**UNITED STATESSECURITIES AND EXCHANGE COMMISSION****Washington, D. C. 20549**

**Form 10-K/A(Amendment No. 1)**

**(Mark One)**

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the fiscal year ended December 31, 2006**

**or**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the transition period from                           to                          **

**Commission file number 1-6352**

**John H. Harland Company**

(Exact name of registrant as specified in its charter)

| **Georgia**                               | ** ** | **58-0278260**       |
|-------------------------------------------|------------|----------------------|
| (State or other  jurisdiction of          |       | (I.R.S. Employer     |
| incorporation or  organization)           |       | Identification  No.) |
|                                      |       |                 |
| **2939  Miller Road, Decatur, Georgia**   | ** ** | **30035**            |
| (Address of  principal executive offices) |       | (Zip Code)           |

 

**(770) 981-9460**(Registrant’s telephone number, including area code)

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

| Title of each class | ** ** | **Name of each exchange on which registered** | ** ** |
|------------------------------------|------------|-----------------------------------------------------------------------------|------------|
| Common Stock $1 par value          |       | New  York Stock Exchange                                                    |       |
| Share Purchase Rights              |       | New  York Stock Exchange                                                    |       |

 

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  x     No  o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o     No  x

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. Yes  x     No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x            Accelerated filer  o              Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  o    No  x

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of the close of business on July 1, 2006 was $1,118,693,415.

The number of shares of the Registrant’s Common Stock outstanding on February 23, 2007 was 25,783,578. 

**E****xplanatory Note:**  This Amendment No. 1 to the Annual Report on Form 10-K of John H. Harland Company (“we”, “us” or the “Company”) for the fiscal year ended December 31, 2006 is being filed on Form 10-K/A solely to provide information required under Item 11—Executive Compensation in Part III—Management.

 

 

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**ITEM 11.               EXECUTIVECOMPENSATION**

**COMPENSATION DISCUSSION ANDANALYSIS**

**Introductionand Business Context**

Harland’s mission is to produce superiorreturns for our shareholders by being the leading provider of products andservices to chosen segments of the financial and educational markets.  Our core strategy consists of the followingprimary elements:

·                  Focus on businesses where we can build and sustain clear competitiveadvantage

·                  Attract and retain the best people, who have a passion for and acommitment to excellence

·                  Continuously innovate our processes, products, and services

·                  Provide our customers with higher quality and better overall value

The executive compensation philosophy, strategy and programs described inthis compensation discussion and analysis reflect and reinforce our mission andbusiness objectives.  We set and maintainsalaries at market competitive levels necessary to attract high calibertalent.  We use short-term incentiveprograms to focus and reward our leaders for achieving near termobjectives.  We use long-term incentivesto similarly focus and reward our leaders for achieving long-term objectivesand to encourage retention of key talent necessary to providing superiorcustomer service and shareholder returns.

**ExecutiveCompensation Philosophy and Core Principles**

The following principles influence the designand administration of our executive compensation program:

·                  *Compensationshould reinforce our  business objectivesand values*

Thedesign and administration of our executive compensation programs communicateand reinforce the Company’s business strategy and operating priorities.  In addition to supporting the “right”outcomes, the compensation program rewards achieving business objectives in the“right” way.

·                  *Compensationopportunity should  permit us to attractand retain highly qualified key executives*

Targetedcompensation opportunities reflect median market practices, with the ability toearn superior pay for superior performance. We believe that this attracts and rewards high quality, entrepreneurialtalent.

·                  *Compensationdelivered should reflect Company performance and shareholder value creation*

Incentive programs are structured with significantupside opportunity and downside risk to achieve pay and performance alignment throughoutthe spectrum of performance outcomes.

**Governance Committee**

TheGovernance Committee of our Board of Directors (the “Committee”) oversees ourexecutive compensation program and is responsible for determining the elementsof the program.  The Committee iscomprised of four of our independent directors, G. Harold Northrop (Chair),William S. Antle III, Richard K. Lochridge and Jesse J. Spikes.  The Committee met six times in 2006, andregularly meets in executive session without members of management present.

*Role of Compensation Consultants*

The Committee hasretained Watson Wyatt & Co. (“Watson Wyatt”) as its executive compensationconsultant.  The scope of Watson Wyatt’swork has primarily been limited to matters of CEO compensation.  The Committee directs the work of thisconsultant and has the sole authority to retain, at our expense, and terminateany compensation consultant.  On mattersof executive officer compensation other than the CEO, the Committee reviewspeer group and other information and analyses prepared by our Human Resourcesdepartment with the assistance of management’s human resources consultant,Mercer Human Resource Consulting (“Mercer”). The work of Mercer is primarily directed by management, subject to theCommittee’s oversight and guidance.  Both consultants work under the direction of apre-defined and pre-approved scope of services, but are not given any limitingdirection as to how their independent work is conducted or presented.  Neither consultant performs any other consultingservices 

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for us, other than certainworker compensation reserve analysis work performed by a valuation groupaffiliated with Mercer.

*PeerGroup Data*

Our annual compensation review process includes ananalysis of peer group data.  The dataare gathered from published compensation surveys and proxy statements of apeer group of comparably sized companies with whom we compete for customers andfor executive talent, as well as comparably sized firms across a wide range ofindustries.  We use different peer groupsfor our CEO, our corporate executive officers and our divisional executiveofficers.  With respect to our CEO, the data is compiled by Watson Wyatt based ondiscussions between the Committee and Watson Wyatt as to the appropriate peergroup companies.  With respect to ourexecutive officers other than the CEO, the data is compiled by Mercer based oninput from management and the consultant and recommended to the Committee as tothe appropriate peer group companies.

The peer groupcompanies considered in analyzing 2006 compensation for our CEO were: AcxiomCorporation, Autodesk Inc., Banta Corporation, Bea Systems Inc., BISYS GroupInc., Bowne & Co., Inc, Cenveo, Inc., CheckFree Corp., ConsolidatedGraphics Inc., Deluxe Corporation, Esco Technologies Inc., Harte-Hanks, Inc.,Jack Henry & Associates Inc, McAfee, Inc., Parametric Technology Corp.,Paxar Corp., Renaissance Learning, Inc., Scholastic Corp, School Specialty,Inc., Standard Register Company and Sybase, Inc.

The peer groupcompanies considered in analyzing 2006 compensation for Charles Carden, ourCFO, Arlene Bates, the head of our human resources group, and John Walters, ourcorporate secretary and former general counsel, were: Acxiom Corporation, BantaCorporation, BISYS Group Inc., Bowne & Co., Inc., CheckFree Corp.,Consolidated Graphics Inc., Deluxe Corporation, eFunds Corporation, Ennis,Inc., Fidelity National Information Services, Fiserv, Inc., Harte-Hanks, Inc.,Jack Henry & Associates Inc., Renaissance Learning, Inc., Scholastic Corp.,School Specialty, Inc. and Standard Register Company.

The peer groupcompanies considered in analyzing 2006 compensation for Jeffrey Heggedahl, thehead of our Printed Products group, were: Bowne & Co., Inc, CadmusCommunications Corporation, Champion Industries, Inc., Consolidated GraphicsInc., Ennis, Inc, Interactive Data Corporation, Journal Register Co., LeeEnterprises, Multi-Color Corporation, Paxar Corporation and Topps Company, Inc.

In each case thepeer group companies were selected because they are among the significantcompetitors in our Printed Products, Software and Education businesses, or, inthe case of Mr. Heggedahl, comparable size companies in the Printed Productsarea.

**Elementsof our Executive Compensation Program**

The elements of compensation for our CEO, CFOand the three other most highly compensated executive officers for 2006,calculated in accordance with SEC rules and regulations (the “named executiveofficers” or “NEOs”) included:

·                  Base salary;

·                  Annual cash incentives;

·                  Long-term equity-based incentives; and

·                  Benefits and perquisites.

We use various methods to determine the amount of each element ofcompensation. *  *Althoughno specific formulas or ratios are used to determine the mix of elements, theCommittee seeks to have a majority of each executive’s total compensationopportunity be performance based with a balance between short-term andlong-term performance emphasis.  Totalcompensation levels are reviewed annually, typically in conjunction with theFebruary meeting of the Committee, with the assistance of the consultants.  In addition, we provide the Committee withcomprehensive tally sheets to ensure a total compensation perspective in makingcompensation decisions.

*Base Salary*

The Committee annually reviews the base salary of each executiveofficer.  Our CEO, with the assistance ofour Senior Vice President—Human Resources, makes recommendations to theCommittee about salaries for executive officers (other than himself). ** **Changesin base salary for executive officers reflect the Committee’s assessment of 

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peergroup data within the appropriate peer group of companies together withindustry surveys, changes in roles and responsibilities and an assessment ofindividual performance.  Our CEO providesthe Committee with his assessment of the other executive officers’ performanceand recommendations with respect to salary increases.

Merit increases are made in accordance with a matrix that provides forpercentage increases based on the executive’s individual performance and thesalary quartile in which his or her base salary falls.  Each executive’s performance is rated “belowexpectations”, “needs further development”, “meets expectations” or “exceedsexpectations”.  A fixed percentageincrease is then applied to the performance rating, depending on locationwithin the salary quartiles.  TheCommittee seeks to target the 50th percentile (as measured by our peer groupand industry surveys) for base pay.  Tothe extent that the base salary for a senior executive exceeds 120% of ablended number represented by broad general industry surveys and the peer group50th percentile market average****for that position, the Committee willfreeze the salary level for the executive and grant a lump sum cash payment forthe year in lieu of a base salary increase.

*AnnualCash Incentives*

Theannual incentive bonus is provided under our Senior Management IncentivePlan.  The components of the plan areestablished at the beginning of each year by the CEO, CFO, business unit headsand senior HR officers, and are then recommended to the Committee.  The Committee approves performance targetsand sets pay-out levels based on the extent to which the targets are met.

TheCommittee establishes performance targets tailored to the area ofresponsibility of individual executives. For our corporate senior executives, performance targets are typicallycompany-wide measures such as earnings per share growth, revenue growth or cashflow.** The Committee ties bonuses for business unitmanagers to the performance of their business units. * *In addition, a portion of theannual incentive bonus is based on the achievement of personal stretchobjectives, reflecting performance above and beyond the scope of normalperformance by our senior managers.

Inestablishing bonus ranges, the Committee seeks to target the 75th percentile (as measured by our peer group andindustry surveys) for target levels of performance, more-than-competitivecompensation for performance above target and less-than-competitivecompensation for performance below target. For performance above or below expectations, incentive awards canrange from 0% to 150% of each individual’s target award (or 200%, in the caseof our CEO).

