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UNITED STATES
  SECURITIES AND EXCHANGE
    COMMISSIONWashington, D.C. 20549Form 10-K
  (Mark One)x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission File Number
    333-133253
  HARLAND CLARKE HOLDINGS
    CORP.
   Delaware(State or other jurisdiction of
    incorporation or organization)10931 Laureate Drive, San Antonio, TX(Address of principal executive offices)

84-1696500(I.R.S. Employer Identification No.)78249(Zip code)  (210) 697-8888
  Securities registered pursuant to Section 12(b) of the
    Act: None
 Securities registered pursuant to Section 12(g) of the
    Act: None
  o x
  o x
  x o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. x
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer x
    Smaller
    reporting
    company o   Rule 12b-2 o x
    *
    The registrant is not required to file this Annual Report on
    Form 10-K
    or other reports pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934, but has filed all reports
    during the preceding 12 months that would have been
    required pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934. The filing is required, however, pursuant
    to the terms of the indenture governing Harland Clarke Holdings
    Corp.s senior notes due 2015.




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##### 





HARLAND
    CLARKE HOLDINGS CORP.
  INDEX TO
    ANNUAL REPORT ON
    FORM 10-K
  For the
    Year Ended December 31, 2010
   
 PagePART IItem 1.


Business


1Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


23Item 2.


Properties


23Item 3.


Legal Proceedings


25Item 4.


Removed and Reserved


25PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


26Item 6.


Selected Financial Data


26Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of 
    Operations


27Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risks


50Item 8.


Financial Statements and Supplementary Data


50Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


51Item 9A.


Controls and Procedures


51Item 9B.


Other Information


51PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


52Item 11.


Executive Compensation


55Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related 
    Stockholder Matters


71Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


72Item 14.


Principal Accounting Fees and Services


74PART IVItem 15.


Exhibits and Financial Statement Schedules


75EX-21.1EX-31.1EX-31.2   i




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PART I  Item 1.
    Business      e-mail
  Form 10-K).
    account-to-account person-to-person Form 10-K).
   1




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##### Table of Contents



Form 10-K).
  Form 10-K).
  Company
    Overview
  Harland
    Clarke
    Products
    and Services
  Checks
    and Related Products
        Marketing
    Services
  business-to-consumer business-to-business
  
    marketing strategies such as acquisition, lead generation and
    nurturing, retention, activation, cross-selling and up-selling; 2




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
    data management and analytics;
    database design, development and hosting;
    print production and lettershop;
    teleservices; and
    online and
    e-mail
    marketing with advanced filtering to deliver targeted messages,
    social media and web analytics integration, and tools to manage
    complex enterprise and channel programs.  Customized
    Business and Home Office Products
    Sales
    and Marketing
    e-mail
  Clients
      Competition
  Harte-Hanks,
  Environmental
    Matters
   3




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and/or
  Harland
    Financial Solutions
    Products
    and Services
  account-to-account person-to-person
  Pro Suite CreditQuest
    Backlog
   4




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Sales
    and Marketing
    Clients
    Competition
    Scantron
    Products
    and Services
  Education-Related
    Products
    Achievement Series Performance Series
 5




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Achievement Series Performance Series Achievement Series Performance Series
  ®
  Pinnacle System Pinnacle System
      Commercial,
    Healthcare, and Government  Related
    Products
        Field
    Maintenance Services
   6




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##### Table of Contents



Backlog
    Sales,
    Marketing and Product Support
  on-site
  Clients
    Competition
    The
    Companys Suppliers
      The
    Companys Foreign Sales
    The
    Companys Employees
    The
    Companys Intellectual Property
   7




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Governmental
    Regulation Related to the Company
    direct-to-consumer
  e-commerce and/or
  Non-Operating
    Contingent Claims, Indemnification and Insurance
    Matters
  Honeywell
    Indemnification
    Other
  LaserPro
 8




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Availability
    of Reports
  Form 10-K, Form 10-Q, Form 8-K,
  Item 1A.
    Risk
    Factors  Risks
    Related to Our Substantial Indebtedness
  We
    have substantial indebtedness, which may adversely affect our
    ability to operate our business and prevent us from fulfilling
    our obligations under our debt agreements.
  and/or
  
    make it more difficult for us to satisfy our obligations with
    respect to our indebtedness;
    increase our vulnerability to general adverse economic and
    industry conditions;
    require us to dedicate a substantial portion of our cash flow
    from operations to payments on our indebtedness, thereby
    reducing the availability of our cash flow to fund working
    capital, capital expenditures, research and development efforts
    and other general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our businesses and the industries in which we
    operate; and
    limit our ability to borrow additional funds.  Our
    ability to make payments on our indebtedness depends on our
    ability to generate sufficient cash in the future.
   9




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Despite
    our current indebtedness levels, we may still be able to incur
    substantially more debt. Additional indebtedness could
    exacerbate the risks associated with our substantial
    leverage.
  and/or
  Covenant
    restrictions under our indebtedness may limit our ability to
    operate our business.
    
