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<SEC-DOCUMENT>0000897101-01-500044.txt : 20010326
<SEC-HEADER>0000897101-01-500044.hdr.sgml : 20010326
ACCESSION NUMBER:		0000897101-01-500044
CONFORMED SUBMISSION TYPE:	10-K405
PUBLIC DOCUMENT COUNT:		11
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010323

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DELUXE CORP
		CENTRAL INDEX KEY:			0000027996
		STANDARD INDUSTRIAL CLASSIFICATION:	BLANKBOOKS, LOOSELEAF BINDERS & BOOKBINDING & RELATED WORK [2780]
		IRS NUMBER:				410216800
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K405
		SEC ACT:		
		SEC FILE NUMBER:	001-07945
		FILM NUMBER:		1577670

	BUSINESS ADDRESS:	
		STREET 1:		3680 VICTORIA STREET NORTH
		CITY:			SHOREVIEW
		STATE:			MN
		ZIP:			55126
		BUSINESS PHONE:		6514837111

	MAIL ADDRESS:	
		STREET 1:		3680 VICOTRIA STREET NORTH
		CITY:			SHOREVIEW
		STATE:			MN
		ZIP:			55126

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DELUXE CHECK PRINTERS INC
		DATE OF NAME CHANGE:	19880608
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>deluxe010420_10-k.txt
<DESCRIPTION>DELUXE CORPORATION 10-K YEAR ENDED 12-31-00
<TEXT>


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934. FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000.

         Commission file number 1-7945.

                               DELUXE CORPORATION

             (Exact name of registrant as specified in its charter)

           Minnesota                                  41-0216800
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)

3680 Victoria St. N., Shoreview, Minnesota            55126-2966
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: (651) 483-7111.

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $1.00 per share          New York Stock Exchange
            (Title of Class)         (Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. _X_ Yes ___ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant is $1,685,824,790 based on the last sales price of the registrant's
common stock on the New York Stock Exchange on March 7, 2001. The number of
outstanding shares of the registrant's common stock as of March 7, 2001, was
70,644,880.

<PAGE>


Documents Incorporated by Reference:

1.   Portions of the registrant's annual report to shareholders for the fiscal
     year ended December 31, 2000, are incorporated by reference in Parts I and
     II.

2.   The registrant's definitive proxy statement to be filed within 120 days
     after the Company's fiscal year-end is incorporated by reference in Part
     III.



                                     PART I

ITEM 1. NARRATIVE DESCRIPTION OF BUSINESS

OVERVIEW
   Deluxe Corporation is the largest provider of checks in the United States,
both in terms of revenue and number of checks produced. We sell checks and
related products to individuals and small businesses. In addition, we produce
computer and business forms on a small quantity order basis, including
continuous forms, deposit tickets, invoices, statements, tax forms and labels.
Our checks and business forms are compatible with nearly all of today's
off-the-shelf accounting software packages. We also sell accessories, such as
checkbook covers, deskbooks and rubber stamps. In addition, we offer products
and services to our financial institution clients and consumers, such as
protection from check order fraud. Our products and services are sold entirely
in the United States.

   Our company was incorporated under the laws of the State of Minnesota in
1920. From 1920 until 1988, our company was named Deluxe Check Printers,
Incorporated. Our principal executive offices are located at 3680 Victoria
Street North, Shoreview, Minnesota 55126-2966, telephone (651) 483-7111.

DISCONTINUED OPERATIONS
   Consistent with its stated intent to enhance shareholder value, our board of
directors declared a distribution of eFunds Corporation (eFunds) common stock
owned by Deluxe to all holders of our common stock as of 5:00 p.m., central
standard time, on the record date of December 11, 2000. On December 29, 2000, we
distributed our 40 million eFunds shares, representing approximately 88% of
eFunds outstanding shares, on a pro rata basis to our shareholders. Our
shareholders received .5514 share of eFunds common stock for each share of
Deluxe common stock held. Cash was issued in lieu of fractional shares. As a
result of this distribution, eFunds is now a completely independent company. Our
Consolidated Financial Statements set forth in Item 8 below contain further
information regarding eFunds as a discontinued operation.

   eFunds provides transaction processing and risk management services to
financial institutions, retailers, electronic funds transfer networks,
e-commerce providers and

<PAGE>


government agencies and also offers information technology consulting and
business process management services.

INDUSTRY BACKGROUND
   Payment systems and methods have been changing in the United States in recent
years as banking and other industries have introduced alternatives to the
traditional paper check, including, among others, automatic teller machines,
credit cards, debit cards and electronic payment systems, such as electronic
bill presentment and payment. Use of these payment alternatives is negatively
affecting the number of checks written.

   According to our estimates, growth in total checks written by individuals and
small businesses, the primary purchasers of checks, was flat in 2000 compared to
1999. We believe that the number of checks written by individuals and small
businesses will eventually decline due to the increasing use of alternative
payment methods. Although individual and small business check writing has not
yet begun to decline, the total number of personal, business and government
checks written in the United States has been in decline since 1997. We believe
the decline in personal, business and government checks is due to the increasing
use of the alternative payment methods, increasing use of direct deposits for
payroll and government transfer payments, and changing payment practices at
large businesses and government agencies.

   The most common method by which consumers order checks is through financial
institutions. We believe such orders comprised approximately 73% of all check
sales to individuals and small businesses in 2000. Orders originating in this
manner are sourced through financial institutions such as banks, savings and
loan institutions, credit unions, brokerages and other financial institutions.
In recent years, margins on check orders obtained through financial institutions
have been pressured by competitive factors and by the consolidation in the
financial institution industry. Margin pressure arising from consolidation in
the financial institution industry is a result of merged entities seeking not
only the most favorable prices formerly offered to the predecessor institutions
but also additional discounts due to the greater volume represented by the
combined company.

   The direct-to-the-consumer method of ordering checks emerged in the mid-1980s
based upon consumer desire for lower-priced alternatives to checks obtained
through financial institutions and the ability to obtain enhanced design
selections. We believe that direct sales to individuals and small businesses
have slightly increased from 1997 to 2000. Direct-to-the-consumer checks are
marketed to individuals and small businesses primarily through newspaper and
magazine inserts, direct mail advertisements, catalogs and the Internet.

DELUXE'S PRODUCTS AND SERVICES
   For the past 85 years, we have provided check printing services to consumers
through financial institutions. We have developed relationships with financial
institutions where the financial institution agrees to offer checks we produce
to its customers. We provide

<PAGE>


these checks to these customers at prices negotiated by their financial
institutions. Customers commonly submit initial check orders and reorders to
their respective financial institutions, who then forward those requests to us.
Printed checks are always shipped directly by us to the customers. Our charges
are usually paid by electronic transfer directly from the customers' accounts.
We typically produce and ship check orders within two days after the receipt of
an order. We sold checks through more than 10,000 financial institutions during
2000.

   Our relationships with specific financial institutions are usually formalized
through supply contracts averaging three to five years in duration. We are
committed to our financial institution relationships and seek to strengthen and
expand them by emphasizing the breadth and value of our checks and related
products and services. While the majority of our check orders are generated
through our relationships with financial institutions, we also offer checks and
related products directly to individuals and small businesses.

   We increased our direct-to-the-consumer selling in the 1980's in response to
the changes in the industry, although we have been selling products directly to
consumers since our first catalog was produced in 1918. In 1987, we expanded our
direct-to-consumer selling through an acquisition. We use a variety of direct
marketing techniques to acquire new customers in the direct-to-the-consumer
market, including free-standing inserts in newspapers, direct mail, catalogs and
referrals from other third parties, including our financial institution clients.
We also use Internet banner advertising and hyperlinks to direct traffic to our
websites. We have been emphasizing telephone and Internet contacts because they
are more effective than mail for our selling efforts.

   We have three websites that sell checks and related products directly to
customers: www.checksunlimited.com, www.designerchecks.com and
www.deluxeforms.com. Currently, almost ten percent of our orders received
directly are obtained from customers via the Internet. We received over one
million Internet orders for our checks and forms in 2000.

   As part of our growth strategy, we acquired Designer Checks, Inc. in February
2000. This acquisition provided us with access to additional customers, as well
as additional capacity, new product configurations such as a side tear option,
and additional background designs for our checks. As part of our growth and
e-commerce retailing strategies, we have offered many of our business partners
access to our small business website so that their customers can order online
with us. Although orders from new customers obtained in this manner are not a
significant contributor to our revenue at this time, we believe that this
additional order capture medium will allow customers to access a wider range of
products and services and will provide further convenience when placing orders.
We believe this will increase customer satisfaction and encourage repeat sales.

   Due to our belief that the individual and small business segments of the
check industry will eventually decline due to the increasing use of alternative
payment methods, we have implemented measures to reduce costs of production and
other cost management


<PAGE>


measures. In 1996, we announced a plan to close 21 of our financial institution
check printing plants over a two-year period in order to better manage our cost
structure. Four additional plant closings were announced in 1998. The plant
closings were made possible by advancements in our telecommunications, order
processing and printing technologies. By the end of 2000, all of the production
functions in these 25 plants were closed. Four of the order capture and
processing functions remain open and are expected to be closed in 2001. We have
also outsourced many non-strategic areas, such as information technology (IT)
application development, mail processing and certain data entry and accounting
functions.

   Our checks offer consumers opportunities to express their personal style,
which is a key element in our customer merchandising approach. In addition to
including basic name and address information on their checks, customers may add
other details and may choose from many variations in the format and style of
their checks, including:

         *        selection of type fonts;

         *        placement of information on the check;

         *        approximately 200 distinct background designs, including
                  choice of plain safety paper designs or background designs,
                  including specially licensed designs from companies such as
                  Disney (R), Coca-Cola Company, Warner Bros. and NASCAR Inc.;

         *        choice of paper and ink color;

         *        choice of top or side tear options; and

         *        choice of stubs or duplicate copies.

   Over the last several years, we have begun offering enhanced services, such
as customized reporting services, file management and expedited account
conversion support, to our financial institution clients in order to increase
efficiency and our revenue. We continue to offer our SecureMail(TM) service,
which we implemented in September 1999, to help protect financial institutions
and their customers from check order fraud.

   The primary raw materials used in producing our products are paper, ink and
cartons. We purchase paper, ink and cartons from various sources. We believe
that supplies of our materials are sufficient to meet our planned operating
needs for the foreseeable future. We also utilize a paper printing plate
material that is available from only a limited number of sources. We believe our
source provides a reliable supply of this material and that it maintains an
inventory sufficient to avoid any production disruptions in the event of an
interruption of its supply.


<PAGE>


OUR STRATEGY
   Our strategy is to strengthen our leading position in the markets in which we
compete by leveraging our core competencies, which are personalization, direct
marketing and e-commerce, adding services and expanding product offerings to
retain and gain market share. Key elements of our strategy are to:

         *        LEVERAGE CORE COMPETENCIES TO DEVELOP NEW SOURCES OF REVENUE
                  THROUGH NEW AND EXPANDING PRODUCT OFFERINGS WITHIN OUR
                  EXISTING BUSINESSES.

                       PROVIDE ADDITIONAL SERVICES AND NEW PRODUCTS. We intend
                       to sell additional services and new product offerings to
                       our existing customers. For example, we recently
                       introduced a line of Disney(R) check designs. This marks
                       the first time that Disney(R) characters have appeared on
                       personal checks and related products.

                       PURSUE EXPANDED PRODUCT OFFERING OPPORTUNITIES. We intend
                       to maximize revenue per order by pursuing expanded
                       product offering opportunities within our existing
                       customer base. For example, our customers have specific
                       preferences and requirements. When we take reorders
                       directly via the Internet and our voice response unit
                       from financial institution customers, we have an
                       opportunity to directly focus on their preferences and
                       requirements. This allows us the opportunity to sell more
                       products and additional services to them. We intend to
                       expand our direct contact with customers by providing
                       them with the ability to process reorders by speaking
                       directly to a person via the telephone. We also pursue
                       cross-selling opportunities by placing advertising
                       inserts in the boxes of checks we ship and by placing
                       hyperlinks on our websites.

         *        FURTHER EXPAND OUR PRESENCE ON THE INTERNET. Consumers'
                  willingness to do business via electronic methods is
                  beneficial for us due to the accuracy, efficiency and
                  convenience of this medium. In addition, the Internet allows
                  us to connect directly with check writers, affording us the
                  opportunity to improve product mix and customer satisfaction.

         *        INVEST IN TECHNOLOGY AND PROCESSES THAT WILL LOWER OUR COST
                  STRUCTURE. We intend to continue to manage our costs carefully
                  and to invest in technology and processes to increase
                  operating efficiency in our business. In recent years we have
                  implemented a number of programs to control expenses and
                  increase efficiency, such as consolidating plants, improving
                  production capacity, implementing electronic customer
                  interfaces and outsourcing certain IT application development
                  and mail processing functions.


<PAGE>


         *        CONSIDER ACQUISITIONS THAT LEVERAGE CORE COMPETENCIES, ARE
                  ACCRETIVE TO EARNINGS AND GENERATE CASH FROM OPERATING
                  ACTIVITIES. For example, we acquired Designer Checks, Inc. in
                  February 2000 which contributed positive earnings and cash
                  flow to our operations.

COMPETITION
   The check printing industry is highly competitive. We expect that competition
will intensify as the overall check industry continues to mature and decline. We
face competition from alternative electronic payment systems such as automatic
teller machines, credit cards, debit cards and electronic payment systems, such
as electronic bill presentment and payment. We also face considerable
competition from at least six other check printers. Electronic commerce is new,
rapidly evolving and intensely competitive. As we expand our e-commerce
presence, we will face competition from check printing software vendors and from
Internet-based sellers of checks and related products to consumers, such as
iPrint or ImageX.

   In the check printing industry, the principal factors on which we compete are
service, convenience, quality, product range and price. From time to time, some
of our check printing competitors have reduced the prices of their products in
an attempt to gain greater volume, and the corresponding pricing pressure placed
on us has resulted in reduced profit margins for us in the past. We have also
experienced some loss of business due to our refusal to meet competitive prices
that fell below our profitability targets. Similar pressures may result in
margin reductions in the future.

GOVERNMENT REGULATION
   We will be subject to the privacy requirements of a new federal financial
modernization law known as the Gramm-Leach-Bliley Act, enforcement of which will
begin in July 2001. Regulations implementing the Act require each regulated
entity to develop and implement policies to protect the security and
confidentiality of consumers' nonpublic personal information and to disclose
those policies to consumers before a customer relationship is established and
annually thereafter.

   The regulations will require us to provide a notice to our consumer customers
to allow them an opportunity to remove their nonpublic personal information from
our files before we share their information with certain third parties. The
regulations, including the above provision, may limit our ability to use our
direct consumer data in our businesses. However, the regulations allow us to
transfer consumer information to process a transaction that a consumer requests
and to protect the confidentiality of a consumer's records or to protect against
or prevent actual or potential fraud, unauthorized transactions, claims or other
liability. We are also allowed to transfer consumer information for required
institutional risk control and for resolving customer disputes or inquiries. We
may also contribute consumer information to a consumer reporting agency pursuant
to the Fair Credit Reporting Act.


<PAGE>


   We are evaluating the methods by which we will comply with the regulations
and any related contractual requirements. Further, we anticipate that our
financial institution clients will request various contractual provisions in
their agreements with us that are intended to comply with their obligations
under the Act and regulations.

   We have entered into an agreement, effective until July 1, 2001, with eFunds
pursuant to which we will contribute consumer information to eFunds. eFunds has
agreed that it may only use this information for purposes that are consistent
with applicable federal, state and local laws.

   Congress and many states are considering more stringent laws or regulations
that, among other things, restrict the purchase, sale or sharing of non-public
personal information about consumers. For example, legislation has been
introduced in Congress to further restrict the sharing of consumer information
by financial institutions, as well as to require that a consumer opt-in prior to
a financial institution's use of his or her data in its marketing program.

   Laws and regulations may be adopted in the future with respect to the
Internet or e-commerce covering issues such as user privacy. New laws or
regulations may impede the growth of Internet business. This could decrease
traffic to our websites and the demand for our products. Moreover, the
applicability to the Internet of existing laws governing property ownership,
taxation, libel and personal privacy is uncertain and may remain uncertain for a
considerable length of time.

INTELLECTUAL PROPERTY RIGHTS
   We rely on a combination of trademark and copyright laws, trade secret
protection and confidentiality and license agreements to protect our
intellectual property. Intellectual property laws afford limited protection. It
may be possible for a third party to copy our products and services or otherwise
obtain and use our proprietary information without our permission. There is no
assurance that our competitors will not independently develop products and
services that are substantially equivalent or superior to our products and
services.

EMPLOYEES
   As of December 31, 2000, we had approximately 7,800 full- and part-time
employees employed within the United States. Of the total number of employees,
3,390 were engaged in production, 3,259 were engaged in customer and technical
support services, 428 were engaged in sales and marketing and 723 were engaged
in administrative and other functions. None of our employees are represented by
a labor union, and we consider our employee relations to be good.

OTHER FINANCIAL INFORMATION
   The information about segments and geographic areas appearing under the
caption "Note 15. Business segment information" on pages 43 through 45 of the
Annual Report is incorporated by reference.


<PAGE>


EXECUTIVE OFFICERS OF THE REGISTRANT
   Our executive officers are elected by the board of directors each year. The
term of office of each executive officer will expire at the annual meeting of
the board of directors that will be held after the regular shareholders meeting
on May 8, 2001. The executive officers and their positions are as follows:

- ----------------------- ----------------------------------- ------ -------------
Name                    Position                            Age    Officer Since
- ----------------------- ----------------------------------- ------ -------------
Lawrence J. Mosner      Chairman of the Board and Chief     59     1995
                        Executive Officer
- ----------------------- ----------------------------------- ------ -------------
Ronald E. Eilers        President and Chief Operating       53     1996
                        Officer
- ----------------------- ----------------------------------- ------ -------------
Stephen J. Berry        Senior Vice President, President    38     2000
                        - Checks Unlimited/Designer Checks
- ----------------------- ----------------------------------- ------ -------------
Guy C. Feltz            Senior Vice President, President    45     2000
                        - FI Check Printing
- ----------------------- ----------------------------------- ------ -------------
Sonia W. St. Charles    Senior Vice President, Human        40     2000
                        Resources
- ----------------------- ----------------------------------- ------ -------------
Anthony C. Scarfone     Senior Vice President, General      39     2000
                        Counsel and Secretary
- ----------------------- ----------------------------------- ------ -------------
Warner F. Schlais       Senior Vice President and Chief     48     2000
                        Information Officer
- ----------------------- ----------------------------------- ------ -------------
Richard L. Schulte      Senior Vice President, President    44     2000
                        - Deluxe Business Forms and
                        Supply Chain
- ----------------------- ----------------------------------- ------ -------------
Douglas J. Treff        Senior Vice President and Chief     43     2000
                        Financial Officer
- ----------------------- ----------------------------------- ------ -------------
Gene H. Peterson        Vice President, eBusiness and       56     2000
                        Corporate Development
- ----------------------- ----------------------------------- ------ -------------

   LAWRENCE J. MOSNER has served as chairman of the board and chief executive
officer of Deluxe since the spin-off of eFunds from the Company, which was
completed on December 29, 2000. Prior to this position, Mr. Mosner served as
vice chairman, a position he assumed in August 1999. Before being named as vice
chairman, Mr. Mosner served as executive vice president of the Company. In that
position, Mr. Mosner had overall responsibility for all of the Company's
day-to-day operations from July 1997 until April 1999, at which point he was
designated to lead the Company's initiative to restructure the Company's various
businesses along business unit lines and otherwise evaluate strategic
alternatives for enhancing shareholder value. From February to July 1997, Mr.
Mosner was senior vice president of the Company and served as president of


<PAGE>


its Paper Payment Systems business unit. From November 1995 until February 1997,
Mr. Mosner served as senior vice president of the Company and president of
Deluxe Direct, Inc., a subsidiary of the Company that included all of its
business units selling directly to individuals and small businesses.

   RONALD E. EILERS has served as president and chief operating officer of the
Company since December 29, 2000. From August 1997 to December 2000, Mr. Eilers
was a senior vice president of the Company and managed its Paper Payment Systems
business. From February 1997 to August 1997, Mr. Eilers was president of Deluxe
Direct, Inc., a subsidiary of the Company, and from October 1996 was vice
president of Deluxe Direct, Inc. In 1995, Mr. Eilers became president of
PaperDirect, Inc., a subsidiary of the Company, and the manager of the Company's
business forms division.

   STEPHEN J. BERRY was named a senior vice president of the Company in December
2000 and has served as president of Checks Unlimited, LLC and Designer Checks
(Direct Checks), the direct to consumer check provider subsidiary of the
Company, since May 1999. From August 1997 to April 1999, Mr. Berry was director
of marketing for Direct Checks, and from August 1996 to July 1997 was a
marketing manager for Direct Checks. Mr. Berry was its customer service and
telemarketing manager from April 1994 to July 1996.

   GUY C. FELTZ was named a senior vice president of the Company in December
2000 and has served as president of the Company's financial institution check
printing business since July 2000. He was also a vice president of the Company
from July to December 2000. From August 1999 to July 2000, Mr. Feltz served as
senior vice president of sales and marketing of the Company's financial
institution check printing business. From June 1998 to July 1999, Mr. Feltz was
the president and chief executive officer of the Company's government services
business, which is part of Deluxe's former subsidiary, eFunds. From May 1996 to
May 1998, he served as president of Deluxe-HCL, an international joint venture
of the Company.

   SONIA W. ST. CHARLES was named an executive officer of the Company in
December 2000 and has served as senior vice president of human resources since
May 1999. From October 1997 to April 1999, Ms. St. Charles was vice president of
human resources for the company and from July 1996 to July 1997 was vice
president of human resources for the Company's financial services group. She
joined PaperDirect, Inc., a subsidiary of the Company, in August 1994 as vice
president of human resources and held that position until June 1996.

   ANTHONY C. SCARFONE joined the Company in September 2000 as senior vice
president, general counsel and secretary and became an executive officer of the
Company in December 2000. Prior to joining the Company, Mr. Scarfone served as
vice president, general counsel and secretary of Dahlberg, Inc., a worldwide
manufacturer, distributor and retailer of electronic hearing devices, a position
he held from November 1993 to November 1999.


<PAGE>


   WARNER F. SCHLAIS has served as senior vice president and chief information
officer since November 1999, and became an executive officer of the Company in
December 2000. From December 1997 to November 1999, Mr. Schlais was vice
president and chief information officer and from April 1995 to December 1997 was
the Company's vice president of applications development.

   RICHARD L. SCHULTE was named a senior vice president of the Company in
December 2000 and has served as president of the Company's business forms and
supply chain areas since July 2000. From May 1999 to July 2000, Mr. Schulte was
senior vice president of supply chain and operations for the Company. From 1995
to May 1999, he was president and general manager of Current, Inc. (now Direct
Checks), the Company's direct mail check business.

   DOUGLAS J. TREFF joined the Company in October 2000 as senior vice president
and chief financial officer and became an executive officer of the Company in
December 2000. From February 1993 until Mr. Treff joined the Company, he served
as vice president, finance, of Wilsons the Leather Experts, Inc. (Wilsons), a
leather specialty apparel retailer. He was also appointed chief financial
officer of Wilsons in May 1996.

   GENE H. PETERSON was named an executive officer of the Company in December
2000 and has served as vice president, eBusiness and corporate development since
November 1999. From October 1997 until November 1999, Mr. Peterson was vice
president of planning and development. From February 1996 to October 1997, he
served as vice president of planning and development for the Company's financial
services division.

ITEM 2. PROPERTIES

   We conduct our operations in 22 principal facilities, 18 of which are used
for production and service operations. These facilities are located in 15 states
and total approximately 2,333,000 square feet. Our headquarters occupies a
158,000-square-foot building in Shoreview, Minnesota. We believe that our
current facilities are adequate to meet our anticipated space requirements. We
believe that additional space will be available at a reasonable cost to meet our
future needs. The following table provides a description of our principal
facilities:

<PAGE>

<TABLE>
<CAPTION>
                                                         OWNED OR
                                                          LEASE
                                      APPROXIMATE       EXPIRATION
LOCATION                              SQUARE FEET          DATE                      FUNCTION
- --------                              -----------          ----                      --------
<S>                                     <C>          <C>                 <C>
Shoreview, Minnesota (2 locations)      313,965           Owned          Administration, marketing, sales,
                                                                         teleservice center and headquarters
Lancaster, California                    68,539           Owned          Production and mail center
Des Plaines, Illinois                   191,805           Owned          Production and distribution
Colorado Springs, Colorado              291,311           Owned          Production, administration, marketing
                                                                         and teleservice center
Dallas, Texas                            53,490           Owned          Production
Greensboro, North Carolina               44,336           Owned          Production
Indianapolis, Indiana                    43,969           Owned          Production
Lenexa, Kansas (2 locations)            321,080           Owned          Production, distribution and
                                                                         teleservice center
Mountain Lakes, New Jersey               62,961           Owned          Production
Pittsburgh, Pennsylvania                 45,884           Owned          Production
Streetsboro, Ohio                       115,205           Owned          Production
Salt Lake City, Utah                     95,307           Owned          Production
Campbell, California                     68,655           Owned          Production
Shoreview, Minnesota (2 locations)      189,338       September 2006     Administration
Shoreview, Minnesota                    180,832       September 2009     Administration
Anniston, Alabama                        83,400         June 2001        Production, marketing, and
                                                                         teleservice center
Greensboro, North Carolina               65,340       November 2007      Teleservice center
Syracuse, New York                       47,469       December 2004      Teleservice center
Phoenix, Arizona                         50,337         June 2003        Administration and teleservice
                                                                         center
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

   Other than routine litigation incidental to our business, there are no
material pending legal proceedings to which we are a party or to which any of
our property is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   Not applicable.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

   Our common stock is traded on the New York Stock Exchange under the symbol
DLX. During the years ended December 31, 2000 and 1999, we declared dividends of
$0.37 per share during each quarterly period. As of December 31, 2000, the
number of shareholders of record was 12,770. The table below shows the per-share
price ranges of

<PAGE>


our common stock for the past two fiscal years as quoted on the New York Stock
Exchange. The per-share prices have been adjusted to reflect the spin-off of our
subsidiary, eFunds Corporation, on December 29, 2000.


      STOCK PRICE RANGES (DOLLARS)       HIGH       LOW         CLOSE
      ----------------------------------------------------------------
      2000
        Quarter 1                        23.18      17.74       21.18
        Quarter 2                        21.23      18.65       18.84
        Quarter 3                        19.19      15.99       16.24
        Quarter 4                        20.20      15.89       20.20
      ----------------------------------------------------------------
      1999
        Quarter 1                        29.88      23.28       23.28
        Quarter 2                        31.03      22.63       31.03
        Quarter 3                        32.37      26.48       27.18
        Quarter 4                        27.83      19.79       21.93
      ----------------------------------------------------------------


ITEM 6. SELECTED FINANCIAL DATA

   The information appearing under the caption "Five-year Summary" on page 25 of
the Annual Report is incorporated by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

   The information appearing under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 18 through
23 of the Annual Report is incorporated by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The information appearing under the caption "Market Risk Disclosure" on page
23 of the Annual Report is incorporated by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   The financial statements, notes and independent auditors' report on pages 26
through 50 of the Annual Report and the information appearing under the caption
"Summarized Quarterly Financial Data" (unaudited) on page 51 of the Annual
Report is incorporated by reference.

<PAGE>


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

   On March 16, 2001, the Company determined not to re-engage its independent
auditors, Deloitte & Touche LLP ("Deloitte") and appointed
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") as its new independent
auditors for the fiscal year ending December 31, 2001. This determination
followed the Company's decision to seek competitive bids from independent
accounting firms, including Deloitte, with respect to the engagement of
independent accountants to audit the Company's consolidated financial statements
for the fiscal year ending December 31, 2001. The decision not to re-engage
Deloitte and to engage PricewaterhouseCoopers was approved by the unanimous
vote of the Company's board of directors upon the recommendation of its audit
committee. The shareholders of the Company will be asked to ratify the
appointment of PricewaterhouseCoopers at the Company's Annual Meeting to be held
on May 8, 2001.

   The reports of Deloitte on the consolidated financial statements of the
Company for its fiscal years ended December 31, 2000 and December 31, 1999 did
not contain any adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles. During the
Company's two most recent fiscal years and the subsequent interim period
through March 16, 2001, (i) there were no disagreements between the Company and
Deloitte on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of Deloitte, would have caused Deloitte to make reference to
the subject matter of the disagreement in connection with its reports (a
"Disagreement") and (ii) there were no reportable events, as defined in Item
304(a)(1)(v) of Regulation S-K of the Securities and Exchange Commission (a
"Reportable Event").

   The Company reported the change in accountants on Form 8-K on March 21, 2001.
The Form 8-K contained a letter from Deloitte addressed to the Securities and
Exchange Commission stating that it agreed with certain of the above statements,
and had no reason to agree or disagree with the remaining statements.


                                    PART III

ITEMS 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT,
                         EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN
                         BENEFICIAL OWNERS AND MANAGEMENT, AND CERTAIN
                         RELATIONSHIPS AND RELATED TRANSACTIONS

   The Company's definitive proxy statement, to be filed with the Securities and
Exchange Commission within 120 days after the Company's fiscal year-end, is
incorporated by reference.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

   (a) The following financial statements, schedules and independent auditors'
report and consent are filed with or incorporated by reference in this report:

                                                                      Page in
   Financial Statements                                            Annual Report
   --------------------                                            -------------

    Consolidated Balance Sheets at December 31, 2000 and 1999............26
    Consolidated Statements of Income for each of the three
       years in the period ended December 31, 2000.......................27
    Consolidated Statements of Comprehensive Income for each of
       the three years in the period ended December 31, 2000.............27
    Consolidated Statements of Cash Flows for each of the three
        years in the period ended December 31, 2000......................28
    Notes to Consolidated Financial Statements........................29-49
    Independent Auditors' Report ........................................50
    Supplemental Financial Information (Unaudited):
    -----------------------------------------------
    Summarized Quarterly Financial Data .................................51

                                                                    Page in this
                                                                     Form 10-K
                                                                     ---------

    Independent Auditors' Consent to the incorporation by
    reference of its reports in the Company's registration
    statements numbered 2-96963, 33-53585, 33-57261,
    33-32279, 33-58510, 33-62041, 333-03625, 33-48967,
    333-95739, 333-52452 and 333-52454..................................F-1


<PAGE>


   Schedules other than those listed above are not required or are not
applicable, or the required information is shown in the consolidated financial
statements or notes.


   (b) Reports on Form 8-K

       The Company filed the following reports on Form 8-K:

         *  December 4, 2000 report concerning approval by the Company's board
            of directors of the spin-off of eFunds.

         *  December 14, 2000 report concerning a press release issued by the
            Company announcing the final distribution ratio for the spin-off of
            eFunds.

         *  December 19, 2000 report providing an information statement
            concerning the spin-off of eFunds.

         *  January 12, 2001 report announcing the completion of the spin-off of
            eFunds and providing required pro forma financial information.

         *  March 21, 2001 report concerning a change in certified public
            accountants.

   (c) The following exhibits are filed as part of or are incorporated in this
report by reference:

    Exhibit                                                            Method of
    Number                      Description                             Filing
    ------                      -----------                             ------

     2.1    Initial Public Offering and Distribution Agreement,            *
            dated as of March 31, 2000, by and between Deluxe and
            eFunds (incorporated by reference to Exhibit 2.1 to the
            Registration Statement on Form S-1 ("the S-1") filed by
            eFunds Corporation with the Securities and Exchange
            Commission (the "Commission") on April 4, 2000,
            Registration No. 333-33992)).


     3.1    Articles of Incorporation (incorporated by reference to        *
            the Company's Annual Report on Form 10-K for the year
            ended December 31, 1990).

     3.2    Bylaws (incorporated by reference to Exhibit 3.2 to the        *
            Company's Quarterly Report on Form 10-Q ("the September
            1999 10-Q") for the quarter ended September 30, 1999).


     4.1    Amended and Restated Rights Agreement, dated as of             *
            January 31, 1997, by and between the Company and Norwest
            Bank Minnesota, National Association, as Rights Agent,
            which includes as Exhibit A thereto, the form of Rights
            Certificate

<PAGE>


            (incorporated by reference to Exhibit 4.1 to the
            Company's Amendment No. 1 on Form 8-A/A-1 (File No.
            001-07945) filed with the Commission on February 7,
            1997).

     4.2    Indenture, relating to up to $150,000,000 of debt              *
            securities (incorporated by reference to Exhibit 4.1 to
            the Company's Registration Statement on Form S-3
            (33-32279) filed with the Commission on November 24,
            1989).

     4.3    Amended and Restated Credit Agreement, dated as of July        *
            8, 1997, among the Company, Bank of America National
            Trust and Savings Association, as agent, and the other
            financial institutions party thereto, related to a
            $150,000,000 committed line of credit (incorporated by
            reference to Exhibit 4.3 to the Company's Annual Report
            on Form 10-K ("the 1997 10-K") for the year ended
            December 31, 1997).

     4.4    Credit Agreement, dated as of August 30, 1999 (the             *
            "August 30, 1999 Credit Agreement"), among the Company,
            Bank of America, N.A. as the sole and exclusive
            administrative agent, and the other financial
            institution party thereto related to a $500,000,000
            revolving credit agreement (incorporated by reference to
            Exhibit 4.4 to the September 1999 10-Q).


     4.5    Amendment No. 1 to Amended and Restated Rights                 *
            Agreement, entered into as of January 21, 2000, between
            the Company and Norwest Bank Minnesota, National
            Association as Rights Agent (incorporated by reference
            to Exhibit 4.1 to the Company's Amendment No. 1 to its
            Quarterly Report on Form 10-Q for the Quarter Ended June
            30, 2000).

     4.6    Extension of the August 30, 1999 Credit Agreement,             *
            entered into as of August 14, 2000 (incorporated by
            reference to Exhibit 10.4 to the Company's Quarterly
            Report on Form 10-Q ("the September 2000 10-Q") for the
            Quarter Ended September 30, 2000).

     4.7    Amendment to Amended and Restated Credit Agreement dated       *
            July 8, 1997, entered into as of August 14, 2000
            (incorporated by reference to Exhibit 10.5 to the
            September 2000 10-Q).

     4.8    Second Amendment to Amended and Restated Credit              Filed
            Agreement dated July 8, 1997, entered into as of October    herewith
            5, 2000.

<PAGE>


     4.9    Amendment to the August 30, 1999 Credit Agreement,           Filed
            entered into as of October 5, 2000.                         herewith

     10.1   Deluxe Corporation 2000 Annual Incentive Plan                  *
            (incorporated by reference to Exhibit 10.1 to the
            September 2000 10-Q).

     10.2   Deluxe Corporation 2000 Stock Incentive Plan                   *
            (incorporated by reference to Exhibit 10.2 to the
            September 2000 10-Q).

     10.3   Deluxe Corporation 2000 Employee Stock Purchase Plan           *
            (incorporated by reference to Exhibit 10.3 to the
            September 2000 10-Q).

     10.4   Deluxe Corporation Executive Deferred Compensation Plan        *
            for Employee Retention and Other Eligible Arrangements
            (incorporated by reference to Exhibit 10.24 to the
            Company's Quarterly Report on Form 10-Q ("the June 2000
            10-Q") for the quarter ended June 30, 2000).

     10.5   Deluxe Corporation Supplemental Benefit Plan                   *
            (incorporated by reference to Exhibit (10)(B) to the
            Company's Annual Report on Form 10-K ("the 1995 10-K")
            for the Year Ended December 31, 1995).