*2006 Bonus Targets and Determination of BonusesPaid*

In2006, the bonus components for our NEOs(other than Mr. Heggedahl) were earnings per share (50%), operating cash flowminus capital expenditures (20%), total revenue growth (10%) and the attainmentof individual stretch objectives (20%). For Mr. Heggedahl, the bonus was tied to the Printed Products operatingcash flow (25%), Printed Products income (25%), Printed Products revenue growth(10%), consolidated earnings per share (20%) and individual stretch objectives(20%).  We believe this close linkbetween individual incentive opportunity and corporate or business unitperformance appropriately motivates and rewards participants for theircontributions to our success.

Theearnings per share target for 2006 was $2.73; the operating cash flow minus capital expenditures target was $106million; and the consolidated revenue growth target was 10.3%.  Within Harland Printed Products, the operating cash flow target was $140million; the income target was $109 million; and the revenue growth target was7.0%.

InFebruary 2007 the Committee met to determine bonuses earned for 2006performance.  The earnings per sharetarget for 2006 was achieved, after adjusting for the expenses incurred oraccrued in connection with the proposed M & F Worldwide merger (discussedbelow), as was the cash flow target.  Therevenue growth target was not met. Within Printed Products, the cash flow and income targets were achieved,while the revenue growth target was not met.

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*Long-Term Equity-Based IncentiveAwards*

Long-term equity-based incentive awards are designed to serve threepurposes.  First, they promote retentionof our executives who typically must remain employed until the awards vest inorder to obtain an economic benefit from the incentive.  Second, they align the interests of ourexecutives with those of our shareholders. Finally, in addition to retention and alignment, a key consideration inmaking awards is to reward for performance.

The type of equity-based award granted depends on the Committee’sevaluation of, among other things, the effectiveness of the award in aligningthe interests of our executives with those of our shareholders, the financialaccounting treatment of the type of award granted and the tax implications tous and to the executive of the particular type of award.  During 2004 and 2005 the Committee grantedequity awards in the form of time-vested restricted stock.  In 2006 the Committee granted stock optionsto our executives other than the CEO.  TheCommittee granted performance-based restricted stock to the CEO.  In moving to stock options in 2006, theCommittee aimed to tie the long-term incentive more closely to increases in ourstock price.

The Committee determined 2006 grant levels by aligning the rewardopportunity with (a) performance expectations for stock price growth and (b)competitive levels of long-term incentive opportunity for comparable executivesin similar companies.  In determininglong-term incentive grants, the Committee seeks to target the 75th percentile (as measured by our peer group andindustry surveys).  The Committee alsoconsiders individual performance, prior equity awards, current levels of equityincentive and total compensation opportunity when setting annual grant levels.

*Timing of Equity Grants and Delegation of Authority to Make Grants*

The Committee makes annual grants of long-term equity-based incentiveawards to our executives under our shareholder-approved incentive plans.  In addition, the Committee may grant awardsduring the year in connection with new hires, job promotions or an increase inresponsibilities.

Annual grants are typically made in conjunction withregularly-scheduled meetings of the Committee. At those meetings, the Committee approves the equity awards granted toour entire pool of award recipients, including the named executiveofficers.  These annual grants are made on the date the Committee meets to approvethe grants.  Committee meetingsare generally scheduled in advance on an annual basis and are not timed tocoordinate with the release of quarterly earnings or other major corporateannouncements.

The Committee has delegated to the CEO the ability to make interimgrants, under the following guidelines:

·                  The CEO maygrant options on a monthly basis and SARs on a quarterly basis, up to a maximumof 10,000 shares for any single grant. This includes grants to new hires and promotions as well as otherperiodic grants.

·                  The grants aresubject to existing internal guidelines based on employment level.

·                  Grants to ourCEO and his direct reports, including the named executive officers, may be madeonly by the  Committee.

·                  All option grants are made as of thelast business day of the month in which approved, and all SAR grants are madeas of the last business day of the calendar quarter in which approved.

·                  All interimgrants are reported to the Committee at its next meeting.

In the event of anew hire, promotion or other situation where the grant of an award may beappropriate, action is taken by the Committee or by our CEO in accordance withhis delegated authority, as discussed above.

We do not have,nor have we ever had, a plan or practice of timing stock option grants or otherequity awards to coincide with the release of financial or other materialnon-public information.  In accordancewith our shareholder-approved incentive plans, options are granted at theclosing price of our stock on the date of the grant.  We do not backdate the grant of stock optionsto give the recipient the benefit of a lower exercise price.  Grants made by our CEO under his delegatedauthority are made as of the last business day of the month end or quarter,both for administrative convenience and to avoid any possibility of timinggrants to take advantage of market conditions. We do not permit the repricing of outstanding stock options.

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*M & FWorldwide Merger and its Impact on Compensation Arrangements*

On December 19,2006 we entered into an Agreement and Plan of Merger pursuant to which we haveagreed to be acquired by M & F Worldwide Corp.  In connection with the merger, we have agreednot to make any further equity grants. If the merger is consummated, the transaction will be a “change incontrol” for purposes of our compensation plans and agreements and willaccelerate certain outstanding equity awards, as described in the section “Terminationand Change in Control Payments.”

*Benefit*s *and Perquisites*

We provide what we believe to be a competitive package of employeebenefits to our named executive officers. Our 401(k) plan matches 100% of employee contributions on the first 3%of base salary and 50% of the next 2%, up to $15,000.  We also provide an annual discretionaryperformance-based contribution to the 401(k) plan.  We have a Deferred Compensation Plan underwhich we match employee contributions in excess of $15,000.  This plan was terminated in April 2007.  During 2006 we also maintained a EmployeeStock Purchase Plan under which our employees could acquire shares of our stockthrough payroll deductions at a 15% discount from current market prices.  In connection with the proposed M & F Worldwidemerger, we suspended the Employee Stock Purchase Plan in December 2006.

Perquisites and other personal benefits generally comprise only a smallpart of our compensation program.  Ouroverall compensation program is structured in such a manner that the Committeehas not seen a need to provide significant perquisites and other personalbenefits for our named executive officers. We reimburse our named executive officers (other than Mr. Heggedahl, whodoes not participate) for preparation of tax returns and the cost of annualphysical exams.  In addition, wereimburse certain club expenses for Mr. Tuff and Mr. Walters.

*DeferredCompensation and Retirement Benefits*

TheDeferred Compensation Plan, which supplements our 401(k) plan, allowsparticipants to defer from 1% to 20% of annual base salary, once they havecontributed at least $15,000 to the 401(k).  We match 100% of the first 3% of base salary contributed to this planand 50% of the next 2%.  These matchingcontributions vest immediately.  As mentionedabove, this plan was terminated in April 2007.

In2002 we entered into a supplemental retirement agreement with our CEO whichprovides him with an annual retirement benefit of $186,288 at age 65 for 10years.  In connection with the CEO’s 2005employment agreement discussed below, and as an incentive for him to remainwith us, the Committee negotiated an additional supplemental retirement benefitwhich provides for payments ranging from $460,069 to $2,121,532 in the event oftermination of employment prior to December 31, 2009.  See “Nonqualified Deferred Compensation for2006” below.

In 2006 the Committeeapproved a retirement policy under which it has the discretionary authority tovest outstanding stock option and/or restricted stock awards held by anexecutive who retires at age 55 or older with at least 10 years’ service.

**NEO Compensation in 2006**

*Chief Executive Officer*

* *In April 2005, we entered into an employment agreement with our CEO, TimTuff.  This employment agreement replaceda previous employment agreement that would have expired in February 2006, andextended his term of employment through 2009. The Committee, with the assistance of Watson Wyatt, negotiated the termsof the agreement.

Mr. Tuff’s base salaryremained at $750,000 in 2006.  His annualincentive bonus opportunity under our Senior Management Incentive Plan is up to160% of base salary, and for 2006 was targeted at $600,000. After reviewingcorporate performance and Mr. Tuff’s achievement of his personal goals, theCommittee approved a bonus in the amount of $887,520.  The Committee considered our operatingperformance, including achievement of earnings per share goals and operatingcash flow less capital expenditures, and the attainment of 80% of his personalstretch objectives, including a greater-than $10 million increase in operatingcash flow less capital expenditures, the 

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developmentof strengthened data security policies with no publicly reportable transactionsduring the year, a 50% increase in targeted sales prospects for new productsand a 13% increase in product penetration with clients.

Under Mr. Tuff’s 2005 employment agreement, the Committee has agreed toconsider equity-based compensation incentives annually with a value in therange of $400,000 to $600,000.  The agreementprovides that incentives will be performance based and will be in the form ofrestricted stock, performance shares or cash, provided that such grants willdefer any payment of compensation or transfer of stock to Mr. Tuff no laterthan three years from the grant date or, if sooner, December 31, 2009.  Consistent with this policy, in February 2006the Committee awarded Mr. Tuff performance-based restricted stock covering amaximum of 15,700 shares, with vesting based on our cumulative earnings per sharefor the years 2006 through 2008. If the threshold performance is met, 3,530 shares will vest.  If actual performance exceeds the threshold(but is less than maximum), the number of shares vesting will be determined ona proportional basis using straight-line interpolation.  Inaddition, the award will fully vest at the maximum level upon a change incontrol, termination of his employment by us without cause, termination by Mr.Tuff for good reason, or upon his death or disability.

Effective in February 2007, and consistent with  the restrictions on equity-based grantscontained in the M & F Wordwide merger agreement, the Committee granted Mr.Tuff a performance-based cash award of $600,000, with vesting based on ourcumulative earnings per share for the years 2007 through 2009.  If the threshold performance is met, he willearn $135,000.  If actual performanceexceeds the threshold (but is less than maximum), the amount of the award willbe determined on a proportional basis using straight-line interpolation.  Theaward will fully vest at the maximum level upon termination of his employmentby us without cause, termination by Mr. Tuff for good reason, or upon his deathor disability.

** **Mr.Tuff meets annually with the Governance Committee Chairman and our LeadDirector to discuss their assessment of his performance.  The entire Board also reviews his performanceannually.   Mr. Tuff reviews with theCommittee his assessment of the performance of each of our senior officers, andmeets with each officer to discuss his or her performance and to set personalperformance objectives for the next year.

*ChiefFinancial Officer*

In2006, Mr. Carden received a lump sum payment of $15,630 instead of a salaryincrease, due to the fact that his base salary level exceeded 120% of themarket average for his position.  Hisincentive bonus opportunity is up to 90% of base salary, and for 2006 wastargeted at $234,450.  Mr. Carden wasawarded a bonus of $286,967, based on our corporate operatingperformance and the attainment of 100% of his personal stretch objectives.  These included a greater-than $10 millionincrease in operating cash flow less capital expenditures, establishment of aFinance and Systems Council which developed improvements in systems, processesand reporting, contribution to corporate earnings per share through acombination of finance, tax and risk management strategies and strengtheningand refinement of our data security policies and procedures.  Healso received a stock option award covering 20,000 shares.