    incur or guarantee additional indebtedness;
    make certain investments;
    make restricted payments;
    pay certain dividends or make other distributions;
    incur liens;
    enter into transactions with affiliates; and
    merge or consolidate or transfer and sell assets.     10




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Risks
    Related to Our Business
  Weak
    economic conditions and further acceleration of check unit
    declines may continue to have an adverse effect on the
    Companys revenues and profitability and could result in
    additional impairment charges.
  Form 10-K.
      
    the continued adverse economic environment, which may negatively
    affect future revenue and margins as a result of lower demand
    and pricing pressure; and
    check unit declines that have continued at a higher rate than in
    the past and are expected to continue to decline at higher rates
    than in recent years, which may negatively affect future revenue
    for our Harland Clarke segment.     11




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Difficult
    conditions in the financial markets and a general economic
    downturn may adversely affect the business and results of
    operations of the Company and we cannot determine if these
    conditions will improve or worsen in the near
    future.
  and/or and/or
  Account
    data breaches involving stored client data or misuse of such
    data could adversely affect our reputation, revenues, profits
    and growth.
  and/or
  Legislation
    and contracts relating to protection of personal data could
    limit or harm our future business.
   12




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e-commerce and/or
  We may
    experience processing errors or software defects that could harm
    our business and reputation.
    
    loss of clients;
    additional development costs;
    diversion of technical and other resources;
    negative publicity; or
    exposure to liability claims. 13




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We may
    not successfully implement any or all components of our business
    strategies or realize all of our continued cost savings, which
    could reduce our revenues and profitability.
      We may
    be unable to protect our rights in intellectual property, and
    third-party infringement or misappropriation may materially
    adversely affect our profitability.
    We may
    be unable to maintain our licenses to use third-party
    intellectual property on favorable terms.
    Third
    parties may claim we infringe on their intellectual property
    rights.
  and/or
 14




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We are
    dependent upon third-party providers for significant information
    technology needs, and an interruption of services from these
    providers could materially and adversely affect our
    operations.
    We
    depend upon the talents and contributions of a limited number of
    individuals, many of whom would be difficult to replace, and the
    loss or interruption of their services could materially and
    adversely affect our business, financial condition and results
    of operations.
    We
    face uncertainty with respect to future acquisitions, and
    unsuitable or unsuccessful acquisitions could materially and
    adversely affect our business, prospects, results of operations
    and financial condition.
        Our
    business is exposed to changes in interest rates.
   15




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We are
    dependent on the success of our research and development and the
    failure to develop new and improved products could adversely
    affect our business.
    
    accurately anticipate and properly identify our customers
    needs and industry trends;
    price our products competitively;
    innovate, develop and commercialize new products and
    applications in a timely manner;
    obtain necessary regulatory approvals;
    differentiate our products from competitors
    products; and
    use our research and development budget efficiently.    We may
    be subject to sales and other taxes, which could have adverse
    effects on our business.
  out-of-state
  We may
    be subject to environmental risks, and liabilities for
    environmental compliance or cleanup could have a material,
    adverse effect on our profitability.
     16




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and/or
  M &
    F Worldwide, our indirect parent company, and its principal
    stockholder have significant influence over us.
    Risks
    Related to our Harland Clarke Segment
  The
    paper check industry overall is a mature industry and check
    usage is declining. Our business will be harmed if check usage
    declines faster than expected.
  period-over-period and/or
 17




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Consolidation
    among financial institutions may adversely affect our
    relationships with our clients and our ability to sell our
    products and may therefore result in lower revenues and
    profitability.
  and/or
  We are
    dependent on a few large clients, and adverse changes in our
    relationships with these highly concentrated clients may
    adversely affect our revenues and profitability.
      We
    face intense competition and pricing pressures in certain areas
    of our business, which could result in lower revenues, higher
    costs and lower profitability.
    Interruptions
    or adverse changes in our vendor or supplier relationships or
    delivery services could have a material adverse effect on our
    business.
   18




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Increased
    production and delivery costs, such as fluctuations in paper
    costs, could materially adversely affect our
    profitability.
    Softness
    in direct mail response rates could have an adverse impact on
    our operating results.
  direct-to-consumer and/or
  direct-to-consumer
  Risks
    Related to our Harland Financial Solutions and Scantron
    Segments
  If we
    fail to continually improve our Harland Financial Solutions and
    Scantron products, effectively manage our product offerings and
    introduce new products and service offerings, our business may
    suffer.
    
    continue to enhance and expand existing Harland Financial
    Solutions and Scantron products and services;
    make Harland Financial Solutions and Scantron products
    compatible with future and existing operating systems and
    applications that achieve popularity within the business
    application marketplace, including current and future versions
    of Windows, Unix and IBM iSeries;
    engage in new business initiatives; and 19