     10.6   Description of Deluxe Corporation Non-employee Director        *
            Retirement and Deferred Compensation Plan (incorporated
            by reference to Exhibit 10.14 to the Company's Annual
            Report on Form 10-K for the Year ended December 31,
            1996).

     10.7   Deluxe Corporation 1998 DeluxeSHARES Plan (incorporated        *
            by reference to Exhibit 10.9 to the 1997 10-K).

     10.8   Description of modification to the Deluxe Corporation          *
            Non-Employee Director Retirement and Deferred
            Compensation Plan (incorporated by reference to Exhibit
            10.10 to the 1997 10-K).

     10.9   Description of non-employee Director Compensation              *
            Arrangements (incorporated by reference to Exhibit 10.14
            to the Company's Annual Report on Form 10-K ("the 1999
            10-K") for the Year Ended December 31,1999).

     10.10  Description of John A. Blanchard III Supplemental              *
            Pension Plan (incorporated by reference to Exhibit 10(H)
            to the 1995 10-K).

<PAGE>


     10.11  Government Services Indemnification Agreement, dated as        *
            of May 1, 2000, by and between eFunds Corporation and
            the Company (incorporated by reference to Exhibit 10.17
            to Amendment No. 1 to the S-1 filed by eFunds
            Corporation with the Commission on May 15, 2000
            (Registration No. 333-33992)).

     10.12  Professional Services Agreement, dated as of April 1,          *
            2000, by and between eFunds Corporation and the Company
            (incorporated by reference to Exhibit 10.10 to Amendment
            No. 1 to the S-1 filed by eFunds Corporation with the
            Commission on May 15, 2000 (Registration No.
            333-33992)).

     10.13  Tax Sharing Agreement, dated as of April 1, 2000, by and       *
            between eFunds Corporation and the Company (incorporated
            by reference to Exhibit 10.3 to Amendment No. 1 to the
            S-1 filed by eFunds Corporation with the Commission on
            May 15, 2000 (Registration No. 33-33992)).

     10.14  Amendment, dated November 1, 1999, to Executive                *
            Retention Agreement, dated as of January 9, 1998,
            between John A. Blanchard III and the Company
            (incorporated by reference to Exhibit 10.21 to the 1999
            10-K).

     10.15  Executive Employment Agreement, dated as of May 9, 2000,       *
            by and between eFunds Corporation and John A. Blanchard
            III (incorporated by reference to Exhibit 10.19 to
            Amendment No. 1 to the S-1 filed by eFunds Corporation
            with the Commission on May 15, 2000 (Registration No.
            333-33992)).

     10.16  Agreement to Terminate Executive Retention Agreement and       *
            Memorandum Dated October 11, 1995, dated May 9, 2000, by
            and between John A. Blanchard III and the Company
            (incorporated by reference to Exhibit 10.26 to the June
            2000 10-Q).

     10.17  Severance Agreement entered into effective March 1, 2001     Filed
            between the Company and the following executive             herewith
            officers: Ronald E. Eilers, Anthony C. Scarfone, Richard
            L. Schulte, Douglas J. Treff, Stephen J. Berry, Warner
            F. Schlais, Sonia W. St. Charles, Guy C. Feltz, and
            Gene H. Peterson.

<PAGE>


     10.18  Severance Agreement entered into effective March 1, 2001     Filed
            between the Company and Lawrence J. Mosner.                 herewith

     10.19  Executive Retention Agreement entered into effective         Filed
            December 18, 2000 between the Company and the following     herewith
            executive officers of the Company: Lawrence J. Mosner,
            Ronald E. Eilers, Anthony C. Scarfone, Richard L.
            Schulte, Douglas J. Treff, Stephen J. Berry, Warner F.
            Schlais, Sonia W. St. Charles, Guy C. Feltz, and Gene H.
            Peterson.

     12.5   Statement re: computation of ratios.                         Filed
                                                                        herewith

     13     2000 Annual Report to shareholders.                          Filed
                                                                        herewith

     21.1   Subsidiaries of the Registrant.                              Filed
                                                                        herewith

     23     Consent of Experts and Counsel (incorporated by                *
            reference to page F-1 of this Annual Report on Form
            10-K).

     24.1   Power of attorney.                                           Filed
                                                                        herewith

     99.1   Cautionary Statements and Risk Factors.                      Filed
                                                                        herewith

- ------------------------
*Incorporated by reference

<PAGE>


   Note to recipients of Form 10-K: Copies of exhibits will be furnished upon
written request and payment of the Company's reasonable expenses ($.25 per page)
in furnishing such copies.

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Shoreview, State of Minnesota.

                                         DELUXE CORPORATION

Date: March 23, 2001                     By: /s/ Lawrence J. Mosner
                                             ----------------------------------
                                             Lawrence J. Mosner
                                             Chairman of the Board of Directors
                                             and Chief Executive Officer

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities
indicated on March 23, 2001.

SIGNATURE                                TITLE
- ---------                                -----

By /s/ Lawrence J. Mosner                Chairman of the Board of Directors
   -------------------------------       and Chief Executive Officer
   Lawrence J. Mosner                    (Principal Executive Officer)


By /s/ Douglas J. Treff                  Senior Vice President and Chief
   -------------------------------       Financial Officer (Principal
   Douglas J. Treff                      Financial Officer and Principal
                                         Accounting Officer)

              *                          Director
   -------------------------------
   Ronald E. Eilers

              *                          Director
   -------------------------------
   Barbara B. Grogan


              *                          Director
   -------------------------------
   Stephen P. Nachtsheim


              *                          Director
   -------------------------------
   Calvin W. Aurand, Jr.


<PAGE>


              *                          Director
   -------------------------------
   Donald R. Hollis


              *                          Director
   -------------------------------
   Robert C. Salipante


              *                          Director
   -------------------------------
   Daniel D. Granger


              *                         Director
   -------------------------------
   Cheryl E. Mayberry


              *                         Director
   -------------------------------
   Charles A. Haggerty


*By: /s/ Lawrence J. Mosner
     -----------------------------
         Lawrence J. Mosner
         Attorney-in-Fact

<PAGE>


                          INDEPENDENT AUDITORS' CONSENT

   We consent to the incorporation by reference in Registration Statements Nos.
2-96963, 33-53585, 33-57261, 333-03625, 33-48967, 333-95739, 333-52452 and
333-52454 on Form S-8 and 33-32279, 33-58510 and 33-62041 on Form S-3 of our
report dated January 25, 2001, incorporated by reference in this Annual Report
on Form 10-K of Deluxe Corporation for the year ended December 31, 2000.

   /s/ Deloitte & Touche LLP
   Deloitte & Touche LLP
   Minneapolis, Minnesota
   March 21, 2001


                                       F-1
<PAGE>


                                  EXHIBIT INDEX

   The following exhibits are filed as part of this report:

   Exhibit                                                               Page
   Number                           Description                          Number
   ------                           -----------                          ------

    4.8       Second Amendment to Amended and Restated Credit
              Agreement dated July 8, 1997, entered into as of
              October 5, 2000.

    4.9       Amendment to the August 30, 1999 Credit Agreement,
              entered into as of October 5, 2000.

    10.17     Severance Agreement entered into effective March 1,
              2001 between the Company and the following executive
              officers: Ronald E. Eilers, Anthony C. Scarfone,
              Richard L. Schulte, Douglas J. Treff, Stephen J.
              Berry, Warner F. Schlais, Sonia W. St. Charles, Guy C.
              Feltz, and Gene H. Peterson.

    10.18     Severance Agreement entered into effective March 1,
              2001 between the Company and Lawrence J. Mosner.


    10.19     Executive Retention Agreement entered into effective
              December 18, 2000 between the Company and the
              following executive officers of the Company: Lawrence
              J. Mosner, Ronald E. Eilers, Anthony C. Scarfone,
              Richard L. Schulte, Douglas J. Treff, Stephen J.
              Berry, Warner F. Schlais, Sonia W. St. Charles, Guy C.
              Feltz, and Gene H. Peterson.

    12.5      Statement re: computation of ratios.

    13        2000 Annual Report to shareholders.

    21.1      Subsidiaries of the Registrant.

    24.1      Power of attorney.

    99.1      Cautionary Statements and Risk Factors.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>2
<FILENAME>deluxe010420_ex4-8.txt
<DESCRIPTION>EXHIBIT 4.8 SECOND AMENDMENT TO CREDIT AGREEMENT
<TEXT>

                                                                     Exhibit 4.8

                        SECOND AMENDMENT TO CREDIT AGREEMENT


         THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment Agreement"),
dated as of October 5, 2000, is made among DELUXE CORPORATION, a Minnesota
corporation (the "Company"), the financial institutions listed on the signature
pages hereof under the heading "THE BANKS" (each a "Bank" and, collectively, the
"Banks") and BANK OF AMERICA, N.A. (formerly known as Bank of America National
Trust and Savings Association), as administrative agent for itself and the Banks
(in such capacity, the "Agent").

         The Company, the Banks and the Agent are parties to an Amended and
Restated Credit Agreement dated as of July 8, 1997 (as amended by that Amendment
to Credit Agreement dated as of August 14, 2000, the "Credit Agreement"). The
Company has requested that the Banks agree to certain amendments of the Credit
Agreement, and the Banks are willing to agree to such request, subject to the
terms and conditions of this Amendment Agreement.

         Accordingly, the parties hereto agree as follows:

         SECTION 1 Definitions: Interpretation.

         (a) Terms Defined in Credit Agreement. All capitalized terms used in
this Amendment Agreement (including in the Recitals hereof) and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement.

         (b) Interpretation. The rules of interpretation set forth in Section
1.02 of the Credit Agreement shall be applicable to this Amendment Agreement and
are incorporated herein by this reference.

         SECTION 2 Amendments to the Credit Agreement. The Credit Agreement
shall be amended as set forth in this Section 2, effective as of the date shown
first above (the "Effective Date"), subject to satisfaction of the conditions
set forth in Section 3 hereof.

         (a) Amendments. The Credit Agreement shall be amended as follows:

                  (i)      Section 7.02(d) is amended to read as follows:

                           "(d) dispositions permitted under Section 7.06(c);
                           and"

                  (ii)     Section 7.06(c) is amended to read as follows:

                           "(c) as to the Company, declare and make dividend
                           payments and other distributions to shareholders of
                           the Company of common stock of eFunds Corporation and
                           of cash to the extent in lieu of fractional shares
                           thereof, pursuant to a tax-free distribution; and"

         (b) References Within Credit Agreement. Each reference in the Credit
Agreement to "this Agreement" and the words "hereof," "herein," "hereunder," or
words of like

<PAGE>


import, shall mean and be a reference to the Credit Agreement as amended by this
Amendment Agreement.

         SECTION 3 Conditions of Effectiveness. The effectiveness of this
Amendment Agreement shall be subject to the satisfaction of each of the
following conditions precedent:

         (a) Executed Amendment Agreement. The Agent shall have received an
executed counterpart of this Amendment Agreement from each of the Company and
the Majority Banks.

         (b) Additional Closing Documents and Actions. The Agent shall have
received, in form and substance satisfactory to the Agent, a certificate of a
Responsible Officer of the Company dated the Effective Date stating that (A) the
representations and warranties contained in Section 4 hereof are true and
correct on and as of the Effective Date, and (B) on and as of the Effective
Date, after giving effect to the amendment of the Credit Agreement contemplated
hereby, no Default or Event of Default shall have occurred and be continuing.

         (c) Corporate Authority. The Agent shall have received, in form and
substance satisfactory to the Agent, evidence of the authority of each officer
of the Company executing and delivering this Amendment Agreement.

         (d) Additional Documents. The Agent shall have received, in form and
substance satisfactory to the Agent, such additional approvals, documents and
other information as the Agent or any Bank (through the Agent) may reasonably
request.

For purposes of determining compliance with the foregoing conditions specified
in this Section 3, each of the Banks that has executed this Amendment Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Agent to such Banks for
consent, approval, acceptance or satisfaction, or required hereunder to be
consented to or approved by or acceptable or satisfactory to, such Bank.

         SECTION 4 Representations and Warranties. To induce the Agent and the
Banks to enter into this Amendment Agreement, the Company hereby confirms and
restates, as of the date hereof, the representations and warranties made by it
in Article V of the Credit Agreement. For the purposes of this Section 4, (i)
each reference in Article V of the Credit Agreement to "this Agreement," and the
words "hereof," "herein," "hereunder," or words of like import in such Section,
shall mean and be a reference to the Credit Agreement as amended by this
Amendment Agreement, and each reference in such Section to "the Loan Documents"
shall mean and be a reference to the Loan Documents as amended hereby, (ii) the
representation and warranty set forth in Section 5.11 of the Credit Agreement
shall be deemed instead to refer to the last day of the most recent fiscal
quarter and fiscal year for which financial statements have then been delivered,
and (iii) any representations and warranties which relate solely to an earlier
date shall not be deemed confirmed and restated as of the date hereof (provided
that such representations and warranties shall be true, correct and complete as
of such earlier date).

         SECTION 5 Miscellaneous.


                                       2.
<PAGE>


         (a) Notice. The Agent shall notify the Company and the Banks of the
occurrence of the Effective Date and thereafter distribute to the Company and
the Banks copies of all documents delivered under Section 3.

         (b) Credit Agreement Otherwise Not Affected. Except as expressly
amended and restated pursuant hereto, the Credit Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed in
all respects. The Banks' and the Agent's execution and delivery of, or
acceptance of, this Amendment Agreement and any other documents and instruments
in connection herewith shall not be deemed to create a course of dealing or
otherwise create any express or implied duty by any of them to provide any other
or further amendments, consents or waivers in the future.

         (c) No Reliance By Company. The Company hereby acknowledges and
confirms to the Agent and the Banks that the Company is executing this Amendment
Agreement on the basis of its own investigation and for its own reasons without
reliance upon any agreement, representation, understanding or communication by
or on behalf of any other Person.

         (d) Costs and Expenses. The Company agrees to pay to the Agent on
demand the reasonable out-of-pocket costs and expenses of the Agent, and the
reasonable fees and disbursements of counsel to the Agent, in connection with
the negotiation, preparation, execution and delivery of this Amendment Agreement
and any other documents to be delivered in connection herewith.

         (e) Binding Effect. This Amendment Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Company, the Agent and each
Bank and their respective successors and assigns.

         (f) Governing Law. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         (g) Complete Agreement; Amendments. This Amendment Agreement, together
with the other Loan Documents, contains the entire and exclusive agreement of
the parties hereto and thereto with reference to the matters discussed herein
and therein. This Amendment Agreement supersedes all prior commitments, drafts,
communications, discussion and understandings, oral or written, with respect
thereto. This Amendment Agreement may not be modified, amended or otherwise
altered except in accordance with the terms of Section 10.01 of the Credit
Agreement.

         (h) Severability. Whenever possible, each provision of this Amendment
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Amendment Agreement shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of


                                       3.
<PAGE>


this Amendment Agreement, or the validity or effectiveness of such provision in
any other jurisdiction.

         (i) Counterparts. This Amendment Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.

         (j) Interpretation. This Amendment Agreement is the result of
negotiations among, and has been reviewed by, counsel to the Agent, the Company
and the other parties hereto and are the product of all parties hereto.
Accordingly, this Amendment Agreement shall not be construed against any of the
Banks or the Agent merely because of the Agent's or any Bank's involvement in
the preparation thereof.

         (k) Loan Documents. This Amendment Agreement shall constitute a Loan
Document.

                            [Signature pages follow.]


                                       4.
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment Agreement, as of the date first above written.

                                        THE COMPANY

                                        DELUXE CORPORATION

                                        By: /s/ Karen S. Wiegert
                                        Name: Karen S. Wiegert
                                        Title: Treasurer



                                        THE AGENT

                                        BANK OF AMERICA, N.A. (formerly
                                        known as Bank of America National Trust
                                        and Savings Association), as Agent

                                        By: /s/ Kenneth J. Beck
                                        Name: Kenneth J. Beck
                                        Title: Principal



                                        THE BANKS

                                        BANK OF AMERICA, N.A. (formerly
                                        known as Bank of America National Trust
                                        and Savings Association), as a Bank



                                        By: /s/ Kenneth J. Beck
                                        Name: Kenneth J. Beck
                                        Title: Principal



                                        U.S. BANK NATIONAL ASSOCIATION


                                        By: /s/ Erik P. Dove
                                        Name: Erik P. Dove
                                        Title: Vice President


                                       5.
<PAGE>


                                        THE BANK OF NEW YORK

                                        By: /s/ John-Paul Marotta
                                        Name: JOHN-PAUL MAROTTA
                                        Title: VICE PRESIDENT



                                        WELLS FARGO BANK, N.A. (formerly
                                        known as Norwest Bank Minnesota,
                                        National Association)

                                        By: /s/ Christopher A. Cudak
                                        Name: Christopher A. Cudak
                                        Title: Vice President Wells Fargo Bank,
                                               National Association

                                        By: /s/ Allison S. Gelfman
                                        Name: Allison S. Gelfman
                                        Title: Vice President



                                        WACHOVIA BANK, N.A.

                                        By: /s/ Shawn Janko
                                        Name: Shawn Janko
                                        Title: Assistant Vice President



                                        BANK ONE, N.A.
                                        (Main Office Chicago)

                                        By: /s/ J. Garland Smith
                                        Name: J. Garland Smith
                                        Title: Managing Director


                                       6.
<PAGE>


                               OFFICER'S CERTIFICATE

The undersigned, being the Treasurer of Deluxe Corporation, a Minnesota
corporation (the "Corporation"), pursuant to Section 3(b) of the Second
Amendment to Credit Agreement dated as of October 5, 2000 among Bank of America,
N.A. (formerly known as Bank of America National Trust and Savings Association),
as Agent, the Corporation, and the other financial institutions named therein
(the "Amendment") which amends the Amended and Restated Credit Agreement, dated
as of July 8, 1997, by and among the parties thereto (the "Credit Agreement"),
does hereby certify in the name and on behalf of the Corporation that:

         (i)      the representations and warranties contained in Section 4 of
                  the Amendment are true and correct as of the Effective Date;
                  and

         (ii)     on and as of the Effective Date, after giving effect to the
                  amendment of the Credit Agreement contemplated by the
                  Amendment, no Default or Event of Default exists.

The capitalized terms used in this Certificate unless otherwise defined herein
shall have the meanings attributable to them in the Amendment.

         IN WITNESS WHEREOF, I have executed this Certificate on behalf of the
Corporation this 18th day of December, 2000.



                                              DELUXE CORPORATION

                                              /s/ Karen S. Wiegert
                                              Karen S. Wiegert
                                              Treasurer

<PAGE>


                                 DELUXE CORPORATION

                              CERTIFICATE OF SECRETARY

         I, Anthony C. Scarfone, Secretary of Deluxe Corporation, a Minnesota
corporation (the "Company"), pursuant to Section 3(c) of that Second Amendment
to Credit Agreement dated as of October 5, 2000 (the "Agreement") entered into
by and among the Company, Bank of America, N.A., as administrative agent for
itself and the Lenders (the "Administrative Agent"), and the several financial
institutions from time to time party thereto (collectively, the "Lenders"), do
hereby certify on behalf of the Company as follows, as of the date hereof (terms
used herein and not otherwise defined herein are used as defined in the
Agreement):

                  1. Attached hereto as Exhibit A is a true, correct and
         complete copy of the resolutions duly adopted by the Board of Directors
         of the Company (a) at a meeting of the Board of Directors duly called
         and held on May 6, 1997, at which meeting a quorum was present and
         acting throughout and the requisite number of such directors voted in
         favor of said resolutions, or, (b) by unanimous written consent of all
         members of the Board of Directors of the Company. Such resolutions have
         not in any way been rescinded, amended, modified or revoked and are now
         in full force and effect on the date hereof;

                  2. No resolution of dissolution has been approved or adopted
         by the shareholders or directors of the Company, nor has any meeting
         been called for such purpose, nor has any court or other Governmental
         Authority entered an order of dissolution, nor, to the best of our
         knowledge, has any certificate of dissolution been entered or
         proceeding commenced for such purpose; and

                  3. The following persons have been since October 5, 2000
         (except as otherwise noted) and are now duly elected and qualified
         officers of the Company, and on the date hereof do hold the office as
         set forth opposite his/her name below; the signatures appearing
         opposite their respective names are the true and authentic signatures
         of such officers, and each of such officers is duly authorized to
         execute and deliver to the Administrative Agent and the Lenders the
         Agreement and other such documents as may be required on behalf of the
         Company:

             Name                      Office                  Signature

         Lois M. Martin        Senior Vice President &   /s/ Lois M. Martin
                              Chief Financial Officer

        Karen S. Wiegert              Treasurer          /s/ Karen S. Wiegert

      Anthony C. Scarfone*     Senior Vice President,    /s/ Anthony C. Scarfone
                            General Counsel & Secretary

*Appointed to office on 12/1/00.



<PAGE>


         IN WITNESS WHEREOF, I have signed this Certificate as of the 18th day
of December, 2000.


                                           /s/ Anthony C. Scarfone
                                           Name: Anthony C. Scarfone
                                           Title: Secretary

         I, Lois M. Martin, Senior Vice President of Deluxe Corporation, do
hereby certify on behalf of the Company that Anthony C. Scarfone is on the date
hereof and has been at all times since December 1, 2000, the duly elected or
appointed, qualified and acting Secretary of the Company, and the signature set
forth above is the genuine signature of said officer.

         IN WITNESS WHEREOF, I have executed this Certificate as of the 18th day
of December, 2000.

                                           By: /s/ Lois M. Martin
                                           Name: Lois M. Martin
                                           Title: Senior Vice President


                                       2
<PAGE>


                                                                       Exhibit A

                        Credit Facility with Bank of America

           RESOLVED, that each of the Chief Executive Officer, the Senior Vice
         President and Chief Financial Officer, the Vice President and
         Treasurer, the Assistant Treasurer and the Senior Vice President and
         General Counsel be and hereby is authorized and directed to negotiate,
         execute and deliver on behalf and in the name of the Corporation a
         revolving credit agreement ("Credit Agreement") with the Bank of
         America National Trust and Savings Association ("Bank of America")
         acting as administrative agent on behalf of the Bank of America and
         other financial institutions to provide a revolving credit facility in
         a maximum principal amount of $150,000,000 with a maturity of five
         years (the "Facility"); such Facility to provide for adjusted LIBOR,
         base, and competitive rate and other loan availability upon the terms
         and conditions presented to this meeting, with such changes, additions
         or deletions as such officers deem advisable and proper and to
         negotiate, execute and deliver on behalf and in the name of the
         Corporation such other documentation relating thereto as such officers
         determine to be advisable and proper, the execution by each such
         officer of the Credit Agreement and other documentation relating
         thereto to be conclusive evidence that such officer deems all of the
         terms and provisions thereof to be advisable and proper;

           FURTHER RESOLVED, that each of the Chief Executive Officer, the
         Senior Vice President and Chief Financial Officer, the Vice President
         and Treasurer, the Assistant Treasurer and the Senior Vice President
         and General Counsel of the Corporation be and hereby is authorized and
         directed on behalf and in the name of the Corporation to execute and
         deliver to the Bank of America and BancAmerica Securities, Inc.
         ("BASI"), an agreement or agreements which provide arrangement fees for
         the Facility to be paid to BASI, for other fees to be paid to the Bank
         of America for serving as administrative agent in connection with the
         Facility and for additional costs and fees to be paid to either of them
         in connection with the negotiation and preparation of the documentation
         of the Facility, upon terms and conditions presented to this meeting,
         except for such changes, additions or deletions as such officer shall
         deem advisable and proper;

           FURTHER RESOLVED, that each of the Senior Vice President and Chief
         Financial Officer, the Vice President and Treasurer and Assistant
         Treasurer be and hereby is authorized on behalf of the Corporation to
         borrow from time to time under the Facility, to agree to rates of
         interest and other terms of loans under the Facility, to repay all
         amounts so borrowed, to issue instructions in connection with the
         foregoing and to execute in the name of the Corporation, and deliver
         written confirmations of any such instructions and to do and perform
         all acts which may be necessary or desirable in connection with
         borrowing from time to time and otherwise performing the Corporation's
         obligations under the Facility;


<PAGE>

           FURTHER RESOLVED, that each of the Chief Executive Officer, the
         Senior Vice President and Chief Financial Officer and the Vice
         President and Treasurer is authorized on behalf of the Corporation to
         designate and authorize other officers and employees of the Corporation
         to perform any and all of the functions specified in the preceding
         resolution;

           FURTHER RESOLVED, that each of the Senior Vice President and Chief
         Financial Officer, the Vice President and Treasurer and the Assistant
         Treasurer of the Corporation and the officers and employees designated
         and authorized to from time to time to act on behalf of the Corporation
         in accordance with the preceding resolution be and hereby is authorized
         to take such action from time to time on behalf of the Corporation as
         he or she may deem advisable and proper in order to carry out and
         perform the obligations of this Corporation with respect to the
         Facility; and

           FURTHER RESOLVED, that all authority conferred by these resolutions
         shall be deemed retroactive and any and all acts authorized hereunder
         performed prior to the adoption of this resolution are hereby ratified,
         affirmed, adopted and approved.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>deluxe010420_ex4-9.txt
<DESCRIPTION>EXHIBIT 4.9 AMENDMENT TO CREDIT AGREEMENT
<TEXT>

                                                                     Exhibit 4.9


               AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment Agreement"), dated as of October 5, 2000, is made among DELUXE
CORPORATION, a Minnesota corporation (the "Company"), the financial institutions
listed on the signature pages hereof under the heading "THE BANKS" (each a
"Bank" and, collectively, the "Banks"), and BANK OF AMERICA, N.A., as
administrative agent for itself and the Banks (in such capacity, the "Agent").

         The Company, the Banks and the Agent are parties to an Amended and
Restated Credit Agreement dated as of August 14, 2000 (as in effect as of the
date of this Amendment Agreement, the "Credit Agreement"). The Company has
requested that the Banks agree to certain amendments of the Credit Agreement,
and the Banks are willing to agree to such request, subject to the terms and
conditions of this Amendment Agreement.

         Accordingly, the parties hereto agree as follows:

         SECTION I Definitions: Interpretation.

         (a) Terms Defined in Credit Agreement. All capitalized terms used in
this Amendment Agreement (including in the Recitals hereof) and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement.

         (b) Interpretation. The rules of interpretation set forth in Section
1.02 of the Credit Agreement shall be applicable to this Amendment Agreement and
are incorporated herein by this reference.

         SECTION 2 Amendments to the Credit Agreement. The Credit Agreement
shall be amended as set forth in this Section 2, effective as of the date shown
first above (the "Effective Date"), subject to the satisfaction of the
conditions set forth in Section 3 hereof.

         (a)      Amendments. The Credit Agreement shall be amended as follows:

                  (i)      Section 7.02(d) is amended to read as follows:

                           "(d) dispositions permitted under Section 7.06(c);
                           and"

                  (ii)     Section 7.06(c) is amended to read as follows:

                           "(c) as to the Company, declare and make dividend
                           payments and other distributions to shareholders of
                           the Company of common Stock of eFunds Corporation and
                           of cash to the extent in lieu of fractional shares
                           thereof, pursuant to a tax-free distribution; and"

         (b) References Within Credit Agreement. Each reference in the Credit
Agreement to "this Agreement" and the words "hereof," "herein, hereunder," or
words of like


<PAGE>


import, shall mean and be a reference to the Credit Agreement as amended by this
Amendment Agreement.

         SECTION 3 Conditions of Effectiveness. The effectiveness of this
Amendment Agreement shall be subject to the satisfaction of each of the
following conditions precedent:

         (a) Executed Amendment Agreement. The Agent shall have received an
executed counterpart of this Amendment Agreement from each of the Company and
the Majority Banks.

         (b) Additional Closing Documents and Actions. The Agent shall have
received, in form and substance satisfactory to it, a certificate of a
Responsible Officer of the Company dated the Effective Date, stating that (A)
the representations and warranties contained in Section 4 hereof are true and
correct on and as of the Effective Date, and (B) on and as of the Effective
Date, after giving effect to the amendments of the Credit Agreement contemplated
hereby, no Default or Event of Default shall have occurred and be continuing.

         (c) Corporate Authority. The Agent shall have received, in form and
substance satisfactory to it, evidence of the authority of each officer of the
Company executing and delivering this Amendment Agreement.

         (d) Additional Documents. The Agent shall have received, in form and
substance satisfactory to it, such additional approvals, documents and other
information as the Agent or any Bank (through the Agent) may reasonably request.

For purposes of determining compliance with the foregoing conditions specified
in this Section 3, each of the Banks that has executed this Amendment Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required hereunder to be
consented to or approved by or acceptable or satisfactory to, such Bank.

         SECTION 4 Representations and Warranties of the Company. To induce the
Agent and the Banks to enter into this Amendment Agreement, the Company hereby
confirms and restates, as of the Effective Date, the representations and
warranties made by it in Article V of the Credit Agreement. For the purposes of
this Section 4, (i) each reference in Article V of the Credit Agreement to "this
Agreement," and the words "hereof," "herein," "hereunder," or words of like
import in such Section, shall mean and be a reference to the Credit Agreement as
amended by this Amendment Agreement, and each reference in such Section to "the
Loan Documents" shall mean and be a reference to the Loan Documents as amended
hereby, (ii) the representation and warranty set forth in section 5.11 of the
Credit Agreement shall be deemed instead to refer to the last day of the most
recent fiscal quarter and fiscal year for which financial statements have then
been delivered, and (iii) any representations and warranties which relate solely
to an earlier date shall not be deemed confirmed and restated as of the date
hereof (provided that such representations and warranties shall be true, correct
and complete as of such earlier date).


                                       2.
<PAGE>


         SECTION 5 Miscellaneous.

         (a) Notice. The Agent shall notify the Company and the Banks of the
occurrence of the Effective Date, and thereafter distribute to the Company and
Banks copies of all documents delivered under Section 3.

         (b) Credit Agreement Otherwise Not Affected. Except as expressly
amended and restated pursuant hereto, the Credit Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed in
all respects. The Banks' and the Agent's execution and delivery of, or
acceptance of, this Amendment Agreement and any other documents and instruments
in connection herewith shall not be deemed to create a course of dealing or
otherwise create any express or implied duty by any of them to provide any other
or further amendments, consents or waivers in the future.

         (c) No Reliance By Company. The Company hereby acknowledges and
confirms to the Agent and the Banks that the Company is executing this Amendment
Agreement on the basis of its own investigation and for its own reasons without
reliance upon any agreement, representation, understanding or communication by
or on behalf of any other Person.

         (d) Costs and Expenses. The Company agrees to pay to the Agent on
demand the reasonable out-of-pocket costs and expenses of the Agent, and the
reasonable fees and disbursements of counsel to the Agent, in connection with
the negotiation, preparation, execution and delivery of this Amendment Agreement
and any other documents to be delivered in connection herewith.

         (e) Binding Effect. This Amendment Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Company, the Agent and each
Bank and their respective successors and assigns.

         (f) Governing Law. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         (g) Complete Agreement: Amendments. This Amendment Agreement, together
with the other Loan Documents, contains the entire and exclusive agreement of
the parties hereto and thereto with reference to the matters discussed herein
and therein. This Amendment Agreement supersedes all prior commitments, drafts,
communications, discussion and understandings, oral or written, with respect
thereto. This Amendment Agreement may not be modified, amended or otherwise
altered except in accordance with the terms of Section 10.01 of the Credit
Agreement.

         (h) Severability. Whenever possible, each provision of this Amendment
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Amendment Agreement shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of


                                       3.
<PAGE>


this Amendment Agreement, or the validity or effectiveness of such provision in
any other jurisdiction.

         (i) Counterparts. This Amendment Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.

         (j) Interpretation. This Amendment Agreement is the result of
negotiations among, and has been reviewed by, counsel to the Agent, the Company
and the other parties hereto and are the product of all parties hereto.
Accordingly, this Amendment Agreement shall not be construed against any of the
Banks or the Agent merely because of the Agent's or any Bank's involvement in
the preparation thereof.

         (k) Loan Document. This Amendment Agreement shall constitute a Loan
Document.



                           [SIGNATURE PAGES FOLLOW.]


                                       4.
<PAGE>


                IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment Agreement, as of the date first above written.

                                THE COMPANY

                                DELUXE CORPORATION

                                By: /s/ Karen S. Wiegert
                                Name: Karen S. Wiegert
                                Title: Treasurer



                                THE AGENT

                                BANK OF AMERICA, N.A., as Agent

                                By: /s/ Kenneth J. Beck
                                Name: Kenneth J. Beck
                                Title: Principal



                                THE BANKS

                                BANK OF AMERICA, N.A., as a Bank

                                By: /s/ Kenneth J. Beck
                                Name: Kenneth J. Beck
                                Title: Principal



                                THE BANKS

                                BANK OF AMERICA, N.A., as a Bank

                                By: /s/ Kenneth J. Beck
                                Name: Kenneth J. Beck
                                Title: Principal



                                ABN AMRO BANK N.V.

                                By: /s/ Peter L. Eaton
                                Name: Peter L. Eaton
                                Title: Group Vice President

                                By: /s/ John P. Richardson
                                Name: John P. Richardson
                                Title: Vice President


                                       5.
<PAGE>


                                BANCA DI ROMA - CHICAGO
                                BRANCH

                                By: /s/ Joyce Montgomery
                                Name: Joyce Montgomery
                                Title: Vice President

                                By: Enrico Verdoscia
                                Name: Enrico Verdoscia
                                Title: Sr. Vice Pres. & Branch Mgr.



                                THE BANK OF NEW YORK

                                By: /s/ John-Paul Marotta
                                Name: John-Paul Marotta
                                Title: Vice President



                                BANK ONE, N.A.
                                (Main Office Chicago)

                                By: /s/ J. Garland Smith
                                Name: J. Garland Smith
                                Title: Managing Director



                                FIRSTAR BANK, NATIONAL
                                ASSOCIATION

                                By: /s/ Derek S. Roudebush
                                Name: Derek S. Roudebush
                                Title: Vice President


                                       6.
<PAGE>


                                LLOYDS TSB BANK plc

                                By: /s/ David Rodway
                                Name: David Rodway
                                Title: Assistant Director
                                            R156

                                By: /s/ Michael J. Gilligan
                                Name: Michael J. Gilligan
                                Title: Director, Financial Institutions, USA
                                             G311



                                THE NORTHERN TRUST COMPANY

                                By: /s/ Ashish S. Bhagwat
                                Name: Ashish S. Bhagwat
                                Title: Second Vice President



                                SUNTRUST BANK

                                By: /s/ Molly J. Drennan
                                Name: Molly J. Drennan
                                Title: Director



                                UMB BANK, N.A.

                                By: /s/ Robert P. Elbert
                                Name: Robert P. Elbert
                                Title: Vice President


                                       7.
<PAGE>


WACHOVIA BANK, N.A.



By: /s/ Shawn Janko
Name: Shawn Janko
Title: Assistant Vice President



WELLS FARGO BANK, N.A.

By: /s/ Christopher A. Cudak
Name: Christopher A. Cudak
Title: Vice President, Wells Fargo Bank, National Association


By: /s/ Allan S. Gelfman
Name: Allan S. Gelfman
Title: Vice President


                                       8.
<PAGE>


                             OFFICER'S CERTIFICATE

The undersigned, being the Treasurer of Deluxe Corporation, a Minnesota
corporation (the "Corporation"), pursuant to Section 3(b) of the Amendment to
Amended and Restated Credit Agreement dated as of October 5, 2000 among Bank of
America, N.A., as Agent, the Corporation, and the other financial institutions
named therein (the "Amendment") which amends the Amended and Restated Credit
Agreement, dated as of August 14, 2000, by and among the parties hereto (the
"Credit Agreement"), does hereby certify in the name and on behalf of the
Corporation that:

         (i)      the representations and warranties contained in Section 4 of
                  the Amendment are true and correct on and as of the Effective
                  Date; and

         (ii)     on and as of the Effective Date, after giving effect to the
                  amendment to the Credit Agreement contemplated by the
                  Amendment, no Default or Event of Default exists.