*OtherNEOs*

Ms.Bates received a lump sum payment of $7,800 instead of a salary increase, dueto the fact that her base salary level exceeded 120% of the market average forher position.  Her incentive bonusopportunity is up to 75% of base salary, and for 2006 was targeted at$130,000.  She was awarded a bonus of$159,120, based on our corporate operating performance and the attainment of100% of her personal stretch objectives. These included development of an executive on-boarding process,implementation of new procedures for talent management and succession planning,improved employee satisfaction ratings at our eight lowest-rated facilities andthe development of improved HR security policies and procedures.  Shealso received a stock option award covering 10,000 shares.

Mr.Heggedahl’s base salary increased by 5%, or $16,320, for 2006.  This increase was based on his performance asPresident of our Printed Products unit. His incentive bonus opportunity is up to 90% of base salary, and for2006 was targeted at $205,632.  He wasawarded a bonus of $251,694, based on business unit operating cash flow, revenue growth and division income aswell as our consolidated earnings per share, and the attainment of 100%of his personal stretch objectives. These included a $0.46 increase in total average price above 2005,improvement in the Printed Products selling, general and administrative coststructure from 27.6% to 27.1% of sales, achievement of an 83% favorable surveyresponse relating to strategic diversity management, implementation ofstrengthened Printed Products security policies and procedures andimplementation of a business development program for 

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targeted accounts, resulting in a 50% increase insales leads.  His stock option, covering 35,000 shares,also was larger than in previous years, reflecting his new responsibilities asPresident of Printed Products.

Mr.Walters received a lump sum payment of $12,772 instead of a salary increase for2006, due to the fact that his base salary level exceeded 120% of the marketaverage for the offices held by him.  Hisincentive bonus opportunity is up to 75% of base salary, and for 2006 wastargeted at $159,650.  His incentivebonus of $184,555 was based on our operating performance and theattainment of 75% of his personal stretch objectives.  These included the strengthening andrefinement of our data security policies and procedures, the selection of a newTransfer Agent at a reduced cost and formulation of strategies designed toreduce our litigation exposure.

**Severanceand Change in Control Arrangements**

Wehave agreements with each of the named executive officers providing forseverance payments in the event of termination of employment under variouscircumstances, including a change in control. In addition, as described above, a change in control will triggeraccelerated vesting of stock options and restricted stock grants held by theNEOs.

Theemployment agreements with Mr. Tuff, Mr. Carden, Ms. Bates and Mr. Walters havea so-called “single trigger” which would enable them to receive benefits uponconsummation of a transaction which constitutes a change in control.  The agreement with Mr. Heggedahl requires, inaddition to a change in control, a termination of his employment by a successorcompany, unless he has “good reason” to terminate his employment, including anadverse change in his job responsibilities or a reduction in his basesalary.  The Committee historically hasbelieved that it is more likely that the services of corporate officers will nolonger be required in the event of a change in control than would be the casewith business unit executives.  See “Terminationand Change in Control Benefits” below for additional information regardingthese arrangements.

**Additional Executive CompensationPolicies**

*Limitation on Deductibility ofCompensation Paid to Named Executive Officers*

Our policy with respectto executive compensation takes into account any potential limitation on thedeductibility of compensation in excess of $1,000,000 under Section 162(m) ofthe Internal Revenue Code, but reserves the right to pay compensation which maynot qualify for exemption from such limitation if it is in our bestinterests.  Compensation resulting fromstock option exercises and the vesting of performance-based restricted stock isnot subject to the Section 162(m) limitation, due to qualifying actions takenby the Committee and management.  Thetime-vested restricted stock grants made prior to 2006 are subject to thelimitation, which was one of the reasons why the Committee elected to use stockoptions as the basis for long-term incentives in 2006.  In addition, the performance-based restrictedstock grants to our CEO in 2005 and 2006 were designed to be exempt from theSection 162(m) limitation.

As required under theCode, every five years we must obtain shareholder approval of the materialterms of the performance goals for qualifying performance-based compensation,including our annual Senior Management Incentive Plan.  We last received approval in 2005.

*Stock OwnershipGuidelines*

* *In order to align the interests of our executives with the interests ofshareholders, in 2005 we adopted stock ownership guidelines for ourexecutive officers and business unit Presidents. Under this program, theseexecutives are expected to own shares of our stock having a value equal tothree times their annual salary within five years.  Officers who do not achieve this level ofequity ownership will not be eligible for long-term incentive grants until suchlevel has been achieved.  The CEO isexpected to similarly own shares having a value equal to five times his annualsalary.  In calculating compliance withthis stock ownership policy, we include restricted stock as well as the valueof unexercised vested stock options held by them.  Each of our named executive officers is incompliance with the stock ownership guidelines. As discussed in “Director Compensation”, we also have adopted stockownership guidelines for our Directors.

 

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**Conclusion**

We believe that ourexecutive compensation policies and programs effectively serve the interests ofshareholders and Harland, and are appropriately balanced to attract, retain andmotivate executives to contribute to our overall future success.  The Committee designs the programs so that asignificant portion of executive officer compensation is at risk and tied toattaining corporate and business unit earnings and other operating targets,attaining personal performance objectives, and improving shareholder value.Based on its review of all elements of compensation, the Committee believesthat the total mix of compensation provided to our executive officers in 2006was appropriate.

**Governance Committee Report**

 The Governance Committee, comprised of fourindependent directors, has reviewed the Compensation Discussion and Analysis (“CD&A)and discussed the CD&A with management. Based on such review and discussions, the Committee has recommended tothe Board that the CD&A be included in this Annual Report on Form 10-Kfor filing with the SEC.
|        | GOVERNANCE COMMITTEE      |   |
|--------|---------------------------|--------|
|   | G. Harold Northrop, Chair |   |
|   | William S. Antle III      |   |
|   | Richard K. Lochridge      |   |
|   | Jesse J. Spikes           |   |

 

**SUMMARYCOMPENSATION TABLE FOR 2006**

The following table presents information aboutcompensation for our named executive officers in 2006.
| **Name and  Principal Position**                                | ** ** | **Salary** | ** ** | **Stock  Awards  (1)** | ** ** | **Option  Awards  (2)** | ** ** | **Non-Equity  Incentive  Plan  Compensation  (3)** | ** ** | **Change in  Pension  Value  (4)** | ** ** | **All Other  Compensation   (5)** | ** ** | **Total**  | ** ** |
|---------------------------------------------------------------------------|------------|------------|------------|------------------------|------------|-------------------------|------------|----------------------------------------------------|------------|-----------------------------------------|------------|---------------------------------------------|------------|------------|------------|
| ** **                                                                | ** ** | ** ** | ** ** | ** **             | ** ** | ** **              | ** ** | ** **                                         | ** ** | ** **                              | ** ** | ** **                                  | ** ** | ** ** | ** ** |
| Timothy  C. Tuff  Chairman, President and Chief Executive Officer         |       | $          | 750,000    |                   | $          | 187,086                 |       | $                                                  | 1,082,000  |                                    | $          | 887,520                                     |       | $          | 452,688    |   | $ | 110,904 |   | $ | 3,470,198 |   |
| Charles  B. Carden  Senior Vice President and Chief Financial Officer     |       | 406,380    |       | 173,172                |       | 127,854                 |       | 286,967                                            |       |                                    |       | 71,001                                      |       | 1,065,374  |       |
| Arlene  S. Bates  Senior Vice President— Human Resources             |       | 267,800    |       | 94,047                 |       | 61,768                  |       | 159,120                                            |       |                                    |       | 43,419                                      |       | 626,154    |       |
| Jeffrey  D. Heggedahl   President—Harland Printed Products           |       | 338,326    |       | 127,385                |       | 128,955                 |       | 251,694                                            |       |                                    |       | 42,156                                      |       | 888,516    |       |
| John C. Walters   Senior Vice President and Secretary; General Counsel(6) |       | 332,072    |       | 94,047                 |       | 41,952                  |       | 184,555                                            |       |                                    |       | 59,028                                      |       | 711,654    |       |
|                                                                           |            |            |            |                        |            |                         |            |                                                    |            |                                         |            |                                             |            |            |            |  |  |  |  |  |  |  |

----

(1) Represents compensation expense recognized underFinancial Accounting Standard 123R (“FAS 123R”) during 2006 for all outstandingrestricted stock awards made in 2006 as well as prior years.  See Note 10 of Notes to ConsolidatedFinancial Statements in this Annual Report on Form 10-K.  Cash dividends on restricted stock areincluded under All Other Compensation. Cash dividends are paid on all outstanding restricted stock with theexception of the shares held by Mr. Tuff, who will be entitled to receive anamount equivalent to the cumulative annual dividends on any restricted shareswhich ultimately vest as described under “Grant of Plan-Based Awards” below.

(2)    Representscompensation expense recognized under FAS 123R during 2006 for all outstandingoption awards made in 2006 as well as prior years.  See Note 10 of Notes to ConsolidatedFinancial Statements.

9

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(3) Represents bonusespaid in 2007 for performance under our 2006 Senior Management Incentive Plan.

(4) Represents theincrease during 2006 in the present value of the accumulated benefit under Mr.Tuff’s 2002 and 2005 supplemental retirement agreements.  See “Pension Benefits” below.

(5) Included in this category are amounts for Mr.Tuff, Mr. Carden, Ms. Bates, Mr. Heggedahl and Mr. Walters, respectively,covering (a) life, medical and disability insurance premiums — $17,026,$10,484, $6,290, $3,658 and $11,997; (b) matching contributions to the Company’s401(k) Plan, Deferred Compensation Plan and a 401(k) performance contribution —$80,940, $32,559, $21,062, $28,224 and $25,802; (c) reimbursement for taxpreparation fees — $2,825, $8,150, $5,300, $0 and $3,250: reimbursement of thecost of executive annual physical examinations — $2,908, $2,908, $1,992, $0 and$2,036; and (e) dividends paid on restricted stock grants — $0, $16,900,$8,775, $10,274 and $6,630.  Alsoincludes reimbursement of certain club expenses for Mr. Tuff and Mr. Walters —$7,205 and $9,313.

(6) Mr. Walters served as General Counsel untilSeptember 2006 when Philip A. Theodore was elected as his successor.