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
    develop and introduce new products and new services that satisfy
    increasingly sophisticated client requirements, keep pace with
    technological and regulatory developments, provide client value
    and are attractive to customers.    The
    revenues, cash flows and results of operations of our Harland
    Financial Solutions segment may be reduced if we need to lower
    prices or offer other favorable terms on our products and
    services to meet competitive pressures in the software
    industry.
    Consolidation
    among financial institutions may adversely affect our
    relationships with Harland Financial Solutions clients and our
    ability to sell our products and may therefore result in lower
    revenues and profitability.
  and/or
  Downturns
    in general economic and industry conditions, enhanced regulatory
    burdens and reductions in information technology budgets could
    cause decreases in demand for our software and related services
    which could negatively affect our revenues, cash flows and
    results of operations.
   20




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As our
    software offerings increase in number, scope and complexity, our
    need to prevent any undetected errors and to correct any
    identified errors may increase our costs, slow the introduction
    of new products and we may become subject to warranty or product
    liability claims which could be costly to resolve and result in
    negative publicity.
    Errors,
    defects or other performance problems of our products could
    result in harm or damage to our clients and expose us to
    liability, which may adversely affect our business and operating
    results.
      Failure
    to hire and retain a sufficient number of qualified information
    technology professionals could have a material adverse effect on
    our business, results of operations and financial
    condition.
   21




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We may
    not receive significant revenues from our current research and
    development efforts.
    Our
    Harland Financial Solutions segment provides services to clients
    that are subject to government regulations that could constrain
    its operations.
    We may
    not be able to successfully develop new products and services
    for our Scantron segment, and those products and services may
    not receive widespread acceptance. As a result, the business,
    prospects, results of operations and financial condition of
    Scantron could be materially and adversely
    affected.
    Budget
    deficits may reduce funding available for Scantron products and
    services and have a negative effect on our
    revenue.
    If we
    are not able to obtain paper and other supplies at acceptable
    quantities and prices, our revenue could be adversely
    affected.
   22




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Harland
    Clarke
  Approximate FloorLocation

Use

Space (Square Feet)


Leased/Owned StatusAtlanta, GA

Administration, Information Technology, Sales and Marketing


96,400



OwnedAtlanta,
    GA(a)

Closed


36,000



OwnedAtlanta,
    GA(a)

Closed


54,000



OwnedAtlanta,
    GA(a)

Closed


132,300



OwnedAtlanta, GA

Tech Center


14,294



LeasedAtlanta, GA

Operations Support


9,665



LeasedBoulder City, NV

Administration and Production


4,000



LeasedBraintree, MA

Marketing Services and Support


3,476



LeasedCharlotte, NC

Administration


4,906



LeasedColorado Springs, CO

Services


22,665



LeasedGlen Burnie, MD

Marketing Services and Production


120,000



LeasedGrapevine, TX

Printing


83,282



LeasedGurabo, Puerto Rico

Printing


22,446



LeasedHigh Point, NC

Printing


135,000



LeasedJeffersonville, IN

Printing


141,332



LeasedKansas City, MO

Marketing Services


5,401



LeasedLisle, IL

Marketing Services


7,050



LeasedLouisville, KY

Printing


50,000



LeasedMilton, WA

Printing


87,640



LeasedNashville, TN

Administration


21,309



LeasedNew Braunfels, TX

Administration, Printing and Contact Center


98,030



OwnedPhoenix, AZ

Printing


64,000



LeasedRedwood City, CA

Administration


10,000



LeasedSalt Lake City, UT

Printing, Distribution and Contact Center


129,100



OwnedSan Antonio, TX

Printing


166,000



LeasedSan Antonio, TX

Contact Center


68,000



LeasedSan Antonio, TX

Contact Center


42,262



LeasedSan Antonio, TX

Corporate Headquarters


90,000



LeasedSan Antonio, TX

Administration


1,936



LeasedSan Antonio, TX

Warehouse


16,166



LeasedSan Antonio, TX

Warehouse


18,675



Leased     (a)

    
    Held for sale. 23




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Harland
    Financial Solutions
  Approximate FloorLocation

Use

Space (Square Feet)


Leased/Owned StatusAtlanta, GA

Development and Support


7,098



LeasedBirmingham, AL

Development and Support


4,400



LeasedBothell, WA

Development and Support


20,784



LeasedCarmel, IN

Development and Support


5,931



LeasedCincinnati, OH

Service Bureau


63,901



LeasedClive, IA

Service Bureau


36,466



LeasedCotuit, MA

Development and Support


3,200



LeasedEnglewood, CO

Development and Support


28,838



LeasedFargo, ND

Development and Support


18,371



LeasedGrand Rapids, MI

Development and Support


5,703



LeasedLake Mary, FL

Corporate Headquarters, Development and Support


80,390



LeasedMemphis, TN

Development and Support


7,981



LeasedMiamisburg, OH

Development and Support


15,286



LeasedOrlando, FL

Processing


14,856



LeasedPleasanton, CA

Development and Support


49,115



LeasedPortland, OR

Administration, Development and Support


58,685



LeasedTel Aviv, Israel

Development and Support


7,991



LeasedThiruvananthapuram, India

Development and Support


4,000



Leased   Scantron
  Approximate FloorLocation

Use

Space (Square Feet)