The capitalized terms used in this Certificate unless otherwise defined herein
shall have the meanings attributable to them in the Amendment.

         IN WITNESS WHEREOF, I have executed this Certificate on behalf of the
Corporation (and not personally) this 18th day of December, 2000.



                                  DELUXE CORPORATION


                                  /s/ Karen S. Wiegert
                                  Karen S. Wiegert
                                  Treasurer

<PAGE>


                               DELUXE CORPORATION

                            CERTIFICATE OF SECRETARY

         I, Anthony C. Scarfone, Secretary of Deluxe Corporation, a Minnesota
corporation (the "Company"), pursuant to Section 3(c) of that Amendment to
Amended and Restated Credit Agreement dated as of October 5, 2000 (the
"Agreement") entered into by and among the Company, Bank of America, N.A., as
administrative agent for itself and the Lenders (the "Administrative Agent"),
and the several financial institutions from time to time party thereto
(collectively, the "Lenders"), do hereby certify on behalf of the Company as
follows, as of the date hereof (terms used herein and not otherwise defined
herein are used as defined in the Agreement):

         1. Attached hereto as Exhibit A is a true, correct and complete copy of
the resolutions duly adopted by the Board of Directors of the Company (a) at a
meeting of the Board of Directors duly called and held on August 3-4, 2000, at
which meeting a quorum was present and acting throughout and the requisite
number of such directors voted in favor of said resolutions, or, (b) by
unanimous written consent of all members of the Board of Directors of the
Company. Such resolutions have not in any way been rescinded, amended, modified
or revoked and are now in full force and effect on the date hereof;

         2. No resolution of dissolution has been approved or adopted by the
shareholders or directors of the Company, nor has any meeting been called for
such purpose, nor has any court or other Governmental Authority entered an order
of dissolution, nor, to the best of our knowledge, has any certificate of
dissolution been entered or proceeding commenced for such purpose; and

         3. The following persons have been since October 5, 2000 (except as
otherwise noted) and are now duly elected and qualified officers of the Company,
and on the date hereof do hold the office as set forth opposite his/her name
below; the signatures appearing opposite their respective names are the true and
authentic signatures of such officers, and each of such officers is duly
authorized to execute and deliver to the Administrative Agent and the Lenders
the Agreement and other such documents as may be required on behalf of the
Company:

             Name                      Office                  Signature

         Lois M. Martin        Senior Vice President &   /s/ Lois M. Martin
                              Chief Financial Officer

        Karen S. Wiegert              Treasurer          /s/ Karen S. Wiegert

      Anthony C. Scarfone*     Senior Vice President,    /s/ Anthony C. Scarfone
                            General Counsel & Secretary

*Appointed to office on 12/1/00.

<PAGE>


IN WITNESS WHEREOF, I have signed this Certificate as of the l8th day of
December, 2000.


                                        /s/ Anthony C. Scarfone
                                        Name: Anthony C. Scarfone
                                        Title: Secretary

         I, Lois M. Martin, Senior Vice President of Deluxe Corporation, do
hereby certify on behalf of the Company that Anthony C. Scarfone is on the date
hereof and has been at all times since December 1, 2000, the duly elected or
appointed, qualified and acting Secretary of the Company, and the signature set
forth above is the genuine signature of said officer.

         IN WITNESS WHEREOF, I have executed this Certificate as of the 18th day
of December, 2000.

                                        By: /s/Lois M. Martin
                                        Name: Lois M. Martin
                                        Title: Senior Vice President


<PAGE>


                                                                       Exhibit A

                      Credit Facility with Bank of America

         WHEREAS, the Corporation entered a Credit Agreement, dated as of August
30, 1999 (together with all related schedules, exhibits and other documents
referenced therein, the "Credit Agreement") with Bank of America, N.A.
(including any predecessors and successors, "Bank of America") acting as
administrative agent, and the financial institutions named therein (the
"Financial Institutions") which provided a 364-day revolving credit facility in
the maximum principal amount of $500,000,000, all as set forth in the Credit
Agreement;

         WHEREAS, at the Corporation's request, the maximum principal amount of
the said credit facility was reduced to $300,000,000 (the credit facility having
the reduced maximum principal amount, the "Credit Facility");

         WHEREAS, the Credit Facility expires on August 28, 2000 as provided in
the Credit Agreement;

         WHEREAS, in accordance with the Credit Agreement, the Corporation has
requested, and Bank of America, as administrative agent, and the Financial
Institutions have agreed, to extend the Credit Facility for an additional 364
day period.

                  NOW, THEREFORE, BE IT RESOLVED, that each of the Chief
         Executive Officer, Vice Chairman, Chief Financial Officer, Treasurer
         and Senior Vice President and General Counsel of the Corporation be,
         and hereby is, authorized and directed to negotiate, execute and
         deliver on behalf and in the name of the Corporation an amendment and
         restatement of the Credit Agreement (any agreement containing the terms
         and conditions of such amendment and restatement, the "Agreement") with
         Bank of America acting as administrative agent and the Financial
         Institutions for an additional 364 day period following its expiration
         on August 28, 2000 on the terms and conditions contained in the Credit
         Agreement and the Agreement described at the meeting, with such
         amendments, changes, additions or deletions thereto as such officers,
         or any of them, deem advisable and proper, the execution by each such
         officer of the Agreement and any amendment or supplement to the Credit
         Agreement and other documentation relating thereto to be conclusive
         evidence that such officer deems all of the terms and provisions
         thereof to be advisable and proper;

                  FURTHER RESOLVED, that the actions of the officers of the
         Corporation in connection with the execution and delivery to Bank of
         America and Banc of America Securities LLC ("BAS") of any agreement or
         agreements providing for (a) the payment of administrative,
         arrangement, up-front, structuring, syndicating and other fees in
         connection with the Credit Facility to Bank of America and BAS and of
         any other additional charge, cost and fee in connection with the
         Agreement, any amendment or supplement to the Credit Agreement and any
         other related document or agreement (including, without limitation, the
         negotiation and preparation of the documentation relating thereto); and
         (b) for indemnification of


<PAGE>


         Bank of America, BAS and other persons and entities, which shall
         conclusively be deemed to include, without limitation, the terms and
         conditions contained in two letters dated June 16, 1999 executed by the
         Corporation and Bank of America and BAS, be, and hereby are authorized,
         ratified and approved and the said officers, be, and each of them
         hereby is authorized, to negotiate, execute and deliver any further
         agreement or amendment or supplement to any of the foregoing, in
         connection with the Agreement and any amendment or supplement to the
         Credit Agreement as they, or any of them, determine to be necessary or
         appropriate;

                  FURTHER RESOLVED, that each of the Chief Financial Officer and
         Treasurer be, and hereby is, authorized on behalf of the Corporation to
         borrow from time to time under the Credit Facility as extended, to
         agree to rates of interest and other terms of loans under the Credit
         Facility, to repay all amounts so borrowed, to issue instructions in
         connection with the foregoing and to execute in the name of the
         Corporation, and deliver written confirmations of any such instructions
         and to do and perform all acts which may be necessary or desirable in
         connection with borrowing from time to time and otherwise performing
         the Corporation's obligations under the Credit Facility;

                  FURTHER RESOLVED, that each of the Chief Executive Officer,
         Vice Chairman, Chief Financial Officer and Treasurer be, and hereby is,
         authorized on behalf of the Corporation to designate and authorize
         other officers and employees of the Corporation to perform any and all
         of the functions specified in the preceding resolution;

                  FURTHER RESOLVED, that each of the Chief Financial Officer and
         Treasurer and officers and employees designated and authorized to from
         time to time to act on behalf of the Corporation in accordance with the
         preceding resolution be, and hereby is, authorized to take such action
         from time to time on behalf of the Corporation as he or she may deem
         advisable and proper in order to carry out and perform the obligations
         of this Corporation with respect to the Credit Facility; and

                  FURTHER RESOLVED, that all authority conferred by these
         resolutions shall be deemed retroactive and any and all acts authorized
         hereunder performed prior to the adoption of this resolution are hereby
         ratified, affirmed, adopted and approved.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>deluxe010420_ex10-17.txt
<DESCRIPTION>EXHIBIT 10.17 SEVERANCE AGREEMENT
<TEXT>

                                                                   Exhibit 10.17


March 1, 2001



[Name]
[Address]


Dear ________:

In order to facilitate your attention to the affairs of Deluxe Corporation and
its Affiliates (collectively referred to as the "Company"), and in recognition
of the key role you serve within the Company, the Company has agreed to provide
you with certain separation benefits in the event your employment should ever be
terminated by the Company without Cause (as defined below), or by you for Good
Reason (as defined below), subject to the terms and conditions described below.

If, at the time of your termination of employment by the Company without Cause
or by you with Good Reason, you sign a separation agreement and release, then
you will receive the following benefits:

         A.       Twelve (12) months of severance pay at your then-current level
                  of base monthly salary in accordance with regular Deluxe
                  Corporation (Deluxe) payroll practices;

         B.       For a period of six (6) months commencing on the first
                  anniversary of the initial payment in paragraph A, a monthly
                  payment during each month in such six (6) month period equal
                  to the amount, if any, that your monthly base salary at the
                  time of your termination exceeds your monthly compensation
                  during that month in such six (6) month period. In order to be
                  eligible to receive any such payment, you agree to provide
                  Deluxe a copy of documentation concerning your monthly
                  compensation, such as your payroll statement or, if
                  applicable, your written statement that you are not then
                  employed, and within thirty (30) days thereafter, Deluxe will
                  make such differential payment to you;

         C.       Executive-level outplacement counseling and support services
                  for a period of up to twelve (12) months, to be provided
                  through the Company's then current preferred provider of such
                  services; and

         D.       To assist you with other costs and expenses you may incur in
                  connection with your employment transition, an additional lump
                  sum payment of Thirteen Thousand Dollars ($13,000), which
                  shall be paid to you within thirty (30) days of the effective
                  date of the separation agreement and release referenced above.

<PAGE>


Page 2


"Affiliate" means a company which is directly, or indirectly through one or more
intermediaries, controlled by or under common control with another company where
control shall mean the right, either directly or indirectly, to elect the
majority of the directors thereof without the consent or acquiescence of any
third party.

"Cause" means your (i) continued failure to perform substantially your duties
with the Company (other than any such failure resulting from incapacity due to
physical or mental illness or any such actual or anticipated failure after your
delivery of a written notice to Deluxe's Chief Executive Officer or General
Counsel that you are terminating your employment for Good Reason), after a
written demand for substantial performance is delivered to you which
specifically identifies the manner in which the Company believes that you have
not substantially performed your duties, (ii) conviction of a felony, or (iii)
willful engagement in (a) other illegal conduct relating to the business or
assets of the Company, or (b) gross misconduct.

"Good Reason" means (i) except with your written consent given in your
discretion, (a) the assignment to you of any position and/or duties which
represent or otherwise entail a material diminution in your position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities, or (b) any other action by the Company which results in a
material diminution in your position (or positions) with the Company, excluding
for this purpose an isolated, insubstantial or inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by you and excluding any diminution attributable to the
fact that Deluxe is no longer a public company; (ii) any material reduction in
your aggregate compensation and incentive opportunities, or any failure by the
Company to comply with any other written agreement between you and the Company,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by you; (iii) the Company's requiring you to be based at
any location more than 50 miles from your then current location; (iv) any
purported termination by the Company of your employment which is not effected
pursuant to a written notice of termination specifying the reasons for your
termination and the manner by which such reasons constitute "Cause" (as defined
herein); or (v) any request or requirement by the Company that you take any
action or omit to take any action that is inconsistent with or in violation of
the Company's ethical guidelines and policies as the same existed within the 120
day period prior to the termination date or any professional ethical guidelines
or principles that may be applicable to you.

You also agree that during the term of your employment by Deluxe or any of its
Affiliates and for a period of two (2) years thereafter, you shall retain in
confidence all proprietary and confidential information concerning Deluxe or any
of its Affiliates, including, without limitation, customer and mailing lists,
cost and pricing information, employee data, financial data, business plans,
sales and marketing plans, business acquisition or divestiture plans, research
and development activities relating to existing commercial activities and new
products, services and offerings under active consideration, trade secrets and
software which you may have acquired during the course

<PAGE>


Page 3


of your employment with Deluxe or its Affiliates and, notwithstanding the
exceptions contained in the next sentence, shall return all copies and extracts
thereof (however and on whatever medium recorded, to Deluxe, or as otherwise
requested by Deluxe, without keeping any copies thereof). The foregoing
obligation does not apply to (i) any information which was known to you prior to
disclosure to you by Deluxe or any of its Affiliates; (ii) any information which
was in the public domain prior to its disclosure to you; (iii) any information
which comes into the public domain through no fault of yours; (iv) any
information which you are required to disclose by a court or similar authority
or under subpoena, provided that you provide Deluxe with notice thereof and
assist, at Deluxe's or its Affiliates sole expense, any reasonable Deluxe or
Affiliate endeavor by appropriate means to obtain a protective order limiting
the disclosure of such information; and (v) any information which is disclosed
to you by a third party which has a legal right to make such disclosure.

You may not assign or delegate any of your rights or obligations in respect of
this agreement and any attempted assignment or delegation shall be void and of
no effect; provided, however, that your right to terminate your employment for
Good Reason shall not be affected by your incapacity due to physical or mental
illness. This agreement is binding upon Deluxe Corporation and your affiliated
employer and its successors and assigns and inures to the benefit of you, your
heirs and executors. You acknowledge that you are an employee at will and agree
that your employment may be terminated, by Deluxe or any of its Affiliates of
which you were an employee, at any time for any reason or no reason. This
agreement is governed by the substantive laws of the State of Minnesota.

This agreement is not intended to provide you with payments or benefits that are
duplicative or overlap payments or benefits that will be paid or provided to you
under other agreements between you and Deluxe or its Affiliates. Accordingly,
except as provided herein, you acknowledge that this agreement shall supersede
and replace in their entirety any and all other policies and/or agreements to
which you and Deluxe or any of its Affiliates are a party that provide severance
or continuation of income payments to you or your family following the
termination of your employment, except:

         Executive Retention Agreement dated as of the 18th day of December,
         2000 ("Retention Agreement").

This agreement will be superseded and replaced in its entirety by the Retention
Agreement on the Effective Date thereof or upon the termination prior to the
Effective Date of your employment by (i) the Company without Cause or (ii) you
for Good Reason, where the effect of such termination is to entitle you to
receive the benefits described in Section V.A as a result of the occurrence of
event or circumstances described in Section IV. H of the Retention Agreement.
The capitalized terms used in this paragraph will have the meanings ascribed to
them in the Retention Agreement.

<PAGE>


Page 4


Please sign both copies of this letter agreement and return one to Tony Scarfone
(via hand delivery or confidential courier), retaining the second copy for your
own records. Tony and I also will be happy to address any questions you might
have about this letter.

We look forward to your continued contributions to Deluxe or its Affiliates
under these circumstances which we hope will provide you a greater degree of
assurance concerning your livelihood.

With kindest regards,



Lawrence J. Mosner
Chairman and                            ----------------------------------------
Chief Executive Officer                 Employee

                                        ----------------------------------------
                                        Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>deluxe010420_ex10-18.txt
<DESCRIPTION>EXHIBIT 10.18 SEVERANCE AGREEMENT
<TEXT>

                                                                   Exhibit 10.18


March 1, 2001



Lawrence J. Mosner
483 Highcroft Road
Wayzata, MN  55391

Dear Larry:

In order to facilitate your attention to the affairs of Deluxe Corporation and
its Affiliates (collectively referred to as the "Company"), and in recognition
of the key role you serve within the Company, the Company has agreed to provide
you with certain separation benefits in the event your employment should ever be
terminated by the Company without Cause (as defined below), or by you for Good
Reason (as defined below), subject to the terms and conditions described below.

If, at the time of your termination of employment by the Company without Cause
or by you with Good Reason, you sign a separation agreement and release, then
you will receive the following benefits:

         A.       Twelve (12) months of severance pay at your then-current level
                  of base monthly salary in accordance with regular Deluxe
                  Corporation (Deluxe) payroll practices;

         B.       For a period of twelve (12) months commencing on the first
                  anniversary of the initial payment in paragraph A, a monthly
                  payment during each month in such twelve (12) month period
                  equal to the amount, if any, that your monthly base salary at
                  the time of your termination exceeds your monthly compensation
                  during that month in such twelve (12) month period. In order
                  to be eligible to receive any such payment, you agree to
                  provide Deluxe a copy of documentation concerning your monthly
                  compensation, such as your payroll statement or, if
                  applicable, your written statement that you are not then
                  employed, and within thirty (30) days thereafter, Deluxe will
                  make such differential payment to you;

         C.       Executive-level outplacement counseling and support services
                  for a period of up to twelve (12) months, to be provided
                  through the Company's then current preferred provider of such
                  services; and

         D.       To assist you with other costs and expenses you may incur in
                  connection with your employment transition, an additional lump
                  sum payment of Thirteen Thousand Dollars ($13,000), which
                  shall be paid to you within thirty (30) days of the effective
                  date of the separation agreement and release referenced above.

<PAGE>


Page 2


"Affiliate" means a company which is directly, or indirectly through one or more
intermediaries, controlled by or under common control with another company where
control shall mean the right, either directly or indirectly, to elect the
majority of the directors thereof without the consent or acquiescence of any
third party.

"Cause" means your (i) continued failure to perform substantially your duties
with the Company (other than any such failure resulting from incapacity due to
physical or mental illness or any such actual or anticipated failure after your
delivery of a written notice to Deluxe's Chief Executive Officer or General
Counsel that you are terminating your employment for Good Reason), after a
written demand for substantial performance is delivered to you which
specifically identifies the manner in which the Company believes that you have
not substantially performed your duties, (ii) conviction of a felony, or (iii)
willful engagement in (a) other illegal conduct relating to the business or
assets of the Company, or (b) gross misconduct.

"Good Reason" means (i) except with your written consent given in your
discretion, (a) the assignment to you of any position and/or duties which
represent or otherwise entail a material diminution in your position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities, or (b) any other action by the Company which results in a
material diminution in your position (or positions) with the Company, excluding
for this purpose an isolated, insubstantial or inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by you and excluding any diminution attributable to the
fact that Deluxe is no longer a public company; (ii) any material reduction in
your aggregate compensation and incentive opportunities, or any failure by the
Company to comply with any other written agreement between you and the Company,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by you; (iii) the Company's requiring you to be based at
any location more than 50 miles from your then current location; (iv) any
purported termination by the Company of your employment which is not effected
pursuant to a written notice of termination specifying the reasons for your
termination and the manner by which such reasons constitute "Cause" (as defined
herein); or (v) any request or requirement by the Company that you take any
action or omit to take any action that is inconsistent with or in violation of
the Company's ethical guidelines and policies as the same existed within the 120
day period prior to the termination date or any professional ethical guidelines
or principles that may be applicable to you.

You also agree that during the term of your employment by Deluxe or any of its
Affiliates and for a period of two (2) years thereafter, you shall retain in
confidence all proprietary and confidential information concerning Deluxe or any
of its Affiliates, including, without limitation, customer and mailing lists,
cost and pricing information, employee data, financial data, business plans,
sales and marketing plans, business acquisition or divestiture plans, research
and development activities relating to existing commercial activities and new
products, services and offerings under active consideration, trade secrets and
software which you may have acquired during the course

<PAGE>


Page 3


of your employment with Deluxe or its Affiliates and, notwithstanding the
exceptions contained in the next sentence, shall return all copies and extracts
thereof (however and on whatever medium recorded, to Deluxe, or as otherwise
requested by Deluxe, without keeping any copies thereof). The foregoing
obligation does not apply to (i) any information which was known to you prior to
disclosure to you by Deluxe or any of its Affiliates; (ii) any information which
was in the public domain prior to its disclosure to you; (iii) any information
which comes into the public domain through no fault of yours; (iv) any
information which you are required to disclose by a court or similar authority
or under subpoena, provided that you provide Deluxe with notice thereof and
assist, at Deluxe's or its Affiliates sole expense, any reasonable Deluxe or
Affiliate endeavor by appropriate means to obtain a protective order limiting
the disclosure of such information; and (v) any information which is disclosed
to you by a third party which has a legal right to make such disclosure.

You may not assign or delegate any of your rights or obligations in respect of
this agreement and any attempted assignment or delegation shall be void and of
no effect; provided, however, that your right to terminate your employment for
Good Reason shall not be affected by your incapacity due to physical or mental
illness. This agreement is binding upon Deluxe Corporation and your affiliated
employer and its successors and assigns and inures to the benefit of you, your
heirs and executors. You acknowledge that you are an employee at will and agree
that your employment may be terminated, by Deluxe or any of its Affiliates of
which you were an employee, at any time for any reason or no reason. This
agreement is governed by the substantive laws of the State of Minnesota.

This agreement is not intended to provide you with payments or benefits that are
duplicative or overlap payments or benefits that will be paid or provided to you
under other agreements between you and Deluxe or its Affiliates. Accordingly,
except as provided herein, you acknowledge that this agreement shall supersede
and replace in their entirety any and all other policies and/or agreements to
which you and Deluxe or any of its Affiliates are a party that provide severance
or continuation of income payments to you or your family following the
termination of your employment, except:

         Executive Retention Agreement dated as of the 18th day of December,
         2000 ("Retention Agreement").

This agreement will be superseded and replaced in its entirety by the Retention
Agreement on the Effective Date thereof or upon the termination prior to the
Effective Date of your employment by (i) the Company without Cause or (ii) you
for Good Reason, where the effect of such termination is to entitle you to
receive the benefits described in Section V.A as a result of the occurrence of
event or circumstances described in Section IV. H of the Retention Agreement.
The capitalized terms used in this paragraph will have the meanings ascribed to
them in the Retention Agreement.

<PAGE>


Page 4

Please sign both copies of this letter agreement and return one to Tony Scarfone
(via hand delivery or confidential courier), retaining the second copy for your
own records.

We look forward to your continued contributions to Deluxe or its Affiliates
under these circumstances which we hope will provide you a greater degree of
assurance concerning your livelihood.

With kindest regards,



Calvin W. Aurand, Jr.
Chairman                                ----------------------------------------
Compensation Committee                  Employee

                                        ----------------------------------------
                                        Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>deluxe010420_ex10-19.txt
<DESCRIPTION>EXHIBIT 10.19 EXECUTIVE RETENTION AGREEMENT
<TEXT>

                                                                   Exhibit 10.19


                          EXECUTIVE RETENTION AGREEMENT

         AGREEMENT by and between Deluxe Corporation, a Minnesota corporation
(the "Company") and EXECUTIVE (the "Executive") dated as of the 18th day of
December, 2000.

         The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below).
The Board believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks associated with
a Change of Control and to encourage the Executive's full attention and
dedication to the Company and its business strategies and to provide the
Executive with compensation and benefits arrangements upon the occurrence of a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied in that event and which are competitive with
those of other corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

I.       Certain Definitions.

         A.       "Affiliate" shall mean 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.

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

         C.       "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:

                  1.       any Person 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 (a) of paragraph 3
                           below; or

                  2.       the individuals who at the date of this Agreement
                           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
                           consent, 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 as of the date of
                           this Agreement or whose appointment, election or
                           nomination for election was previously so approved,
                           cease for any reason to constitute a majority
                           thereof; or

                  3.       there is consummated a merger or consolidation of the
                           Company or any Affiliate with any other company,
                           other than (a) a merger or consolidation which would
                           result in the voting securities of the Company
                           outstanding immediately prior thereto 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 (b) a merger or
                           consolidation effected to implement a
                           recapitalization of the Company (or similar
                           transaction) in which no Person becomes the
                           Beneficial Owner,

<PAGE>


                           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

                  4.       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 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.

                  5.       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 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.

         D.       "Change of Control Period" shall mean the period commencing on
                  the date hereof and ending on the third anniversary of the
                  date hereof; provided, however, that commencing on the date
                  one year after the date hereof, and on each annual anniversary
                  of such date (such date and each annual anniversary thereof
                  shall be hereinafter referred to as the "Renewal Date"), the
                  Change of Control Period shall be automatically extended so as
                  to terminate three years from such Renewal Date, unless at
                  least 120 days prior to the Renewal Date the Company shall
                  give notice to the Executive that the Change of Control Period
                  shall not be so extended.

         E.       "Effective Date" shall mean the first date during the Change
                  of Control Period on which a Change of Control occurs.

         F.       "Person" shall have the meaning defined in Sections 3(a)(9)
                  and 13(d) of the Securities Exchange Act of 1934, as amended,
                  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.

II.      Employment Period. The Company hereby agrees to continue the Executive
         in its employ, and the Executive hereby agrees to remain in the employ
         of the Company subject to the terms and conditions of this Agreement,
         for the period commencing on the Effective Date and ending on the
         second anniversary of such date (the "Employment Period").

III.     Terms of Employment.

         A.       Position and Duties.

                  1.       Except with Executive's written consent given in his
                           or her discretion, during the Employment Period, (a)
                           the Executive's position (including status, offices,
                           titles and reporting requirements), authority, duties
                           and responsibilities shall be at least commensurate
                           in all material respects with the most significant of
                           those held, exercised and assigned at any time during
                           the 180-day period immediately preceding the
                           Effective Date and (b) the Executive's services shall
                           be performed at the location where the Executive was
                           employed immediately preceding the Effective Date or
                           at a location less than 50 miles from such location.

                  2.       During the Employment Period, and excluding any
                           periods of vacation and sick leave to which the
                           Executive is entitled, the Executive agrees to devote
                           reasonable attention and time during normal business
                           hours to the business and affairs of the Company and,
                           to the extent necessary to discharge the
                           responsibilities assigned to the Executive hereunder,
                           to use the Executive's reasonable efforts to perform
                           faithfully and efficiently such responsibilities.


                                       2
<PAGE>


                           During the Employment Period it shall not be a
                           violation of this Agreement for the Executive to (a)
                           serve on corporate, civic or charitable boards or
                           committees, (b) deliver lectures, fulfill speaking
                           engagements or teach at educational institutions and
                           (c) manage personal investments, so long as such
                           activities do not significantly interfere with the
                           performance of the Executive's responsibilities as an
                           employee of the Company in accordance with this
                           Agreement. It is expressly understood and agreed that
                           to the extent that any such activities have been
                           conducted by the Executive prior to the Effective
                           Date, the continued conduct of such activities (or
                           the conduct of activities similar in nature and scope
                           thereto) subsequent to the Effective Date shall not
                           thereafter be deemed to interfere with the
                           performance of the Executive's responsibilities to
                           the Company.

         B.       Compensation.

                  1.       Base Salary. During the Employment Period, the
                           Executive shall receive an annual base salary
                           ("Annual Base Salary"), which shall be paid not less
                           often than monthly, at least equal to twelve times
                           the highest monthly base salary paid or payable,
                           including any base salary which has been earned but
                           deferred, to the Executive by the Company and its
                           Affiliates in respect to the twelve-month period
                           immediately preceding the month in which the
                           Effective Date occurs, provided, however, that Annual
                           Base Salary may be reduced to an amount not less than
                           ninety percent (90%) of the Annual Base Salary in
                           effect on the Effective Date pursuant to a general
                           (across-the-board) reduction of base salary similarly
                           affecting all senior officers of the Company or its
                           Affiliates, as the case may be, and all senior
                           officers of any Person in control of the Company.
                           During the Employment Period, the Annual Base Salary
                           shall be reviewed no more than 12 months after the
                           last salary increase awarded to the Executive prior
                           to the Effective Date and thereafter at least
                           annually. Any increase in Annual Base Salary shall
                           not serve to limit or reduce any other obligation to
                           the Executive under this Agreement. Except as set
                           forth in the first sentence of this paragraph, Annual
                           Base Salary shall not be reduced after any such
                           increase and the term Annual Base Salary as utilized
                           in this Agreement shall refer to Annual Base Salary
                           as so increased.

                  2.       Annual Incentive Payment or Bonus. In addition to
                           Annual Base Salary, the Executive shall be paid, for
                           each fiscal year ending during the Employment Period
                           (ratably apportioned in the case of any fiscal year
                           included within the Employment Period but which does
                           not end within the Employment Period), an annual
                           incentive payment or bonus (the "Annual Incentive
                           Payment") in cash on the same basis as such incentive
                           payments or bonuses are paid to other peer
                           executives. For example, if annual incentive payments
                           are paid to other peer executives under the Company's
                           annual incentive plan, the target award for the
                           Executive shall be established in the same manner as
                           the target award for the other peer executives (e.g.,
                           by reference to a percentile target based on
                           comparative market data) and the performance criteria
                           and performance measurements governing any payment
                           earned by Executive shall be based on the same
                           performance criteria (such as earnings per share or
                           return on average capital employed) and performance
                           measurements applied to the other peer executives.
                           Notwithstanding the foregoing, if the payment of a
                           bonus to other peer executives is, in whole or part,
                           not based on objective performance criteria,
                           Executive's Annual Incentive Payment shall be at
                           least equal to the greater of (a) the average of
                           Executive's Annual Incentive Payments for the last
                           three full fiscal years prior to the Effective Date
                           or, if Executive was not in the employment of the
                           Company or its Affiliates during one or more of the
                           last three full fiscal years, the average of
                           Executive's Annual Incentive Payments during the
                           number of full fiscal years prior to the Effective
                           Date that the Executive was so employed (annualized,
                           in either case, in the event that the Executive was
                           not employed by the Company for the whole of any such
                           fiscal year), provided that any special or one-time
                           awards (such as those associated with a new hire or
                           promotion) shall not be taken into account and (b)
                           the Executive's annual target incentive or bonus
                           opportunity as in effect under the Company's annual
                           incentive or bonus plans during the last fiscal year
                           immediately preceding the Effective Date, provided
                           that any special or one time awards (such as those
                           associated with a new hire or promotion) shall not be
                           taken into account (such greater amount being
                           hereinafter referred to as the "Recent Annual
                           Incentive Payment"). Each such Annual Incentive
                           Payment shall be paid no later than the end of the
                           third month


                                       3
<PAGE>


                           of the fiscal year next following the fiscal year for
                           which the Annual Incentive Payment is awarded, unless
                           the Executive shall elect to defer the receipt of
                           such Annual Incentive Payment.

                  3.       Stock Incentive Plans. During the Employment Period,
                           the Executive shall be entitled to participate in the
                           Company's stock incentive, performance share and
                           other stock-based incentive plans (if any), on the
                           same basis as other peer executives. For example, if
                           other peer executives are awarded stock options or
                           performance shares based on references to comparative
                           market data, Executive's awards shall be made on the
                           same basis, and shall, in any event, contain the same
                           terms and conditions, and if applicable, be subject
                           to the same performance criteria, as applied to
                           awards to other peer executives. Notwithstanding the
                           foregoing, such long-term incentive opportunities for
                           the Executive shall in no event be less favorable, in
                           each case and in the aggregate, than those provided
                           by the Company and its Affiliates for the Executive
                           under such plans during the fiscal year immediately
                           preceding the Effective Date, provided that any
                           special or one-time awards (such as those associated
                           with a new hire or promotion) shall not be taken into
                           account.

                  4.       Savings, Retirement and Other Incentive Plans. During
                           the Employment Period, the Executive shall be
                           entitled to participate in all other incentive,
                           savings and retirement plans, practices, policies and
                           programs applicable generally to other peer
                           executives of the Company and its Affiliates, but in
                           no event shall such plans, practices, policies and
                           programs provide the Executive with incentive
                           opportunities (measured with respect to both regular
                           and special incentive opportunities, to the extent,
                           if any, that such distinction is applicable), savings
                           opportunities and retirement benefit opportunities,
                           in each case, less favorable, in the aggregate, than
                           the most favorable of those provided by the Company
                           and its Affiliates for the Executive under such
                           plans, practices, policies and programs as in effect
                           at any time during the one year period immediately
                           preceding the Effective Date or if more favorable to
                           the Executive, those provided generally at any time
                           after the Effective Date to other peer executives of
                           the Company and its Affiliates, provided, however,
                           that such benefits may be reduced pursuant to a
                           general (across-the-board) reduction of such benefits
                           similarly affecting all senior officers of the
                           Company or its Affiliates, as the case may be, and
                           all senior officers of any Person in control of the
                           Company.

                  5.       Welfare Benefit Plans. During the Employment Period,
                           the Executive and/or the Executive's family, as the
                           case may be, shall be eligible for participation in
                           and shall receive all benefits under all welfare
                           benefit plans, practices, policies and programs
                           provided by the Company and its Affiliates
                           (including, without limitation, medical,
                           prescription, dental, disability, employee life,
                           group life, accidental death and travel accident
                           insurance plans and programs) to the Executive and/or
                           the Executive's family, to the extent applicable
                           generally to other peer executives of the Company and
                           its Affiliates, as the case may be, but in no event
                           shall such plans, practices, policies and programs
                           provide the Executive with benefits which are less
                           favorable, in the aggregate, than the most favorable
                           of such plans, practices, policies and programs in
                           effect for the Executive at any time during the one
                           year period immediately preceding the Effective Date
                           or, if more favorable to the Executive, those
                           provided generally at any time after the Effective
                           Date to other peer executives of the Company and its
                           Affiliates, as the case may be, provided, however,
                           that such benefits may be reduced pursuant to a
                           general (across-the-board) reduction of such benefits
                           similarly affecting all senior officers of the
                           Company or its Affiliates, as the case may be, and
                           all senior officers of any Person in control of the
                           Company.

                  6.       Expenses. During the Employment Period, the Executive
                           shall be entitled to receive prompt reimbursement for
                           all reasonable expenses incurred by the Executive in
                           accordance with the most favorable policies,
                           practices and procedures of the Company and its
                           Affiliates in effect for the Executive at any time
                           during the one year period immediately preceding the
                           Effective Date or, if more favorable to the
                           Executive, as in effect generally at any time
                           thereafter with respect to other peer executives of
                           the Company and its Affiliates, as the case may be.


                                       4
<PAGE>


                  7.       Fringe Benefits. During the Employment Period, the
                           Executive shall be entitled to fringe benefits,
                           including, without limitation, tax and financial
                           planning services, use or reimbursement for the use
                           of an automobile, as the case may be, and payment of
                           related expenses, in accordance with the most
                           favorable plans, practices, programs and policies of
                           the Company and its Affiliates in effect for the
                           Executive at any time during the one year period
                           immediately preceding the Effective Date or, if more
                           favorable to the Executive, as in effect generally at
                           any time thereafter with respect to other peer
                           executives of the Company and its Affiliates, as the
                           case may be, provided, however, that such benefits
                           may be reduced pursuant to a general
                           (across-the-board) reduction of such benefits
                           similarly affecting all senior officers of the
                           Company or its Affiliates, as the case may be, and
                           all senior officers of any Person in control of the
                           Company.

                  8.       Office and Support Staff. During the Employment
                           Period, the Executive shall be entitled to an office
                           or offices of a size and with furnishings and other
                           appointments, and to exclusive personal secretarial
                           and other assistance, not materially less favorable
                           with respect to the foregoing provided to the
                           Executive by the Company and its Affiliates at any
                           time during the one year period immediately preceding
                           the Effective Date or, as provided generally at any
                           time thereafter with respect to other peer executives
                           of the Company and its Affiliates, as the case may
                           be, and to similarly situated senior officers of any
                           Person in control of the Company.

