EXHIBIT 4.2
FIRST AMENDMENT
OF
DELUXE CORPORATION
DEFERRED COMPENSATION PLAN
(2001 RESTATEMENT)
The "Deluxe Corporation Deferred Compensation Plan" adopted by Deluxe
Corporation, a Minnesota corporation, effective November 15, 1983, and which is
presently maintained under a document entitled "DELUXE CORPORATION DEFERRED
COMPENSATION PLAN (2001 Restatement") (hereinafter referred to the "Plan
Statement"), is hereby amended in the following respects:
1. CHANGE IN CONTROL. EFFECTIVE FOR ANY CHANGE IN CONTROL OCCURRING ON OR AFTER
JANUARY 1, 2002, SECTION 14 OF THE PLAN STATEMENT SHALL BE AMENDED TO READ IN
FULL AS FOLLOWS:
SECTION 14
MERGER, CONSOLIDATION OR ACQUISITION
Notwithstanding any other provision of this Plan, a Participant or Beneficiary
will receive a distribution of his or her entire Deferral Account if a Change in
Control occurs. Distribution of 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 if an event
set forth in any one of the following paragraphs shall have occurred:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company'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 the Company or its Affiliates or in connection
with a transaction described in clause (i) of paragraph (c)
below; or
(b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on January 1, 2002, constitute the Board and any new
director (other than a director whose initial assumption of
office 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 the Company) whose
appointment or election by the Board or nomination for
election by the Company's shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on
January 1, 2002, or whose appointment, election or nomination
for election was previously so approved or recommended; or
(c) there is consummated a merger or consolidation of the Company
or any Affiliate with any other entity, other than (i) a
merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or any Affiliate, at least 65% of the combined
voting power of the voting securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding
securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale
or disposition by the Company of all or substantially all of
the Company's assets to an entity, at least 65% of the
combined voting power of the voting securities of which are
owned by shareholders of the Company in substantially the same
proportions as their ownership of the Company immediately
prior to such sale.
Notwithstanding the foregoing, a "Change in 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 the
common stock of the Company 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 the Company
immediately following such transaction or series of transactions. Solely for
purposes of this Section 14, the following words and phrases shall have the
following meanings:
14.1. AFFILIATE -- means a company controlled directly or indirectly by the
Company, where "control" shall mean the right, either directly or indirectly, to
elect a majority of the directors thereof without the consent or acquiescence of
any third party.
-2-
14.2. BENEFICIAL OWNER -- a "beneficial owner" within the meaning of Rule 13d-3
under the Exchange Act.
14.3. EXCHANGE ACT -- the Securities Exchange Act of 1934, as amended from time
to time.
14.4. PERSON -- a "person" within the meaning of Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company 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 the Company in
substantially the same proportions as their ownership of stock of the Company.
2. FUNDING OF THE PLAN. EFFECTIVE OCTOBER 26, 2001, SECTION 5.6 OF THE PLAN
STATEMENT SHALL BE AMENDED TO READ IN FULL AS FOLLOWS:
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
Employers' 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.
3. SAVINGS CLAUSE. SAVE AND EXCEPT AS HEREINABOVE EXPRESSLY AMENDED, THE PLAN
STATEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT.
October 26, 2001 DELUXE CORPORATION
By /s/ Anthony C. Scarfone
-------------------------------------
Its Senior Vice-President
----------------------------------
-3-