Leased/Owned StatusAtlanta, GA

Administration, Development and Support


2,921



LeasedBellevue, WA

Administration


16,000



LeasedChennai, India

Development and Support


38,060



LeasedColumbia, PA

Printing


121,370



OwnedEagan, MN

Corporate Headquarters, Development and Support


109,500



OwnedGreeley, CO

Development and Support


10,800



LeasedLakewood, CO

Development and Support


3,077



LeasedLawrence, KS

Administration


21,000



LeasedMcLean, VA

Administration, Development and Support


4,336



LeasedOlivet, MI

Development and Support


1,856



LeasedOmaha, NE

Field Services, Administration and Support


50,000



OwnedSanta Ana, CA

Development and Support


26,057



LeasedSan Diego, CA

Development and Support


21,333



LeasedTowson, MD

Administration, Development and Support


9,193



Leased  24




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Item 3.
    Legal
    Proceedings  LaserPro
      Item 4.
    Removed
    and Reserved 25




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  over-the-counter
  Item 6.
    Selected
    Financial Data    Form 10-K.
  Year Ended December 31,(In millions)

2010(a)


2009(b)


2008(c)


2007(d)


2006Statement of Operations Data:Net revenues

$
1,671.2


$
1,712.3


$
1,794.6


$
1,369.9


$
623.9Cost of revenues


958.6



997.7



1,066.9



833.8



388.4Gross profit


712.6



714.6



727.7



536.1



235.5Selling, general and administrative expenses


389.9



387.4



445.9



333.2



145.2Asset impairment charges


3.7



44.4



2.4



3.1



Restructuring costs


22.3



32.5



14.6



5.6



3.3Operating income


296.7



250.3



264.8



194.2



87.0Gain (loss) on early extinguishment of debt






65.0







(54.6
)


Interest expense, net


(114.8
)


(135.9
)


(184.2
)


(159.9
)


(60.0
)Other income (expense), net


0.1



0.1



(0.4
)


(0.5
)


Income (loss) before income taxes


182.0



179.5



80.2



(20.8
)


27.0Provision (benefit) for income taxes


67.8



67.4



33.0



(5.4
)


7.5Net income (loss)

$
114.2


$
112.1


$
47.2


$
(15.4
)

$
19.5   December 31,(In millions)

2010(a)

2009(b)

2008(c)

2007(d)

2006Balance Sheet Data:Total assets

$
3,336.1


$
3,252.0


$
3,391.8


$
3,447.6


$
1,118.3Long-term debt, including current portion and short-term
    borrowings(e)


2,219.7



2,238.8



2,390.6



2,409.9



603.8Stockholders equity


338.8



246.0



166.3



190.5



219.3     (a)
    
    Includes the financial position and results of operations of
    Spectrum K12 from the date of its acquisition on July 21,
    2010 and the financial position and results of operations of
    Parsam from the date of its acquisition on December 6,
    2010. See Note 3 to our consolidated financial statements
    included elsewhere in this Annual Report on
    Form 10-K.(b)
    
    Includes the financial position and results of operations of
    Protocol IMS from the date of its acquisition on
    December 4, 2009 and the financial position of
    SubscriberMail from the date of its acquisition on
    December 31, 2009. See Note 3 to our consolidated
    financial statements included elsewhere in this Annual Report on
    Form 10-K. 26




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(c)
    
    Includes the financial position and results of operations of
    Data Management I LLC from the date of its acquisition on
    February 22, 2008 and the financial position of Transaction
    Holdings from the date of its acquisition on December 31,
    2008. See Note 3 to our consolidated financial statements
    included elsewhere in this Annual Report on
    Form 10-K.(d)
    
    Includes the financial position and results of operations of
    John H. Harland Company from the date of its acquisition on
    May 1, 2007.(e)
    
    Includes capital leases of $4.6 million, $5.7 million,
    $2.6 million, $3.4 million and $4.6 million at
    December 31, 2010, 2009, 2008, 2007 and 2006, respectively.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    Item 6. Selected Financial Data and the Harland
    Clarke Holdings consolidated financial statements and notes
    thereto included elsewhere in this Annual Report on
    Form 10-K.
  Overview
    of Business
    e-mail
      Recent
    Development
   27




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The
    Parsam Acquisition
  account-to-account person-to-person Form 10-K).
  The
    Spectrum K12 Acquisition
  Form 10-K).
  The
    SubscriberMail and Protocol IMS Acquisitions
   28