                  9.       Vacation. During the Employment Period, the Executive
                           shall be entitled to paid vacation and holidays in
                           accordance with the most favorable plans, policies,
                           programs and practices of the Company and its
                           Affiliates as in effect for the Executive at any time
                           during the one year period immediately preceding the
                           Effective Date or, if more favorable to the
                           Executive, as in effect generally at any time
                           thereafter with respect to other peer executives of
                           the Company and its Affiliates, as the case may be.

IV.      Termination of Employment.

         A.       Death or Disability. The Executive's employment shall
                  terminate automatically upon the Executive's death during the
                  Employment Period. If the Company determines in good faith
                  that the Disability of the Executive has occurred during the
                  Employment Period (pursuant to the definition of Disability
                  set forth below), it may, give a Notice of Termination to the
                  Executive in accordance with Section XI.B. of this Agreement
                  of its intention to terminate the Executive's employment. In
                  such event, the Executive's employment with the Company or its
                  Affiliates, as the case may be, shall terminate effective on
                  the 30th day after receipt of the Notice of Termination by the
                  Executive (unless such date is extended as provided in Section
                  IV.F.), provided that, within the 30 days after such receipt,
                  the Executive shall not have returned to full-time performance
                  of the Executive's duties. For purposes of this Agreement,
                  "Disability" shall mean the absence of the Executive from the
                  Executive's duties with the Company or its Affiliates, as the
                  case may be, on a full-time basis for 180 consecutive business
                  days as a result of incapacity due to mental or physical
                  illness which is determined to be total and permanent by a
                  physician selected by the Company or its insurers and
                  acceptable to the Executive or the Executive's legal
                  representative.

         B.       Cause. The Company may terminate the Executive's employment
                  during the Employment Period for Cause. For purposes of this
                  Agreement, "Cause" shall mean:

                  1.       the willful and continued failure of the Executive to
                           perform substantially the Executive's duties with the
                           Company and its Affiliates (other than any such
                           failure resulting from incapacity due to physical or
                           mental illness or any such actual or anticipated
                           failure after the issuance of a Notice of Termination
                           for Good Reason by the Executive pursuant to Section
                           IV.D. hereof), after a written demand for substantial
                           performance is delivered to the Executive by the
                           Board which specifically identifies the manner in
                           which the Board believes that the Executive has not
                           substantially performed the Executive's duties, or


                                       5
<PAGE>


                  2.       the Executive's conviction of a felony or the willful
                           engaging by the Executive in (a) other illegal
                           conduct relating to the business or assets of the
                           Company, or (b) gross misconduct which is materially
                           injurious to the Company or its Affiliates.

         For purposes of this provision, (a) no act or failure to act, on the
         part of the Executive, shall be considered "willful" unless it is done,
         or omitted to be done, by the Executive in bad faith or without
         reasonable belief that the Executive's action or omission was in the
         best interests of the Company and (b) in the event of a dispute
         concerning the application of this provision, no claim by the Company
         that Cause exists shall be given effect unless the Company establishes
         to the Committee (as defined in Section XI.J.) by clear and convincing
         evidence that Cause exists. Any act, or failure to act, based upon
         authority given pursuant to a resolution duly adopted by the Board or
         upon the instructions of the Chief Executive Officer or a senior
         officer of the Company or based upon the advice of counsel for the
         Company (or if the Executive is counsel to the Company, based upon such
         Executive's own legal conclusions) shall be conclusively presumed to be
         done, or omitted to be done, by the Executive in good faith and in the
         best interests of the Company.

         C.       Good Reason. The Executive's employment during the Employment
                  Period may be terminated by the Executive for Good Reason. For
                  purposes of this Agreement, "Good Reason" shall mean:

                  1.       except with Executive's written consent given in his
                           or her discretion, (a) the assignment to the
                           Executive of any duties materially inconsistent with
                           the Executive's position (including status, offices,
                           titles and reporting requirements), authority, duties
                           or responsibilities as contemplated by Section III.A.
                           of this Agreement, or (b) any other action by the
                           Company which results in a material diminution in the
                           Executive's position (or positions) with the Company
                           or its Affiliates, excluding for this purpose an
                           isolated, insubstantial or inadvertent action not
                           taken in bad faith and which is remedied by the
                           Company promptly after receipt of notice thereof
                           given by the Executive and excluding any diminution
                           attributable to the fact that the Company is no
                           longer a public company;

                  2.       any material reduction in the Executive's aggregate
                           compensation and incentive opportunities, or any
                           failure by the Company to comply with any of the
                           provisions of Section III.B. of this Agreement, other
                           than an isolated, insubstantial and inadvertent
                           failure not occurring in bad faith and which is
                           remedied by the Company promptly after receipt of
                           notice thereof given by the Executive;

                  3.       the Company's requiring the Executive to be based at
                           any location other than as provided in clause
                           III.A.1(b) hereof;

                  4.       any purported termination by the Company of the
                           Executive's employment which is not effected pursuant
                           to a Notice of Termination satisfying the
                           requirements of Section IV.D hereof and otherwise
                           expressly permitted by this Agreement. For purposes
                           of this Agreement, no such purported termination
                           shall be effective;

                  5.       any failure by the Company to comply with and satisfy
                           Section X.C. of this Agreement; or

                  6.       any request or requirement by the Company of its
                           Affiliates that the Executive take any action or omit
                           to take any action that is inconsistent with or in
                           violation of the Company's ethical guidelines and
                           policies as the same existed within the 120 day
                           period prior to the Effective Date or any
                           professional ethical guidelines or principles that
                           may be applicable to the Executive or, if Executive
                           is counsel to the Company, requesting or requiring
                           Executive to practice in or under the laws of any
                           jurisdiction or appear before any court or other
                           tribunal to or before which Executive is not admitted
                           to practice.

                  The Executive's right to terminate the Executive's employment
                  for Good Reason shall not be affected by the Executive's
                  incapacity due to physical or mental illness. The Executive's
                  continued employment shall not constitute a consent to, or a
                  waiver of rights with respect to, any act or failure to act
                  constituting Good Reason hereunder.


                                       6
<PAGE>


         D.       Notice of Termination. Any purported termination of the
                  Executive's employment during the Employment Period (other
                  than by reason of death) shall be communicated by Notice of
                  Termination to the other party hereto given in accordance with
                  Section XI.B. of this Agreement. For purposes of this
                  Agreement, a "Notice of Termination" means a written notice
                  which (1) indicates the specific termination provision in this
                  Agreement relied upon, (2) to the extent applicable, sets
                  forth in reasonable detail the facts and circumstances claimed
                  to provide a basis for termination of the Executive's
                  employment under the provision so indicated and (3) if the
                  Date of Termination (as defined below) is other than the date
                  of receipt of such notice, specifies the termination date
                  (which date shall be not more than thirty days after the
                  giving of such notice). Further, a Notice of Termination for
                  Cause is required to include a copy of a resolution duly
                  adopted by the affirmative vote of not less than
                  three-quarters of the entire membership of the Board at a
                  meeting of the Board called and held for such purpose (after
                  reasonable notice is provided to the Executive and the
                  Executive is given an opportunity, together with counsel, to
                  be heard before the Board), finding that, in the good faith
                  opinion of the Board, the Executive is guilty of the conduct
                  described in subparagraph B.1. or B.2. above, and specifying
                  the particulars thereof in reasonable detail. The failure by
                  the Executive or the Company to set forth in the Notice of
                  Termination any fact or circumstance which contributes to a
                  showing of Disability, Good Reason or Cause shall not waive
                  any right of the Executive or the Company, respectively,
                  hereunder or preclude the Executive or the Company,
                  respectively, from asserting such fact or circumstance in
                  enforcing the Executive's or the Company's rights hereunder;

         E.       Date of Termination. "Date of Termination" means (1) if the
                  Executive's employment is terminated by the Company for Cause,
                  or by the Executive for Good Reason or any other reason, the
                  date of receipt of the Notice of Termination or any later date
                  specified therein, as the case may be, (2) if the Executive's
                  employment is terminated during the Employment Period by the
                  Company other than for Cause or Disability, the Date of
                  Termination shall be the date on which the Company notifies
                  the Executive of such termination, (3) if the Executive's
                  employment is terminated by reason of death during the
                  Employment Period, the Date of Termination shall be the date
                  of death of the Executive and (4) if the Executive's
                  employment is terminated by the Company for Disability, the
                  date Executive's employment is terminated as provided in
                  Section IV.A., provided, however, the Date of Termination
                  specified in this Section E. may be extended as provided in
                  Section IV.F.

         F.       Dispute Concerning Termination. If within fifteen (15) days
                  after any Notice of Termination is given, or, if later, prior
                  to the Date of Termination (as determined without regard to
                  this Section IV.F.), the party receiving such Notice of
                  Termination notifies the other party that a dispute exists
                  concerning the termination, the Date of Termination shall be
                  extended until the earlier of (i) the date on which the
                  Employment Period ends or (ii) the date on which the dispute
                  is finally resolved, either by mutual written agreement of the
                  parties or by a final judgment, order or decree of an
                  arbitrator or a court of competent jurisdiction (which is not
                  appealable or with respect to which the time for appeal
                  therefrom has expired and no appeal has been perfected);
                  provided, however, that the Date of Termination shall be
                  extended by a notice of dispute given by the Executive only if
                  such notice is given in good faith and the Executive pursues
                  the resolution of such dispute with reasonable diligence.

         G.       Compensation During Dispute. If a purported termination occurs
                  during the Employment Period and the Date of Termination is
                  extended in accordance with Section IV.F. hereof, the Company
                  shall continue to pay the Executive the full compensation in
                  effect when the notice giving rise to the dispute was given
                  (including, but not limited to, salary) and continue the
                  Executive as a participant in all compensation, benefit and
                  insurance plans in which the Executive was participating when
                  the notice giving rise to the dispute was given, until the
                  Date of Termination, as determined in accordance with Section
                  IV.F. hereof. Amounts paid under this Section IV.G. are in
                  addition to all other amounts due under this Agreement and
                  shall not be offset against or reduce any other amounts due
                  under this Agreement.

         H.       Pre-Effective Date Actions. For purposes of this Agreement,
                  the Executive's employment shall be deemed to have been
                  terminated during the Employment Period by the Company without
                  Cause or by the Executive with Good Reason, if (i) the
                  Executive's employment is terminated by the Company without
                  Cause prior to the Effective Date (whether or not a Change of
                  Control ever occurs) and such termination was at the request
                  or direction of a Person who has entered into an agreement
                  with the


                                       7
<PAGE>


                  Company the consummation of which would constitute a Change of
                  Control, (ii) the Executive terminates his employment for Good
                  Reason prior to the Effective Date (whether or not a Change of
                  Control ever occurs) and the circumstance or event which
                  constitutes Good Reason occurs at the request or direction of
                  such Person, or (iii) the Executive's employment is terminated
                  by the Company without Cause or by the Executive for Good
                  Reason and such termination or the circumstance or event which
                  constitutes Good Reason is otherwise in connection with or in
                  anticipation of a Change of Control (whether or not a Change
                  of Control ever occurs).

V.       Obligations of the Company upon Termination.

         A.       Good Reason; Other Than for Cause. If, during the Employment
                  Period, the Company shall terminate the Executive's employment
                  other than for Cause or Disability or the Executive shall
                  terminate employment for Good Reason:

                  1.       the Company shall pay to the Executive in a lump sum
                           in cash within 5 days after the Date of Termination
                           the aggregate of the following amounts:

                           (a)      the sum of (i) the Executive's Annual Base
                                    Salary through the Date of Termination to
                                    the extent not theretofore paid, (ii) the
                                    product of (x) the greater of (I) the
                                    Executive's target bonus under the Company's
                                    annual incentive plan in respect of the year
                                    in which the Date of Termination occurs or,
                                    if greater, for the year in which the Change
                                    of Control occurs (the "Target Bonus") and
                                    (II) the Annual Incentive Payment that the
                                    Executive would have earned for the year in
                                    which the Date of Termination occurs based
                                    upon projecting to the end of such year the
                                    Company's actual performance through the
                                    Date of Termination with respect to the
                                    performance measures on which such payment
                                    would have been based and (y) a fraction,
                                    the numerator of which is the number of days
                                    in the current fiscal year through the Date
                                    of Termination, and the denominator of which
                                    365 and (iii) any compensation previously
                                    deferred by the Executive (together with any
                                    accrued interest or earnings thereon) and
                                    any accrued vacation pay, in each case to
                                    the extent not theretofore paid (the sum of
                                    the amounts described in clauses (i), (ii)
                                    and (iii) shall be hereinafter referred to
                                    as the "Accrued Obligations"); and

                           (b)      the amount equal to the product of (i) three
                                    and (ii) the sum of (x) the Executive's
                                    Annual Base Salary and (y) the greater of
                                    (I) the Executive's Target Bonus and (II)
                                    the average of Executive's Annual Incentive
                                    Payments for the last three full fiscal
                                    years prior to the Effective Date or, if
                                    Executive was not in the employment of the
                                    Company or its Affiliates during one or more
                                    of the last three full fiscal years, the
                                    average of Executive's Annual Incentive
                                    Payments during the number of full fiscal
                                    years prior to the Effective Date that the
                                    Executive was so employed (annualized, in
                                    either case, in the event that the Executive
                                    was not employed by the Company for the
                                    whole of any such fiscal year), provided
                                    that any special or one-time awards (such as
                                    those associated with a new hire or
                                    promotion) shall not be taken into account;
                                    and

                           (c)      an amount equal to the product of three
                                    times the higher of (i) the sum of the
                                    amounts that would have been contributed by
                                    the Company or any Affiliate based on the
                                    Reference Amount (defined below) to the
                                    Executive's account under (x) all of the
                                    retirement plans of the Company and its
                                    Affiliates in which the Executive was
                                    eligible to participate immediately prior to
                                    the Effective Date and (y) any excess or
                                    supplemental retirement plan in which the
                                    Executive was eligible to participate as of
                                    the Effective Date as such plans were in
                                    effect and funded for the fiscal year
                                    immediately preceding the Effective Date or
                                    (ii) the sum of the amounts that would have
                                    been contributed by the Company or any
                                    Affiliate based on the Reference Amount to
                                    the Executive's account under (x) all of the
                                    retirement plans of the Company and its
                                    Affiliates in which the Executive was
                                    eligible to participate immediately prior to
                                    the Date of Termination and (y) any excess
                                    or supplemental retirement plan in which the
                                    Executive was eligible to participate
                                    immediately prior


                                       8
<PAGE>


                                    to the Date of Termination as those plans
                                    were in effect and funded for the fiscal
                                    year immediately preceding the Date of
                                    Termination. For the purposes hereof, the
                                    term "Reference Amount" shall mean an amount
                                    equal to one-third of the amount calculated
                                    in clause V.A.1.(b) without adjustment in
                                    the case of death or Disability.

                  2.       for three years after the Executive's Date of
                           Termination, or such longer period as may be provided
                           by the terms of the appropriate plan, program,
                           practice or policy, the Company shall continue
                           benefits to the Executive and/or the Executive's
                           family at least equal to those which would have been
                           provided to them in accordance with the plans,
                           programs, practices and policies described in Section
                           III.B.5. of this Agreement if the Executive's
                           employment had not been terminated or, if more
                           favorable to the Executive, as in effect generally at
                           any time thereafter with respect to other peer
                           executives of the Company and its Affiliates and
                           their families, as the case may be, provided,
                           however, that if the Executive becomes re-employed
                           with another employer and is eligible to receive
                           medical or other welfare benefits under another
                           employer provided plan, the medical and other welfare
                           benefits described herein shall be secondary and
                           supplemental to those provided under such other plan
                           during such applicable period of eligibility. For
                           purposes of determining eligibility (but not the time
                           of commencement of benefits) of the Executive for
                           retiree welfare benefits pursuant to such plans,
                           practices, programs and policies, the Executive shall
                           be considered to have remained employed until three
                           years after the Date of Termination and to have
                           retired on the last day of such period as a qualified
                           retiree of the Company;

                  3.       the Company shall pay to the Executive in a lump sum
                           in cash within 5 days after the Date of Termination
                           an amount equal to the sum of a pro rata portion to
                           the Date of Termination of the aggregate value of all
                           contingent incentive compensation awards to the
                           Executive for all then uncompleted periods under the
                           Deluxe Value Growth Plan (if such plan is adopted by
                           the Board) or any successor plan of the Company in
                           which the Executive participates, calculated as to
                           each such award by multiplying (i) the greater of (a)
                           the award that the Executive would have earned on the
                           last day of the performance award period, assuming
                           the achievement, at the target level, of the
                           individual and corporate performance goals
                           established with respect to such award and (b) the
                           award that the Executive would have earned on the
                           last day of the performance award period, assuming
                           the achievement of the individual and corporate
                           performance goals established with respect to such
                           award at the level that would have been achieved had
                           performance for the portion of the performance award
                           period preceding the date of termination been
                           projected for the entire performance award period, by
                           (ii) the fraction obtained by dividing the number of
                           full months and any fractional portion of a month
                           during such performance award period through the Date
                           of Termination by the total number of months
                           contained in such performance award period;

                  4.       the Company shall, at its sole expense as incurred,
                           provide the Executive with out-placement services the
                           scope and provider of which shall be selected by the
                           Executive in his or her sole discretion, provided,
                           however, that the amount paid by the Company pursuant
                           to this paragraph shall in no event exceed $25,000;
                           and

                  5.       to the extent not theretofore paid or provided, the
                           Company shall timely pay or provide to the Executive
                           any other amounts or benefits required to be paid or
                           provided to the Executive or which the Executive is
                           eligible to receive under any plan, program, policy
                           or practice or contract or agreement of the Company
                           and its Affiliates (such other amounts and benefits
                           shall be hereinafter referred to as the "Other
                           Benefits").

         B.       Death. If the Executive's employment is terminated by reason
                  of the Executive's death during the Employment Period, this
                  Agreement shall terminate without further obligations to the
                  Executive's legal representatives under this Agreement, other
                  than for payment of Accrued Obligations and the timely payment
                  or provision of Other Benefits. Accrued Obligations shall be
                  paid to the Executive's estate or beneficiary, as applicable,
                  in a lump sum in cash within 30 days of the Date of
                  Termination. With respect to the provision of Other Benefits,
                  the term Other Benefits as utilized in this Section V.B. shall
                  include, without limitation, and the Executive's estate and/or
                  beneficiaries shall be entitled to receive, benefits at least
                  equal to the most favorable benefits provided by the Company
                  and its Affiliates, as


                                       9
<PAGE>


                  the case may be, to the estates and beneficiaries of peer
                  executives of the Company or such Affiliates under such plans,
                  programs, practices and policies relating to death benefits,
                  if any, as in effect with respect to other peer executives and
                  their beneficiaries at any time during the one year period
                  immediately preceding the Effective Date or, if more favorable
                  to the Executive's estate and/or the Executive's
                  beneficiaries, as in effect on the date of the Executive's
                  death with respect to other peer executives of the Company and
                  its Affiliates, as applicable, and their beneficiaries.

         C.       Disability. If the Executive's employment is terminated by
                  reason of the Executive's Disability during the Employment
                  Period, this Agreement shall terminate without further
                  obligations to the Executive, other than for payment of
                  Accrued Obligations and the timely payment or provision of
                  Other Benefits. Accrued Obligations shall be paid to the
                  Executive in a lump sum in cash within 30 days of the Date of
                  Termination. With respect to the provision of Other Benefits,
                  the term Other Benefits as utilized in this Section V.C. shall
                  include, and the Executive shall be entitled after the Date of
                  Termination to receive, disability and other benefits at least
                  equal to the most favorable of those generally provided by the
                  Company and its Affiliates, as applicable, to disabled
                  executives and/or their families in accordance with such
                  plans, programs, practices and policies relating to
                  disability, if any, as in effect generally with respect to
                  other peer executives and their families at any time during
                  the one year period immediately preceding the Effective Date
                  or, if more favorable to the Executive and/or the Executive's
                  family, as in effect at any time thereafter generally with
                  respect to other peer executives of the Company and its
                  Affiliates, as applicable, and their families.

         D.       Cause; Other than for Good Reason. If the Executive's
                  employment shall be terminated for Cause during the Employment
                  Period, this Agreement shall terminate without further
                  obligations to the Executive other than the obligation to pay
                  to the Executive (1) his Annual Base Salary through the Date
                  of Termination, (2) the amount of any compensation previously
                  deferred by the Executive, and (3) Other Benefits, in each
                  case to the extent theretofore unpaid. If the Executive
                  terminates employment during the Employment Period, excluding
                  a termination for Good Reason or Disability, this Agreement
                  shall terminate without further obligations to the Executive,
                  other than for Accrued Obligations and the timely payment or
                  provision of Other Benefits. In such case, all Accrued
                  Obligations shall be paid to the Executive in a lump sum in
                  cash within 30 days of the Date of Termination.

VI.      Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
         limit the Executive's continuing or future participation in any plan,
         program, policy or practice provided by the Company or any of its
         Affiliates and for which the Executive may qualify, nor, subject to
         Section XI. F., shall anything herein limit or otherwise affect such
         rights as the Executive may have under any contract or agreement with
         the Company or any of its Affiliates. Amounts which are vested benefits
         or which the Executive is otherwise entitled to receive under any plan,
         policy, practice or program of or any contact or agreement with the
         Company or any of its Affiliates or subsequent to the Date of
         Termination shall be payable in accordance with such plan, policy,
         practice or program or contract or agreement except as explicitly
         modified by this Agreement.

VII.     Full Settlement. The Company's obligation to make the payments provided
         for in this Agreement and otherwise to perform its obligations
         hereunder shall not be affected by any set-off, counterclaim,
         recoupment, defense or other claim, right or action which the Company
         may have against the Executive or others. In no event shall the
         Executive be obligated to seek other employment or take any other
         action by way of mitigation of the amounts payable to the Executive
         under any of the provisions of this Agreement and, except as
         specifically provided in Section V.A.2. hereof, such amounts shall not
         be reduced whether or not the Executive obtains other employment. The
         Company agrees to pay as incurred, to the full extent permitted by law,
         all legal fees and expenses which the Executive may incur in good faith
         as a result of any contest (regardless of the outcome thereof) by the
         Company, the Executive or others of the validity or enforceability of,
         or liability under, any provision of this Agreement or any guarantee of
         performance thereof (including as a result of any contest by the
         Executive about the amount of any payment pursuant to this Agreement),
         plus in each case interest on any delayed payment at the applicable
         Federal rate provided for in Section 7872(f)(2)(A) of the Internal
         Revenue Code of 1986, as amended (the "Code"). Such payments shall be
         made within five (5) business days after delivery of the Executive's
         written requests for payment accompanied with such evidence of fees and
         expenses incurred as the Company reasonably may require.

VIII.    Certain Additional Payments by the Company.


                                       10
<PAGE>


         A.       Anything in this Agreement to the contrary notwithstanding and
                  except as set forth below, in the event it shall be determined
                  that any payment or benefit received or to be received by the
                  Executive (whether paid or payable or distributed or
                  distributable pursuant to the terms of this Agreement or any
                  other plan, arrangement or agreement with the Company, any
                  Person whose actions result in a Change of Control or any
                  Person affiliated with the Company or such Person, but
                  determined without regard to any additional payments required
                  under this Section VIII) (a "Payment") would be subject to the
                  excise tax imposed by Section 4999 of the Code or any interest
                  or penalties are incurred by the Executive with respect to
                  such excise tax (such excise tax, together with any such
                  interest and penalties, are hereinafter collectively referred
                  to as the "Excise Tax"), then the Executive shall be entitled
                  to receive an additional payment (a "Gross-Up Payment") in an
                  amount such that after payment by the Executive of all taxes
                  (including any interest or penalties imposed with respect to
                  such taxes), including, without limitation, any income taxes
                  (and any interest and penalties imposed with respect thereto)
                  and Excise Tax imposed upon the Gross-Up Payment, the
                  Executive retains an amount of the Gross-Up Payment equal to
                  the Excise Tax imposed upon the Payments. Notwithstanding the
                  foregoing provisions of this Section VIII.A., if it shall be
                  determined that the Executive is entitled to a Gross-Up
                  Payment, but that the Executive, after taking into account the
                  Payments and the Gross-Up Payment, would not receive a net
                  after-tax benefit of at least $50,000 (taking into account
                  both income taxes and any Excise Tax) as compared to the net
                  after-tax benefit the Executive would receive if the Gross-Up
                  Payment were eliminated and the Payments were reduced, in the
                  aggregate, to an amount (the "Reduced Amount") such that the
                  receipt of Payments would not give rise to any Excise Tax,
                  then no Gross-Up Payment shall be made to the Executive and
                  the Payments, in the aggregate, shall be reduced to the
                  Reduced Amount. For purposes of determining whether any of the
                  Payments will be subject to the Excise Tax and the amount of
                  such Excise Tax, (i) all of the Payments shall be treated as
                  "parachute payments" (within the meaning of Section 280G(b) of
                  the Code) unless, in the opinion of tax counsel ("Tax
                  Counsel") reasonably acceptable to the Executive and selected
                  by the Accounting Firm (as defined below), such payments or
                  benefits (in whole or in part) do not constitute parachute
                  payments, including by reason of Section 280G(b)(4)(A) of the
                  Code, (ii) all "excess parachute payments" within the meaning
                  of Section 280G(b)(1) of the Code shall be treated as subject
                  to the Excise Tax unless, in the opinion of Tax Counsel, such
                  excess parachute payments (in whole or in part) represent
                  reasonable compensation for services actually rendered (within
                  the meaning of Section 280G(b)(4)(B) of the Code) in excess of
                  the "base amount" (as defined in Section 280G(b)(3) of the
                  Code) allocable to such reasonable compensation, or are
                  otherwise not subject to the Excise Tax, and (iii) the value
                  of any non-cash benefits or any deferred payment or benefit
                  shall be determined by the Accounting Firm in accordance with
                  the principals of Sections 280G(d)(3) and (4) of the Code. For
                  purposes of determining the amount of the Gross-Up Payment,
                  the Executive shall be deemed to pay federal income tax at the
                  highest marginal rate of federal income taxation in the
                  calendar year in which the Gross-Up Payment is to be made and
                  state and local income taxes at the highest marginal rate of
                  taxation in the state and locality of Executive's residence on
                  the Date of Termination (or if there is no Date of
                  Termination, then the date on which the Gross-Up Payment is
                  calculated for purposes of this Section VIII.A.), net of the
                  maximum reduction in federal income taxes which could be
                  obtained from deduction of such state and local taxes.

         B.       Subject to the provisions of Section VIII. C., all
                  determinations required to be made under this Section VIII,
                  including whether a Gross-Up Payment is required and the
                  amount of such Gross-Up Payment and the assumptions to be
                  utilized in arriving at such determination, shall be made by
                  the accounting firm that was, immediately prior to the Change
                  of Control the Company's independent auditors (the "Accounting
                  Firm") which shall provide detailed supporting calculations
                  both to the Company and the Executive within 15 business days
                  of the receipt of notice from the Executive that a Payment has
                  been made or will be required, as the case may be, or such
                  earlier time as is requested by the Company. All fees and
                  expenses of the Accounting Firm shall be borne solely by the
                  Company. Any Gross-Up Payment, as determined pursuant to this
                  Section VIII., shall be paid by the Company to the Executive
                  within five days of the receipt of the Accounting Firm's
                  determination. Any determination by the Accounting Firm shall
                  be binding upon the Company and the Executive. As a result of
                  the uncertainty in the application of Section 4999 of the Code
                  at the time of the initial determination by the Accounting
                  Firm hereunder, it is possible that Gross-Up Payments which
                  will not have been made by the Company should have been made
                  ("Underpayment"), consistent with the calculations required to
                  be made hereunder. In the event that the Company exhausts its
                  remedies pursuant to Section VIII.C.


                                       11
<PAGE>


                  and the Executive thereafter is required to make a payment of
                  any Excise Tax, the Accounting Firm shall determine the amount
                  of the Underpayment that has occurred and any such
                  Underpayment shall be promptly paid by the Company to or for
                  the benefit of the Executive.

         C.       The Executive shall notify the Company in writing of any claim
                  by the Internal Revenue Service that, if successful, would
                  require the payment by the Company of the Gross-Up Payment.
                  Such notification shall be given as soon as practicable but no
                  later than ten business days after the Executive is informed
                  in writing of such claim and shall apprise the Company of the
                  nature of such claim and the date on which such claim is
                  requested to be paid. The Executive shall not pay such claim
                  prior to the expiration of the 30-day period following the
                  date on which he or she gives such notice to the Company (or
                  such shorter period ending on the date that any payment of
                  taxes with respect to such claim is due). If the Company
                  notifies the Executive in writing prior to the expiration of
                  such period that it desires to contest such claim, the
                  Executive shall:

                  1.       give the Company any information reasonably requested
                           by the Company relating to such claim,

                  2.       take such action in connection with contesting such
                           claim as the Company shall reasonably request in
                           writing from time to time, including, without
                           limitation, accepting legal representation with
                           respect to such claim by an attorney reasonably
                           selected by the Company,

                  3.       cooperate with the Company in good faith in order to
                           effectively contest such claim, and

                  4.       permit the Company to participate in any proceedings
                           relating to such claim;

                  provided, however, that the Company shall bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify and hold the Executive harmless, on an
                  after-tax basis, for any Excise Tax or income tax (including
                  interest and penalties with respect thereto) imposed as a
                  result of such representation and payment of costs and
                  expenses. Without limitation on the foregoing provisions of
                  this Section VIII.C., the Company shall control all
                  proceedings taken in connection with such contest and, at its
                  sole option, may pursue or forego any and all administrative
                  appeals, proceedings, hearings and conferences with the taxing
                  authority in respect of such claim and may, at its sole
                  option, either direct the Executive to pay the tax claimed and
                  sue for a refund or contest the claim in any permissible
                  manner, and the Executive agrees to prosecute such contest to
                  a determination before any administrative tribunal, in a court
                  of initial jurisdiction and in one or more appellate courts,
                  as the Company shall determine; provided, however, that if the
                  Company directs the Executive to pay such claim and sue for a
                  refund, the Company shall advance the amount of such payment
                  to the Executive, on an interest-free basis and shall
                  indemnify and hold the Executive harmless, on an after-tax
                  basis, from any Excise Tax or income tax (including interest
                  and penalties with respect thereto) imposed with respect to
                  such advance or with respect to any imputed income with
                  respect to such advance; and further provided that any
                  extension of the statute of limitations relating to payment of
                  taxes for the taxable year of the Executive with respect to
                  which such contested amount is claimed to be due is limited
                  solely to such contested amount. Furthermore, the Company's
                  control of the contest shall be limited to issues with respect
                  to which a Gross-Up Payment would be payable hereunder and the
                  Executive shall be entitled to settle or contest, as the case
                  may be, any other issue raised by the Internal Revenue Service
                  or any other taxing authority.

         D.       If, after the receipt by the Executive of an amount advanced
                  by the Company pursuant to Section VIII.C., the Executive
                  becomes entitled to receive any refund with respect to such
                  claim, the Executive shall (subject to the Company's complying
                  with the requirements of Section VIII.C.) promptly pay to the
                  Company the amount of such refund (together with any interest
                  paid or credited thereon after taxes applicable thereto). If,
                  after the receipt by the Executive of any amount advanced by
                  the Company pursuant to Section VIII.C., a determination is
                  made that the Executive shall not be entitled to any refund
                  with respect to such claim and the Company does not notify the
                  Executive in writing of its intent to contest such denial of
                  refund prior to the expiration of 30 days after such
                  determination, then such advance shall be forgiven and shall
                  not be required to be repaid and the amount of such advance
                  shall offset, to the extent thereof, the amount of Gross-Up
                  Payment required to be paid.


                                       12
<PAGE>


         E.       The Gross-Up Payment shall be made not later than the fifth
                  day following the Date of Termination; provided, however, that
                  if the amount of such Gross-Up Payment, and the limitation on
                  such payments set forth in Section VIII.A. hereof, cannot be
                  finally determined on or before such day, the Company shall
                  pay to the Executive on such day an estimate, as determined in
                  good faith by the Accounting Firm, of the minimum amount of
                  such Gross-Up Payment to which the Executive is clearly
                  entitled and shall pay the remainder of such payments
                  (together with interest on the unpaid remainder (or on all
                  such payments to the extent the Company fails to make such
                  payments when due) at 120% of the rate provided in section
                  1274(b)(2)(B) of the Code) as soon as the amount thereof can
                  be determined but in no event later than the thirtieth (30th)
                  day after the Date of Termination. In the event that the
                  amount of the estimated payments exceeds the amount
                  subsequently determined to have been due, such excess shall
                  constitute a loan by the Company to the Executive, payable on
                  the fifth (5th) business day after demand by the Company
                  (together with interest at 120% of the rate provided in
                  section 1274(b)(2)(B) of the Code). At the time that payments
                  are made under this Agreement, the Company shall provide the
                  Executive with a written statement setting forth the manner in
                  which such payments were calculated and the basis for such
                  calculations including, without limitation, any opinions or
                  other advice the Company has received from Tax Counsel, the
                  Accounting Firm or other advisors or consultants (and any such
                  opinions or advice which are in writing shall be attached to
                  the statement).

IX.      Confidential Information. During the term of this Agreement and at all
         times thereafter, Executive will retain in confidence all proprietary
         and confidential information concerning the Company and its Affiliates,
         including, without limitation, customer lists, cost and pricing
         information, employee data, trade secrets and software and, shall
         return to the Company or destroy all copies and extracts thereof
         (however and on whatever medium recorded), without keeping any copies
         thereof. The foregoing obligation with respect to the protection of
         confidential information shall not apply to (A) any information which
         was known to the Executive prior to disclosure to the Executive by the
         Company or any of its Affiliates; (B) any information which was in the
         public domain prior to its disclosure to the Executive; (C) any
         information which comes into the public domain through no fault of the
         Executive; (D) any information which the Executive is required to
         disclose by a court or similar authority or under subpoena, provided
         that the Executive provides the Company with notice thereof and
         assists, at the Company's sole expense, any reasonable endeavor by the
         Company, using appropriate means, to obtain a protective order limiting
         the disclosure of such information; and (E) any information which is
         disclosed to the Executive by a third party which has a legal right to
         make such disclosure. In no event shall an asserted violation of the
         provisions of this Section X. constitute a basis for deferring or
         withholding any amounts otherwise payable to the Executive under this
         Agreement.

X.       Successors.

         A.       This Agreement is personal to the Executive and without the
                  prior written consent of the Company shall not be assignable
                  by the Executive otherwise than by will or the laws of descent
                  and distribution. This Agreement shall inure to the benefit of
                  and be enforceable by the Executive's legal representatives.
                  If the Executive shall die while any amount would still be
                  payable to the Executive hereunder (other than amounts which,
                  by their terms, terminate upon the death of the Executive) if
                  the Executive had continued to live, all such amounts, unless
                  otherwise provided herein, shall be paid in accordance with
                  the terms of this Agreement to the executors, personal
                  representatives or administrators of the Executive's estate.

         B.       This Agreement shall inure to the benefit of and be binding
                  upon the Company and its successors and assigns.

         C.       The Company will require any successor (whether direct or
                  indirect, by purchase, merger, consolidation or otherwise) to
                  all or substantially all of the business and/or assets of the
                  Company to assume expressly and agree to perform this
                  Agreement in the same manner and to the same extent that the
                  Company would be required to perform it if no such succession
                  had taken place. Failure of the Company to obtain such
                  assumption and agreement prior to the effectiveness of any
                  such succession shall be a breach of this Agreement and shall
                  entitle the Executive to compensation from the Company in the
                  same amount and on the same terms as the Executive would be
                  entitled to hereunder if the Executive were to terminate the
                  Executive's employment for Good Reason after the Effective
                  Date, except that, for purposes of implementing the foregoing,
                  the date on which any such succession becomes effective shall
                  be deemed the Date of Termination. As used in this Agreement,
                  "Company"


                                       13
<PAGE>


                  shall mean the Company as hereinbefore defined and, except for
                  purposes of determining whether a Change of Control has
                  occurred, shall include any successor to its business and/or
                  assets as aforesaid which assumes and agrees to perform this
                  Agreement by operation of law, or otherwise.