**GRANTSOF PLAN-BASED AWARDS IN 2006**

The following table provides details regarding estimated payouts underour 2006 Senior Management Incentive Plan as well as stock option andrestricted stock grants to the named executive officers during 2006.  
|                       | ** ** | ** **          | ** ** | **Estimated  Future Payouts  Under Non-Equity Incentive Plan  Awards(1)** | ** ** | **Estimated  Future Payouts  Under Equity Incentive Plan  Awards(2)** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying** | ** ** | **Exercise or  Base Price  of  Option** | ** ** | **Grant Date  Fair Value  of Stock  and  Option** | ** ** |
|-----------------------|------------|---------------------|------------|---------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|------------|
| **Name**              | ** ** | **Grant Date** | ** ** | **Threshold  ($)**                                                        | ** ** | **Target  ($)**                                                       | ** ** | **Maximum  ($)**                                                            | ** ** | **Threshold  (#)**                                | ** ** | **Target  (#)**                                                  | ** ** | **Maximum  (#)** | ** ** | **Options  (#) (3)** | ** ** | **Awards  ($/Sh)** | ** ** | **Awards  ($)** | ** ** |
|                  |       |                |       |                                                                      |       |                                                                  |       |                                                                        |       |                                              |       |                                                             |       |   |   |   |   |   |   |   |   |
| Timothy C. Tuff       |       | 2/6/06              |       | 150,000                                                                   |       | 600,000                                                               |       | 1,200,000                                                                   |       |                                              |       |                                                             |       |   |   |   |   |   |   |   |   |
|                       |       | 2/9/06              |       |                                                                      |       |                                                                  |       |                                                                        |       | 3,530                                             |       | 6,624                                                            |       | 15,700 |   |   |   |   |   | 74,074 | (4) |
| Charles  B. Carden    |       | 2/6/06              |       | 58,612                                                                    |       | 234,450                                                               |       | 351,675                                                                     |       |                                              |       |                                                             |       |   |   |   |   |   |   |   |   |
|                  |       | 4/27/06             |       |                                                                      |       |                                                                  |       |                                                                        |       |                                              |       |                                                             |       |   |   | 20,000 |   | 41.45 |   | 228,400 | (5) |
| Arlene S. Bates       |       | 2/6/06              |       | 32,500                                                                    |       | 130,000                                                               |       | 195,000                                                                     |       |                                              |       |                                                             |       |   |   |   |   |   |   |   |   |
|                       |       | 4/27/06             |       |                                                                      |       |                                                                  |       |                                                                        |       |                                              |       |                                                             |       |   |   | 10,000 |   | 41.45 |   | 114,200 | (5) |
| Jeffrey  D. Heggedahl |       | 2/6/06              |       | 46,267                                                                    |       | 205,632                                                               |       | 308,448                                                                     |       |                                              |       |                                                             |       |   |   |   |   |   |   |   |   |
|                  |       | 4/27/06             |       |                                                                      |       |                                                                  |       |                                                                        |       |                                              |       |                                                             |       |   |   | 35,000 |   | 41.45 |   | 399,700 | (5) |
| John C. Walters       |       | 2/6/06              |       | 39,912                                                                    |       | 159,650                                                               |       | 239,475                                                                     |       |                                              |       |                                                             |       |   |   |   |   |   |   |   |   |

----

(1) The amountsshown represent  projected  payouts under the 2006 Senior ManagementIncentive Plan.  The actual amounts paidin February 2007 are shown in the Summary Compensation Table underNon-Equity  Incentive Plan Compensation.

(2) The award to Mr. Tuffis performance based and will vest based on our cumulative earnings per shareduring calendar 2006-2008.  The award issubject to threshold and maximum performance limitations.  If the threshold is met, 3,530 shares willvest.  If actual performance exceeds thethreshold, but is less than the maximum, the number of shares vesting will bedetermined on a proportional basis using straight-line interpolation.  If the maximum earnings per share isachieved, 15,700 shares will vest.  Ifthe threshold is not achieved, the entire award will be forfeited andcancelled.  The award will fully vestupon (a) a change in control of the Company, (b) our termination of Mr. Tuff’semployment without cause, (c) his termination of employment for good reason, or(d) termination by reason of death or disability on or before December 31,2009.

(3) The options vest at the rate of 25% per yearcommencing one year from date of grant and have a term of seven years.  All options vest in the event of a change incontrol.

(4) Represents thecompensation expense recognized under FAS 123R during 2006 for the targetnumber of shares covered by this award.

(5) Calculated using theBlack-Scholes option pricing model, a formula widely used for valuing stockoptions.  The actual value will depend onthe excess of the market price over the exercise price on the date ofexercise.  

10

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Reference is made to Note 10 of Notes to ConsolidatedFinancial Statements for a discussion of the assumptions used to value theoption grants.

**EMPLOYMENTAGREEMENTS**

We have entered into employment agreements witheach of our named executive officers.

*ChiefExecutive Officer*

* *Mr. Tuff was initiallyemployed by us as President and CEO in 1998 pursuant to a five-year agreement.In 2002 a new agreement extended his employment until February 2006. In orderto secure his employment for a longer term, the Committee, with the assistanceof Watson Wyatt, entered into the 2005 Employment Agreement with Mr. Tuff inApril 2005, extending his employment through December 31, 2009.

Under the 2005 EmploymentAgreement, Mr. Tuff receives a base salary of $750,000, reviewable annually, aswell as an annual bonus opportunity up to 160% of his base salary.  The Committee reviews his overallcompensation annually in view of competitive market conditions, our performanceand his performance, and intends to provide additional long-term compensationopportunities annually with a value in the range of $400,000 to $600,000. Suchcompensation may be in the form of restricted stock, performance shares orcash, provided that such grants will defer payment of compensation or transferof stock to Mr. Tuff no later than three years from the grant date, or ifsooner, December 31, 2009. Such awards will fully vest upon:

·        achange in control,

·        terminationby us without cause,

·        terminationby Mr. Tuff for good reason or

·        terminationby reason of his death or disability.

In accordance with the M&F Worldwide mergeragreement, his 2007 award is cash based.

* *In connection with the 2005agreement Mr. Tuff has agreed not to compete with us in our printed products,software and information management products and services businesses for twoyears following termination of employment. If, within one year after a changein control (but before December 31, 2009), he resigns for any reason or weterminate his employment without cause, we will pay him a lump sum equal to thelesser of 2.99 times his highest W-2 compensation in any year preceding thedate of termination or the maximum payment which will not trigger federalexcise tax liability. Mr. Tuff will not be entitled to such payment if heresigns or if we terminate his employment without cause after December 31,2009. Also, after a change in control, if he resigns for good reason, he willbe entitled to such payment under certain circumstances.  In addition, if we terminate his employmentwithout cause before December 31, 2009 or he resigns for good reason on orbefore such date, then, absent a change in control within one year prior tosuch termination, he will receive two times his base salary plus a pro rataportion of any bonus which otherwise would have been earned for the year oftermination.

*OtherNamed Officers*

We have entered intoagreements with the named executive officers under which they have agreed notto compete with us for a two-year period following termination ofemployment.  However, if employment isterminated after a change in control, or (in the case of Ms. Bates and Messrs.Carden and Walters) if the officer resigns within one year thereafter, theagreement not to compete will not apply and the officer will receive a lump sumequal to the lesser of three times her or his average annual compensation forthe five calendar year period preceding termination or the maximum paymentwhich will not trigger federal excise tax liability.

Mr. Heggedahl’s agreementprovides that if he is terminated within two years after a change in control ofHarland or the Printed Products Division, or if he terminates his employmentfor good reason, he will receive a lump sum equal to three times his basesalary.  In the event of a termination ofemployment without good cause in the absence of a change in control, the namedexecutive officer will receive a lump sum equal to her or his annual basesalary.

11

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**OUTSTANDING EQUITY AWARDS AT 2006FISCAL YEAR END**

The following tableprovides details regarding outstanding stock option and restricted stock grantsheld by the named executive officers at December 31, 2006.
|                      | ** ** | ** **          | ** ** | **Option  Awards**                                                                      | ** ** | **Stock  Awards**                                                                    | ** ** |
|----------------------|------------|---------------------|------------|-----------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------|------------|
| **Name**             | ** ** | **Grant Date** | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Exercisable  (1)** | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Unexercisable** | ** ** | **Option  Exercise  Price  ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number  of Shares  or Units  of Stock  That Have  Not  Vested  (#)(2)** | ** ** | **Market  Value of  Shares or  Units of  Stock That  Have Not  Vested  ($)(3)** | ** ** | **Equity  Incentive  Plan  Awards:  Number of  Unearned  Shares,  Units or  Other Rights  That Have  Not Vested  (#)(2)** | ** ** | **Equity  Incentive  Plan  Awards:  Market or  Payout  Value of  Unearned  Shares,  Units or  Other Rights  That Have  Not Vested  ($)(3)** | ** ** |
| ** **           | ** ** | ** **          | ** ** | ** **                                                                              | ** ** | ** **                                                                           | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Timothy C. Tuff      |       | 10/6/98             |       | 150,000                                                                                 |       | 0                                                                                    |       | 20.00   |   | 10/6/08 |   |   |   |   |   |   |   |   |   |
|                      |       | 1/4/99              |       | 100,000                                                                                 |       | 0                                                                                    |       | 20.00   |   | 1/4/09 |   |   |   |   |   |   |   |   |   |
|                      |       | 3/20/00             |       | 50,000                                                                                  |       | 0                                                                                    |       | 15.375 |   | 3/20/10 |   |   |   |   |   |   |   |   |   |
|                      |       | 4/26/02             |       | 400,000                                                                                 |       | 0                                                                                    |       | 31.00   |   | 4/26/12 |   |   |   |   |   |   |   |   |   |
|                      |       | 4/21/05             |       | 200,000                                                                                 |       | 300,000                                                                              |       | 37.59   |   | 4/21/15 |   |   |   |   |   |   |   |   |   |
|                      |       | 8/2/05              |       |                                                                                    |       |                                                                                 |       |   |   |   |   |   |   |   |   | 16,900 |   | 848,380 |   |
|                      |       | 2/9/06              |       |                                                                                    |       |                                                                                 |       |   |   |   |   |   |   |   |   | 15,700 |   | 788,140 |   |
| Charles B. Carden    |       | 1/16/02             |       | 0                                                                                       |       | 3,200                                                                                |       | 22.33   |   | 1/16/12 |   |   |   |   |   |   |   |   |   |
|                 |       | 10/1/02             |       | 0                                                                                       |       | 2,800                                                                                |       | 27.12   |   | 10/1/12 |   |   |   |   |   |   |   |   |   |
|                 |       | 1/27/03             |       | 0                                                                                       |       | 6,400                                                                                |       | 20.88   |   | 1/27/13 |   |   |   |   |   |   |   |   |   |
|                 |       | 4/27/06             |       | 0                                                                                       |       | 20,000                                                                               |       | 41.45   |   | 4/27/13 |   |   |   |   |   |   |   |   |   |
|                 |       | 4/1/04              |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 20,000 |   | 1,004,000 |   |   |   |   |   |
|                 |       | 6/28/05             |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 6,000 |   | 301,200 |   |   |   |   |   |
| Arlene S. Bates      |       | 1/16/02             |       | 0                                                                                       |       | 2,400                                                                                |       | 22.33   |   | 1/16/12 |   |   |   |   |   |   |   |   |   |
|                      |       | 1/27/03             |       | 0                                                                                       |       | 4,800                                                                                |       | 20.88   |   | 1/27/13 |   |   |   |   |   |   |   |   |   |
|                      |       | 4/27/06             |       | 0                                                                                       |       | 10,000                                                                               |       | 41.45   |   | 4/27/13 |   |   |   |   |   |   |   |   |   |
|                      |       | 4/1/04              |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 7,500 |   | 376,500 |   |   |   |   |   |
|                      |       | 6/28/05             |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 6,000 |   | 301,200 |   |   |   |   |   |
| Jeffrey D. Heggedahl |       | 1/16/02             |       | 0                                                                                       |       | 2,400                                                                                |       | 22.33   |   | 1/16/12 |   |   |   |   |   |   |   |   |   |
|                 |       | 12/18/02            |       | 4,000                                                                                   |       | 4,000                                                                                |       | 21.45   |   | 12/18/12 |   |   |   |   |   |   |   |   |   |
|                 |       | 4/27/06             |       | 0                                                                                       |       | 35,000                                                                               |       | 41.45   |   | 4/27/13 |   |   |   |   |   |   |   |   |   |
|                 |       | 4/1/04              |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 2,142 |   | 107,528 |   |   |   |   |   |
|                 |       | 6/28/05             |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 13,500 |   | 677,700 |   |   |   |   |   |
| John C. Walters      |       | 1/16/02             |       | 0                                                                                       |       | 2,400                                                                                |       | 22.33   |   | 1/16/12 |   |   |   |   |   |   |   |   |   |
|                      |       | 1/27/03             |       | 0                                                                                       |       | 4,800                                                                                |       | 20.88   |   | 1/27/13 |   |   |   |   |   |   |   |   |   |
|                      |       | 4/1/04              |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 4,500 |   | 225,900 |   |   |   |   |   |
|                      |       | 6/28/05             |       |                                                                                    |       |                                                                                 |       |   |   |   |   | 4,800 |   | 240,960 |   |   |   |   |   |