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Form 10-K).
  The
    Transaction Holdings Acquisition
    The Data
    Management Acquisition
    Economic
    and Other Factors Affecting the Businesses of the
    Company
  Harland
    Clarke
  period-over-period and/or
  Harte-Hanks,
   29




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and/or
  Harland
    Financial Solutions
  and/or
      Scantron
   30




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Critical
    Accounting Policies and Estimates
    Revenue Recognition
      percentage-of-completion
     31




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and/or
    Income Taxes
    Long-Lived Assets
  
    Significant underperformance relative to expected historical or
    projected future operating results;
    Significant changes in the manner of use of these assets or the
    strategy for the Companys overall business; and
    Significant negative industry or economic trends.    Goodwill and Acquired Intangible
    Assets
   32




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and/or
          Contingent Consideration Arrangements
    Contingencies and Indemnification
    Agreements
 33




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Form 10-K.
  Postretirement Benefits
    Derivative Financial Instruments
    Accounting
    Guidance
  Form 10-K
  Off-Balance
    Sheet Arrangements
  and/or
 34




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Asset
    Impairments
    Restructuring
    Consolidated
    Operating Results
      Year
    Ended December 31, 2010 Compared to Year Ended
    December 31, 2009
  Form 10-K).
  Net
    Revenues:
 Year Ended December 31,2010


2009Consolidated Net Revenues:Harland Clarke segment

$
1,191.2


$
1,226.0Harland Financial Solutions segment


282.7



278.9Scantron segment


203.7



208.0Eliminations


(6.4
)


(0.6
)Total

$
1,671.2


$
1,712.3    35




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Cost
    of Revenues:
  Year Ended December 31,2010


2009Consolidated Cost of Revenues:Harland Clarke segment

$
730.9


$
764.3Harland Financial Solutions segment


121.7



119.6Scantron segment


112.4



114.4Eliminations


(6.4
)


(0.6
)Total

$
958.6


$
997.7        36




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Selling,
    General and Administrative Expenses:
  Year Ended December 31,2010


2009Consolidated Selling, General and Administrative Expenses:Harland Clarke segment

$
206.3


$
206.6Harland Financial Solutions segment


109.6



112.1Scantron segment


58.8



55.9Corporate


15.2



12.8Total

$
389.9


$
387.4          37




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Asset
    Impairment Charges
    Form 10-K
  Restructuring
    Costs
    Form 10-K).
  Interest
    Income
  Form 10-K).
  Interest
    Expense
    Gain
    on Early Extinguishment of Debt
  Form 10-K).
 38




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Other
    Income (Expense), Net
    Provision
    for Income Taxes
    Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
  Form 10-K).
  Net
    Revenues:
  Year Ended December 31,2009


2008Consolidated Net Revenues:Harland Clarke segment

$
1,226.0


$
1,290.4Harland Financial Solutions segment


278.9



293.7Scantron segment


208.0



211.3Eliminations


(0.6
)


(0.8
)Total

$
1,712.3


$
1,794.6          39




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##### Table of Contents



Cost
    of Revenues:
  Year Ended December 31,2009


2008Consolidated Cost of Revenues:Harland Clarke segment

$
764.3


$
822.5Harland Financial Solutions segment


119.6



124.1Scantron segment


114.4



121.1Eliminations


(0.6
)


(0.8
)Total

$
997.7


$
1,066.9           Selling,
    General and Administrative Expenses:
  Year Ended December 31,2009


2008Consolidated Selling, General and Administrative Expenses:Harland Clarke segment

$
206.6


$
240.1Harland Financial Solutions segment


112.1



131.6Scantron segment


55.9



59.4Corporate


12.8



14.8Total

$
387.4


$
445.9      40




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##### Table of Contents



Asset
    Impairment Charges
      Form 10-K
  Restructuring
    Costs
    Form 10-K).
 41




---



##### Table of Contents



Interest
    Income
    Interest
    Expense
    Gain
    on Early Extinguishment of Debt
  Form 10-K).
  Other
    Income (Expense), Net
  other-than-temporary
  Provision
    for Income Taxes
    Related
    Party Transactions
  Notes
    Receivable
     42




---



##### Table of Contents



Form 10-K.
  Other
      Form 10-K,
  Form 10-K,
    Liquidity
    and Capital Resources
  Cash
    Flow Analysis
       43




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##### Table of Contents



The
    Companys Consolidated Contractual
    Obligations
    Payments Due by PeriodLess than








AfterTotal


1 year


1-3 years


4-5 years


5 years(In millions)Revolving credit
    facilities(1)(7)

$



$



$



$



$
Senior secured term
    loans(2)(7)


1,737.0



18.0



36.0



1,683.0



Senior
    notes(3)(7)


478.1











478.1



Interest on long-term
    debt(4)(7)


361.3



101.8



183.7



75.8



Capital lease obligations and other indebtedness


5.2



1.7



2.5



1.0



Operating lease obligations


112.4



27.0



42.1



23.7



19.6Raw material purchase obligations


16.2



16.2











Other long-term liabilities


10.0



0.7



1.9



1.6



5.8Client incentive
    payments(5)