XI.      Miscellaneous.

         A.       This Agreement shall be governed by and construed in
                  accordance with the laws of the State of Minnesota, without
                  reference to principles of conflict of laws. The captions of
                  this Agreement are not part of the provisions hereof and shall
                  have no force or effect. This Agreement may not be amended or
                  modified otherwise than by a written agreement executed by the
                  parties hereto or their respective successors and legal
                  representatives.

         B.       All notices and other communications hereunder shall be in
                  writing and shall be given by hand delivery to the other party
                  or by registered or certified mail, return receipt requested,
                  postage prepaid, addressed as follows:

                  If to the Executive:



                  If to the Company:

                  Deluxe Corporation
                  3680 Victoria Street North
                  Shoreview, MN 55126
                  Attn: General Counsel

         or to such other address as either party shall have furnished to the
         other in writing in accordance herewith. Notice and communications
         shall be effective when actually received by the addressee.

         C.       The invalidity or unenforceability of any provision of this
                  Agreement shall not affect the validity or enforceability of
                  any other provision of this Agreement.

         D.       The Company may withhold from any amounts payable under this
                  Agreement such Federal, state, local or foreign taxes as shall
                  be required to be withheld pursuant to any applicable law or
                  regulation.

         E.       The Executive's or the Company's failure to insist upon strict
                  compliance with any provision of this Agreement or the failure
                  to assert any right the Executive or the Company may have
                  hereunder, including, without limitation, the right of the
                  Executive to terminate employment for Good Reason pursuant to
                  Section IV.C. of this Agreement, shall not be deemed to be a
                  waiver of such provision or right or any other provision or
                  right of this Agreement.

         F.       The Executive and the Company acknowledge that, except as may
                  otherwise be provided under any other written agreement
                  between the Executive and the Company, the employment of the
                  Executive by the Company is "at will" and, subject to Section
                  IV.H. hereof, prior to the Effective Date, the Executive's
                  employment and/or this Agreement may be terminated by either
                  the Executive or the Company at any time prior to the
                  Effective Date, in which case the Executive shall have no
                  further rights under this Agreement, provided that nothing
                  herein shall be construed to limit or prevent the Executive
                  from receiving compensation and benefits from the Company or
                  its Affiliates that are customarily paid and provided other
                  peer executives who leave the employment of the Company or any
                  of its Affiliates. From and after the Effective Date this
                  Agreement shall supersede any other agreement between the
                  parties with respect to benefits accruing to the Executive
                  upon termination of employment following a Change of Control,
                  recapitalization or other business combination, restructuring
                  or reorganization.

         G.       The obligations of the Company and the Executive under this
                  Agreement which by their nature may require either partial or
                  total performance after the expiration of the term of this
                  Agreement (including, without limitation, those under Section
                  V. hereof) shall survive such expiration.


                                       14
<PAGE>


         H.       In the event that the Company is a party to a transaction
                  which is otherwise intended to qualify for "pooling of
                  interests" accounting treatment then (A) this Agreement shall,
                  to the extent practicable, be interpreted so as to permit such
                  accounting treatment, and (B) to the extent that the
                  application of clause (A) of this Section XI.H. does not
                  preserve the availability of such accounting treatment, then,
                  the Company may modify or limit the effect of the provisions
                  of this Agreement to the extent necessary to qualify the
                  transactions as a "pooling transaction" and provide the
                  Executive with payments or benefits as nearly equivalent as
                  possible to those the Executive would have received absent
                  such modification or limitation, provided, however, to the
                  extent that any provision of the Agreement would disqualify
                  the transaction as a "pooling" transaction (including, if
                  applicable, the entire Agreement) and cannot otherwise be
                  modified or limited, such provision shall be null and void as
                  of the date hereof. All determinations under this Section
                  XI.H. shall be made by the accounting firm whose opinion with
                  respect to "pooling of interests" is required as a condition
                  to the consummation of such transaction.

         I.       All claims by the Executive for benefits under this Agreement
                  shall be directed to and determined by the Committee and shall
                  be in writing. Any denial by the Committee of a claim for
                  benefits under this Agreement shall be delivered to the
                  Executive in writing and shall set forth the specific reasons
                  for the denial and the specific provisions of this Agreement
                  relied upon. The Committee shall afford a reasonable
                  opportunity to the Executive for a review of the decision
                  denying a claim and shall further allow the Executive to
                  appeal to the Committee a decision of the Committee within
                  sixty (60) days after notification by the Committee that the
                  Executive's claims has been denied.

         J.       Notwithstanding any other provision in this Agreement to the
                  contrary, the Board shall delegate the responsibilities,
                  duties and powers specified under this Agreement to be
                  observed or performed by the "Committee" to a committee (the
                  "Committee") consisting of not less than three individuals
                  who, on the date six months before a Change of Control, were
                  directors of the Corporation ("Incumbent Directors"), provided
                  that in the event that fewer than three Incumbent Directors
                  are available at the time of such delegation or thereafter,
                  the Committee's members may include such individual or
                  individuals as may be appointed by the Incumbent Directors
                  (including, for such purpose, by any individual or individuals
                  who have been appointed to the Committee by the Incumbent
                  Directors); provided further, however, the maximum number of
                  individuals (including directors) appointed to the Committee
                  shall not exceed five.

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.


Deluxe Corporation                       Executive

By:
    -------------------------------      -------------------------------

Its:


                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>7
<FILENAME>deluxe010420_ex12-5.txt
<DESCRIPTION>EXHIBIT 12.5 STATEMENT RE: COMPUTATION OF RATIOS
<TEXT>

                                                                    Exhibit 12.5

DELUXE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                                        -----------------------

                                                        2000         1999         1998         1997         1996
                                                        ----         ----         ----         ----         ----

Earnings:
- ---------
<S>                                                   <C>          <C>          <C>          <C>          <C>
Income from continuing operations before
  income taxes                                        $273,429     $322,582     $256,305     $147,682     $111,914

Interest expense (excluding capitalized interest)       10,837        7,620        8,040        7,289        9,406

Portion of rent expense under long-term operating
 leases representative of an interest factor             3,520        7,728        8,859        8,732        9,365

Amortization of debt expense                               464          263          122          122          121
                                                          ----         ----         ----         ----         ----

TOTAL EARNINGS                                        $288,250     $338,193     $273,326     $163,825     $130,806


Fixed charges:
- --------------

Interest expense (including capitalized interest)     $ 10,837     $  8,693     $  9,431     $  8,209     $ 10,735

Portion of rent expense under long-term operating
  leases representative of an interest factor            3,520        7,728        8,859        8,732        9,365

Amortization of debt expense                               464          263          122          122          121
                                                          ----         ----         ----         ----         ----

TOTAL FIXED CHARGES                                   $ 14,821     $ 16,684     $ 18,412     $ 17,063     $ 20,221


RATIO OF EARNINGS TO FIXED CHARGES                        19.4         20.3         14.8          9.6          6.5
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>8
<FILENAME>deluxe010420_ex13.txt
<DESCRIPTION>EXHIBIT 13 2000 ANNUAL REPORT TO SHAREHOLDERS
<TEXT>

                                                                     Exhibit 13


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

COMPANY PROFILE

During 2000, we operated two business segments: Paper Payment Systems and
eFunds. Paper Payment Systems provides checks and related products to
individuals and small businesses located in the United States. eFunds provides
transaction processing and risk management services to financial institutions,
retailers, electronic funds transfer networks, e-commerce providers and
government agencies and also offers information technology consulting and
business process management services. On December 29, 2000, we distributed our
40 million shares of eFunds Corporation stock, representing 87.9% of eFunds'
total outstanding stock, to our shareholders of record on December 11, 2000.
Each shareholder received .5514 eFunds share for each Deluxe share owned. Cash
was issued in lieu of fractional shares. We received confirmation from the
Internal Revenue Service that this spin-off transaction would be tax-free to
us and to our shareholders for U.S. federal income tax purposes, except to the
extent that cash was received in lieu of fractional shares. The results of the
eFunds segment are reflected as discontinued operations in our consolidated
financial statements.
   During 1999 and 1998, we also operated NRC Holding Corporation, a collections
business. This business was sold in December 1999.
   During 1998, we operated two additional segments: Direct Response and Deluxe
Direct. The sales of both of these businesses were completed in December 1998.
Direct Response provided direct marketing, customer database management, and
related services to the financial industry and other businesses. Deluxe Direct
primarily sold greeting cards, stationery, and specialty paper products through
direct mail.

UNUSUAL CHARGES AND CREDITS

Over the past three years, we have had charges for restructurings, asset
impairments and other developments, as well as gains and losses from the
dispositions of businesses. These items have had a significant impact on our
results of operations and financial position over this period of time. The
significant items recorded in 2000, 1999 and 1998, on a pre-tax basis, were:

Year Ended December 31,
- --------------------------------------------------------------------------------
(dollars in thousands)                           2000        1999      1998
- --------------------------------------------------------------------------------
Continuing  operations:
   Net restructuring (reversals) charges      $ (2,253)   $ (8,155)  $36,327
   Asset impairment charges                      9,740          --        --
   (Gains) losses on sales of businesses            --     (19,770)    4,850
- --------------------------------------------------------------------------------
      Total continuing  operations               7,487     (27,925)   41,177
Discontinued  operations                        27,041       4,207    38,943
- --------------------------------------------------------------------------------
      Total charges  (gains)                  $ 34,528    $(23,718)  $80,120
================================================================================


These items are reflected in our consolidated statements of income as follows:

Year Ended December 31,
- --------------------------------------------------------------------------------
(dollars in thousands)                           2000        1999      1998
- --------------------------------------------------------------------------------
Cost of goods sold                            $     --    $ (1,950)  $10,853
Selling, general and
   administrative expense                        7,369      (3,863)   17,941
Other expense (income)                             118     (22,112)   12,383
- --------------------------------------------------------------------------------
      Total continuing operations                7,487     (27,925)   41,177
Discontinued operations                         27,041       4,207    38,943
- --------------------------------------------------------------------------------
      Total charges (gains)                    $34,528    $(23,718)  $80,120
================================================================================

   For more information about these items, see Notes 4, 5, 6 and 16 to our
consolidated financial statements.


18    Deluxe Corporation   *   2000 Annual Report
<PAGE>


RESULTS OF OPERATIONS

The following table presents, for the periods indicated, the relative
composition of selected statement of income data:

<TABLE>
<CAPTION>
Year Ended December 31,
- ---------------------------------------------------------------------------------------------------------------------
                                                         2000                   1999                     1998
- ---------------------------------------------------------------------------------------------------------------------
(dollars in thousands,                                          % of                  % of                       % of
except revenue per unit amounts)                      $      Revenue          $    Revenue             $      Revenue
- ---------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>      <C>          <C>         <C>           <C>
Continuing Operations:
   Revenue from external customers              $1,262,712       --     $1,363,798     --        $1,673,715      --
   Gross  profit                                   811,455     64.3%       807,886   59.2%          943,976    56.4%
   Selling, general and administrative expense     534,145     42.3%       509,652   37.4%          686,082    41.0%
   Operating income                                277,310     22.0%       298,234   21.9%          257,894    15.4%
On-going operations:
   Revenue from external customers              $1,262,712       --     $1,239,724     --        $1,285,728      --
   Units (millions)(1)                              101.16       --         105.21     --            111.85      --
   Revenue per unit                                  12.48       --          11.78     --             11.50      --
   Gross  profit                                   811,455     64.3%       777,342   62.7%          779,021    60.6%
   Selling, general and administrative expense     534,145     42.3%       481,129   38.8%          507,241    39.5%
   Operating income                                277,310     22.0%       296,213   23.9%          271,780    21.1%
Divested businesses (including
   intercompany eliminations):
      Revenue from external customers           $       --       --     $  124,074     --        $  387,987      --
      Gross profit                                      --       --         30,544   24.6%          164,955    42.5%
      Selling, general and administrative expense       --       --         28,523   23.0%          178,841    46.1%
      Operating income                                  --       --          2,021    1.6%          (13,886)   (3.6%)
=====================================================================================================================
</TABLE>

(1) Units represents an equivalent measure used across all product lines to
measure sales volume.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31, 1999

REVENUE: Revenue decreased $101.1 million, or 7.4%, to $1,262.7 million for 2000
from $1,363.8 million for 1999. Our collections business, which was sold in
December 1999, had revenue of $124.1 million in 1999. With this revenue excluded
from 1999, revenue increased $23.0 million, or 1.9%, in 2000. We acquired
Designer Checks in February 2000, which contributed revenue of $55.9 million.
Additionally, revenue per unit increased 5.9% due to price increases and sales
of higher priced products. We increased sales of higher priced products by
selling directly to consumers where we could pursue opportunities to sell
additional products. Partially offsetting these increases, was a 3.8% decrease
in units due to lost financial institution clients and fewer new customers for
products sold directly to consumers, excluding those obtained through the
Designer Checks acquisition. The loss of financial institutions was due
primarily to bank consolidations and competitive pricing which fell below our
revenue and profitability per unit targets. There were fewer new customers for
direct-to-consumer sales due to reduced spending on direct marketing.
   In 2001, we plan to offset volume declines by expanding product offerings and
increasing our customer base through promotional spending.

GROSS PROFIT: Gross profit increased $3.6 million to $811.5 million for 2000
from $807.9 million for 1999. As a percentage of revenue, gross margin increased
to 64.3% in 2000 from 59.2% in 1999. Excluding our collections business which
was sold in December 1999, gross profit increased $34.1 million and our 1999
gross margin percentage was 62.7%. The improvement over 1999 was due to process
improvements, the loss of lower margin financial institution clients due to bank
consolidations and competitive pricing, and increased revenue per unit. We
continued to see cost savings from check printing plant closings, as well as
general production efficiencies, including reduced inventory and supplies levels
and improved production workflow. The last of the scheduled check printing
plant closings was completed during the first quarter of 2000, and two
facilities were consolidated into one at the end of the second quarter of 2000.
We plan to continue our process improvements in 2001, although the large levels
of cost savings seen in previous years are not anticipated.


                                               Enhancing shareholder value    19
<PAGE>


SELLING, GENERAL AND ADMINISTRATIVE EXPENSE: Selling, general and administrative
(SG&A) expense increased $24.4 million, or 4.8%, to $534.1 million for 2000 from
$509.7 million for 1999. Excluding our collections business which was sold in
December 1999, SG&A expense increased $53.0 million, or 11.0% in 2000. 2000 SG&A
expense includes asset impairment charges of $9.7 million and restructuring
charges of $0.9 million relating to a discontinued e-commerce project. During
2000, we introduced PlaidMoon.com, an Internet-based business concept that
allowed consumers to design and purchase personalized items. In October 2000, we
announced that we were scaling back and repositioning our PlaidMoon.com business
concept. Instead of being a standalone business as had been planned, it is being
folded into the rest of the business. As a result of this decision, we completed
an evaluation to determine to what extent the long-lived assets and employees
of the business could be utilized by our other businesses or with external
alliance partners. We recorded the asset impairment and restructuring charges in
the fourth quarter of 2000 based on the results of this evaluation. The increase
in SG&A expense was also due to the acquisition of Designer Checks in February
2000 and increased spending on e-commerce capabilities for existing businesses.
In 2001, we anticipate continuing spending on e-commerce infrastructure and
increasing promotional spending to obtain new customers.

OTHER INCOME: Other income decreased $21.4 million to $2.5 million for 2000 from
$23.9 million for 1999. This was primarily due to a gain of $19.8 million
recognized in 1999 on the sale of our collections business.

INTEREST EXPENSE: Interest expense increased $3.2 million to $10.8 million for
2000 as compared to $7.6 million for 1999. This was due to higher levels of
borrowings in 2000 than in 1999. During 2000, we had an average of $18.8 million
drawn on our lines of credit, as well as an average of $6.2 million of
commercial paper outstanding. During 1999, we had an average of $13.8 million
drawn on our lines of credit and no commercial paper outstanding.

INVESTMENT INCOME: Investment income decreased $3.6 million to $4.5 million for
2000 as compared to $8.1 million for 1999. This was due to lower levels of
investments in marketable securities and short-term investments (cash
equivalents) during 2000. Our average investment level was $77.5 million during
2000 as compared to $161.7 million during 1999. We had higher levels of cash
available for investment in 1999 due to proceeds from sales of businesses which
occurred in December 1998. The acquisition of Designer Checks in February 2000
reduced cash available for investment during 2000.

PROVISION FOR INCOME TAXES: Our effective tax rate for continuing operations was
38.0% for 2000 compared to 36.7% for 1999. We anticipate a 2001 effective tax
rate between 37.0% and 38.0%.

INCOME FROM CONTINUING OPERATIONS: Income from continuing operations decreased
$34.8 million to $169.5 million for 2000 from $204.3 million for 1999. Our
improved gross profit was more than offset by the impact of increased spending
on e-commerce initiatives. Additionally, 1999 results included a $19.8 million
gain from the sale of our collections business.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED DECEMBER 31, 1998

REVENUE: Revenue decreased $309.9 million, or 18.5%, to $1,363.8 million for
1999 from $1,673.7 million for 1998. This decrease was primarily due to
discontinuing production of direct mail products and the sale of the remaining
businesses in the Direct Response and Deluxe Direct segments in 1998. With
divested businesses excluded from both years, revenue decreased $46.0 million,
or 3.6%, to $1,239.7 million for 1999 from $1,285.7 million for 1998. This
decrease was primarily due to a 5.9% decrease in units due primarily to lost
financial institution clients. The loss of business was due to competitive
pricing which fell below our revenue and profitability per unit targets. This
volume decrease was partially offset by a 2.4% increase in revenue per unit due
to a focus on sales of higher priced products.


20     Deluxe Corporation   *   2000 Annual Report
<PAGE>


GROSS PROFIT: Gross profit decreased $136.1 million, or 14.4%, to $807.9 million
for 1999 from $944.0 million for 1998. As a percentage of revenue, gross margin
increased to 59.2% in 1999 from 56.4% in 1998. Excluding divested businesses
from both years, gross profit decreased $1.7 million, or 0.2%, to $777.3 million
for 1999 from $779.0 million for 1998. Gross margin excluding divested
businesses in both years was 62.7% in 1999 and 60.6% in 1998. 1998 cost of goods
sold for on-going businesses included restructuring charges of $8.3 million
relating to the planned closure of four check printing plants. By comparison
1999 cost of goods sold for on-going businesses included the reversal of $2.9
million of restructuring reserves relating to the closing of check printing
plants. The closing check printing plants experienced higher attrition rates
than anticipated, resulting in lower severance payments than originally
estimated. Also contributing to the improvement in gross margin were cost
reductions realized from closing check printing plants, process improvements and
the loss of lower margin financial institution clients.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE: SG&A expense decreased $176.4
million, or 25.7%, to $509.7 million for 1999 from $686.1 million for 1998.
Excluding divested businesses in both years, SG&A expense decreased $26.1
million, or 5.1%, to $481.1 million for 1999 from $507.2 million for 1998. 1998
SG&A expense included $17.9 million of restructuring charges relating to our
initiative to reduce SG&A expense and the planned closing of four additional
check printing plants. By comparison, 1999 SG&A expense for on-going businesses
included the reversal of $4.5 million of restructuring charges primarily related
to changes made to our initiative to reduce SG&A expense as a result of a plan
announced in April 1999 to reorganize Deluxe. Additionally, SG&A expense
decreased due to consolidation efforts and reductions in the number of
employees. Partially offsetting these decreases was increased marketing expense
for products sold directly to consumers.

OTHER INCOME (EXPENSE): Other income increased $27.6 million to income of $23.9
million for 1999 from expense of $3.7 million for 1998. 1999 included a gain of
$19.8 million on the sale of our collections business, while 1998 included a net
loss of $4.9 million on the sales of the remaining businesses of the Direct
Response and Deluxe Direct segments.

PROVISION FOR INCOME TAXES: Our effective tax rate for continuing operations
decreased to 36.7% for 1999 from 40.1% for 1998 due primarily to decreased state
tax expense.

INCOME FROM CONTINUING OPERATIONS: Income from continuing operations increased
$50.7 million to $204.3 million for 1999 from $153.6 million for 1998. 1998
included restructuring charges and losses on sales of businesses of $41.2
million, while 1999 included net restructuring reversals and a gain on the sale
of a business of $27.9 million. Additionally, our operating margin improved as a
result of better performance from our on-going operations, as well as from the
sales of the businesses within the Direct Response and Deluxe Direct segments.

DISCONTINUED OPERATIONS

We reported losses from discontinued operations of $7.5 million in 2000, $1.3
million in 1999 and $10.5 million in 1998. These losses represent the results of
the Company's eFunds segment, which was spun-off in December 2000. See Notes 3
and 16 to our consolidated financial statements for more information.
   Pre-tax income from the operations of discontinued operations increased in
2000 due to revenue increases across product lines resulting from increased
volumes. Additionally, the business took steps to improve its gross margin.
Partially offsetting the revenue and gross margin improvements was increased
SG&A expense due to additional promotional advertising geared toward creating
brand awareness, and infrastructure investments.
   Pre-tax income from the operations of discontinued operations increased in
1999 due to charges of $38.9 million recorded in 1998 primarily relating to
asset impairments and losses on long-term service contracts of the government
services business. Additionally, revenue increased from 1998 due to greater
transaction processing


                                               Enhancing shareholder value    21
<PAGE>


and account verification inquiry volumes and price increases, the acquisition of
the professional services business in April 1999 and the roll-out of additional
states for the government services business. Partially offsetting these
improvements over 1998 were costs incurred in conjunction with the development
of new products and services, as well as costs resulting from the acquisition of
the professional services business in April 1999.

LIQUIDITY, CAPITAL RESOURCES AND
FINANCIAL CONDITION

As of December 31, 2000, we had cash and cash equivalents of $69.8 million, as
well as marketable securities of $18.5 million. Our working capital was negative
$96.4 million and positive $14.1 million on December 31, 2000 and 1999,
respectively. The current ratio on December 31, 2000 and 1999 was 0.7 to 1 and
1.0 to 1, respectively. The decrease in working capital and the current ratio
was primarily due to the fact that formerly long-term debt of $100.0 million
was payable in February 2001. Thus, the debt was classified in current
liabilities in our consolidated balance sheet as of December 31, 2000. This debt
was paid in February 2001 with cash on hand.
   The following table shows our cash flow activity for the past three years and
should be read in conjunction with our consolidated statements of cash flows:

Year Ended December 31,
- --------------------------------------------------------------------------------
(dollars in thousands)                    2000           1999           1998
- --------------------------------------------------------------------------------
Continuing operations:
   Cash provided by
      operating activities             $ 253,572      $ 221,237      $ 265,130
   Cash (used) provided by
      investing activities               (96,141)        72,637         (5,670)
   Cash used by financing activities    (159,925)      (343,612)      (157,681)
- --------------------------------------------------------------------------------
      Cash (used) provided by
         continuing operations            (2,494)       (49,738)       101,779
   Cash (used) provided by
      discontinued operations            (32,360)       (97,981)         2,961
- --------------------------------------------------------------------------------
      Net (decrease) increase in
         cash and cash equivalents     $ (34,854)     $(147,719)     $ 104,740
================================================================================

   Cash provided by continuing operations was $253.6 million for 2000. Cash
provided by operations represents our primary source of working capital and the
source for financing capital expenditures and paying cash dividends. We believe
that cash provided by operations, as well as cash available from our current
credit facilities and commercial paper program, is sufficient to sustain our
existing operations, provide cash for share repurchases and fund possible
acquisitions.
   Earnings before interest, taxes, depreciation and amortization (EBITDA) was
$348.4 million for 2000. We also generated cash flows of $16.8 million by
decreasing accounts receivable. Over the past two years, we have been able to
increase the level of trade accounts receivable settled via Automated Clearing
House (ACH) processing, resulting in quicker collection of receivables. We do
not expect to see as large of a reduction in accounts receivable levels in 2001,
as most of our customers which have the ability to settle via ACH processing now
do so. Partially offsetting these cash inflows were income tax payments of $93.6
million and reductions in accounts payable and miscellaneous accruals. During
2000, we also generated $47.0 million of cash through sales of capital assets
and the collection of a loan receivable. These cash inflows were used to
purchase capital assets ($48.5 million), acquire Designer Checks ($96.0
million), pay cash dividends ($107.2 million) and pay-off short-term debt
($60.0 million). We anticipate that purchases of capital assets in 2001 will
approximate the 2000 amount.
   We have agreed to indemnify eFunds for future losses arising from any
litigation based on the conduct of its electronic benefits transfer and medical
eligibility verification businesses prior to eFunds' initial public offering in
June 2000, and from certain future losses on identified loss contracts. The
maximum amount of litigation and contract losses for which we will indemnify
eFunds is $14.6 million.
   As of December 31, 2000, we had both committed and uncommitted bank lines of
credit. These lines of credit could be withdrawn if we failed to comply with the
covenants established in the credit agreements. Commitment fees on the committed
lines of credit range from six and one-half to seven basis points.
   Our committed lines of credit for $450.0 million were available for borrowing
and as support for our $150.0 million commercial paper program. The average
amount drawn on these lines during 2000 was $18.8 million at a weighted-average
interest rate of 6.26%. As of December 31, 2000, no amounts were outstanding
under these lines


22     Deluxe Corporation   *   2000 Annual Report
<PAGE>


of credit. The average amount drawn on these lines during 1999 was $12.7 million
at a weighted-average interest rate of 6.10%. As of December 31, 1999, $60.0
million was outstanding under these lines of credit at an interest rate of
6.39%. The average amount of commercial paper outstanding during 2000 was $6.2
million at a weighted-average interest rate of 6.56%. No commercial paper was
issued during 1999. There was no outstanding commercial paper at December 31,
2000 or 1999. In March 2001, we increased the amount of our commercial paper
program to $300.0 million.
   Our uncommitted bank lines of credit for $35.0 million had variable interest
rates. The average amount drawn on these lines during 2000 was $33,000 at a
weighted-average interest rate of 6.38%. The average amount drawn on these
lines during 1999 was $1.1 million at a weighted-average interest rate of
5.12%. As of December 31, 2000 and 1999 there was no outstanding balance under
these lines of credit.
   We have a shelf registration in place for the issuance of up to $300.0
million in medium-term notes. Such notes could be used for general corporate
purposes, including working capital, capital expenditures, possible acquisitions
and repayment or repurchase of outstanding indebtedness and other securities of
Deluxe. As of December 31, 2000 and 1999, no such notes were issued or
outstanding.

RECENT DEVELOPMENTS

On January 1, 2001, we adopted Statement of Financial Accounting Standard (SFAS)
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, as
amended by SFAS No. 138, ACCOUNTING FOR CERTAIN DERIVATIVE INSTRUMENTS AND
CERTAIN HEDGING ACTIVITIES. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It requires
that all derivatives, including those embedded in other contracts, be recognized
as either assets or liabilities and that those financial instruments be measured
at fair value. The accounting for changes in the fair value of derivatives
depends on their intended use and designation. We have reviewed the requirements
of SFAS No. 133 and have determined that we currently have no free-standing or
embedded derivatives. Application of this SFAS did not have a material impact on
our reported operating results or financial position.
   On December 31, 2000, we adopted Emerging Issues Task Force (EITF) Issue No.
00-10, ACCOUNTING FOR SHIPPING AND HANDLING FEES AND COSTS. EITF No. 00-10
establishes the appropriate statement of income classification for amounts
charged to customers for shipping and handling, as well as for costs incurred
related to shipping and handling. Application of this guidance did not result in
a material reclassification within our consolidated statements of income.
   In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS,
which provides guidance in applying generally accepted accounting principles to
revenue recognition in financial statements. Application of this SAB did not
have a material impact on our reported operating results or financial position.
   In January 2001, we announced that our board of directors approved a stock
repurchase program, authorizing the repurchase of up to 14 million shares of
Deluxe common stock. Depending on market conditions, we anticipate completing
these purchases over the next 12 to 18 months.
   In February 2001, our $100.0 million unsecured and unsubordinated notes were
due. We paid these notes utilizing cash on hand.
   In March 2001, we increased the amount of our commercial paper program to
$300.0 million.

MARKET RISK DISCLOSURE

As of December 31, 2000, we had an investment portfolio of fixed income
securities, excluding those classified as cash and cash equivalents, of $18.5
million. These securities, like all fixed income instruments, are subject to
interest rate risk and will decline in value if market interest rates increase.
However, we have the ability to hold these fixed income investments until
maturity and therefore we would not expect to recognize an adverse impact on
earnings or cash flows.
   As of December 31, 2000, we had only fixed rate debt which was due on
February 15, 2001. Thus, interest rate fluctuations would not impact interest
expense or cash flows. If we were to undertake additional debt, interest rate
changes would impact our earnings and cash flows.
   Since the  spin-off of eFunds in December 2000, we no longer operate
internationally. Thus, we are no longer exposed to foreign exchange risk.


                                               Enhancing shareholder value    23
<PAGE>


MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

   The accompanying consolidated financial statements and related information
are the responsibility of management. They have been prepared in conformity with
accounting principles generally accepted in the United States of America and
include amounts that are based on our best estimates and judgments under
existing circumstances. The financial information contained elsewhere in this
annual report is consistent with that in the consolidated financial statements.
   The Company maintains internal accounting control systems that are adequate
to provide reasonable assurance that assets are safeguarded from loss or
unauthorized use. These systems produce records adequate for preparation of
financial information. We believe the Company's systems are effective, and the
costs of the systems do not exceed the benefits obtained.
   The audit committee of the board of directors has reviewed the financial data
included in this report. The audit committee is composed entirely of outside
directors and meets periodically with the Company's internal auditors,
management and the independent public accountants on financial reporting
matters. The independent public accountants have free access to meet with the
audit committee, without the presence of management, to discuss their audit
results and opinions on the quality of financial reporting.
   The role of the independent public accountants is to render an independent,
professional opinion on management's consolidated financial statements to the
extent required by auditing standards generally accepted in the United States of
America.
   Deluxe recognizes its responsibility for conducting its affairs according to
the highest standards of personal and corporate conduct.


/s/ Lawrence J. Mosner

Lawrence J. Mosner
Chairman of the Board of Directors
and Chief Executive Officer


/s/ Douglas J. Treff

Douglas J. Treff
Senior Vice President
and Chief Financial Officer

January 25, 2001


24     Deluxe Corporation   *   2000 Annual Report
<PAGE>


FIVE-YEAR SUMMARY

<TABLE>
<CAPTION>
Year Ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share amounts)       2000            1999           1998           1997           1996
- ----------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>            <C>            <C>            <C>
STATEMENT OF INCOME DATA:
Revenue                                            $ 1,262,712     $ 1,363,798    $ 1,673,715    $ 1,699,086    $ 1,785,266
Gross margin                                              64.3%           59.2%          56.4%          55.4%          52.0%
Selling, general and administrative expense as a
     percentage of revenue                                42.3%           37.4%          41.0%          46.7%          41.2%
Depreciation and amortization expense                   68,570          61,041         62,154         58,395         82,667
Operating income as a percentage of revenue               22.0%           21.9%          15.4%           8.6%           4.5%
Earnings before interest, taxes, depreciation
     and amortization                                  348,362         383,138        316,330        208,781        201,820
Income from continuing operations                      169,472         204,321        153,566         69,034         62,042
     Per share - basic                                    2.34            2.66           1.90           0.84           0.75
     Per share - diluted                                  2.34            2.65           1.90           0.84           0.75
Net income                                             161,936         203,022        143,063         44,672         65,463
     Per share - basic                                    2.24            2.65           1.77           0.55           0.80
     Per share - diluted                                  2.24            2.64           1.77           0.55           0.79
Average common shares outstanding (thousands)           72,324          76,710         80,648         81,854         82,311
Return on average shareholders' equity                    47.6%           39.7%          23.5%           6.8%           8.8%
Return on average assets                                  20.8%           20.5%          13.4%           4.1%           5.5%
Cash dividends per share                                  1.48            1.48           1.48           1.48           1.48
============================================================================================================================

BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities        88,220         130,329        293,468        155,616        115,345
Working capital                                        (96,405)         14,083        177,385        131,058        108,148
Total assets                                           649,469         905,365      1,077,400      1,057,755      1,140,625
Long-term debt                                          10,201         111,945        102,291        105,415        106,196
Debt to capital ratio                                     25.5%           27.3%          14.6%          15.3%          15.1%
============================================================================================================================

OTHER OPERATING DATA:
Net cash provided by operating activities of
     continuing operations                             253,572         221,237        265,130        261,481             --(1)
Purchases of capital assets                             48,483          76,795         90,807         91,515         83,170
Number of employees - continuing operations (2)          7,800           8,900         13,260         16,910         17,610
Units (millions)(3) (4)                                 101.16          105.21         111.85             --(1)          --(1)
Number of production facilities (2) (3)                     13              13             16             21             31
Number of teleservice facilities (2) (3)                     7               6             10             20             31
============================================================================================================================
</TABLE>

(1) Information is not available.
(2) Information reflects data as of the end of the year.
(3) Information reflects only the on-going operations of the Company. Divested
    businesses have been excluded from these figures.
(4) Units represents an equivalent measure used across all product lines to
    measure sales volume.


