)(1)(ii), an employee shall be considered to have incurred a separation from service on the date on which it is reasonably anticipated that the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) will  permanently decrease to less than 50 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the employer if the employee has been providing services to the employer less than 36 months); and 

		
	(ii)
	for purposes of identifying specified employees the safe harbor definition of compensation contained in Treas. Reg. §1.415(c)-2(d)(4) (compensation required to be reported on Form W-2 plus elective deferrals) shall be used, and compensation paid to a nonresident alien that is not effectively connected with the conduct of a trade or business within the United States shall be excluded.

5

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