94.8



56.2



34.0



4.1



0.5Other purchase
    obligations(6)


22.7



12.7



8.7



1.3



Postretirement benefits payments


6.4



0.6



1.3



1.3



3.2Contingent consideration
    arrangements(8)


8.2



4.6



3.6







Total

$
2,852.3


$
239.5


$
313.8


$
2,269.9


$
29.1     (1)

    
    Consists of our $100.0 million revolving credit facility,
    which will mature on June 28, 2013. See Note 11 to the
    accompanying consolidated financial statements included
    elsewhere in this Annual Report on
    Form 10-K.(2)

    
    $1,800.0 million senior secured term loan will mature on
    June 30, 2014 and the Company is required to make payments
    of principal in the amount of $18.0 million per year in
    equal quarterly installments. See Note 11 to the
    accompanying consolidated financial statements included
    elsewhere in this Annual Report on
    Form 10-K.(3)

    
    The senior notes will mature in 2015 and include
    $271.3 million of fixed rate notes and $206.8 million
    of floating rate notes. See Note 11 to the accompanying
    consolidated financial statements included elsewhere in this
    Annual Report on
    Form 10-K.(4)

    
    Interest on long-term debt assumes that all floating rates of
    interest remain the same as those in effect at December 31,
    2010 and includes the effect of the Companys interest rate
    derivative arrangements on future cash payments for the
    remaining period of those derivatives. The payments noted above
    also assume that the level of borrowing under the revolving
    credit facility remains at zero, as it was on December 31,
    2010, and all mandatory payments are made.(5)

    
    Represents unpaid amounts under existing client contracts.(6)

    
    Purchase obligations include amounts due under contracts with
    third-party service providers. Such contracts are primarily for
    information technology services including license rights for
    mainframe software usage, voice and network data services and
    telecommunication services. We routinely issue purchase orders
    to numerous vendors for the purchase of inventory and other
    supplies. These purchase orders are generally cancelable with
    reasonable notice to the vendor. As such, these purchase orders
    are not included in the purchase obligations presented in the
    table above.(7)

    
    The credit facilities and senior notes include early repayment
    provisions if certain events occur, including excess cash flow
    payments with respect to the senior secured credit facilities.
    See Note 11 to the 44




---



##### Table of Contents



accompanying consolidated financial statements included
    elsewhere in this Annual Report on
    Form 10-K.
    Payments in the table above assume that only mandatory principal
    payments will be made and that there will be no prepayments.(8)

    
    Represents the recorded liabilities for contingent consideration
    arrangements as of December 31, 2010. See Notes 3 and
    13 to the accompanying consolidated financial statements
    included elsewhere in this Annual Report on
    Form 10-K.    The
    Companys Credit Agreement
          
    a rate per annum equal to the higher of (a) the prime rate
    of Credit Suisse and (b) the Federal Funds rate plus 0.50%,
    in each case plus an applicable margin of 1.50% per annum for
    revolving loans and for term loans; or
    a rate per annum equal to a reserve-adjusted LIBOR rate, plus an
    applicable margin of 2.50% per annum for revolving loans and for
    term loans.     45




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##### Table of Contents



The
    Companys Senior Notes
        Impact of
    Inflation
    Liquidity
    Assessment
  Form 10-K)
 46




---



##### Table of Contents




    Capital Expenditures.  The Companys
    capital expenditures are primarily related to infrastructure
    investments, internally developed software, cost reduction
    programs, marketing initiatives and other projects that support
    future revenue growth. During the years ended December 31,
    2010, 2009 and 2008, the Company incurred $38.6 million,
    $42.2 million and $48.2 million of capital
    expenditures and $0.1 million, $0.3 million and
    $0.7 million of capitalized interest, respectively. Capital
    expenditures for the years ended December 31, 2009 and 2008
    include $11.8 million and $21.7 million, respectively
    related to integration projects.
    Contract Acquisition Payments.  During the
    years ended December 31, 2010, 2009 and 2008, the Company
    made $39.6 million, $39.5 million and
    $43.8 million of contract acquisition payments to its
    clients, respectively.
    Restructuring/Cost Reductions.  Restructuring
    accruals and purchase accounting reserves have been established
    for anticipated severance payments, costs related to facilities
    closures and other expenses related to the planned restructuring
    or consolidation of some of the Companys historical
    operations, as well as related to the acquisition of Harland,
    the Data Management Acquisition, the Transaction Holdings
    Acquisition and the acquisition of Protocol IMS. During the
    years ended December 31, 2010, 2009 and 2008, the Company
    made $14.4 million, $33.6 million and
    $19.2 million of payments for restructuring, respectively.    Cash Flow
    Risks
    Honeywell
    Indemnification
   47