                                              Enhancing shareholder value     25
<PAGE>


CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------
(dollars in thousands)                                                   2000           1999
- -----------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>
CURRENT ASSETS:
     Cash and cash equivalents                                       $   69,762     $  104,616
     Marketable securities                                               18,458         25,713
     Trade accounts receivable-net                                       46,332         62,940
     Inventories                                                         10,560         11,586
     Supplies                                                            12,578         15,007
     Deferred advertising                                                17,089         17,189
     Deferred income taxes                                                6,877          3,654
     Prepaid expenses and other current assets                           27,112         72,169
     Net current assets of discontinued operations                           --         20,646
- ----------------------------------------------------------------------------------------------
          Total current assets                                          208,768        333,520
- ----------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS                                                    43,947         39,519
- ----------------------------------------------------------------------------------------------
PROPERTY, PLANT, AND EQUIPMENT - NET                                    173,956        219,484
- ----------------------------------------------------------------------------------------------
INTANGIBLES - NET                                                       222,798        138,525
- ----------------------------------------------------------------------------------------------
NET NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS                            --        174,317
- ----------------------------------------------------------------------------------------------
              Total assets                                           $  649,469     $  905,365
==============================================================================================
CURRENT LIABILITIES:
     Accounts payable                                                $   32,191     $   41,085
     Accrued liabilities:
          Wages, including vacation pay                                  36,191         45,753
          Employee profit sharing and pension                            21,872         25,582
          Accrued income taxes                                           27,065         28,405
          Accrued rebates                                                24,968         28,281
          Other                                                          62,214         87,869
     Short-term debt                                                         --         60,000
     Long-term debt due within one year                                 100,672          2,462
- ----------------------------------------------------------------------------------------------
          Total current liabilities                                     305,173        319,437
- ----------------------------------------------------------------------------------------------
LONG-TERM DEBT                                                           10,201        111,945
- ----------------------------------------------------------------------------------------------
DEFERRED INCOME TAXES                                                    60,712         47,870
- ----------------------------------------------------------------------------------------------
OTHER LONG-TERM LIABILITIES                                              10,575          8,805
- ----------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Notes 12 and 16)
SHAREHOLDERS' EQUITY:
     Common shares $1 par value (authorized: 500,000,000 shares;
           issued: 2000 - 72,555,474; 1999 - 72,019,898)                 72,555         72,020
     Additional paid-in capital                                          44,243             --
     Retained earnings                                                  146,243        346,617
     Unearned compensation                                                  (60)           (47)
     Accumulated other comprehensive income                                (173)        (1,282)
- ----------------------------------------------------------------------------------------------
          Total shareholders' equity                                    262,808        417,308
- ----------------------------------------------------------------------------------------------
              Total liabilities and shareholders' equity             $  649,469     $  905,365
==============================================================================================
</TABLE>

See Notes to Consolidated Financial Statements


26     Deluxe Corporation   *   2000 Annual Report
<PAGE>


CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
- ------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share amounts)                          2000             1999            1998
- ------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>             <C>             <C>
REVENUE                                                               $ 1,262,712     $ 1,363,798     $ 1,673,715
     Cost of goods sold                                                   451,257         555,912         729,739
- ------------------------------------------------------------------------------------------------------------------
GROSS PROFIT                                                              811,455         807,886         943,976
     Selling, general and administrative expense                          534,145         509,652         686,082
- ------------------------------------------------------------------------------------------------------------------
                                                                          277,310         298,234         257,894
     Other income (expense)                                                 2,482          23,863          (3,718)
- ------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST AND TAXES               279,792         322,097         254,176
     Interest expense                                                     (10,837)         (7,620)         (8,040)
     Investment income                                                      4,474           8,105          10,169
- ------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                     273,429         322,582         256,305
     Provision for income taxes                                           103,957         118,261         102,739
- ------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS                                         169,472         204,321         153,566
==================================================================================================================
DISCONTINUED OPERATIONS:
     Income (loss) from operations (net of income tax expense
          (benefit) of $5,173, $3,372, and ($2,887), respectively)          5,229          (1,299)        (10,503)
     Costs of spin-off (net of income tax benefit of $4,021)              (12,765)             --              --
- ------------------------------------------------------------------------------------------------------------------
LOSS FROM DISCONTINUED OPERATIONS                                          (7,536)         (1,299)        (10,503)
- ------------------------------------------------------------------------------------------------------------------
NET INCOME                                                            $   161,936     $   203,022     $   143,063
==================================================================================================================
BASIC NET INCOME PER SHARE:
     Income from continuing operations                                $      2.34     $      2.66     $      1.90
     Loss from discontinued operations                                      (0.10)          (0.01)          (0.13)
- ------------------------------------------------------------------------------------------------------------------
BASIC NET INCOME PER SHARE                                            $      2.24     $      2.65     $      1.77
==================================================================================================================
DILUTED NET INCOME PER SHARE:
     Income from continuing operations                                $      2.34     $      2.65     $      1.90
     Loss from discontinued operations                                      (0.10)          (0.01)          (0.13)
- ------------------------------------------------------------------------------------------------------------------
DILUTED NET INCOME PER SHARE                                          $      2.24     $      2.64     $      1.77
==================================================================================================================
CASH DIVIDENDS PER SHARE                                              $      1.48     $      1.48     $      1.48
==================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
- ----------------------------------------------------------------------------------------------------------------------
(dollars in thousands)                                                             2000          1999          1998
- ----------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>           <C>           <C>
NET INCOME                                                                      $ 161,936     $ 203,022     $ 143,063
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
     Foreign currency translation adjustments                                         867          (555)          177
     Unrealized gains on securities:
          Unrealized holding gains arising during the year                            728             4           116
          Less reclassification adjustments for gains included in net income         (486)         (489)          (46)
- ----------------------------------------------------------------------------------------------------------------------
     Other comprehensive income (loss)                                              1,109        (1,040)          247
- ----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME                                                            $ 163,045     $ 201,982     $ 143,310
======================================================================================================================
RELATED TAX BENEFIT (EXPENSE) OF OTHER COMPREHENSIVE INCOME (LOSS):
     Foreign currency translation adjustments                                   $     132     $     333     $    (124)
     Unrealized gains on securities:
          Unrealized holding gains arising during the year                           (392)           (2)          (61)
          Less reclassification adjustments for gains included in net income          262           263            24
======================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements


                                             Enhancing shareholder value      27
<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)                                                               2000          1999          1998
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                   $ 161,936     $ 203,022     $ 143,063
     Adjustments to reconcile net income to net cash provided by operating
       activities of continuing operations:
          Loss from discontinued operations                                           7,536         1,299        10,503
          Depreciation                                                               33,375        41,786        46,916
          Amortization of intangibles                                                35,195        19,255        15,238
          Asset impairment charges                                                    9,740            --            --
          Share purchase discount                                                     1,772         4,056         5,235
          Net (gain) loss on sales of businesses                                         --       (19,770)        4,850
          Deferred income taxes                                                       9,490        54,948        18,675
          Changes in assets and liabilities, net of effects from acquisitions,
            sales of businesses and discontinued operations:
              Trade accounts receivable                                              16,752        20,185         1,388
              Inventories                                                             2,079           385         3,568
              Accounts payable                                                      (10,601)         (657)          563
              Accrued wages, employee profit sharing and pension                     (5,866)      (17,602)        3,669
              Restructuring accruals                                                (11,834)      (32,596)        9,256
              Other assets and liabilities                                            3,998       (53,074)        2,206
- ------------------------------------------------------------------------------------------------------------------------
     Net cash provided by operating activities of continuing operations             253,572       221,237       265,130
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sales of marketable securities                                    47,627        32,775        19,199
     Purchases of marketable securities                                             (40,000)      (17,915)      (52,411)
     Purchases of capital assets                                                    (48,483)      (76,795)      (90,807)
     Payments for acquisitions, net of cash acquired                                (95,991)           --            --
     Net proceeds from sales of businesses, net of cash sold                             --        99,475        89,416
     Proceeds from sales of capital assets                                           14,469        65,663        28,448
     Loans to others                                                                 32,500       (32,500)           --
     Other                                                                           (6,263)        1,934           485
- ------------------------------------------------------------------------------------------------------------------------
     Net cash (used) provided by investing activities of continuing operations      (96,141)       72,637        (5,670)
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net (payments) borrowings on short-term debt                                   (60,000)       60,000            --
     Payments on long-term debt                                                        (794)       (5,793)       (4,525)
     Payments to retire shares                                                           --      (313,492)      (59,704)
     Proceeds from issuing shares under employee plans                                8,064        29,208        26,230
     Cash dividends paid to shareholders                                           (107,195)     (113,535)     (119,682)
- ------------------------------------------------------------------------------------------------------------------------
     Net cash used by financing activities of continuing operations                (159,925)     (343,612)     (157,681)
- ------------------------------------------------------------------------------------------------------------------------
NET CASH (USED) PROVIDED BY DISCONTINUED OPERATIONS                                 (32,360)      (97,981)        2,961
- ------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                (34,854)     (147,719)      104,740
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                      104,616       252,335       147,595
- ------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                          $  69,762     $ 104,616     $ 252,335
========================================================================================================================
SUPPLEMENTAL INFORMATION - CONTINUING OPERATIONS:
     Interest paid                                                                $  12,169     $   8,329     $   7,345
     Income taxes paid                                                            $  93,593     $  62,793     $  82,276
========================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements


28     Deluxe Corporation   *   2000 Annual Report

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1

SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION: The consolidated financial statements include the accounts of the
Company and all majority owned subsidiaries. All significant intercompany
accounts, transactions and profits have been eliminated.

CASH AND CASH EQUIVALENTS: The Company considers all cash on hand, money market
funds and other highly liquid investments with original maturities of three
months or less to be cash and cash equivalents. The carrying amounts reported in
the consolidated balance sheets for cash and cash equivalents approximate fair
value.

MARKETABLE SECURITIES: Marketable securities consist of debt and equity
securities. They are classified as available for sale and are carried at fair
value, based on quoted market prices. Unrealized gains and losses, net of tax,
are reported in other accumulated comprehensive income in the shareholders'
equity section of the consolidated balance sheets. Realized gains and losses and
permanent declines in value are included in investment income in the
consolidated statements of income. The cost of securities sold is determined
using the specific identification method.

ACCOUNTS RECEIVABLE: Accounts receivable are stated net of allowances for
uncollectible accounts of $1.4 million and $1.3 million at December 31, 2000 and
1999, respectively. The Company records allowances for uncollectible accounts
when it is probable that the full amount of its accounts receivable balance will
not be collected and when this uncollectible amount can be reasonably estimated.
Increases in the allowances for uncollectible accounts are recorded as bad debt
expense and are reflected in selling, general and administrative expense in the
Company's consolidated statements of income. Bad debt expense for continuing
operations was $3.8 million in 2000, $3.1 million in 1999 and $1.4 million in
1998. Bad debt expense reflected in discontinued operations was $3.3 million,
$2.9 million and $1.1 million in 2000, 1999 and 1998, respectively. As of
December 31, 2000 and 1999, no one customer accounted for 10% or more of total
receivables.

INVENTORIES: Inventories are stated at the lower of cost or market. Cost is
determined using the last-in, first-out (LIFO) method for substantially all
inventories. LIFO inventories were approximately $2.7 million and $6.3 million
less than replacement cost at December 31, 2000 and 1999, respectively.
Inventories were comprised of the following at December 31:

- --------------------------------------------------------------------------------
(dollars in thousands)                          2000           1999
- --------------------------------------------------------------------------------
Raw materials                                 $  2,879       $  3,110
Semi-finished goods                              6,504          7,245
Finished goods                                   1,177          1,231
- --------------------------------------------------------------------------------
   Total                                      $ 10,560       $ 11,586
================================================================================

    During 2000, inventory quantities were reduced, which resulted in a
liquidation of LIFO inventory layers carried at lower costs which prevailed in
prior years. The effect of this liquidation was to decrease cost of goods sold
by $2.4 million and to increase income from continuing operations by $1.5
million, or $0.02 per share diluted. There were no significant liquidations of
LIFO inventories in 1999 or 1998.

SUPPLIES: These costs consist of items not used directly in the production of
goods, such as maintenance and packaging supplies. Such costs are deferred and
charged to expense when used.

DEFERRED ADVERTISING: These costs consist of materials, production, postage and
design expenditures required to produce newspaper and magazine inserts, direct
mail advertisements and catalogs for products sold directly to consumers. Such
costs are amortized over periods (averaging 18 months) that correspond to the
estimated revenue streams of the individual advertisements. The actual timing of
these revenue streams may differ from these estimates. Sales materials are
charged to expense when no longer owned or expected to be used. Costs of
nondirect response advertising are


                                             Enhancing shareholder value      29
<PAGE>


expensed as incurred. The total amount of advertising expense for continuing
operations was $67.6 million in 2000, $49.8 million in 1999 and $99.7 million in
1998. Total advertising expense for discontinued operations was $9.9 million,
$0.7 million and $0.4 million in 2000, 1999 and 1998, respectively.

LONG-TERM INVESTMENTS: At December 31, 2000 and 1999, long-term investments
consist principally of cash surrender values of insurance contracts, notes
receivable and other investments. Such investments are carried at cost or
amortized cost which approximates their fair values.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment, including
leasehold and other improvements that extend an asset's useful life or
productive capabilities, are stated at historical cost. Buildings with 40-year
lives and machinery and equipment with lives of three to 11 years are generally
depreciated using accelerated methods. Leasehold and building improvements are
depreciated on a straight-line basis over the estimated useful life of the
property or the life of the lease, whichever is shorter. Property, plant and
equipment was comprised of the following at December 31:

- --------------------------------------------------------------------------------
(dollars in thousands)                           2000              1999
- --------------------------------------------------------------------------------
Land and land improvements                    $   32,739       $   36,165
Buildings and building improvements              113,848          131,344
Machinery and equipment                          323,181          353,405
- --------------------------------------------------------------------------------
   Total                                         469,768          520,914
Accumulated depreciation                        (295,812)        (301,430)
- --------------------------------------------------------------------------------
   Property, plant and equipment-net          $  173,956       $  219,484
================================================================================

INTANGIBLES: Intangible assets are stated at historical cost. Amortization
expense is generally determined on the straight-line basis over periods of 15 to
30 years for cost in excess of net assets acquired (goodwill) and one to 10
years for internal-use software and other intangibles. Other intangibles consist
primarily of a customer database obtained upon the acquisition of Designer
Checks in February 2000 (see Note 6). The Company continually re-evaluates the
original assumptions and rationale utilized in the establishment of the
estimated lives of its identifiable intangible assets and goodwill. The carrying
values of its intangible assets are evaluated for impairment in accordance with
the Company's policy on impairment of long-lived assets and intangibles.
   Intangibles were comprised of the following at December 31:

- --------------------------------------------------------------------------------
(dollars in thousands)                           2000             1999
- --------------------------------------------------------------------------------
Cost in excess of net assets acquired         $   96,826       $   8,000
Internal-use software                            195,515         172,000
Other intangible assets                            5,812             451
- --------------------------------------------------------------------------------
   Total                                         298,153         180,451
Accumulated amortization                         (75,355)        (41,926)
- --------------------------------------------------------------------------------
   Intangibles-net                            $  222,798       $ 138,525
================================================================================

CAPITALIZATION OF INTERNAL-USE SOFTWARE: The Company capitalizes costs of
software developed or obtained for internal use once the preliminary project
stage has been completed, management commits to funding the project and it is
probable that the project will be completed and the software will be used to
perform the function intended. Capitalized costs include only (1) external
direct costs of materials and services consumed in developing or obtaining
internal-use software, (2) payroll and payroll-related costs for employees who
are directly associated with and who devote time to the internal-use software
project, and (3) interest costs incurred, when material, while developing
internal-use software. Capitalization of costs ceases when the project is
substantially complete and ready for its intended use. The carrying value of
internal-use software is reviewed in accordance with the Company's policy on
impairment of long-lived assets and intangibles.

WEB SITE DEVELOPMENT COSTS: The Company capitalizes costs associated with the
development of web sites in accordance with its policy on capitalization of
internal-use software. Costs incurred in populating the site with information
about the Company or products available to customers are expensed as incurred.


30     Deluxe Corporation   *   2000 Annual Report
<PAGE>


IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES: The Company periodically
evaluates the recoverability of property, plant, equipment and identifiable
intangibles not held for sale by measuring the carrying amount of the asset
against the estimated undiscounted future cash flows associated with it. When
the asset being evaluated was acquired in a purchase business combination in
which goodwill was recorded, a pro rata portion of the goodwill value is
included in the carrying amount of the asset. This pro rata portion of goodwill
is based on the relative fair values at the date of acquisition of the
long-lived assets and identifiable intangibles acquired. Should the sum of the
expected future net cash flows be less than the carrying value of the asset
being evaluated, an impairment loss would be recognized. The impairment loss
would be calculated as the amount by which the carrying value of the asset
exceeds the fair value of the asset. The pro rata portion of any goodwill
allocated to the asset would be eliminated before recording any reduction of the
original carrying amount of the asset.
   The Company periodically evaluates the recoverability of property, plant,
equipment and identifiable intangibles held for sale by comparing the asset's
carrying amount with its fair value less costs to sell. If a large segment or
separable group of assets which were acquired in a purchase business combination
are held for sale, all of the unamortized goodwill associated with those assets
is included in the carrying amount of the assets for purposes of this
evaluation. Should the fair value less costs to sell be less than the carrying
value of the long-lived asset(s), an impairment loss would be recognized. The
impairment loss would be calculated as the amount by which the carrying value of
the asset(s) exceeds the fair value of the asset(s) less costs to sell. The
unamortized goodwill associated with those assets would be eliminated before
recording any reduction in the original carrying value of the asset(s).
   The Company evaluates the carrying value of goodwill at an enterprise level
when events or changes in circumstances at the businesses to which the goodwill
relates indicate that the carrying amount may not be recoverable. Such
circumstances could include, but are not limited to, (1) a current period
operating or cash flow loss combined with a history of operating or cash flow
losses, (2) a forecast that demonstrates continuing losses, (3) a significant
adverse change in legal factors or in business climate, or (4) an adverse action
or assessment by a regulator. In evaluating the recoverability of enterprise
goodwill, the Company measures the carrying amount of the goodwill against the
estimated undiscounted future net cash flows of the businesses to which the
goodwill relates. In determining the future net cash flows, the Company looks to
historical results and current forecasts. The estimated net cash flows include
the effects of income tax payments and interest charges. Should the sum of the
expected future net cash flows be less than the carrying value of the goodwill,
an impairment loss would be recognized. The impairment loss would be calculated
as the amount by which the net book value of the related businesses exceeds the
fair value of these businesses.

INCOME TAXES: Deferred income taxes result from temporary differences between
the financial reporting basis of assets and liabilities and their respective tax
reporting bases. Future tax benefits are recognized to the extent that
realization of such benefits is more likely than not.

REVENUE RECOGNITION: The Company records revenue for the majority of its
operations as products are shipped or as services are performed. When products
are shipped, title to the goods passes to the customer and the customer assumes
the risks and rewards of ownership. Revenue includes amounts billed to customers
for shipping and handling. Costs incurred by the Company for shipping and
handling are reflected in cost of goods sold.

SALES INCENTIVES: The Company enters into contractual agreements with its
customers for rebates on certain products it sells. The Company records these
amounts as reductions of revenue and records a liability reflected as accrued
rebates on the Company's consolidated balance sheets. As these rebate amounts
are determined when the contract is entered into, these revenue reductions are
recorded at the time the related revenue is recorded.
    The Company also does, at times, sell its products at discounted prices,
issue coupons and provide free products to customers when they purchase a
specified product. The discount and coupon amounts are recorded as reductions of
revenue at the time the related revenue is recorded. The cost of free products
is recorded as cost of goods sold when the revenue for the related purchase is
recorded.


                                             Enhancing shareholder value      31
<PAGE>


EMPLOYEE STOCK-BASED COMPENSATION: As permitted by Statement of Financial
Accounting Standards (SFAS) No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
the Company continues to account for its employee stock-based compensation in
accordance with Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK
ISSUED TO EMPLOYEES. Accordingly, no compensation cost has been recognized for
fixed stock options issued under the Company's stock incentive plan. The Company
discloses pro forma net income and net income per share as if the fair value
method of SFAS No. 123 had been used (see Note 10).

COMPREHENSIVE INCOME: Comprehensive income includes charges and credits to
shareholders' equity that are not the result of transactions with shareholders.
The Company's total comprehensive income consists of net income, foreign
currency translation adjustments and unrealized gains and losses on securities.
The foreign currency translation adjustments and unrealized gains and losses on
securities are reflected as accumulated other comprehensive income in the
Company's consolidated balance sheets and in the Company's shareholders' equity
statement presented in Note 14.

RECLASSIFICATIONS: Other than the reclassifications to reflect the results of
the eFunds segment as discontinued operations (see Note 3), certain other
amounts reported in 1999 and 1998 have been reclassified to conform with the
2000 presentation. These changes had no impact on previously reported net income
or shareholders' equity.

USE OF ESTIMATES: The Company has prepared the accompanying consolidated
financial statements in conformity with accounting principles generally accepted
in the United States of America. In this process, it is necessary for management
to make certain assumptions and related estimates affecting the amounts reported
in the consolidated financial statements and attached notes. These estimates and
assumptions are developed based upon all information available using
management's best efforts. However, actual results can differ from assumed and
estimated amounts.

NEW ACCOUNTING PRONOUNCEMENTS: On January 1, 2001, the Company adopted SFAS No.
133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, as amended by
SFAS No. 138, ACCOUNTING FOR CERTAIN DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING
ACTIVITIES. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires that all
derivatives, including those embedded in other contracts, be recognized as
either assets or liabilities and that those financial instruments be measured at
fair value. The accounting for changes in the fair value of derivatives depends
on their intended use and designation. The Company has reviewed the requirements
of SFAS No. 133 and has determined that it currently has no free-standing or
embedded derivatives. Application of this standard did not have a material
impact on the Company's reported operating results or financial position.
   On December 31, 2000, the Company adopted Emerging Issues Task Force (EITF)
Issue No. 00-10, ACCOUNTING FOR SHIPPING AND HANDLING FEES AND COSTS. EITF No.
00-10 establishes the appropriate statement of income classification for amounts
charged to customers for shipping and handling, as well as for costs incurred
related to shipping and handling. Application of this guidance did not result in
a material reclassification within the Company's consolidated statements of
income.
   In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS,
which provides guidance in applying generally accepted accounting principles to
revenue recognition in financial statements. Application of this SAB did not
have a material impact on the Company's reported operating results or financial
position.


32     Deluxe Corporation   *   2000 Annual Report
<PAGE>


NOTE 2

EARNINGS PER SHARE

The following table reflects the calculation of basic and diluted earnings per
share from continuing operations.

<TABLE>
<CAPTION>
Year Ended December 31,
- -------------------------------------------------------------------------------------------------------------
(dollars and shares in thousands, except per share amounts)                    2000        1999        1998
- -------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>         <C>         <C>
Income from continuing operations per share - basic:
   Income from continuing operations                                         $169,472    $204,321    $153,566
   Weighted average shares outstanding                                         72,324      76,710      80,648
- -------------------------------------------------------------------------------------------------------------
Income from continuing operations per share -  basic                         $   2.34    $   2.66    $   1.90
=============================================================================================================

Income from continuing operations per share - diluted:
   Income from continuing operations                                         $169,472    $204,321    $153,566
   Weighted average shares outstanding                                         72,324      76,710      80,648
   Dilutive impact of options                                                      87         273         179
   Shares contingently issuable                                                     9          26          28
- -------------------------------------------------------------------------------------------------------------
      Weighted average shares and potential dilutive shares outstanding        72,420      77,009      80,855
- -------------------------------------------------------------------------------------------------------------
Income from continuing operations per share - diluted                        $   2.34    $   2.65    $   1.90
=============================================================================================================
</TABLE>

   During 2000, 1999, and 1998, options to purchase a weighted-average number
of shares of 5.4 million, 2.0 million and 0.7 million, respectively, were
outstanding but were not included in the computation of diluted earnings per
share. The exercise prices of the excluded options were greater than the average
market price of the Company's common shares during the respective periods.


NOTE 3

DISCONTINUED OPERATIONS

In January 2000, the Company announced that its board of directors approved a
plan to combine its electronic payments, professional services and government
services businesses into an independent, publicly-traded company to be called
eFunds Corporation (eFunds). The Company contributed ownership of various
subsidiaries and certain assets and liabilities to eFunds on March 31, 2000. In
June 2000, eFunds sold 5.5 million shares of its common stock to the public. On
December 29, 2000, the Company distributed its 40 million shares of eFunds
stock, representing 87.9% of eFunds' total outstanding shares, to all Company
shareholders of record on December 11, 2000. Each shareholder received .5514
eFunds share for each Deluxe share owned. Cash was issued in lieu of fractional
shares. The net assets distributed to shareholders of $254.0 million was
reflected as a reduction of retained earnings. The Company received confirmation
from the Internal Revenue Service that the spin-off transaction would be
tax-free to the Company and to its shareholders for U.S. federal income tax
purposes, except to the extent that cash was received in lieu of fractional
shares. The results of eFunds are reflected as discontinued operations in the
Company's consolidated financial statements for all periods presented. See Note
16 for additional discontinued operations disclosures not included elsewhere in
these notes to consolidated financial statements.


NOTE 4

RESTRUCTURING CHARGES

During 2000, the Company recorded restructuring charges of $2.0 million within
continuing operations. During the second quarter of 2000, the Company announced
its plan to outsource certain data entry functions to the Company's discontinued
operations. This outsourcing effort affected approximately 155 employees. In the
fourth quarter of 2000, the Company announced that it would be scaling back its
PlaidMoon.com project (see Note 5). This decision is expected to result in the
termination of approximately 40 employees. Additionally, the Company reversed
$4.3 million of restructuring charges primarily relating to the Company's
initiative to reduce selling, general and administrative


                                             Enhancing shareholder value      33
<PAGE>


(SG&A) expense. This was due to higher attrition than anticipated and the
reversal of "early termination" payments to a group of employees. Under the
Company's severance program, employees are provided 60 days notice prior to
being terminated. In certain situations, the Company asks the employees to leave
immediately because they may have access to crucial infrastructure or
information. In these cases, severance includes this additional amount. In
certain situations, management subsequently decided to keep employees working
for the 60-day period and thus, a reduction in the restructuring reserves was
required since this pay was no longer severance, but an operating expense. These
new restructuring charges and reversals are reflected in the Company's 2000
consolidated statement of income as a reduction in SG&A expense of $2.4 million
and a decrease in other income of $0.1 million.
   During 1999, restructuring accruals of $9.8 million were reversed within
continuing operations. The majority of this amount related to the Company's
initiatives to reduce SG&A expense and to discontinue production of direct mail
products. The excess accrual amount occurred when the Company determined that it
was able to use a greater portion of the direct mail production assets in its
ongoing operations than was originally anticipated, as well as changes in the
SG&A expense reduction initiative due to the 1999 reorganization of the Company
into four independently operated business units. The remainder of the accrual
reversal related to the Company's planned reductions within its Paper Payment
Systems segment. Closing check printing plants experienced higher attrition
rates than anticipated, resulting in lower severance payments than originally
estimated. Also during 1999, the Company recorded restructuring accruals of $0.8
million for employee severance and $0.8 million for estimated losses on asset
dispositions related to the planned closing of one collections office and
planned employee reductions in another collections office within the Company's
collection business which was sold in 1999 (see Note 6). These accrual reversals
and the new restructuring accruals are reflected in the 1999 consolidated
statement of income as a reduction in cost of goods sold of $2.0 million, a
reduction in SG&A expense of $3.9 million and other income of $2.3 million.
   During 1998, the Company recorded restructuring charges of $36.3 million
within continuing operations. These charges included costs associated with the
Company's initiative to reduce SG&A expense, discontinuing production of the
Direct Response segment's direct mail products and closing four additional check
printing plants. The charges anticipated the elimination of 725 SG&A positions
within sales, marketing, finance, human resources and information services.
Discontinuing production of direct mail products was expected to result in the
elimination of 60 positions. The Company also planned to close four additional
check printing plants, affecting approximately 870 employees. The restructuring
charges consisted of employee severance costs of $28.0 million and $8.3 million
for expected losses on the disposition of assets. Expenses of $10.9 million were
included in cost of goods sold, $17.9 million was included in SG&A expense and
$7.5 million was included in other expense in the Company's 1998 consolidated
statement of income. As of the end of 1999, three of the four check printing
plants were closed, with the remaining plant closed in the first quarter of
2000. The majority of the reductions in SG&A positions were completed in 2000.
   The Company's consolidated balance sheets reflect restructuring accruals for
continuing operations of $3.1 million and $13.9 million as of December 31, 2000
and 1999, respectively, for employee severance costs. Additionally, the Company
had restructuring accruals for estimated losses on asset dispositions of $1.1
million as of December 31, 1999.


34     Deluxe Corporation   *   2000 Annual Report
<PAGE>


   The status of the severance portion of the Company's restructuring accruals
for continuing operations as of December 31, 2000 was as follows:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
                                                           SG&A Reductions
                               Check Printing Plant         & Direct Mail
                                 Closings/Other(1)           Production(2)              Other(3)                   Total
- --------------------------------------------------------------------------------------------------------------------------------
                                             No. of                   No. of                    No. of                   No. of
                                          employees                employees                 employees                employees
(dollars in millions)           Amount     affected        Amount   affected       Amount     affected        Amount   affected
- --------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>          <C>         <C>           <C>        <C>            <C>        <C>          <C>
Balance, January 1, 1998         $  34.9      2,260       $    --         --       $     --         --       $  34.9      2,260
   Restructuring charges            10.0        870          18.0        785             --         --          28.0      1,655
   Severance paid                  (21.9)      (940)           --         --             --         --         (21.9)      (940)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998          23.0      2,190          18.0        785             --         --          41.0      2,975
   Restructuring charges              --         --            --         --            0.8         70           0.8         70
   Restructuring reversals          (2.9)      (375)         (5.1)      (230)            --         --          (8.0)      (605)
   Sale of business                   --         --            --         --           (0.1)        --          (0.1)        --
   Severance paid                  (13.6)    (1,375)         (5.5)      (275)          (0.7)       (70)        (19.8)    (1,720)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999           6.5        440           7.4        280             --         --          13.9        720
   Restructuring charges              --         --           0.1          5            1.8        195           1.9        200
   Restructuring reversals          (0.6)       (70)         (3.5)      (125)          (0.2)       (60)         (4.3)      (255)
   Severance paid                   (5.1)      (300)         (2.5)      (120)          (0.8)      (100)         (8.4)      (520)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000       $   0.8         70       $   1.5         40       $    0.8         35       $   3.1        145
================================================================================================================================
</TABLE>

(1) Includes charges recorded in 1996 and 1998 for plans to close check printing
    plants and charges recorded in 1996 and 1997 for reductions in corporate
    support functions, implementation of a new order processing and customer
    service system and implementation of process improvements in the post-press
    phase of check production. As of December 31, 2000, all accruals recorded in
    1996 and 1997 had been fully utilized.
(2) Includes charges recorded in 1998 for the Company's initiatives to reduce
    SG&A expense and to discontinue production of direct mail products.
(3) Includes charges recorded in 1999 for a collection center closing and
    reductions, and charges recorded in 2000 for the outsourcing of certain data
    entry functions and the scaling-back of PlaidMoon.

   The status of the estimated loss on asset dispositions portion of the
Company's continuing operations restructuring accruals as of December 31, 2000
was as follows:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
                                 Check        Discon-    Collection
                              Printing    tinuance of        Center
                                 Plant    Direct Mail      Closing/
(dollars in millions)         Closings(1)  Production    Reductions       Total
- --------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>          <C>
Balance, January 1, 1998          $  3.7       $   --       $   --       $  3.7
   Restructuring charges             3.1          5.2           --          8.3
   Losses realized                  (1.9)        (3.3)          --         (5.2)
- --------------------------------------------------------------------------------
Balance, December 31, 1998           4.9          1.9           --          6.8
   Restructuring charges              --           --          0.8          0.8
   Restructuring reversals            --         (1.8)          --         (1.8)
   Sale of business                   --           --         (0.2)        (0.2)
   Losses realized                  (3.8)        (0.1)        (0.6)        (4.5)
- --------------------------------------------------------------------------------
Balance, December 31, 1999           1.1           --           --          1.1
   Restructuring charges             0.1           --           --          0.1
   Losses realized                  (1.2)          --           --         (1.2)
- --------------------------------------------------------------------------------
Balance, December 31, 2000        $   --       $   --       $   --       $   --
================================================================================
</TABLE>

(1) Includes charges recorded in 1996 for the plan to close 21 check printing
    plants.


NOTE 5

IMPAIRMENT LOSSES

During 2000, the Company recorded impairment charges of $9.7 million related to
a discontinued e-commerce initiative. Earlier in 2000, the Company announced an
e-commerce growth strategy. One outcome of this strategy was PlaidMoon.com, an
Internet-based business concept that allowed consumers to design and purchase
personalized items. In October 2000, the Company announced that it was scaling
back and repositioning the PlaidMoon.com business concept. Instead of being a
stand-alone business as had been planned, PlaidMoon.com will be folded into the
rest of the business. As a result of this decision, the Company completed an
evaluation to determine to what extent the long-lived assets of the business
could be utilized by its other businesses or with external alliance partners.
This evaluation resulted in the impairment charges of $9.7 million. The impaired
assets consisted of internal-use software developed


                                             Enhancing shareholder value      35
<PAGE>


for use by the PlaidMoon.com web site. The estimated fair value of the software
was determined by calculating the present value of net cash flows expected to be
generated by the Company's alternative uses of these assets. These impairment
charges are reflected in SG&A expense in the Company's 2000 consolidated
statement of income.


NOTE 6

BUSINESS COMBINATIONS AND DIVESTITURES

2000 ACQUISITION: During February 2000, the Company acquired all of the
outstanding shares of Designer Checks, Inc. for $96.0 million, net of cash
acquired. Designer Checks produces specialty design checks and related products
for direct sale to consumers. This acquisition was accounted for under the
purchase method of accounting. The consolidated financial statements of the
Company include the results of this business subsequent to its acquisition date.
The purchase price was allocated to the assets acquired and liabilities assumed
based on their fair values on the date of purchase. Total cost in excess of net
assets acquired in the amount of $88.8 million is being amortized over 15 years.

1999 DIVESTITURES: During 1999, the Company sold substantially all of the assets
of NRC Holding Corporation and all of the outstanding stock of United Creditors
Alliance International Limited, the Company's collections businesses. The cash
proceeds, net of cash sold, from the sales of these businesses was $74.4
million. The 1999 consolidated statement of income reflects a net gain of $19.8
million on these sales. The consolidated financial statements of the Company
include the results of these businesses through their sale dates. These
businesses contributed revenue of $124.1 million and $121.3 million in 1999 and
1998, respectively.

1998 DIVESTITURES: During 1998, the Company sold substantially all of the assets
of PaperDirect (UK) Limited, ESP Employment Screening Partners, Inc., Social
Expressions, and the remaining businesses within the Direct Response segment.
The Company also sold all of the outstanding stock of PaperDirect, Inc. The
aggregate net sales price for these businesses was $113.7 million, consisting of
cash proceeds of $87.9 million and notes receivable of $25.8 million. The
Company realized a loss of $10.5 million on the combined sale of PaperDirect and
Social Expressions. The individual gains and losses recognized on the sales of
the other businesses did not have a material impact on the results of the
Company. The consolidated financial statements of the Company include the
results of these businesses through their individual sale dates. The notes
receivable from the sales of these businesses were collected in full by the end
of 1999.
   The following summarized, unaudited pro forma results of operations for 1998
assumes the divestitures occurred as of the beginning of the period. No
assumptions were made in the pro forma information concerning the use of the
cash received in consideration for the sales of the businesses.


- --------------------------------------------------------------------------------
(dollars in thousands, except per share amounts)                       1998
- --------------------------------------------------------------------------------
Revenue                                                            $1,423,919
Cost of goods sold                                                    609,056
Selling, general and administrative expense                           552,129
Other income, interest expense and investment income                    7,887
Provision for income taxes                                            107,750
- --------------------------------------------------------------------------------
Income from continuing operations                                  $  162,871
================================================================================

Income from continuing operations per share - basic                $     2.02
Income from continuing operations per share - diluted              $     2.01
================================================================================


36     Deluxe Corporation   *   2000 Annual Report
<PAGE>


NOTE 7

SALE-LEASEBACK TRANSACTION

During 1999, the Company entered into a $42.5 million sale-leaseback
transaction whereby the Company sold five facilities in Shoreview, Minnesota and
entered into leases for three of these facilities for periods ranging from five
to 10 years. Of the related leases, two are being accounted for as operating
leases and one is a capital lease. The result of this sale was a $17.1 million
gain, of which $10.6 million was deferred and is being amortized over the lease
terms in the case of the operating leases and over the life of the capital asset
in the case of the capital lease. $6.7 million and $8.7 million of the deferred
gain is reflected in other long-term liabilities in the December 31, 2000 and
1999 consolidated balance sheets, respectively. The Company provided short-term
financing for $32.5 million of the proceeds from this sale. This amount is
reflected in prepaid expenses and other current assets in the December 31, 1999
consolidated balance sheet and is reflected as loans to others in the 2000 and
1999 consolidated statements of cash flows. The loan was paid in full in January
2000.