----

(1)             Options granted priorto 2006 are generally exercisable at the rate of 20% per year beginning one yearfrom the grant date and have a term of 10 years.  Options granted in 2006 are exercisable atthe rate of 25% per year after one year and have a term of seven years.  All options vest in the event of a change incontrol.

(2)             See Note (1) to theGrants of Plan-Based Awards table for a summary of the 2006 restricted stockaward granted to Mr. Tuff.  The structureof his 2005 award is similar to the 2006 award, but is based on our cumulativeearnings per share during calendar 2005-2007, with a threshold vesting of 3,800shares.  The restricted stock awards heldby Mr. Carden and Ms. Bates and the 2005 award held by Mr. Heggedahl vest atthe rate of 331¤3%per year after three years from date of grant. The 2004 award held by Mr.Heggedahl and the awards held by Mr. Walters vest 20% per year after one yearfrom date of grant.  All restricted stockgrants vest in the event of a change in control.

(3)             Thevalue of the restricted stock grants is based on our closing stock price onDecember 29, 2006.

 

12

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**OPTIONEXERCISES AND STOCK VESTED IN 2006**

The followingtable sets forth, for each of the named executive officers, informationregarding stock options exercised and restricted stock which vested during2006.
| ** **           | ** ** | **Option Awards**                                                       | ** ** | **Stock Awards**                                      | ** ** |
|----------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------|------------|
| **Name**             | ** ** | **Number of Shares  Acquired on Exercise (#)** | ** ** | **Value Realized  on Exercise ($)(1)** | ** ** | **Number of Shares  Acquired on Vesting (#)** | ** ** | **Value Realized on  Vesting ($)(2)** | ** ** |
| Timothy C. Tuff      |       |                                                                    |       |                                                  |       |   |   |   |   |
| Charles B. Carden    |       | 53,600                                                                  |       | 1,579,804                                             |       |   |   |   |   |
| Arlene S. Bates      |       | 26,800                                                                  |       | 681,706                                               |       |   |   |   |   |
| Jeffrey D. Heggedahl |       | 8,400                                                                   |       | 137,038                                               |       | 714 |   | 28,060 |   |
| John C. Walters      |       | 46,800                                                                  |       | 1,524,206                                             |       | 2,700 |   | 111,006 |   |

----

(1)  Represents the difference between marketprice and the exercise price of the option on the date of exercise, before paymentof applicable withholding taxes.

(2)  Represents the market value of such shares onthe date the restrictions lapsed, based on the closing price of our stock.

**NONQUALIFIEDDEFERRED COMPENSATION FOR 2006**

Wemaintain two deferred compensation plans, one covering contributions through2004 and the other covering contributions after 2004.  The following table sets forth informationregarding deferral of compensation to the named executive officers under ourPost-2004 Deferred Compensation Plan (“DCP”) during 2006, as well as the earningsduring 2006 and the aggregate balance at December 31, 2006 under both plans.
| **Name**              | ** ** | **Executive  Contributions  in 2006  ($)(1)** | ** ** | **Company  Contributions  in 2006  ($)(2)** | ** ** | **Aggregate  Earnings  in 2006  ($)(3)** | ** ** | **Aggregate  Balance at  December 31, 2006  ($)** | ** ** |
|-----------------------|------------|----------------------------------------------------|------------|--------------------------------------------------|------------|-----------------------------------------------|------------|------------------------------------------------------------------|------------|
| Timothy C. Tuff       |       | 88,125                                             |       | 68,738                                           |       | 75,680                                        |       | 766,621                                                          |       |
| Charles B.  Carden    |       | 133,094                                            |       | 20,819                                           |       | 104,810                                       |       | 880,904                                                          |       |
| Arlene S. Bates       |       | 47,560                                             |       | 9,322                                            |       | 35,905                                        |       | 368,268                                                          |       |
| Jeffrey D.  Heggedahl |       | 109,785                                            |       | 16,484                                           |       | 47,480                                        |       | 480,535                                                          |       |
| John C. Walters       |       | 99,309                                             |       | 14,062                                           |       | 59,744                                        |       | 546,589                                                          |       |

----

(1)These amounts are also reported in the salary column of the SummaryCompensation Table.

(2)These amounts are also reported in the all other compensation column of theSummary Compensation Table.

(3) Because these earningsare not considered to be “above-market” in accordance with SEC rules, they arenot included in the Summary Compensation Table.

The DCP, which supplements our 401(k) plan, allows participants to deferfrom 1% to 20% of annual base salary, once they have contributed at least$15,000 to the 401(k) plan.  Theinvestment options are the same as in the 401(k) plan, and are administered byMerrill Lynch.  We match 100% of thefirst 3% of base salary contributed to the DCP and 50% of the next 2%.  These matching contributions vest immediately.  The DCP is a nonqualified plan and is noteligible for the special tax treatment enjoyed by qualified plans, such as our401(k) plan.

Assets invested in the DCP are not protected from our creditors, andparticipants have only a general, unsecured claim against us in the event wesuffer financial difficulties.  Earningsunder the DCP are dependent on the performance of the funds in whichcontributions are invested.  We do not creditinterest or other amounts under the DCP.

Balancesin a participant’s account are payable upon death or disability, termination ofemployment or at a time specified by the participant, whichever comesfirst.  Distributions to the namedexecutive officers cannot begin until 

13

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six months after terminationof employment, and may be made in a lump sum or in quarterly installments overfive or 10 years.  The Committee mayauthorize an early distribution in the event of severe financial hardship orother extraordinary circumstances not under the participant’s control.

**2006****PENSIONBENEFITS**

As describedabove, we provide a 401(k) plan that is generally available to all eligibleemployees.  Except for Mr. Tuff, we havenot entered into any other defined benefit arrangements with our namedexecutive officers.

In 2002 Mr. Tuff enteredinto an amended supplemental retirement agreement under which he is entitled toan annual retirement benefit of $186,288 at age 65 for a period of 10 years. Ifhis employment terminates for any reason other than death prior to age 65, thebenefit is payable commencing at age 65. Mr. Tuff can elect to receive this benefit prior to age 65, but at areduced amount.  Alternatively, Mr. Tuffcan elect to receive this benefit in a lump sum payment of $1,400,000 at age65. If he elects to receive a lump sum payment prior to age 65, it will be at areduced amount ($772,800 if the payment is made at age 60, increasingannually).  In 2006 Mr. Tuff made anelection to receive a lump sum payment, which is payable when he terminates employment.

We also providesupplemental life insurance coverage for Mr. Tuff in the amount of $750,000.

In connection withhis 2005 employment agreement, we entered into an additional supplementalretirement agreement with Mr. Tuff with respect to compensation deferredsubsequent to December 31, 2004.  Underthis agreement, Mr. Tuff will be eligible to receive the amounts set forthbelow.

|                                                     | ** ** | ** **                                                                                                                   | ** ** | **Reason for Termination**                     | ** ** | ** **                                                                                                                                                                                                      | ** ** |
|-----------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| ** **                                          | ** ** | **A**                                                                                                                        | ** ** | **B**                                          | ** ** | **C**                                                                                                                                                                                                           | ** ** | **D** | ** ** |
| **Date of Termination  December 31** | ** ** | **Resignation for any  Reason other than  as described in  Columns  B, C or D** | ** ** | **Retirement for  Non-Business  Reasons** | ** ** | **Termination for  Death, Disability,  by the Company  Without Cause, by  Mr. Tuff for Good  Reason or after a   Change in Control** | ** ** | **Termination by the   Company for Cause** | ** ** |
| ** **                                          | ** ** | ** **                                                                                                                   | ** ** | ** **                                     | ** ** | ** **                                                                                                                                                                                                      | ** ** | ** ** | ** ** |
| 2005                                                |       | $                                                                                                                            | 0          |                                           | $          | 166,491                                                                                                                                                                                                         |       | $ | 832,457 |   | $ | 0 |   |
| 2006                                                |       | 0                                                                                                                            |       | 424,943                                        |       | 1,062,357                                                                                                                                                                                                       |       | 0 |   |
| 2007                                                |       | 460,069                                                                                                                      |       | 828,953                                        |       | 1,381,588                                                                                                                                                                                                       |       | 0 |   |
| 2008                                                |       | 1,146,459                                                                                                                    |       | 1,375,889                                      |       | 1,719,861                                                                                                                                                                                                       |       | 0 |   |
| 2009                                                |       | 2,121,532                                                                                                                    |       | 2,121,532                                      |       | 2,121,532                                                                                                                                                                                                       |       | 0 |   |
|                                                     |            |                                                                                                                              |            |                                                |            |                                                                                                                                                                                                                 |            |  |  |  |  |  |  |

 

If Mr. Tuff terminatesemployment on a date other than December 31, his benefit will be determinedusing straight-line interpolation between the benefit on the immediatelypreceding and following December 31. He will not be entitled to any benefit ifhe is terminated by us for cause or he terminates his employment beforeDecember 31, 2007 for any reason other than death, disability, termination byus without cause, termination by him for good reason, retirement fornon-business reasons or a change in control.