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##### Table of Contents



Other
  LaserPro
    Forward-Looking
    Statements
  Form 10-K Form 10-K, Form 10-K. Form 10-K
    
    our substantial indebtedness;
    further adverse changes in or worsening of general economic and
    industry conditions, including the depth and length of the
    economic downturn and higher unemployment, which could result in
    more rapid declines in product sales of
    and/or
    pricing pressure on the Harland Clarke and Scantron segments,
    and reductions in information technology budgets which could
    result in adverse impacts on the Harland Financial Solutions
    segment; 48




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##### Table of Contents




    weak economic conditions and declines in the financial
    performance of our business that may result in material
    impairment charges, which could have a negative effect on the
    Companys earnings, total assets and market prices of the
    Companys outstanding securities;
    our ability to generate sufficient cash in the future that
    affects our ability to make payments on our indebtedness;
    our ability to incur substantially more debt that could
    exacerbate the risks associated with our substantial leverage;
    covenant restrictions under our indebtedness that may limit our
    ability to operate our businesses and react to market changes;
    increases in interest rates;
    the maturity of the paper check industry, including a faster
    than anticipated decline in check usage due to increasing use of
    alternative payment methods, decreased consumer spending and
    other factors and our ability to grow non-check related product
    lines;
    consolidation among financial institutions;
    adverse changes or failures or consolidation of the large
    financial institution clients on which we depend, resulting in
    decreased revenues
    and/or
    pricing pressure;
    intense competition in all areas of our businesses;
    our ability to successfully manage acquisitions;
    our ability to implement any or all components of our business
    strategy;
    interruptions or adverse changes in our vendor or supplier
    relationships;
    increased production and delivery costs;
    fluctuations in the costs of raw materials and other supplies;
    our ability to attract, hire and retain qualified personnel;
    technological improvements that may reduce any advantage over
    other providers in our respective industries;
    our ability to protect customer or consumer data against data
    security breaches;
    changes in legislation relating to consumer privacy protection
    that could increase our costs or limit our future business
    opportunities;
    contracts with our clients relating to consumer privacy
    protection that could restrict our business;
    our ability to protect our intellectual property rights;
    our reliance on third-party providers for certain significant
    information technology needs;
    software defects or cyber attacks that could harm our businesses
    and reputation;
    sales and other taxes that could have adverse effects on our
    businesses;
    environmental risks;
    the ability of our Harland Financial Solutions segment to
    achieve organic growth;
    regulations governing the Harland Financial Solutions segment;
    our ability to develop new products for our Scantron segment and
    to grow Scantrons web-based education business; 49




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##### Table of Contents




    our ability to achieve VSOE for software businesses we have
    acquired or will acquire, which could affect the timing of
    recognition of revenue;
    changes in contingent consideration estimates related to
    acquisition earn-out arrangements;
    future warranty or product liability claims which could be
    costly to resolve and result in negative publicity;
    government and school clients budget deficits, which could
    have an adverse impact on our Scantron segment;
    softness in direct mail response rates;
    lower than expected cash flow from operations;
    unfavorable foreign currency fluctuations;
    the loss of one of our significant customers;
    work stoppages and other labor disturbances; and
    unanticipated internal control deficiencies or weaknesses.    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risks      Form 10-K.
      Item 8.
    Financial
    Statements and Supplementary Data  page F-1 Regulation S-X Form 10-K.
 50




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Rules 13(a)-15(e) 15d-15(e)
  Rules 13a-15(f) 15d-15(f)
  Managements
    Report on Internal Control over Financial Reporting
      
    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of the Company;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of the Company; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.        Item 9B.
    Other
    Information   51




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Organizational
    Structure
      Name

Age

PositionCharles T. Dawson


61


President and Chief Executive Officer, Harland Clarke Holdings
    Corp.; Chief Executive Officer, Harland Clarke; DirectorPeter A. Fera, Jr.


42


Executive Vice President and Chief Financial Officer, Harland
    Clarke Holdings Corp. and Harland ClarkeJames D. Singleton


51


President and Chief Operating Officer, Harland ClarkeRaju M. Shivdasani


60


President, Harland Financial SolutionsWilliam D. Hansen


51


Chairman, ScantronPaul G. Savas


48


DirectorBarry F. Schwartz


61


Director   Charles T. Dawson
  Peter A. Fera, Jr.
  James D. Singleton
 52




---



##### Table of Contents



Raju M. Shivdasani
  William D. Hansen
  Paul G. Savas
  Barry F. Schwartz
  Code of
    Ethics
    Board of
    Directors
   53




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##### Table of Contents



Board
    Committees
  http://www.mandfworldwide.com/Corporate_Charter/audit_committee_charter.htm.
  Compensation
    Committee Interlocks and Insider Participation
    Compensation
    Risk Assessment
      