NOTE 8

MARKETABLE SECURITIES

On December 31, 2000 and 1999, investments classified as available for sale
consisted of the following:

December 31, 2000
- --------------------------------------------------------------------------------
                                                       Unrealized
                                                          holding
(dollars in thousands)                           Cost        loss   Fair value
- --------------------------------------------------------------------------------
Debt securities issued by the U.S. Treasury
    and other government agencies            $ 18,724     $  (266)    $ 18,458
Other debt securities (cash equivalents)       76,483          --       76,483
- --------------------------------------------------------------------------------
   Total                                     $ 95,207     $  (266)    $ 94,941
================================================================================


December 31, 1999
- --------------------------------------------------------------------------------
                                                       Unrealized
                                                          holding
(dollars in thousands)                           Cost        loss   Fair value
- --------------------------------------------------------------------------------
Debt securities issued by the U.S. Treasury
    and other government agencies            $ 24,352     $  (636)    $ 23,716
Debt securities issued by states of the U.S.
    and political subdivisions of states        2,000          (3)       1,997
- --------------------------------------------------------------------------------
   Total marketable securities                 26,352        (639)      25,713
Other debt securities (cash equivalents)      124,110          --      124,110
- --------------------------------------------------------------------------------
   Total                                     $150,462     $  (639)    $149,823
================================================================================

   At December 31, 2000, debt securities maturing in 2001 have a cost basis of
$84.5 million and a fair value of $84.4 million. Debt securities maturing in
2002 have a cost basis of $10.7 million and a fair value of $10.5 million.
   Proceeds from sales of marketable securities available for sale were $47.6
million, $32.8 million and $19.2 million in 2000, 1999 and 1998, respectively.
The Company realized net gains of $0.7 million, $0.8 million and $0.1 million on
the sales of marketable securities in 2000, 1999 and 1998, respectively.


NOTE 9

PROVISION FOR INCOME TAXES

The components of the provision for income taxes for continuing operations were
as follows:

- --------------------------------------------------------------------------------
(dollars in thousands)                         2000         1999        1998
- --------------------------------------------------------------------------------
Current tax provision:
   Federal                                   $ 90,533    $ 61,268     $ 71,396
   State                                        8,320      10,710       21,882
- --------------------------------------------------------------------------------
      Total                                    98,853      71,978       93,278
Deferred tax provision:
   Federal                                      2,870      42,797        9,409
   State                                        2,234       3,486           52
- --------------------------------------------------------------------------------
      Total                                  $103,957    $118,261     $102,739
================================================================================

   The Company's effective tax rate on pre-tax income from continuing
operations differs from the U.S. federal statutory tax rate of 35% as follows:

- --------------------------------------------------------------------------------
(dollars in thousands)                         2000        1999         1998
- --------------------------------------------------------------------------------
Income tax at federal statutory rate         $ 95,700    $112,904     $ 89,707
State income taxes net of federal
   income tax benefit                           6,860       9,227       14,257
Other                                           1,397      (3,870)      (1,225)
- --------------------------------------------------------------------------------
Provision for income taxes                   $103,957    $118,261     $102,739
================================================================================


                                             Enhancing shareholder value      37
<PAGE>

   Tax effected temporary differences which give rise to a significant portion
of deferred tax assets and liabilities at December 31, 2000 and 1999 are as
follows:

- --------------------------------------------------------------------------------
(dollars in thousands)                  2000                      1999
- --------------------------------------------------------------------------------
                               Deferred     Deferred     Deferred     Deferred
                                    tax          tax          tax          tax
                                 assets  liabilities       assets  liabilities
- --------------------------------------------------------------------------------
Capital assets                 $     --     $ 75,720     $     --     $ 55,241
Capital loss carryforwards        9,249           --        7,400           --
Deferred advertising                 --        4,111           --        4,747
Employee benefit plans           13,488           --       10,669           --
Inventory                         1,294           --        1,062           --
Restructuring accruals            1,174           --        5,648           --
Miscellaneous reserves
   and accruals                   9,674           --        9,062           --
Prepaid services                     --       14,402           --       16,389
All other                        18,341       12,822       12,267       13,947
- --------------------------------------------------------------------------------
Total deferred taxes           $ 53,220     $107,055     $ 46,108     $ 90,324
================================================================================

   At December 31, 2000, the Company had capital loss carryforwards of $25.0
million which expire in 2003.


NOTE 10

EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS

STOCK PURCHASE PLAN: The Company has an employee stock purchase plan that
enables eligible employees to purchase the Company's common stock at 75% of its
fair market value on the first business day following each three-month purchase
period. Compensation expense recognized in continuing operations for the
difference between the employees' purchase price and the fair value of the stock
was $1.8 million, $4.1 million and $5.2 million in 2000, 1999 and 1998,
respectively. Related compensation expense recognized in discontinued operations
was $0.9 million, $0.7 million and $0.7 million in 2000, 1999 and 1998,
respectively. Under the plan, 434,337, 568,107 and 698,830 shares were issued at
prices ranging from $16.83 to $20.58, $20.95 to $27.57 and $24.38 to $26.16 in
2000, 1999 and 1998, respectively.

STOCK INCENTIVE PLAN: Under the Company's stock incentive plan, stock-based
awards may be issued to employees via a broad range of methods, including
non-qualified or incentive stock options, restricted stock and restricted stock
units, stock appreciation rights and other awards based on the value of the
Company's common stock. Options become exercisable in varying amounts beginning
generally one year after the date of grant. The plan was amended in 1996 to
reserve an aggregate of seven million shares of common stock for issuance under
the plan. Awards for 5.4 million of these shares were granted prior to the
termination of the plan on December 31, 2000. The Company's 2000 stock incentive
plan, which is effective January 1, 2001, was approved by shareholders in August
2000. Three million shares of common stock were reserved for issuance under this
plan.
   In 1998, the Company adopted the DeluxeSHARES program. Under this program,
options were awarded to substantially all employees of the Company (excluding
foreign employees and employees of businesses held for sale), allowing them,
subject to certain conditions, to purchase 100 shares of common stock at a
converted exercise price of $25.20 per share. The options became exercisable on
January 30, 2001. Options for the purchase of 1.7 million shares of common stock
were issued under this program.
   All options allow for the purchase of shares of common stock at prices equal
to their market value at the date of grant. Information regarding the options
issued under the current plan, which was adopted in 1994, the remaining options
outstanding under the former plan adopted in 1984, and the DeluxeSHARES plan, is
as follows:

                                                                      Weighted-
                                                                        average
                                                          Number       exercise
                                                       of shares          price
- --------------------------------------------------------------------------------
Outstanding at January 1, 1998                         2,503,352         $33.04
Granted                                                3,085,800          33.18
Exercised                                               (277,848)         29.76
Canceled                                                (689,042)         34.60
- --------------------------------------------------------------------------------
Outstanding at December 31, 1998                       4,622,262          33.10
Granted                                                1,231,053          35.72
Exercised                                               (481,340)         30.62
Canceled                                                (835,418)         35.41
- --------------------------------------------------------------------------------
Outstanding at December 31, 1999                       4,536,557          33.65
Granted                                                1,215,823          25.36
Canceled                                                (384,932)         33.84
- --------------------------------------------------------------------------------
Outstanding at December 31, 2000                       5,367,448          24.33
================================================================================

   Options for the purchase of 3,271,030 shares were exercisable at December 31,
2000, 1,905,060 were exercisable at December 31, 1999 and 1,641,298 were
exercisable at December 31, 1998.

38     Deluxe Corporation   *   2000 Annual Report
<PAGE>


   In connection with the spin-off of eFunds (see Note 3), options outstanding
as of the spin-off record date were converted to options of the Company and
options of eFunds. This conversion was calculated under a formula based on the
market value of the Company's and eFunds' common stock at the spin-off record
date and was designed to maintain an equivalent intrinsic value for the option
holder utilizing the criteria described in Financial Accounting Standards Board
Interpretation No. 44, ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK
COMPENSATION. This conversion process resulted in an adjustment to the pricing
of the Company's options. The number of options and the remaining lives of the
options were not adjusted. The weighted-average exercise prices shown in the
table above, reflect the option prices on the dates the indicated events
occurred. Thus, the weighted-average exercise price of options outstanding at
December 31, 2000 reflects this pricing adjustment. The Company did not record a
compensation charge as a result of this conversion process.

   For options outstanding and exercisable at December 31, 2000, the adjusted
exercise price ranges and average remaining lives were as follows:

<TABLE>
<CAPTION>
                                                    Options outstanding                          Options exercisable
- --------------------------------------------------------------------------------------------------------------------------
                                         Number   Weighted-average     Weighted-average         Number    Weighted-average
Range of exercise prices            outstanding     remaining life       exercise price    exercisable      exercise price
- --------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>                       <C>         <C>                    <C>
$16.42 to $21.99                      1,333,189        8.64  years               $19.95        490,700              $20.74
$22.00 to $27.99                      3,908,266        5.91  years                25.55      2,654,337               25.47
$28.00 to $35.03                        125,993        2.97  years                32.79        125,993               32.79
- --------------------------------------------------------------------------------------------------------------------------
                                      5,367,448        6.52  years               $24.33      3,271,030              $25.05
==========================================================================================================================
</TABLE>

   The Company issued 72,111, 106,815 and 60,912 restricted shares and
restricted stock units at weighted-average fair values of $25.55, $34.78 and
$33.22 during 2000, 1999 and 1998, respectively. These awards generally vest
over periods ranging from one to five years.
   Pro forma net income and net income per share have been determined as if the
Company had accounted for its employee stock-based compensation under the fair
value method. The fair value of options was estimated at the date of grant using
the Black-Scholes option pricing model. The following weighted-average
assumptions were used in valuing options issued:

- --------------------------------------------------------------------------------
                                            2000          1999          1998
- --------------------------------------------------------------------------------
Risk-free interest rate (%)                  6.6           6.7           5.9
Dividend yield (%)                           7.1           4.6           4.5
Expected volatility (%)                     24.4          24.0          21.8
Weighted-average option life (years)         9.0           9.0           5.9
================================================================================

   The weighted-average fair value of options granted in 2000, 1999 and 1998
was $3.57, $8.24 and $5.99 per share, respectively. For purposes of pro forma
disclosures, the estimated fair value of the options was recognized as expense
over the options' vesting periods. The Company's pro forma net income and net
income per share were as follows:

- --------------------------------------------------------------------------------
(dollars in thousands,
except per share amounts)                 2000          1999          1998
- --------------------------------------------------------------------------------
Net income:
   As reported                          $161,936      $203,022      $143,063
   Pro forma                             157,552       197,555       140,510
Net income per share - basic:
   As reported                          $   2.24      $   2.65      $   1.77
   Pro forma                                2.18          2.58          1.74
Net income per share - diluted:
   As reported                          $   2.24      $   2.64      $   1.77
   Pro forma                                2.18          2.57          1.74
================================================================================

   These pro forma calculations only include the effects of grants made
subsequent to January 1, 1995. As such, these impacts are not necessarily
indicative of the pro forma effects on reported net income of future years.


                                             Enhancing shareholder value      39
<PAGE>


PROFIT SHARING, DEFINED CONTRIBUTION AND 401(K) PLANS: The Company maintains
profit sharing plans, a defined contribution pension plan and a plan established
under section 401(k) of the Internal Revenue Code to provide retirement benefits
for certain employees. The plans cover substantially all full-time and some
part-time employees with approximately 15 months of service. Contributions to
the profit sharing and defined contribution plans are made solely by the
Company. Employees may contribute up to the lessor of $10,500 or 10% of their
wages to the 401(k) plan. The Company will match the first 1% of wages
contributed and 50% of the next 4% of wages contributed. All contributions are
remitted to the plans' respective trustees, and benefits provided by the plans
are paid from accumulated funds of the trusts.
   Contributions to the defined contribution pension plan equaled 4% of eligible
compensation in 2000, 1999 and 1998. Related expense for continuing operations
for these years was $9.5 million, $12.3 million and $11.2 million, respectively.
Related expense for discontinued operations was $4.9 million, $3.2 million and
$2.5 million in 2000, 1999 and 1998, respectively. Contributions to the profit
sharing plans vary based on the Company's performance. Expense for continuing
operations for these plans was $11.7 million, $12.8 million and $22.9 million in
2000, 1999 and 1998, respectively. Expense for discontinued operations was $3.1
million, $4.8 million and $4.6 million in 2000, 1999 and 1998, respectively.
Company contributions to the 401(k) plan for continuing operations were $4.7
million, $6.4 million and $6.3 million in 2000, 1999 and 1998, respectively.
Company contributions for discontinued operations were $2.3 million, $1.5
million and $1.5 million in 2000, 1999 and 1998, respectively.


NOTE 11

POST-RETIREMENT BENEFITS

The Company provides certain health care benefits for a large number of its
retired employees. Employees included in the plan may become eligible for such
benefits if they attain the appropriate years of service and age while working
for the Company. During 2000, the Company's plan was expanded to include certain
employees of its Checks Unlimited subsidiary who were previously not covered by
the plan.
   Certain retirees' medical insurance premiums are based on the amounts paid by
active employees. Effective January 1, 1998, active employees' premiums were
reduced, thus reducing the medical premiums required to be paid by these
retirees. Additionally, for retirees who participate in the active employees'
indemnity plans, their co-payment amount was increased 5%.
   The following table summarizes the change in benefit obligation and plan
assets during 2000 and 1999:

(dollars in thousands)
- --------------------------------------------------------------------------------
Benefit obligation, January 1, 1999                                   $ 80,639
   Service cost                                                          1,694
   Interest cost                                                         5,286
   Actuarial (gains) and losses                                          3,383
   Effect of curtailment                                                (3,200)
   Benefits paid from plan assets and general funds
      of the Company                                                    (6,947)
- --------------------------------------------------------------------------------
Benefit obligation, December 31, 1999                                   80,855
   Service cost                                                          1,586
   Interest cost                                                         5,873
   Plan amendments                                                       3,459
   Actuarial (gains) and losses                                          2,329
   Effect of curtailment                                                (1,837)
   Benefits paid from plan assets and general funds
      of the Company                                                    (6,088)
- --------------------------------------------------------------------------------
Benefit obligation, December 31, 2000                                 $ 86,177
================================================================================

Fair value of plan assets, January 1, 1999                            $ 64,486
   Actual return on plan assets                                         11,678
   Benefits paid                                                        (3,900)
- --------------------------------------------------------------------------------
Fair value of plan assets, December 31, 1999                            72,264
   Actual return on plan assets                                         11,386
   Benefits paid                                                        (4,200)
- --------------------------------------------------------------------------------
Fair value of plan assets, December 31, 2000                          $ 79,450
================================================================================

   The funded status of the plan was as follows at December 31:

- --------------------------------------------------------------------------------
(dollars in thousands)                                        2000       1999
- --------------------------------------------------------------------------------
Accumulated post-retirement benefit obligation             $ 86,177    $ 80,855
Less:
   Fair value of plan assets (debt and equity securities)    79,450      72,264
   Unrecognized prior service cost                            3,949         743
   Unrecognized net loss                                      8,526      10,908
   Unrecognized transition obligation                         5,038       5,949
- --------------------------------------------------------------------------------
Prepaid post-retirement asset recognized in the
   consolidated balance sheets                             $(10,786)   $ (9,009)
================================================================================


40     Deluxe Corporation   *   2000 Annual Report
<PAGE>


   Net post-retirement benefit cost for the years ended December 31 consisted
of the following components:

- --------------------------------------------------------------------------------
(dollars in thousands)                        2000          1999          1998
- --------------------------------------------------------------------------------
Service cost - benefits earned
   during the year                         $  1,586      $  1,694      $  1,218
Interest cost on the accumulated
    post-retirement benefit obligation        5,873         5,286         4,651
Expected return on plan assets               (7,236)       (6,126)       (5,719)
Amortization of transition obligation           458           586           680
Amortization of prior service cost              186           257           269
Recognized net amortization of
   (gains) and losses                           127           290           (63)
- --------------------------------------------------------------------------------
Net post-retirement benefit cost                994         1,987         1,036
Curtailment (gain) loss                        (883)       (1,242)          315
- --------------------------------------------------------------------------------
Total post-retirement benefit cost         $    111      $    745      $  1,351
================================================================================

   As a result of sales of businesses (see Note 6) and a reduction in employees
as a result of the Company's cost-saving initiatives (see Note 4), the Company
recognized a net post-retirement benefit curtailment gain of $0.3 million in
2000 and $1.2 million in 1999, and a net curtailment loss of $0.3 million in
1998. Additionally, in connection with the spin-off of eFunds (see Note 3),
eFunds terminated its post-retirement medical plan. eFunds employees and
retirees who were qualified for retiree medical benefits as of the spin-off
date will continue to be eligible for these benefits from the Company. The
Company has retained an obligation of $0.1 million as of December 31, 2000 for
these employees and retirees. A net post-retirement benefit curtailment gain of
$0.6 million was recorded at the spin-off date and was included in discontinued
operations in the Company's 2000 consolidated statement of income.
   In measuring the accumulated post-retirement benefit obligation as of
December 31, 2000, the Company's health care inflation rate for 2000 and beyond
was assumed to be 5%. A one percentage point increase in the health care
inflation rate for each year would increase the accumulated post-retirement
benefit obligation by approximately $12.8 million and the service and interest
cost components of the net post-retirement benefit cost by approximately $1.1
million. A one percentage point decrease in the health care inflation rate for
each year would decrease the accumulated post-retirement benefit obligation by
approximately $11.2 million and the service and interest cost components of the
net post-retirement benefit cost by approximately $1.0 million. The discount
rate used in determining the accumulated post-retirement benefit obligation as
of December 31, 2000 and 1999 was 7.5%. The expected long-term rate of return
on plan assets used to determine the net periodic post-retirement benefit cost
was 9.5% in 2000, 1999 and 1998.


NOTE 12

LEASE AND DEBT COMMITMENTS

Long-term debt was as follows:

December 31,
- --------------------------------------------------------------------------------
(dollars in thousands)                                   2000            1999
- --------------------------------------------------------------------------------
8.55% unsecured and unsubordinated notes due
   February 15, 2001                                   $100,000        $100,000
Other                                                    10,873          14,407
- --------------------------------------------------------------------------------
   Total long-term debt                                 110,873         114,407
   Less amount due within one year                      100,672           2,462
- --------------------------------------------------------------------------------
      Total                                            $ 10,201        $111,945
================================================================================

   In February 1991, the Company issued $100.0 million of 8.55% unsecured and
unsubordinated notes due February 15, 2001. The notes are not redeemable prior
to maturity. The fair values of these notes were estimated to be $100.2 million
and $101.8 million at December 31, 2000 and 1999, respectively, based on quoted
market prices.
   Other long-term debt as of December 31, 2000 consists of a facility capital
lease. This capital lease obligation bears interest at 10.4% and is due through
the year 2009. The Company also has entered into operating leases on certain
facilities and equipment. Future minimum lease payments under the capital
obligation and noncancelable operating leases as of December 31, 2000 are as
follows:

- --------------------------------------------------------------------------------
                                               Capital               Operating
(dollars in thousands)                           Lease                  Leases
- --------------------------------------------------------------------------------
2001                                          $  1,773                $  7,071
2002                                             1,804                   6,041
2003                                             1,897                   4,534
2004                                             1,897                   3,717
2005                                             1,897                   2,619
2006 and thereafter                              7,437                   3,343
- --------------------------------------------------------------------------------
Total minimum lease payments                    16,705                 $27,325
================================================================================
Less portion representing interest               5,832
- --------------------------------------------------------------------------------
Present value of minimum lease payments         10,873
Less current portion                               672
- --------------------------------------------------------------------------------
Long-term portion of obligation                $10,201
================================================================================


                                             Enhancing shareholder value      41
<PAGE>


   Rent expense charged to continuing operations was $10.6 million, $23.2
million and $26.6 million for 2000, 1999 and 1998, respectively. Rent expense
charged to discontinued operations was $17.5 million, $20.7 million and $18.8
million for 2000, 1999 and 1998, respectively.
   Depreciation of the Company's real estate asset under capital lease is
included in depreciation expense in the Company's consolidated statements of
cash flows. The balance of the leased asset was as follows:

December 31,
- --------------------------------------------------------------------------------
(dollars in thousands)                                 2000          1999
- --------------------------------------------------------------------------------
Buildings and building improvements                 $ 11,574      $ 11,574
Less accumulated depreciation                          1,933           232
- --------------------------------------------------------------------------------
Net buildings and building improvements
    under capital lease                             $  9,641      $ 11,342
================================================================================

   As of December 31, 2000, the Company had both committed and uncommitted bank
lines of credit. These lines of credit could be withdrawn if the Company failed
to comply with the covenants established in the credit agreements. Commitment
fees on the committed lines of credit range from six and one-half to seven
basis points.
   The Company's committed lines of credit for $450.0 million were available for
borrowing and as support for its $150.0 million commercial paper program. The
average amount drawn on these lines during 2000 was $18.8 million at a
weighted-average interest rate of 6.26%. As of December 31, 2000, no amounts
were outstanding under these lines of credit. The average amount drawn on these
lines during 1999 was $12.7 million at a weighted-average interest rate of
6.10%. As of December 31, 1999, $60.0 million was outstanding under these lines
of credit at an interest rate of 6.39%. The average amount of commercial paper
outstanding during 2000 was $6.2 million at a weighted-average interest rate of
6.56%. No commercial paper was issued during 1999. There was no outstanding
commercial paper at December 31, 2000 or 1999.
   The Company's uncommitted bank lines of credit for $35.0 million were
available at variable interest rates. The average amount drawn on these lines
during 2000 was $33,000 at a weighted-average interest rate of 6.38%. The
average amount drawn on these lines during 1999 was $1.1 million at a
weighted-average interest rate of 5.12%. As of December 31, 2000 and 1999 there
was no outstanding balance under these lines of credit.
   The Company has a shelf registration in place for the issuance of up to
$300.0 million in medium-term notes. Such notes could be used for general
corporate purposes, including working capital, capital expenditures, possible
acquisitions and repayment or repurchase of outstanding indebtedness and other
securities of the Company. As of December 31, 2000 and 1999, no such notes were
issued or outstanding.
   Absent certain defined events of default under a $150.0 million committed
credit facility and the indenture related to its outstanding 8.55% unsecured and
unsubordinated notes due February 15, 2001, there are no significant contractual
restrictions on the ability of the Company to pay cash dividends.


NOTE 13

COMMON STOCK PURCHASE RIGHTS

On February 5, 1988, the Company declared a distribution to shareholders of
record on February 22, 1988, of one common stock purchase right for each
outstanding share of common stock. These rights were governed by the terms and
conditions of a rights agreement entered into by the Company as of February 12,
1988. That agreement was amended and restated as of January 31, 1997 and further
amended as of January 21, 2000 (Restated Agreement).
   Pursuant to the Restated Agreement, upon the occurrence of certain events,
each right will entitle the holder to purchase one share of common stock at an
exercise price of $150. In certain circumstances described in the Restated
Agreement, if (i) any person becomes the beneficial owner of 15% or more of the
Company's common stock, (ii) the Company is acquired in a merger or other
business combination or (iii) upon the occurrence of other events, each right
will entitle its holder to purchase a number of shares of common stock of the
Company, or the acquirer or the surviving entity if the Company is not the
surviving corporation in such a transaction. The number of shares purchasable
will be equal to the exercise price of the right divided by 50% of the
then-current market price of one share of common stock of the Company, or other
surviving entity (i.e., at a 50% discount), subject to adjustments provided in
the Restated Agreement. The rights expire January 31, 2007, and may be redeemed
by the Company at a price of $.01 per right at any time prior to the occurrence
of the circumstances described above.


42     Deluxe Corporation   *   2000 Annual Report
<PAGE>


NOTE 14

SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Accumulated Other
                                                                                                         Comprehensive Income
                                                                                                     ----------------------------
                                                                                                         Unrealized
                                                               Additional                            gain (loss) on    Cumulative
                                                     Common       paid-in      Retained      Unearned    marketable   translation
(dollars in thousands)                               shares       capital      earnings  compensation    securities    adjustment
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>           <C>           <C>           <C>           <C>
Balance, December 31, 1997                        $  81,326     $   4,758     $ 525,302     $    (649)    $      --     $    (489)
Net income                                               --            --       143,063            --            --            --
Cash dividends                                           --            --      (119,682)           --            --            --
Common stock issued                                     988        31,613            --            --            --            --
Common stock retired                                 (1,833)      (29,549)      (28,941)           --            --            --
Unearned compensation                                    --            --            --           411            --            --
Unrealized fair value adjustments                        --            --            --            --            70            --
Translation adjustment                                   --            --            --            --            --           177
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998                           80,481         6,822       519,742          (238)           70          (312)
Net income                                               --            --       203,022            --            --            --
Cash dividends                                           --            --      (113,535)           --            --            --
Common stock issued                                   1,112        35,846            --            --            --            --
Common stock retired                                 (9,573)      (42,668)     (262,612)           --            --            --
Unearned compensation                                    --            --            --           191            --            --
Unrealized fair value adjustments                        --            --            --            --          (485)           --
Translation adjustment                                   --            --            --            --            --          (555)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999                           72,020            --       346,617           (47)         (415)         (867)
Net income                                               --            --       161,936            --            --            --
Adjustment for lag in financial reporting (1)            --            --        (1,125)           --            --            --
Cash dividends                                           --            --      (107,195)           --            --            --
Distribution of subsidiary stock
    to shareholders (see Note 3)                         --            --      (253,990)           --            --            --
Gain on sale of subsidiary stock (2)                     --        30,495            --            --            --            --
Common stock issued                                     583        14,938            --            --            --            --
Common stock retired                                    (48)       (1,190)           --            --            --            --
Unearned compensation                                    --            --            --           (13)           --            --
Unrealized fair value adjustments                        --            --            --            --           242            --
Translation adjustment                                   --            --            --            --            --           867
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000                        $  72,555     $  44,243     $ 146,243     $     (60)    $    (173)    $      --
==================================================================================================================================
</TABLE>

(1) Prior to 2000, for purposes of consolidating a subsidiary based in India,
    the Company used financial statements with a November 30 fiscal period end.
    Effective January 1, 2000, this subsidiary changed its reporting dates to
    coincide with the rest of the Company. The results of operations for this
    subsidiary for the month of December 1999 were excluded from the Company's
    consolidated statements of income and were reflected as an adjustment to
    retained earnings during the first quarter of 2000.
(2) In June 2000, the Company's subsidiary, eFunds, sold 5.5 million shares of
    its common stock to the public. Prior to this initial public offering (IPO),
    the Company owned 40 million, or 100%, of eFunds' total outstanding shares.
    Subsequent to the IPO, the Company continued to own 40 million shares of
    eFunds, representing 87.9% of eFunds' total outstanding shares. Proceeds
    from the offering, based on the offering price of $13.00 per share, totaled
    $71.5 million ($64.5 million, net of offering expenses). The difference of
    $30.5 million between the net proceeds from the offering and the carrying
    amount of the Company's investment in eFunds was recorded as additional
    paid-in capital. No tax expense or deferred tax was provided on this
    amount, as the Company disposed of its ownership in eFunds in a tax-free
    manner (see Note 3).


NOTE 15

BUSINESS SEGMENT INFORMATION

During 2000, the Company operated two business segments, based on the nature of
the products and services offered by each: Paper Payment Systems and eFunds.
Paper Payment Systems provides checks and related products to individuals and
small businesses located in the United States. eFunds provides transaction
processing and risk management services to financial institutions, retailers,
electronic funds transfer networks, e-commerce providers and government
agencies and also offers information technology consulting and business process
management services. In December 2000, the Company disposed of its ownership in
eFunds via a spin-off transaction (see Note 3). The results of eFunds are
reflected


                                             Enhancing shareholder value      43
<PAGE>


as discontinued operations in the Company's consolidated financial statements
and thus, are excluded from the Company's segment information. Prior year
information for the Paper Payment Systems segment has been restated to include
unallocated corporate expenses.
   During 1999 and 1998, the Company also operated NRC Holding Corporation, a
collections business. This business was sold in December 1999 (see Note 6). The
results of this business are not included in the Company's reportable segments,
but are included in the Company's reconciliations to consolidated amounts.
   During 1998, the Company operated two additional segments: Direct Response
and Deluxe Direct. The sales of both of these businesses were completed in
December 1998 (see Note 6). Direct Response provided direct marketing, customer
database management, and related services to the financial industry and other
businesses. Deluxe Direct primarily sold greeting cards, stationery, and
specialty paper products through direct mail.
   None of the Company's reportable segments operated internationally during
2000 or 1999. The Company's Deluxe Direct segment did have operations in the
United Kingdom during 1998. These operations generated revenue of $1.2 million
during 1998. No single customer of the Company accounted for more than 10% of
revenue in 2000, 1999 or 1998.
   The accounting policies of the segments are the same as those described in
Note 1. During 1998, corporate expenses were allocated to the segments as a
fixed percentage of segment revenues. This allocation included expenses for
various support functions such as human resources, information services and
finance and included depreciation and amortization expense related to corporate
assets. The corresponding corporate asset balances were allocated to the
segments. Most inter-segment sales were based on current market pricing.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                                                  Reportable Business Segments
                                       -----------------------------------------------
                                                 Paper          Direct          Deluxe
(dollars in thousands)                 Payment Systems        Response          Direct      All Others    Consolidated
- ----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>             <C>             <C>             <C>
Revenue from external customers:
   2000                                     $1,262,712      $       --      $       --      $       --      $1,262,712
   1999                                      1,239,724              --              --         124,074       1,363,798
   1998                                      1,285,728          42,662         223,906         121,419       1,673,715
- ----------------------------------------------------------------------------------------------------------------------
Intersegment sales:
   2000                                             --              --              --              --              --
   1999                                             --              --              --              --              --
   1998                                          1,808             722              --             350           2,880
- ----------------------------------------------------------------------------------------------------------------------
Operating income (loss):
   2000                                        277,310              --              --              --         277,310
   1999                                        296,213              --              --           2,021         298,234
   1998                                        271,780         (22,573)          5,047           3,640         257,894
- ----------------------------------------------------------------------------------------------------------------------
Depreciation and amortization expense:
   2000                                         68,570              --              --              --          68,570
   1999                                         58,991              --              --           2,050          61,041
   1998                                         53,984           2,213              --           5,957          62,154
- ----------------------------------------------------------------------------------------------------------------------
Total assets:
   2000                                        649,469              --              --              --         649,469
   1999                                        710,402              --              --         194,963         905,365
   1998                                        919,264              --              --         158,136       1,077,400
- ----------------------------------------------------------------------------------------------------------------------
Capital purchases:
   2000                                         48,483              --              --              --          48,483
   1999                                         73,458              --              --           3,337          76,795
   1998                                         80,426             602           1,623           8,156          90,807
======================================================================================================================
</TABLE>


44     Deluxe Corporation   *   2000 Annual Report
<PAGE>


   All Others total assets as of December 31, 1999 represents the net assets of
discontinued operations (see Note 3). All Others total assets as of December 31,
1998 includes net assets of discontinued operations of $89.4 million and the
assets of the Company's collections business.
   The Company's revenue by product was as follows:

- --------------------------------------------------------------------------------
(dollars in thousands)                  2000           1999           1998
- --------------------------------------------------------------------------------
Checks and related services         $1,126,249     $1,113,143     $1,140,236
Other printed products                  21,519         23,757         25,659
Accessories                            114,944        102,824        119,833
Divested businesses                         --        124,074        387,987
- --------------------------------------------------------------------------------
Total revenue                       $1,262,712     $1,363,798     $1,673,715
================================================================================


NOTE 16

ADDITIONAL DISCONTINUED OPERATIONS DISCLOSURES

SIGNIFICANT ACCOUNTING POLICIES:

CAPITALIZATION OF SOFTWARE DEVELOPED FOR RESALE: The Company's discontinued
operations capitalized costs of software developed for licensing and resale once
technological feasibility had been established. Costs incurred prior to
establishing technological feasibility were expensed as incurred. Technological
feasibility was established upon completion of all planning, designing, coding
and testing activities that were necessary to determine that a product could be
produced to meet its design specifications, including functions, features and
technical performance requirements. Capitalization of costs ceased when the
product was available for general release to customers. Such costs were
amortized on a product-by-product basis, but no longer then five years. The
carrying value of software developed for resale was reviewed in accordance with
the Company's policy on impairment of long-lived assets and intangibles.
   In some situations, customers did not take possession of the software.
Instead, it remained installed on the Company's hardware and customers accessed
it as needed. The software utilized under these arrangements was also sold to
customers. Thus, the development costs of these software products were accounted
for under the Company's policy on capitalization of software developed for
resale.

TRANSLATION ADJUSTMENT: The financial position and results of operations of
international subsidiaries were measured using local currencies as the
functional currencies. Assets and liabilities of these operations were
translated at the exchange rate in effect at the balance sheet date. Income
statement accounts were translated at the average exchange rate during the year.
Translation adjustments arising from the use of differing exchange rates from
period to period were included in accumulated other comprehensive income in the
shareholders' equity section of the consolidated balance sheets. After the
spin-off of discontinued operations in December 2000 (see Note 3), the Company
no longer operates international subsidiaries.

REVENUE RECOGNITION: Transaction processing and service fees were recognized in
the period that the service was performed. These services consisted of
processing customers' electronic debit transactions through electronic funds
transfer networks and settling the funds with the financial institutions
involved in the transaction. Additionally, these services included monitoring
automated teller machines (ATM) and point-of-sale devices to alert the
customers when potential problems occurred. These fees were charged on a per
transaction basis, depending on the contractual arrangement with the customer.
Government services fees were recognized in the period services were provided
based on monthly fees per benefits recipient.
   Decision support fees were recognized as revenue in the period the services
were provided. Decision support services consisted of new account applicant and
check verification screenings to manage the risk associated with account
openings and check acceptance. Decision support fees were based on the number of
inquiries against the databases used for screening purposes or monthly fees
based on the aggregate dollar value of checks authorized by the retailer,
depending on the product and service.
   Software license fees for standard software products were recognized at the
point when delivery occurred, the license fee was fixed and determinable,
collectibility was probable and evidence of the arrangement existed. License
fees were charged based on modules purchased by the customer. In some
situations, customers did not take possession of the software. Instead, it
remained installed on the Company's hardware and customers accessed it as
needed. Revenue in these situations was recognized on a fee-for-service basis.


                                             Enhancing shareholder value      45
<PAGE>


   Software maintenance and support revenues were recognized ratably over the
term of the contract, and/or as the services were provided. Support services,
such as customization of standard software modules, were charged on a time and
materials basis and were recognized as hours were completed.
   Revenue for information technology consulting and business process management
services were generally recognized under two methods, depending on contractual
terms. Under the time and materials method, revenue was based on a fee per hour
basis and was recognized as hours were completed. Under the fixed contract
method, a pre-set fee was agreed upon for a project, and revenue was recognized
proportionately to the percentage completion of the project.

LONG-TERM SERVICE CONTRACTS: Long-term service contracts are definitive
agreements to provide services over a period of time in excess of one year and
with respect to which the Company has no contractual right to adjust the prices
or terms at or on which its services are supplied during the term of the
contract. The Company's long-term service contracts were for transaction
processing and business process management services provided by discontinued
operations. Total revenues for some long-term service contracts could vary
based on the demand for services. Revenues on long-term service contracts were
recognized under the applicable revenue recognition policy outlined above.
Expenses were recognized when incurred, with the exception of installation
costs. Under the discontinued operations' long-term service contracts,
installation costs were not recovered at the time of installation. Rather, they
were factored into billing rates over the term of the contract. Accordingly,
installation costs for long-term service contracts were initially capitalized
and then amortized over the life of the contract. Any equipment and software
purchased to support a long-term service contract was capitalized and
depreciated or amortized over the life of the related contract or the life of
the asset, whichever was shorter.
   In determining the profitability of a long-term service contract, only
direct and allocable indirect costs associated with the contract were included
in the calculation. The appropriateness of allocations of indirect costs
depended on the circumstances and involved the judgment of management, but such
costs could have included the costs of indirect labor, contract supervision,
tools and equipment, supplies, quality control and inspection, insurance,
repairs and maintenance, depreciation and amortization and, in some
circumstances, support costs. The method of allocating any indirect costs
included in the analysis was also dependent upon the circumstances and the
judgment of management, but the allocation method was systematic and rational.
Selling, general and administrative costs were not included in the analysis.
Provisions for estimated losses on long-term service contracts, if any, were
made in the period in which the loss first became probable and reasonably
estimable. Projected losses were based on management's best estimates of a
contract's revenue and costs. Actual losses on individual long-term service
contracts were compared to the loss projections periodically, with any changes
in the estimated total contract loss recognized as they became probable and
reasonably estimable.
   Certain direct costs associated with electronic benefits transfer (EBT)
contracts were common to a number of contracts and were attributed to each
contract based on its use of the services associated with these common direct
costs. Revenues, case counts or other applicable statistics were used to
attribute these costs to individual contracts.
   In the event an asset impairment loss was recognized on long-lived assets
used to support a long-term service contract, the original estimation of the
contract's costs was revised to reduce the depreciation and amortization
associated with the impaired assets accordingly.