The following table setsforth the present value of the accumulated benefit under Mr. Tuff’s 2002 and2005 supplemental retirement agreements (“SERPs”) at December 31, 2006.

| Name            | ** ** | **Plan Name** | ** ** | ** Present Value of  Accumulated Benefit  ($)(1)** | ** ** |
|-----------------|------------|--------------------|------------|------------------------------------------------------------------------|------------|
| Timothy C. Tuff |       | 2002  SERP         |       | 834,908                                                                |       |
|            |       | 2005 SERP          |       | 777,008                                                                |       |

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(1)          Represents the presentvalue of the accumulated benefit under each SERP, as recorded in our financialstatements for 2006.  The annual increasein the present value of the accumulated benefits during 2006 is included in thechange in pension value column of the Summary Compensation Table.  See Note 11 of Notes to ConsolidatedFinancial Statements.

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**TERMINATION AND CHANGE IN CONTROLPAYMENTS**

We have agreements witheach of the named executive officers providing for payments in the event oftermination of employment under various circumstances, including a change incontrol.  In addition, under our equityincentive plans a change in control may result in the vesting of certain stockoptions and restricted stock grants held by the named executive officers.

Theagreements and arrangements that trigger severance and change in controlpayments are described below.  After thenarrative description we have provided a table quantifying these amounts,assuming that the triggering events took place on December 31, 2006.

*Chief Executive Officer*

Under Mr. Tuff’s 2005employment agreement, if we terminate his employment without cause beforeDecember 31, 2009 or he resigns for good reason on or before such date, he willreceive a lump sum payment equal to two times his base salary plus a pro rataportion of any bonus which would have been earned for the year oftermination.  In addition, if within oneyear after a change in control (but before December 31, 2009), he resigns forany reason or we terminate his employment without cause, we will pay him a lumpsum equal to the lesser of 2.99 times the highest total W-2 compensation paidto him by us in any calendar year preceding the date of termination or themaximum payment which will not trigger federal excise tax liability.  He will not be entitled to such payment if heresigns or we terminate his employment without cause after December 31, 2009.Also, after a change in control, if he resigns for good reason, he will beentitled to such payment.

In the event of a changein control all unvested stock options and restricted stock held by Mr. Tuffwill vest.  In addition, a change incontrol will entitle him to a lump sum payment under his 2005 supplementalretirement agreement.  If the change incontrol occurred on December 31, 2006, he would have been entitled to receive$1,062,357 under the 2005 agreement, which is in addition to the amount shownin the change in control payment column in the table below.

UnderMr. Tuff’s employment agreement, his 2005 supplemental retirement agreement andhis restricted stock awards, a change in control occurs in the event of a saleof our assets, a consolidation with another person, or a merger where we do notsurvive.  In addition, there is a changein control if 30% or more of our stock is held by a single person or a “triggeringevent” occurs under our Share Purchase Rights Plan.  Under his outstanding stock options, a changein control will result from an agreement to sell our assets or upon thecompletion of a merger or other transaction where our shareholders end up withless than 50% of the voting power of the purchaser.  A change in the composition of a majority ofour Board of Directors will also trigger a change in control under all of theagreements mentioned above.

*Chief Financial Officer*

Inthe event of a termination of employment without cause Mr. Carden will receivea lump sum payment equal to his annual base salary.   In the event of a change in control, he willbe entitled to receive a lump sum equal to the lesser of three times his averageannual compensation for the five calendar year period preceding termination orthe maximum payment which will not trigger federal excise tax liability.  In addition, in the event a change in controlis consummated, all unvested stock options and restricted stock held by Mr.Carden will vest.

UnderMr. Carden’s employment agreement, a change in control results from the sale ofassets, a consolidation with another person or a merger where we do notsurvive, or if more than 50% of our stock is held by any single person.  Under his stock options granted prior to2006, a change in control occurs when we agree to sell our assets or to mergeor consolidate into another company, or if more than 50% of our stock is held bya single person.  Under his 2006 stockoption award, a change in control results from a sale of our assets or amerger, consolidation or other transaction where our shareholders end up withless than 50% of the voting power of the purchaser.  Under his restricted stock awards, a changein control occurs upon consummation of a sale of assets or a merger orconsolidation.  A change in thecomposition of a majority of our Board will also trigger a change in controlunder all of the agreements mentioned above.

15

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*Other Named Executive**Officers*

The severance and changein control benefits for Ms. Bates and Mr. Walters are calculated on the samebasis as Mr. Carden.  Mr. Heggedahl’sseverance benefit is calculated on the same basis as Mr. Carden.  If he is terminated within two years after achange in control of the Company or the Printed Products Division, or if heterminates his employment for good reason after a change in control, he willreceive a lump sum equal to three times his base salary.

Under Ms. Bates’employment agreement, a change in control results if more than 50% of our stockis held by any single person.  The changein control provisions in her stock option and restricted stock awards are thesame as Mr. Carden.  Mr. Heggedahl’semployment agreement contains the same change in control provision as Mr.Carden, and his agreement also provides for a change in control if the assetsof his business unit are sold or if there is a merger or consolidation of hisbusiness unit where it is not the survivor. The change in control provisions in his stock option and restrictedstock awards are the same as Mr. Carden. The change in control provisions under the employment agreement andrestricted stock awards held by Mr. Walters are the same as Mr. Carden, and thechange in control provisions in his stock option awards are the same as thepre-2006 awards held by Mr. Carden.  Achange in the composition of a majority of our Board will also trigger a changein control under all of the agreements mentioned above.

Theemployment agreements with Mr. Tuff, Mr. Carden, Ms. Bates and Mr. Walters havea so-called “single trigger” which would enable them to receive benefits uponconsummation of a transaction which constitutes a change in control, while theagreement with Mr. Heggedahl requires a termination of his employment by asuccessor company before he is entitled to any payment, unless he has goodreason to terminate his employment.

We have no otherseverance policies applicable to the named executive officers.

**Summary of Termination and Change in Control Payments**

The following table setsforth, for each of our named executive officers, (1) the severance payment inthe event of a termination of employment without cause, (2) the payment thatwould be made in the event of a change in control and (3) the value of allunvested stock options and restricted stock, in each case assuming atermination of employment or change in control occurred at midnight on December31, 2006.
| Name                  | ** ** | **Cash Severance** | ** ** | **Change in Control  Payment** | ** ** | **Value of Unvested  Stock Options and  Restricted Stock** | ** ** |
|-----------------------|------------|-------------------------|------------|------------------------------------------|------------|-------------------------------------------------------------------------------------|------------|
| Timothy C. Tuff       |       | $                       | 2,387,520  |                                     | $          | 6,170,419                                                                           |       | $ | 5,419,520 |   |
| Charles B.  Carden    |       | 390,750                 |       | 3,203,382                                |       | 1,821,656                                                                           |       |
| Arlene S. Bates       |       | 260,000                 |       | 1,968,820                                |       | 972,824                                                                             |       |
| Jeffrey D.  Heggedahl |       | 342,720                 |       | 1,028,160                                |       | 1,273,366                                                                           |       |
| John C. Walters       |       | 319,300                 |       | 3,100,290                                |       | 674,484                                                                             |       |
|                       |            |                         |            |                                          |            |                                                                                     |            |  |  |  |

 

**Noncompete Agreements**

In connection with his2005 employment agreement Mr. Tuff has agreed not to compete with us in ourprinted products, software and information management products and servicesbusinesses for two years following termination of employment.  We have agreements with the other namedexecutive officers under which they have agreed not to compete with us for atwo-year period following termination of employment.  However, if employment is terminated after achange in control, or (in the case of Mr. Carden, Ms. Bates and Mr. Walters) ifthe officer resigns within one year thereafter, or (in the case of Mr.Heggedahl) if he resigns for good reason, the noncompete will not apply.

16

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**DIRECTORCOMPENSATION**

In 2006 each non-employeeDirector received an annual cash retainer of $20,000.  The Lead Director and the chairs of the AuditCommittee and Governance Committee received additional cash retainers of$20,000, $10,000 and $8,000, respectively. All retainers are paid quarterly in arrears.  Directors also received a $1,500 fee for eachBoard or committee meeting attended.

Our 2005 CompensationPlan for Non-Employee Directors (“Director Compensation Plan”) in effect during2006 provided that each non-employee Director receive an annual retainer inCommon Stock, as determined by the Board. The 2006 retainer was 2,500 shares.

During 2006, as well asin prior years, Directors could elect to defer the cash or stock retainers andmeeting fees.  Deferred amounts arecredited to the Director’s deferred compensation account, in cash or stockequivalents.  Stock equivalents arecredited with dividends and cash deferrals are credited with interest at theprime rate.  Deferred amounts will bedistributed in cash at such future dates as specified by the Director, subjectto acceleration in the event of a change in control.

Wedo not provide any perquisites or other personal benefits to any of ourDirectors.  Employee Directors receive nocompensation for Board services.

The following table setsforth information with respect to amounts paid to non-employee Directors orcredited to the deferred accounts maintained for them during 2006.

| Name                 | ** ** | **Fees Earned  or Paid inCash  ($)(1)** | ** ** | **Stock Awards  ($)(2)** | ** ** | **Total  ($)** | ** ** |
|----------------------|------------|--------------------------------------------------------|------------|-------------------------------|------------|----------------|------------|
| William S. Antle III |       | 39,500                                                 |       | 105,906                       |       | 145,406        |       |
| Robert J. Clanin     |       | 57,000                                                 |       | 105,906                       |       | 162,906        |       |
| John D. Johns        |       | 36,500                                                 |       | 105,906                       |       | 142,406        |       |
| Scott A. Kisting     |       | 26,500                                                 |       | 54,156                        |       | 80,656         |       |
| Richard K. Lochridge |       | 42,500                                                 |       | 105,906                       |       | 148,406        |       |
| John J. McMahon, Jr. |       | 44,000                                                 |       | 105,906                       |       | 149,906        |       |
| G. Harold Northrop   |       | 61,000                                                 |       | 105,906                       |       | 166,906        |       |
| Larry L. Prince      |       | 62,500                                                 |       | 105,906                       |       | 168,406        |       |
| Eileen M. Rudden     |       | 45,500                                                 |       | 105,906                       |       | 151,406        |       |
| Jesse J. Spikes      |       | 53,000                                                 |       | 105,906                       |       | 158,906        |       |

----

(1) Directors are entitled to defer receipt of cashretainers or meeting fees earned by them. The amounts in this column include all payments made to or deferred byDirectors during 2006.  Fees may bedeferred in shares of our stock.  AtDecember 31, 2006 our Directors held the following shares of our stock in theirdeferred accounts: Mr. Antle—23,010; Mr. Clanin—10,736; Mr. Johns—21,208; MrKisting—1,489; Mr. Lochridge—19,451; Mr. McMahon—30,129; Mr. Northrop—32,434;Mr. Prince—34,667; Ms. Rudden—16,701; and Mr. Spikes—19,466.

(2) Represents the full grant date value of the annualstock retainer, which was paid quarterly in arrears.  Each Director elected to defer receipt of thestock retainer in 2006.

In connection with theM&F Worldwide merger, in 2006 we amended the Director Compensation Plan toeliminate the annual stock retainer and to provide that effective January 1,2007 cash retainers and meeting fees may not be deferred in stock.  In addition, any distribution of amountspreviously deferred in stock will be made in cash.  The annual cash and stock retainers have beencombined into a single cash retainer of $150,000 for 2007.  The Lead Director and Committee Chairretainers and meeting fees remain the same as in 2006.

17

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The Board has adopted aDirector stock ownership program pursuant to which non-management Directors areexpected to acquire ownership of our common stock equal to five times theannual stock retainer over a period of five years.  In connection with the M&F mergeragreement, the ownership guidelines were eliminated.

Director compensation isreviewed annually by the Governance Committee with the assistance ofMercer.  Any changes in compensation arerecommended by the Governance Committee and submitted to the full Board forapproval.

**RELATED PARTY TRANSACTIONS**

In accordance with awritten policy adopted by our Audit Committee, we review all relationships andtransactions in which we, our Directors and executive officers or theirimmediate family members are participants to determine whether such personshave a direct or indirect material interest. Our Legal Department is primarily responsible for the development andimplementation of processes and controls to obtain information from theDirectors and executive officers regarding related party transactions and forreporting any such transactions to the Audit Committee.

During 2006 therewere no transactions exceeding $100,000 in which we were a participant and inwhich any of the following persons had a direct or indirect material interest:

·            any Director,executive officer or immediate family member of any of them,

·            any third party inwhich any Director, executive officer or immediate family member owns 10% ormore of any class of securities, or

·            any trust or otherestate in which any Director, executive officer or immediate family member servesas a trustee or similar capacity.

In the event that any such relationship is identified,it is the responsibility of the Audit Committee to review and/or approve therelated transaction.  Our Directors andexecutive officers are required to report to us on an annual basis anyrelationship which would require disclosure.

**GOVERNANCECOMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**

During 2006:

·             No member of theCommittee was an officer or employee, or former officer or employee, of theCompany or any subsidiary.

·             No member of theCommittee entered into any transaction with us.

·             No executive officerof the Company served on the compensation committee of another entity where oneof that entity’s executive officers served as a member of the Committee or as adirector of the Company.

·             No executive officerof the Company served as a director of another entity where one of that entity’sexecutive officers served on the Committee.

 

18

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**PART IV**

**ITEM 15.**                                              EXHIBITSAND FINANCIAL STATEMENT SCHEDULES

(a)3.   Exhibits

(Asterisk (*) indicates exhibit previously filed withthe Securities and Exchange Commission as indicated in parentheses andincorporated herein by reference. Plus (+) indicates management contracts andcompensatory arrangements required to be filed pursuant to Item 15(b) of thisannual report.  Pound (#) indicatesexhibit previously filed with the Securities and Exchange Commission).
| 2.1          |   | *      |   | Agreement and Plan of Merger, dated as of December  19, 2006, by and among the Registrant, M&F Worldwide Corp. and H  Acquisition Corp. Exhibit 2.1 to Registrant’s Current Report on Form 8-K  (“8-K”)filed December 20, 2006). |
|------------------------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1          |   | *      |   | Amended and Restated Articles of Incorporation  (Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q (“10-Q”) for the  quarterly period ended March 26, 2004).                                                                 |
| 3.2          |   | *      |   | Bylaws, as amended through December 19, 2002  (Exhibit 3.2 to Registrant’s Annual Report on Form 10-K (“10-K”) for the year  ended December 31, 2002).                                                                               |
| 4.1          |   | *      |   | Rights Agreement, dated as of December 17, 1998,  between Registrant and First Chicago Trust Company of New York (Exhibit 4.1  to the 8-K filed January 29, 1999).                                                                                  |
| 4.2          |   | *      |   | Amendment No. 1 to Rights Agreement, dated as of  October 13, 2006 (Exhibit 4.2 to 10-Q for the quarter ended September 29,  2006).                                                                                                                 |
| 4.3          |   | *      |   | Amendment No. 2 to Rights Agreement, dated as of  December 19, 2006 (Exhibit 4.1 to the 8-K filed December 20, 2006).                                                                                                                               |
| 4.4          |   |   |   | See Articles IV, V and VII of Registrant’s Amended  and Restated Articles of Incorporation, filed as Exhibit 3.1, and Articles I,  V and VIII of Registrant’s Bylaws, filed as Exhibit 3.2.                                               |
| 10.1    |   | * +    |   | Form of Noncompete and Termination Agreement between  Registrant and Arlene S. Bates, Charles B. Carden and John C. Walters  (Exhibit 10.1 to the 2002 10-K).                                                                                       |
| 10.2    |   | * +    |   | Employment Agreement, dated November 18, 2005,  between Registrant and Jeffrey D. Heggedahl (Exhibit 10.2 to the 2005 10-K).                                                                                                                        |
| 10.3    |   | * +    |   | Amendment to Employment Agreement between Registrant  and Mr. Heggedahl, dated as of December 19, 2006 (Exhibit 10.8 to 8-K filed  December 21, 2006).                                                                                              |
| 10.4    |   | * +    |   | Employment Letter Agreement, dated April 21, 2005,  between the Registrant and Timothy C. Tuff (Exhibit 10.3 to 10-Q for the  quarterly period ended July 1, 2005).                                                                                 |
| 10.5    |   | * +    |   | Noncompete and Termination Agreement, dated as of  January 1, 2005, between Registrant and Mr. Tuff (Exhibit 10.4 to 10-Q for  the quarterly period ended July 1, 2005).                                                                            |
| 10.6    |   | * +    |   | Employment Agreement, dated as of September 5, 2006,  between Registrant and Philip A. Theodore (Exhibit 10.2 to 10-Q for the  quarterly period ended September 29, 2006).                                                                          |
| 10.7    |   | * +    |   | Restricted Stock Agreement, dated August 2, 2005,  between Registrant and Mr. Tuff (Exhibit 10.5 to the 2005 10-K).                                                                                                                                 |
| 10.8    |   | * +    |   | Restricted Stock Agreement, dated February 9, 2006,  between Registrant and Mr. Tuff (Exhibit 10.6 to the 2005 10-K).                                                                                                                               |
| 10.9    |   | * +    |   | Form of Restricted Stock Agreements between  Registrant and Ms. Bates and Messrs. Carden, Heggedahl and Walters (Exhibit  10.5 to 2004 10-K).                                                                                                       |
| 10.10             |   | * +    |   | Supplemental Retirement Agreement, dated as of  January 1, 2002, between Registrant and Mr. Tuff (Exhibit 10.7 to the 2001  10-K).                                                                                                                  |
| 10.11             |   | * +    |   | 2005 Supplemental Retirement Agreement, dated as of  January 1, 2005, between Registrant and Mr. Tuff (Exhibit 10.5 to 10-Q for  the quarterly period ended July 1, 2005).                                                                          |
| 10.12             |   | # +    |   | Amendment to 2005 Supplemental Retirement Agreement,  dated as of November 1, 2006, between Registrant and Mr. Tuff.                                                                                                                                |
| 10.13             |   | * +    |   | Nonqualified Stock Option Agreement, dated April 21,  2005, between Registrant and Mr. Tuff (Exhibit 10.6 to 10-Q for the quarterly  period ended July 1, 2005).                                                                                    |

 

19

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| 10.14                 |   | * +    |   | 1999 Stock Option Plan, as amended (Exhibit 99.1 to  Registrant’s Registration Statement on Form S-8, dated January 14, 2000, File  No. 333-94727).                                             |
|----------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.15                 |   | * +    |   | Amendment to 1999 Stock Option Plan, effective  December 19, 2006 (Exhibit 10.1 to 8-K filed December 21, 2006).                                                                                     |
| 10.16                 |   | * +    |   | 2000 Stock Option Plan, as amended (Exhibit 99.1 to  Registrant’s Registration Statement on Form S-8, dated November 29, 2000,  File No. 333-70386).                                            |
| 10.17                 |   | * +    |   | Amendment to 2000 Stock Option Plan, effective  December 19, 2006 (Exhibit 10.2 to 8-K filed December 21, 2006).                                                                                     |
| 10.18                 |   | * +    |   | 2002 Stock Option Plan (Exhibit A to Registrant’s  Proxy Statement filed March 20, 2002).                                                                                                       |
| 10.19                 |   | * +    |   | Amendment to 2002 Stock Option Plan, effective  December 19, 2006 (Exhibit 10.3 to 8-K filed December 21, 2006).                                                                                     |
| 10.20                 |   | * +    |   | 2005 New Employee Stock Option Plan (Exhibit 10.1 to  8-K filed August 5, 2005).                                                                                                                     |
| 10.21                 |   | * +    |   | Amendment to 2005 New Employee Stock Option Plan,  effective December 19, 2006 (Exhibit 10.4 to 8-K filed December 21, 2006).                                                                        |
| 10.22                 |   | * +    |   | 2006 Stock Incentive Plan (Exhibit 10.1 to 8-K filed  April 27, 2006).                                                                                                                               |
| 10.23                 |   | * +    |   | Senior Management Incentive Plan (Exhibit C to  Registrant’s Proxy Statement, filed March 16, 2005).                                                                                            |
| 10.24                 |   | # +    |   | 1996 Compensation Plan for Non-Employee Directors,  as amended through December 18, 2003.                                                                                                            |
| 10.25                 |   | * +    |   | Amendment to 1996 Compensation Plan for Non-Employee  Directors effective as of January 1, 2007 (Exhibit 10.6 to 8-K filed December  21, 2006).                                                      |
| 10.26                 |   | * +    |   | 2005 Compensation Plan for Non-Employee Directors  (Exhibit 10.12 to the 2004 10-K).                                                                                                                 |
| 10.27                 |   | * +    |   | Amendment to 2005 Compensation Plan for Non-Employee  Directors effective as of December 19, 2006 (Exhibit 10.5 to 8-K filed  December 21, 2006).                                                    |
| 10.28                      |   | *      |   | Credit Agreement dated as of July 3, 2006 among  Registrant, the Lenders named therein and Wachovia Bank, National  Association, as Administrative Agent (Exhibit 10.1 to 8-K filed July 10,  2006). |
| 11.1             |   |   |   | Computation of Per Share Earnings.(1)                                                                                                                                                                |
| 14     |   | *      |   | Code of Business Conduct and Ethics, as amended  through February 7, 2006 (Exhibit 14 to the 2005 10-K).                                                                                             |
| 21     |   | #      |   | Subsidiaries of the Registrant.                                                                                                                                                                      |
| 23     |   | #      |   | Consent of Deloitte & Touche, LLP.                                                                                                                                                               |
| 31.1             |   |   |   | Certification Pursuant to Rule 13a-14(a), as Adopted  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“SOX”).                                                                   |
| 31.2             |   |   |   | Certification Pursuant to Rule 13a-14(a), as Adopted  Pursuant to Section 302 of SOX.                                                                                                                |
| 32.1             |   | #      |   | Certification Pursuant to 18 U.S.C. Section 1350, as  Adopted Pursuant to Section 906 of SOX.                                                                                                        |
| 32.2             |   | #      |   | Certification Pursuant to 18 U.S.C. Section 1350, as  Adopted Pursuant to Section 906 of SOX.                                                                                                        |

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(1)             Datarequired by SFAS No. 128, “Earnings Per Share,” is provided in Note 1 to theConsolidated Financial Statements included in this report.