RESULTS OF DISCONTINUED OPERATIONS:

Revenue and loss from discontinued operations were as follows:

Year Ended December 31,
- --------------------------------------------------------------------------------
(dollars in thousands)                          2000        1999        1998
- --------------------------------------------------------------------------------
Revenue from external customers               $358,609    $293,502    $265,934
Pre-tax income (loss) from operations
   of discontinued operations before
   measurement date                           $ 10,402    $  2,073    $(13,390)
Pre-tax costs of spin-off                      (16,786)         --          --
Income tax expense (benefit)                     1,152       3,372      (2,887)
- --------------------------------------------------------------------------------
Net loss from discontinued operations         $ (7,536)   $ (1,299)   $(10,503)
================================================================================


46     Deluxe Corporation   *   2000 Annual Report
<PAGE>


   Pre-tax costs of the spin-off are net of pre-tax income of $2.2 million for
the results of discontinued operations subsequent to the November 30, 2000
measurement date. This is the date on which the Company's board of directors
approved the spin-off. Costs of the spin-off also include amounts due to
officers of the Company under executive employment agreements of $7.2 million,
losses of $2.9 million on disposals of infrastructure assets not usable by the
Company or by the discontinued operations, as well as legal, consulting and
accountants fees.
   In connection with the spin-off, the Company and eFunds entered into various
agreements that define their relationship after the separation. The Company has
agreed to indemnify eFunds for future losses arising from any litigation based
on the conduct of the discontinued operations' EBT and medical eligibility
verification businesses prior to eFunds' initial public offering in June 2000
(see Note 14), and from certain future losses on identified loss contracts. The
maximum amount of litigation and contract losses for which the Company will
indemnify eFunds is $14.6 million. The Company has also entered into contracts
with eFunds for the purchase of application development, support and repair
services and business process management services. The Company expects to pay
eFunds approximately $50.0 million per year for these services through 2004. The
Company also agreed to provide eFunds the right, through 2001, to use the system
through which the Company's check printing customers order products in order
that eFunds may deliver its ChexSystems products. The Company will receive
approximately $3.9 million from eFunds in 2001 for providing this right.
Additionally, the two companies entered into agreements addressing such matters
as data sharing, real estate and tax sharing.

RESTRUCTURING CHARGES:

During 2000, the Company's results of discontinued operations includes
restructuring charges of $0.6 million for administrative reductions. These
charges assumed the termination of 31 employees.
   During 1999, the Company's results of discontinued operations includes
reversals of restructuring charges of $2.4 million relating to the Company's
1998 initiative to reduce SG&A expense and its 1996 plan to reduce its
international workforce. The reduction in the SG&A expense initiative accrual
was due to higher than anticipated attrition, resulting in severance payments to
37 fewer employees than originally anticipated. Also, prior to 1999, the Company
was planning on divesting its international operations. In 1999, the Company
decided to retain these operations, thus, planned reductions within that
business were canceled.
   During 1998, the Company's results of discontinued operations includes
restructuring charges of $3.2 million for severance associated with the
Company's initiative to reduce SG&A expense. The Company had anticipated
eliminating 76 positions in various support functions within sales, marketing,
finance, human resources and information services. Also during 1998, the results
of discontinued operations includes the reversal of $1.0 million of a 1996
restructuring charge. The 1996 charge related to planned reductions in various
international support functions. Due to higher than anticipated attrition, it
was necessary to reduce this reserve.

The following table summarizes the changes in discontinued operations
restructuring reserves during 2000, 1999 and 1998:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
(dollars in millions)                   2000                      1999                      1998
- -------------------------------------------------------------------------------------------------------
                                          Number of                 Number of                 Number of
                                          employees                 employees                 employees
                                  Amount   affected         Amount   affected         Amount   affected
- --------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>         <C>          <C>          <C>           <C>
Balance-beginning of year         $  1.2          6         $  4.7        186         $  4.6        174
Adjustments to accruals               .6         31           (2.4)      (162)           2.2         31
Severance paid                      (1.4)       (28)          (1.1)       (18)          (2.1)       (19)
Spin-off                            (0.4)        (9)            --         --             --         --
- --------------------------------------------------------------------------------------------------------
Balance-end of year               $   --         --         $  1.2          6         $  4.7        186
========================================================================================================
</TABLE>


                                             Enhancing shareholder value      47
<PAGE>


IMPAIRMENT LOSSES:

During 1998, the Company's results of discontinued operations includes
impairment charges of $26.3 million to write-down the carrying value of the
long-lived assets of the EBT business. The assets consisted of point-of-sale
equipment, internal-use software and capitalized installation costs. The Company
concluded that the operating losses incurred by this business would continue.
This was primarily due to the fact that the variable costs associated with
supporting benefit recipient activity were higher than originally anticipated
and actual transaction volumes were below original expectations. In calculating
the impairment charges, the Company determined that the assets utilized by this
business had no fair market value. The point-of-sale equipment was purchased via
capital leases. The lease buy-out prices for the equipment plus the
deinstallation costs exceeded the amount equipment resellers were willing to pay
for the equipment. The utility of the internal-use software was limited to its
use in supporting the EBT business, and the installation costs could not be
resold. Thus, the long-lived assets and intangibles of this business were
reduced to a carrying value of zero.

CONTRACT LOSSES:

During 2000, 1999 and 1998, the Company's results of discontinued operations
includes charges for expected future losses on the long-term service contracts
of the EBT business.
   During 2000, net contract loss charges of $9.7 million were recorded. In
April 2000, the Company completed negotiations with the prime contractor for a
state coalition for which the Company's discontinued operations provides EBT
services. Prior to this, the Company and the prime contractor were operating
without a binding, legally enforceable contract. The Company increased its
accrual for expected future losses on long-term service contracts by $12.2
million to reflect the fact that there was now a definitive agreement with this
contractor. Offsetting this charge was the reversal of $2.5 million of
previously recorded contract loss accruals. These reversals resulted from
productivity improvements and cost savings from lower than anticipated
telecommunications and interchange expenses.
   During 1999, contract loss charges of $8.2 million were recorded. A majority
of the charges resulted from the conclusion of negotiations with a prime
contractor regarding the timing and costs of transitioning switching services
from the Company to a new processor. Also, lower than projected actual
transaction volumes (primarily related to states fully rolled-out in 1999)
contributed to changes in the estimates underlying the charges recorded in 1998.
   During 1998, contract loss charges of $14.7 million were recorded. Due to a
continuing strong economy, record low unemployment and welfare reform, the
actual transaction volumes and expected future revenues of the EBT business were
well below original expectations. Additionally, actual and expected future
telecommunications, installation, help desk and other costs were significantly
higher than originally anticipated. These factors resulted in expected future
losses on existing EBT contracts.

BUSINESS COMBINATIONS:

2000 ACQUISITION: During March 2000, the Company paid cash of $20.0 million for
an approximately 24% interest in a limited liability company that provides ATM
management and outsourcing services to retailers and financial institutions. The
Company's share of the results of this business subsequent to its acquisition
date are included in discontinued operations in the Company's consolidated
statements of income. The difference of $20.0 million between the carrying value
of the investment and the underlying equity in the net assets of the limited
liability company was being amortized over 15 years.


48     Deluxe Corporation   *   2000 Annual Report
<PAGE>


1999 ACQUISITIONS: During February 1999, the Company acquired all of the
outstanding shares of eFunds Corporation of Tustin, California for $13.0 million
in cash. This company provides electronic check conversion and electronic funds
transfer solutions to financial services companies and retailers. The
acquisition was accounted for under the purchase method of accounting. The
results of this business subsequent to its acquisition date are included in
discontinued operations in the Company's consolidated statements of income. The
purchase price was allocated to the assets acquired and liabilities assumed
based on their fair values on the date of purchase. Total cost in excess of net
assets acquired in the amount of $15.7 million was being amortized over 10
years.
   During April 1999, the Company acquired the remaining 50% ownership interest
in HCL-Deluxe, N.V. for $23.4 million in cash. The joint venture, which the
Company entered into with HCL Corporation of India in 1996, commenced operations
in September 1997. The company provides information technology consulting and
business process management services to financial services companies and to all
of the Company's businesses. The acquisition was accounted for under the
purchase method of accounting. The entire results of this business from the date
the Company acquired 100% ownership are included in discontinued operations in
the Company's consolidated statements of income. Prior to this, the Company
recorded its 50% ownership of the joint venture's results under the equity
method of accounting. These results are also included in discontinued operations
in the Company's consolidated statements of income. The purchase price was
allocated to the assets acquired and liabilities assumed based on their fair
values on the date of purchase. Total cost in excess of net assets acquired in
the amount of $24.9 million was being amortized over 15 years.

LEGAL PROCEEDINGS:

During 1997, a judgment was entered against the Company in the U.S. District
Court for the Western District of Pennsylvania. The case was brought against the
Company by Mellon Bank (Mellon) in connection with a potential bid to provide
EBT services for the Southern Alliance of States. In 1997, the Company recorded
a pre-tax charge of $40.0 million to reserve for this judgment and other
related costs. In 1998, Mellon's motion for prejudgment interest was denied by
the district court. As a result, the Company's 1998 results of discontinued
operations includes a reversal of $4.2 million of the $40.0 million liability.
   In January 1999, the United States Court of Appeals for the Third Circuit
affirmed the judgment of the district court and the Company paid $32.2 million
to Mellon in February 1999. The portion of the reserve remaining after the
payment of this judgment ($2.1 million) was reversed in 1999.


NOTE 17

SUBSEQUENT EVENTS (UNAUDITED)

In January 2001, the Company's board of directors approved a stock repurchase
plan, authorizing the repurchase of up to 14 million shares of its common stock.
   In February 2001, the Company's $100.0 million of 8.55% unsecured and
unsubordinated notes became payable. The Company paid these notes by utilizing
cash on hand.
   In March 2001, the Company increased the amount of its commercial paper
program to $300.0 million.


                                             Enhancing shareholder value      49
<PAGE>


INDEPENDENT AUDITORS' REPORT



Deluxe Corporation

   We have audited the accompanying consolidated balance sheets of Deluxe
Corporation and its subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of income, comprehensive income, and cash flows
for each of the three years in the period ended December 31, 2000. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
   We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
   In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Deluxe Corporation and its
subsidiaries at December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States of America.


/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

Minneapolis, Minnesota
January 25, 2001


50     Deluxe Corporation   *   2000 Annual Report
<PAGE>


SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
2000 QUARTER ENDED
- -------------------------------------------------------------------------------------------------------------------

(dollars in thousands, except per share amounts)           March 31        June 30   September 30    December 31
- -------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>            <C>            <C>            <C>
Revenue                                                    $321,578(1)    $322,250(1)    $316,084(1)    $302,800
Gross profit                                                206,207(1)     209,555(1)     202,876(1)     192,817
Income from continuing operations                            42,024         42,644         46,964         37,840(3)
Per share of common stock:
   Continuing operations - basic                                .58            .59            .65            .52(3)
   Continuing operations - diluted                              .58            .59            .65            .52(3)
   Net income - basic                                           .61            .48(2)         .68            .46(4)
   Net income - diluted                                         .61            .48(2)         .68            .46(4)
   Cash dividends                                               .37            .37            .37            .37
===================================================================================================================

<CAPTION>
1999 QUARTER ENDED
- -------------------------------------------------------------------------------------------------------------------

(dollars in thousands, except per share amounts)           March 31        June 30   September 30    December 31
- -------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>            <C>            <C>            <C>
Revenue                                                    $347,844(1)    $337,481(1)    $341,321(1)    $337,152(1)
Gross profit                                                203,320(1)     196,799(1)     201,049(1)     206,718(1)
Income from continuing operations                            43,554         47,904         49,319         63,544(5)
Per share of common stock:
   Continuing operations - basic                                .54            .62            .65            .86(5)
   Continuing operations - diluted                              .54            .61            .65            .86(5)
   Net income - basic                                           .60            .61            .65            .79(6)
   Net income - diluted                                         .60            .61            .65            .79(6)
   Cash dividends                                               .37            .37            .37            .37
===================================================================================================================
</TABLE>

(1) As a result of the spin-off of eFunds, these figures differ from those
    previously reported in the Company's Quarterly Reports on Form 10-Q and the
    Company's Annual Report on Form 10-K for the year ended December 31, 1999.
    The results of eFunds are reflected as discontinued operations in the
    Company's consolidated financial statements for all periods presented.

(2) 2000 second quarter results include charges of $9.7 million for additional
    expected future losses on existing EBT contracts of discontinued operations,
    charges of $7.2 million for payments due under executive employment
    agreements due to the planned separation of eFunds and net restructuring
    reversals of $1.6 million.

(3) 2000 fourth quarter results from continuing operations include asset
    impairment charges of $9.7 million relating to a discontinued e-commerce
    initiative.

(4) 2000 fourth quarter results include asset impairment charges of $9.7 million
    relating to a discontinued e-commerce initiative and costs of $9.1 million
    relating to the spin-off of eFunds.

(5) 1999 fourth quarter results from continuing operations include a gain of
    $19.8 million on the sale of its collections businesses and the reversal of
    $5.6 million of restructuring reserves.

(6) 1999 fourth quarter results include a gain of $19.8 million on the sale of
    its collections businesses, the reversal of $6.0 million of restructuring
    reserves and charges of $8.2 million to reserve for additional expected
    future losses on existing EBT contracts of discontinued operations.


                                             Enhancing shareholder value      51
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>9
<FILENAME>deluxe010420_ex21-1.txt
<DESCRIPTION>EXHIBIT 21.1 SUBSIDIARIES OF THE REGISTRANT
<TEXT>

                                                                    Exhibit 21.1


                         DELUXE CORPORATION SUBSIDIARIES

Designer Checks Inc. (Alabama)
Direct Checks Unlimited, Inc. (Colorado)
DLX Check Printers, Inc. (Minnesota)
DLX Check Texas, Inc. (Minnesota)
Deluxe Financial Services, Inc. (Minnesota)
Deluxe Financial Services Texas, L.P. (Texas)
Deluxe Mexicana S.A. de C.V. (Mexico) (50% owned)
PPS Holding Company, Inc. (Minnesota)
PPS Services 1 Inc. (Minnesota)
PPS Services 2 Inc. (Minnesota)
Paper Payment Services LLC (Minnesota)
Plaid Moon Inc. (Minnesota)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>10
<FILENAME>deluxe010420_ex24-1.txt
<DESCRIPTION>EXHIBIT 24.1 POWER OF ATTORNEY
<TEXT>

                                                                    Exhibit 24.1


                                POWER OF ATTORNEY

Each of the undersigned directors and officers of DELUXE CORPORATION, a
Minnesota corporation, hereby constitutes and appoints Lawrence J. Mosner,
Douglas J. Treff, Katherine L. Miller and Anthony C. Scarfone his true and
lawful attorneys-in-fact, and each of them, with full power to act without the
other, to sign the Company's annual report on Form 10-K for the year ended
December 31, 2000, and any and all amendments to such report, and to file the
same and any such amendment, with any exhibits, and any other documents required
in connection with such filing, with the Securities and Exchange Commission
under the provisions of the Securities Exchange Act of 1934.

                                                       Date

/s/ Lawrence J. Mosner                                 3/16/01
- ---------------------------------------------------------------
Lawrence J. Mosner, Director and
Principal Executive Officer

/s/ Douglas J. Treff                                   3/16/01
- ---------------------------------------------------------------
Douglas J. Treff, Principal Financial
Officer and Principal Accounting Officer

/s/ Ronald E. Eilers                                   3/16/01
- ---------------------------------------------------------------
Ronald E. Eilers, Director

/s/ Barbara B. Grogan                                  3/16/01
- ---------------------------------------------------------------
Barbara B. Grogan, Director

/s/ Stephen P. Nachtsheim                              3/16/01
- ---------------------------------------------------------------
Stephen P. Nachtsheim, Director

/s/ Calvin W. Aurand, Jr.                              3/16/01
- ---------------------------------------------------------------
Calvin W. Aurand, Jr., Director

/s/ Donald R. Hollis                                   3/16/01
- ---------------------------------------------------------------
Donald R. Hollis, Director

/s/ Robert C. Salipante                                3/16/01
- ---------------------------------------------------------------
Robert C. Salipante, Director

/s/ Daniel D. Granger                                  3/16/01
- ---------------------------------------------------------------
Daniel D. Granger, Director

/s/ Cheryl E. Mayberry                                 3/16/01
- ---------------------------------------------------------------
Cheryl E. Mayberry, Director

/s/ Charles A. Haggerty                                3/16/01
- ---------------------------------------------------------------
Charles A. Haggerty, Director
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>11
<FILENAME>deluxe010420_ex99-1.txt
<DESCRIPTION>EXHIBIT 99.1 CAUTIONARY STATEMENTS & RISK FACTORS
<TEXT>

                                                                    Exhibit 99.1


            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     The Private Securities Litigation Reform Act of 1995 ("the Reform Act")
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information. The Company is filing this cautionary
statement in connection with the Reform Act. When used in this Annual Report on
Form 10-K, the Company's Annual Report to Shareholders, in future filings by the
Company with the Securities and Exchange Commission ("the Commission"), in the
Company's press releases and in oral statements made by the Company's
representatives, the words or phrases "should result," "believe", "intend",
"plan", "are expected to," "targeted," "will continue," "will approximate," "is
anticipated," "estimate," "project" or similar expressions are intended to
identify forward-looking statements within the meaning of the Reform Act.

     The Company wishes to caution you that any forward-looking statements made
by or on its behalf are subject to uncertainties and other factors that could
cause such statements to be wrong. Some of these uncertainties and other factors
are listed under the caption "Risk Factors" below (many of which have been
discussed in prior filings with the Commission). Though the Company has
attempted to list comprehensively these important factors, the Company wishes to
caution investors that other factors may prove to be important in affecting
future operating results. New factors emerge from time to time, and it is not
possible for the Company to predict all of these factors, nor can the Company
assess the impact each factor or combination of factors may have on its
business.

     You are further cautioned not to place undue reliance on those
forward-looking statements because they speak only of the Company's views as of
the date the statements were made. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.


                                  RISK FACTORS

     THE PAPER CHECK INDUSTRY OVERALL IS A MATURE INDUSTRY AND IF THE INDUSTRY
DECLINES FASTER THAN EXPECTED, THE COMPANY'S BUSINESS COULD BE HARMED.

     Check printing is, and is expected to continue to be, an essential part of
the Company's business and the principal source of its operating income. The
Company primarily sells checks for personal and small business use and believes
that there will continue to be a substantial demand for these checks for the
foreseeable future. However, according to Company estimates, growth in total
checks written by individuals and small businesses was flat in 2000 compared to
1999, and the total number of personal, business and government checks written
in the United States has been in decline since 1997. The Company believes that
checks written by individuals and small businesses will eventually decline due
to the increasing use of alternative payment methods, including credit cards,
debit cards, smart cards, automated teller machines, direct deposit, electronic
and other bill paying services, home banking applications and Internet-based
payment services. However, the rate and the extent to which alternative payment
methods will achieve consumer acceptance and replace checks cannot be predicted
with certainty. A surge in the popularity of any of these alternative payment
methods could have a material, adverse effect on the demand for checks and a
material, adverse effect on the Company's business, results of operations and
prospects.

     THE COMPANY FACES INTENSE COMPETITION IN ALL AREAS OF ITS BUSINESS.

     Although the Company believes it is the leading check printer in the United
States, it faces considerable competition. In addition to competition from
alternative payment systems, the Company also faces considerable competition
from other check printers in its traditional sales channel through financial
institutions, from direct mail sellers of checks and from sellers of business
checks and forms. Additionally, the Company faces competition from check
printing software vendors, and increasingly, from Internet-based sellers of
checks to individuals and small businesses. From time to time, some of the
Company's competitors have reduced the prices of their products in an attempt to
gain volume. The corresponding pricing pressure placed on the Company has
resulted in reduced profit margins for the Company in the past and similar
pressures can reasonably be expected in the future. The Company cannot assure
you that it will be able to compete effectively against current and future
competitors. Continued competition could result in price reductions, reduced
margins and loss of customers.

<PAGE>


     CONSOLIDATION AMONG FINANCIAL INSTITUTIONS MAY ADVERSELY AFFECT THE
COMPANY'S ABILITY TO SELL ITS PRODUCTS.

     Financial institutions have been undergoing large-scale consolidation,
causing the number of financial institutions to decline. Margin pressures arise
from this consolidation when merged entities seek not only the most favorable
prices formerly offered to the predecessor institutions, but also additional
discounts due to the greater volume represented by the combined entity. This
concentration greatly increases the importance to the Company of retaining its
major customers and attracting significant additional customers in an
increasingly competitive environment. Although the Company devotes considerable
efforts towards the development of a competitively priced, high quality suite of
products and services for the financial services industry, there can be no
assurance that significant customers will not be lost or that any such loss can
be counterbalanced through the addition of new customers or by expanded sales to
the Company's remaining customers.

     FORECASTS INVOLVING FUTURE RESULTS REFLECT VARIOUS ASSUMPTIONS THAT MAY
PROVE TO BE INCORRECT.

     From time to time, representatives of the Company make predictions or
forecasts regarding the Company's future results, including but not limited to,
forecasts regarding estimated revenues, earnings or earnings per share. Any
forecast regarding the Company's future performance reflects various assumptions
which are subject to significant uncertainties, and, as a matter of course, may
prove to be incorrect. Further, the achievement of any forecast depends on
numerous factors which are beyond the Company's control. As a result, the
Company cannot assure you that its performance will be consistent with any
management forecasts or that the variation from such forecasts will not be
material and adverse. You are cautioned not to base your entire analysis of the
Company's business and prospects upon isolated predictions, and are encouraged
to use the entire available mix of historical and forward-looking information
made available by the Company, and other information affecting the Company and
its products and services, including the risk factors discussed in this Exhibit
99.

     In addition, representatives of the Company may occasionally comment
publicly on the perceived reasonableness of published reports by independent
analysts regarding the Company's projected future performance. Such comments
should not be interpreted as an endorsement or adoption of any given estimate or
range of estimates or the assumptions and methodologies upon which such
estimates are based. The methodologies employed by the Company in arriving at
its own internal projections and the approaches taken by independent analysts in
making their estimates are likely different in many significant respects. The
Company expressly disclaims any responsibility to advise analysts or the public
markets of its view regarding the current accuracy of the published estimates of
outside analysts. If you are relying on these estimates, you should pursue your
own independent investigation and analysis of their accuracy and the
reasonableness of the assumptions on which they are based.

     UNCERTAINTIES EXIST REGARDING THE COMPANY'S SHARE REPURCHASE PROGRAM.

     In January 2001, the Company announced that its board of directors had
approved the repurchase of up to 14 million shares of its common stock. The
Company has also indicated that it expects to complete these purchases over 12
to 18 months. Stock repurchase activities are subject to certain pricing
restrictions, stock market forces, management discretion and various regulatory
requirements. As a result, there can be no assurance as to the timing and/or
amount of shares that the Company may repurchase under this share repurchase
program.

     THE COMPANY'S STRATEGIC INITIATIVES MAY COST MORE THAN ANTICIPATED AND MAY
NOT BE SUCCESSFUL.

     The Company is developing and evaluating plans and launching initiatives
for future growth, including the development of additional products and services
and the expansion of Internet commerce capabilities. These plans and initiatives
will involve increased levels of investment. There can be no assurance that the
amount of this investment will not exceed the Company's expectations and result
in materially increased levels of expense.

     The new products and services developed by the Company may not meet
acceptance in the marketplace. Also, Internet commerce initiatives involve new
technologies and business methods and serve new or developing markets. There is
no assurance that these initiatives will achieve targeted revenue, profit or
cash flow levels or result in positive returns on the Company's investment.
Internet commerce is also a relatively recent phenomenon and may not continue to
expand as a medium of commerce.

<PAGE>


     THE SPIN-OFF OF eFUNDS CORPORATION MAY NOT RESULT IN INCREASED SHAREHOLDER
VALUE.

     In December 2000, the Company completed the spin-off of eFunds Corporation
(eFunds). On December 29, 2000, the Company distributed its 40 million shares of
eFunds stock, representing 87.9% of eFunds' then total outstanding shares, to
all Company shareholders of record on December 11, 2000. Each shareholder
received .5514 eFunds share for each Deluxe share owned. Cash was issued in lieu
of fractional shares. There can be no assurance that the separation of the
Company and eFunds will result in increased value to the Company's shareholders
in the long-term for many reasons or that the separation will achieve the
desired levels of efficiency or cost savings in the Company's operations.

     THE COMPANY MAY EXPERIENCE SOFTWARE DEFECTS THAT COULD HARM ITS BUSINESS
AND REPUTATION.

     The Company uses sophisticated software and computing systems. The Company
may experience difficulties in installing or integrating its technologies on
platforms used by its customers or in new environments, such as the Internet.
Errors or delays in the processing of check orders or other difficulties could
result in lost customers, delay in market acceptance, additional development
costs, diversion of technical and other resources, negative publicity or
exposure to liability claims.

     THE COMPANY FACES UNCERTAINTY WITH RESPECT TO FUTURE ACQUISITIONS.

     The Company has acquired complementary businesses in the past as part of
its business strategy and may pursue acquisitions of complementary businesses in
the future. The Company cannot predict whether suitable acquisition candidates
can be acquired on acceptable terms or whether any acquired products,
technologies or businesses will contribute to its revenues or earnings to any
material extent. A significant acquisition could result in the potentially
dilutive issuance of equity securities, the incurrence of contingent liabilities
or debt, or additional amortization expense relating to goodwill and other
intangible assets, and thus, could adversely affect the Company's business,
results of operations and financial condition. Additionally, the success of any
acquisition would depend upon the Company's ability to effectively integrate the
acquired businesses into the Company. The process of integrating acquired
businesses may involve numerous risks, including among others, difficulties in
assimilating operations and products, diversion of management's attention from
other business concerns, risks of operating businesses in which the Company has
limited or no direct prior experience, potential loss of key employees of
acquired businesses or of the Company, potential exposure to unknown liabilities
and possible loss of customers of the Company or of the acquired businesses.

     THE COMPANY FACES RESTRICTIONS ON ITS ABILITY TO ACQUIRE OR ISSUE COMPANY
SHARES.

     Under Section 355(e) of the Internal Revenue Code, the spin-off of eFunds
could be taxable to the Company if 50% or more of the Company's shares are
acquired as part of a plan or series of transactions that include the spin-off.
For this purpose, any acquisitions of the Company's shares within two years
before or after the spin-off are presumed to be part of such a plan, although
the Company may be able to rebut that presumption. As a result of such possible
adverse U.S. federal income tax consequences, the Company may be restricted in
its ability to affect certain acquisitions, issuances of Company shares or other
transactions that would result in a change of control of the Company. Section
355(e) of the Internal Revenue Code is not expected to place limitations on the
stock repurchase program the Company announced in January 2001.

     INCREASED PRODUCTION AND DELIVERY COSTS COULD ADVERSELY AFFECT THE
COMPANY'S OPERATING RESULTS.

     Increases in production costs such as labor and paper could adversely
affect the Company's profitability. In addition, events such as the 1997 United
Parcel Services strike can also adversely impact the Company's margins by
imposing higher delivery costs. Competitive pressures in the check printing
industry may have the effect of inhibiting the Company's ability to reflect any
of these increased costs in the prices of its products.

     THE COMPANY DEPENDS ON A LIMITED SOURCE OF SUPPLY FOR ITS PRINTING PLATE
MATERIAL AND THE UNAVAILABILITY OF THIS MATERIAL COULD HAVE AN ADVERSE EFFECT ON
ITS RESULTS OF OPERATIONS.

     The Company's check printing operations utilize a paper printing plate
material that is available from only a limited number of sources. The Company
believes it has a reliable source of supply for this material and that it
maintains an inventory sufficient to avoid any production disruptions in the
event of an interruption of its supply. In the event, however, that the
Company's current supplier becomes unwilling or unable to supply the required
printing plate material at an acceptable price and the Company is unable to
locate a suitable alternative source within a reasonable time frame, the Company
would be forced to convert its facilities to an alternative

<PAGE>


printing process. Any such conversion would require the unanticipated investment
of significant sums and could result in production delays and loss of business.

     THE COMPANY MAY BE UNABLE TO PROTECT ITS INTELLECTUAL PROPERTY.

     Despite efforts by the Company to protect its intellectual property, third
parties may infringe or misappropriate the Company's intellectual property or
otherwise independently develop substantially equivalent products and services.
The loss of intellectual property protection or the inability to secure or
enforce intellectual property protection could harm the Company's business and
ability to compete. The Company relies on a combination of trademark and
copyright laws, trade secret protection and confidentiality and license
agreements to protect its trademarks, software and know-how. The Company may be
required to spend significant resources to protect its trade secrets and monitor
and police its intellectual property rights.

     Third parties may assert infringement claims against the Company in the
future. In particular, there has been a substantial increase in the issuance of
patents for Internet-related systems and business methods, which may have broad
implications for all participants in Internet commerce. Claims for infringement
of these patents are increasingly becoming a subject of litigation. If the
Company becomes subject to an infringement claim, it may be required to modify
its products, services and technologies or obtain a license to permit its
continued use of those rights. The Company may not be able to do either of these
things in a timely manner or upon reasonable terms and conditions. Failure to do
so could seriously harm the Company's business, operating results and prospects
as a result of lost business, increased expense or being barred from offering
its products or implementing its systems or other business methods. In addition,
future litigation relating to infringement claims could result in substantial
costs to the Company and a diversion of management resources. Adverse
determinations in any litigation or proceeding could also subject the Company to
significant liabilities and could prevent the Company from using or offering
some of its products, services or technologies.

     THE COMPANY IS DEPENDENT UPON eFUNDS FOR CERTAIN SIGNIFICANT INFORMATION
TECHNOLOGY NEEDS.

     The Company has entered into an agreement with eFunds for the provision of
software development, maintenance and support services through March 31, 2005.
In the event that eFunds is not able to provide adequate information technology
services, the Company would be adversely affected. Although the Company believes
that information technology services are available from numerous sources, a
failure to perform by eFunds could cause a disruption in the Company's business
while it obtains an alternative source of supply.

     LEGISLATION RELATING TO CONSUMER PRIVACY PROTECTION COULD HARM THE
COMPANY'S BUSINESS.

     In July 2001, the Company will be subject to regulations implementing the
privacy requirements of a new federal financial modernization law known as The
Gramm-Leach-Bliley Act ("the Act"). The Act requires the Company to develop and
implement policies to protect the security and confidentiality of consumers'
nonpublic personal information and to disclose these policies to consumers
before a customer relationship is established and annually thereafter. These new
regulations could have the effect of increasing the Company's expenses and
otherwise foreclosing future business initiatives.

     The Act does not prohibit state legislation or regulations that are more
restrictive on the collection and use of data. More restrictive legislation or
regulations have been introduced in the past and could be introduced in the
future in Congress and the states. The Company is unable to predict whether more
restrictive legislation or regulations will be adopted in the future. Any future
legislation or regulations could have a negative impact on the Company's
business, results of operations or prospects.

     Laws and regulations may be adopted in the future with respect to the
Internet or e-commerce covering issues such as user privacy. New laws or
regulations may impede the growth of the Internet. This could decrease traffic
to the Company's websites and decrease the demand for the Company's products or
services. Additionally, the applicability to the Internet of existing laws
governing property ownership, taxation, libel and personal privacy is uncertain
and may remain uncertain for a considerable length of time.

     THE INTERNAL REVENUE SERVICE (IRS) MAY TREAT THE SPIN-OFF OF eFUNDS AS
TAXABLE TO THE COMPANY AND TO ITS SHAREHOLDERS IF REPRESENTATIONS MADE TO THE
IRS WERE INACCURATE OR IF UNDERTAKINGS MADE TO THE IRS OR THE REQUIREMENTS OF
THE INTERNAL REVENUE CODE ARE NOT FULFILLED.

     The Company has received confirmation from the IRS that, for U.S. federal
income tax purposes, the spin-off of eFunds is tax-free to the Company and to
its shareholders, except to the extent that cash was received in lieu of
fractional shares. This confirmation

<PAGE>


is premised on a number of representations and undertakings made by Deluxe and
eFunds to the IRS, including representations with respect to each company's
intention not to engage in certain transactions in the future. The spin-off may
be held to be taxable to the Company and to its shareholders who receive eFunds
shares if the IRS determines that any of the representations made are incorrect
or untrue in any respect, or if any undertakings made are not complied with. If
the spin-off is held to be taxable, both the Company and its shareholders who
receive eFunds shares could be subject to a material amount of taxes. eFunds
will be liable to the Company for any such taxes incurred by the Company to the
extent such taxes are attributable to specific actions or failures to act by
eFunds, or to specific transactions involving eFunds following the spin-off. In
addition, eFunds will be liable to the Company for a portion of any taxes
incurred by the Company if the spin-off fails to qualify as tax-free as a result
of a retroactive change of law or other reason unrelated to the action or
inaction of either eFunds or the Company. eFunds may not, however, have adequate
funds to perform its indemnification obligations and such indemnification
obligations are only for the benefit of the Company and not individual
shareholders.

     THE COMPANY MAY BE SUBJECT TO ENVIRONMENTAL RISKS.

     The Company's check printing plants are subject to many existing and
proposed federal and state regulations designed to protect the environment. In
some instances, the Company has owned and operated its check printing plants
before the environmental regulations came into existence. The Company has sold
former check printing plants to third parties and in most instances has agreed
to indemnify the current owner of the facility for on-site environmental
liabilities. Although the Company is not aware of any fact or circumstance which
would require the future expenditure of material amounts for environmental
compliance, if environmental liabilities are discovered at its check printing
plants, it could be required to spend material amounts for environmental
compliance in the future.

     THE COMPANY MAY BE SUBJECT TO SALES AND OTHER TAXES WHICH COULD HAVE
ADVERSE EFFECTS ON ITS BUSINESS.

     In accordance with current federal, state and local tax laws, and the
constitutional limitations thereon, the Company currently collects sales, use or
other similar taxes in state and local jurisdictions where the Company's
direct-to-consumer businesses have a physical presence. One or more state or
local jurisdictions may seek to impose sales tax collection obligations on the
Company and other out-of-state companies which engage in remote or online
commerce. Further, tax law and the interpretation of constitutional limitations
thereon, are subject to change. In addition, any new operations of these
businesses in states where they do not presently have a physical presence could
subject shipments of goods by these businesses into such states to sales tax
under current or future laws. If one or more state or local jurisdictions
successfully asserts that the Company must collect sales or other taxes beyond
its current practices, it could have a material, adverse affect on the Company's
business.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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