20

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**SIGNATURES**

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto dulyauthorized.
| JOHN H. HARLAND COMPANY             |   |           |
|-------------------------------------|--------|----------------|
|                                |   |           |
| /s/ John C. Walters                 |   | April 27, 2007 |
| John C. Walters                     |   | Date           |
| Senior Vice President and Secretary |   |           |

 

21

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**EXHIBIT LIST**

(Asterisk (*) indicates exhibit previously filed withthe Securities and Exchange Commission as indicated in parentheses andincorporated herein by reference. Plus (+) indicates management contracts andcompensatory arrangements required to be filed pursuant to Item 15(b) of thisannual report.  Pound (#) indicatesexhibit previously filed with the Securities and Exchange Commission).
| 2.1          |   | *      |   | Agreement and Plan of Merger, dated as of December  19, 2006, by and among the Registrant, M&F Worldwide Corp. and H  Acquisition Corp. Exhibit 2.1 to Registrant’s Current Report on Form 8-K  (“8-K”)filed December 20, 2006). |
|------------------------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1          |   | *      |   | Amended and Restated Articles of Incorporation  (Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q (“10-Q”) for the  quarterly period ended March 26, 2004).                                                                 |
| 3.2          |   | *      |   | Bylaws, as amended through December 19, 2002  (Exhibit 3.2 to Registrant’s Annual Report on Form 10-K (“10-K”) for the year  ended December 31, 2002).                                                                               |
| 4.1          |   | *      |   | Rights Agreement, dated as of December 17, 1998,  between Registrant and First Chicago Trust Company of New York (Exhibit 4.1  to the 8-K filed January 29, 1999).                                                                                  |
| 4.2          |   | *      |   | Amendment No. 1 to Rights Agreement, dated as of  October 13, 2006 (Exhibit 4.2 to 10-Q for the quarter ended September 29,  2006).                                                                                                                 |
| 4.3          |   | *      |   | Amendment No. 2 to Rights Agreement, dated as of December  19, 2006 (Exhibit 4.1 to the 8-K filed December 20, 2006).                                                                                                                               |
| 4.4          |   |   |   | See Articles IV, V and VII of Registrant’s Amended  and Restated Articles of Incorporation, filed as Exhibit 3.1, and Articles I,  V and VIII of Registrant’s Bylaws, filed as Exhibit 3.2.                                               |
| 10.1         |   | * +    |   | Form of Noncompete and Termination Agreement between  Registrant and Arlene S. Bates, Charles B. Carden and John C. Walters  (Exhibit 10.1 to the 2002 10-K).                                                                                       |
| 10.2         |   | * +    |   | Employment Agreement, dated November 18, 2005,  between Registrant and Jeffrey D. Heggedahl (Exhibit 10.2 to the 2005 10-K).                                                                                                                        |
| 10.3         |   | * +    |   | Amendment to Employment Agreement between Registrant  and Mr. Heggedahl, dated as of December 19, 2006 (Exhibit 10.8 to 8-K filed  December 21, 2006).                                                                                              |
| 10.4         |   | * +    |   | Employment Letter Agreement, dated April 21, 2005,  between the Registrant and Timothy C. Tuff (Exhibit 10.3 to 10-Q for the  quarterly period ended July 1, 2005).                                                                                 |
| 10.5    |   | * +    |   | Noncompete and Termination Agreement, dated as of  January 1, 2005, between Registrant and Mr. Tuff (Exhibit 10.4 to 10-Q for  the quarterly period ended July 1, 2005).                                                                            |
| 10.6         |   | * +    |   | Employment Agreement, dated as of September 5, 2006,  between Registrant and Philip A. Theodore (Exhibit 10.2 to 10-Q for the  quarterly period ended September 29, 2006).                                                                          |
| 10.7         |   | * +    |   | Restricted Stock Agreement, dated August 2, 2005,  between Registrant and Mr. Tuff (Exhibit 10.5 to the 2005 10-K).                                                                                                                                 |
| 10.8         |   | * +    |   | Restricted Stock Agreement, dated February 9, 2006,  between Registrant and Mr. Tuff (Exhibit 10.6 to the 2005 10-K).                                                                                                                               |
| 10.9         |   | * +    |   | Form of Restricted Stock Agreements between  Registrant and Ms. Bates and Messrs. Carden, Heggedahl and Walters (Exhibit  10.5 to 2004 10-K).                                                                                                       |
| 10.10                  |   | * +    |   | Supplemental Retirement Agreement, dated as of  January 1, 2002, between Registrant and Mr. Tuff (Exhibit 10.7 to the 2001  10-K).                                                                                                                  |
| 10.11                  |   | * +    |   | 2005 Supplemental Retirement Agreement, dated as of  January 1, 2005, between Registrant and Mr. Tuff (Exhibit 10.5 to 10-Q for  the quarterly period ended July 1, 2005).                                                                          |
| 10.12                  |   | # +    |   | Amendment to 2005 Supplemental Retirement Agreement,  dated as of November 1, 2006, between Registrant and Mr. Tuff.                                                                                                                                |
| 10.13                  |   | * +    |   | Nonqualified Stock Option Agreement, dated April 21,  2005, between Registrant and Mr. Tuff (Exhibit 10.6 to 10-Q for the quarterly  period ended July 1, 2005).                                                                                    |
| 10.14                  |   | * +    |   | 1999 Stock Option Plan, as amended (Exhibit 99.1 to  Registrant’s Registration Statement on Form S-8, dated January 14, 2000, File  No. 333-94727).                                                                                            |

 

22

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| 10.15                      |   | * +    |   | Amendment to 1999 Stock Option Plan, effective  December 19, 2006 (Exhibit 10.1 to 8-K filed December 21, 2006).                                                                                     |
|----------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.16                      |   | * +    |   | 2000 Stock Option Plan, as amended (Exhibit 99.1 to  Registrant’s Registration Statement on Form S-8, dated November 29, 2000,  File No. 333-70386).                                            |
| 10.17                      |   | * +    |   | Amendment to 2000 Stock Option Plan, effective  December 19, 2006 (Exhibit 10.2 to 8-K filed December 21, 2006).                                                                                     |
| 10.18                      |   | * +    |   | 2002 Stock Option Plan (Exhibit A to Registrant’s  Proxy Statement filed March 20, 2002).                                                                                                       |
| 10.19                      |   | * +    |   | Amendment to 2002 Stock Option Plan, effective  December 19, 2006 (Exhibit 10.3 to 8-K filed December 21, 2006).                                                                                     |
| 10.20                      |   | * +    |   | 2005 New Employee Stock Option Plan (Exhibit 10.1 to  8-K filed August 5, 2005).                                                                                                                     |
| 10.21                      |   | * +    |   | Amendment to 2005 New Employee Stock Option Plan,  effective December 19, 2006 (Exhibit 10.4 to 8-K filed December 21, 2006).                                                                        |
| 10.22                      |   | * +    |   | 2006 Stock Incentive Plan (Exhibit 10.1 to 8-K filed  April 27, 2006).                                                                                                                               |
| 10.23                      |   | * +    |   | Senior Management Incentive Plan (Exhibit C to  Registrant’s Proxy Statement, filed March 16, 2005).                                                                                            |
| 10.24                      |   | # +    |   | 1996 Compensation Plan for Non-Employee Directors,  as amended through December 18, 2003.                                                                                                            |
| 10.25                      |   | * +    |   | Amendment to 1996 Compensation Plan for Non-Employee  Directors effective as of January 1, 2007 (Exhibit 10.6 to 8-K filed December  21, 2006).                                                      |
| 10.26                      |   | * +    |   | 2005 Compensation Plan for Non-Employee Directors  (Exhibit 10.12 to the 2004 10-K).                                                                                                                 |
| 10.27                      |   | * +    |   | Amendment to 2005 Compensation Plan for Non-Employee  Directors effective as of December 19, 2006 (Exhibit 10.5 to 8-K filed  December 21, 2006).                                                    |
| 10.28                      |   | *      |   | Credit Agreement dated as of July 3, 2006 among  Registrant, the Lenders named therein and Wachovia Bank, National  Association, as Administrative Agent (Exhibit 10.1 to 8-K filed July 10,  2006). |
| 11.1             |   |   |   | Computation of Per Share Earnings.(1)                                                                                                                                                                |
| 14     |   | *      |   | Code of Business Conduct and Ethics, as amended  through February 7, 2006 (Exhibit 14 to the 2005 10-K).                                                                                             |
| 21     |   | #      |   | Subsidiaries of the Registrant.                                                                                                                                                                      |
| 23     |   | #      |   | Consent of Deloitte & Touche, LLP.                                                                                                                                                               |
| 31.1             |   |   |   | Certification Pursuant to Rule 13a-14(a), as Adopted  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“SOX”).                                                                   |
| 31.2             |   |   |   | Certification Pursuant to Rule 13a-14(a), as Adopted  Pursuant to Section 302 of SOX.                                                                                                                |
| 32.1             |   | #      |   | Certification Pursuant to 18 U.S.C. Section 1350, as  Adopted Pursuant to Section 906 of SOX.                                                                                                        |
| 32.2             |   | #      |   | Certification Pursuant to 18 U.S.C. Section 1350, as  Adopted Pursuant to Section 906 of SOX.                                                                                                        |

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(1)             Datarequired by SFAS No. 128, “Earnings Per Share,” is provided in Note 1 to theConsolidated Financial Statements included in this report.

23

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