    The programs provide an appropriate mix of fixed and variable
    compensation.
    Variable pay is an appropriate mix of both short-term and
    long-term compensation.
    Program features which limit the payout of variable compensation
    provide an additional balance between risk and reward. For
    example, all 2010 variable compensation plans are capped and
    certain plans commencing in 2011 will have a
    clawback provision.
    Base pay is limited by the terms of the relevant employment
    agreements for executives or compensation policy for employees
    who do not have an employment agreement.
    Long-term incentives are subject to multi-year vesting which
    ties value to long-term performance.
    All executive variable compensation programs are based on the
    achievement of pre-established targets set by management and
    reviewed with the CEO and management, as well as the
    Compensation Committee of M & F Worldwide.
    Adjustments to performance measures are made to align
    achievement of targets with significant changes to the business,
    including adjustments for acquisitions and dispositions, and are
    subject to Compensation Committee or Board approval to assure
    actual payout levels reflect performance. 54




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##### Table of Contents




    Harland Clarke Holdings currently does not provide
    single-trigger change of control compensation to its
    executives or employees.
    Severance pay is defined by Company policy or applicable
    employment agreement with severance packages offering a maximum
    of two years of salary continuation for only certain of our NEOs
    and significantly lesser amounts for other employees.
    Severance amounts for all employees, including those severance
    amounts made available to NEOs and other executives under an
    employment agreement, are in line with market standards.
    Compensation policies in general are reviewed periodically to
    compare against market standards.    Item 11.
    Executive
    Compensation  Compensation
    Discussion & Analysis
  Named
    Executive Officers
    
    Mr. Charles T. Dawson, President and CEO of the Company;
    Mr. Peter A. Fera, Jr., CFO of the Company;
    Mr. James D. Singleton, President and COO of Harland Clarke;
    Mr. Raju M. Shivdasani, President of Harland Financial
    Solutions; and
    Mr. William D. Hansen, President of Scantron during 2010,
    and currently serving as Chairman of Scantron.  Compensation
    Decision Makers
  Our
    Compensation Committee
  http://www.mandfworldwide.com/Corporate_Charter/compensation_committee_charter.htm.
    Role
    of Executive Officers in the Compensation Process
   55




---



##### Table of Contents



Compensation
    Consultants
  2011-2013
  Market
    Data
  2011-2013
  Compensation
    Philosophy
        and/or
 56




---



##### Table of Contents



Overview
    of Compensation Components
    Pay Element

What the Pay Element Rewards

Purpose of the Pay ElementBase Salary

   Recognized leadership skills

   Provides base level of monthly income not subject
    to performance risk   Experience and expertise in the position

   Makes overall pay package more competitive   Demonstrated prior achievement of Company and
    personal goalsAnnual Executive Bonus Plan

   Executives contributions towards our
    achievement of annual performance targets

   Focuses executive on achievement of annual goals
    most important to the Company and investors   Recognizes executives direct responsibility
    for our annual performance targets

   Exposes executive to risk of not receiving pay or
    receiving diminished pay if Company underperforms   Gives executive direct motivation to help Company
    achieve annual performance targets with significant upside for
    achieving exceptional resultsLong-Term Incentive Compensation Plans

   Achievement of sustained growth

   Keeps executive focused on long- term growth of
    the Company   Achievement of cumulative performance targets over
    a three-year period

   Keeps executive personally invested in the
    implementation of the Companys long-term growth planExecutive Employment Contract

   Continued service with the Company

   Keeps executive focused on job and performance401(k) and Nonqualified Deferred Compensation Plan

   Long-term service with the Company

   Provides retention incentive Makes overall pay package more competitive   Helps executive prepare for retirementAdditional Benefits and Perquisites

   Continued service with the Company

   Makes overall pay package more competitive   Payments in-kind may foster added Company loyalty
    in a way added cash pay does notTermination Benefits

   Continued service in circumstances under which
    executives job is at risk

   Keeps executive focused on job and performance in
    best interest of Company even if executive works himself or
    herself out of a job  57




---



##### Table of Contents



Elements
    of Compensation
  Base
    Salary
      Annual
    Executive Bonus Plan
        Actual 2010Base Salary



Bonus as a %

Actual 2009

Bonus PaidNEO

for 2010

Target %

of Base Salary

Bonus Paid

in 2011Charles T. Dawson

$
1,000,000



90-145.1+



90-175


$
1,250,000


$
1,250,000Peter A. Fera, Jr.

$
450,000



90-145.1+



90-150


$
450,000


$
450,000James D. Singleton

$
500,000



90-145.1+



90-150


$
500,000


$
500,000Raju M. Shivdasani

$
425,000



90-145.1+



65-112.5


$
225,000


$
318,750William D. Hansen

$
425,000



90-145.1+



65-112.5


$
150,205


$
318,750   Long-Term
    Incentive Compensation
   58




---



##### Table of Contents



The
    2008-2010
    M & F Worldwide Long-Term Incentive Compensation Plan
    (2008-2010
    LTIP)
  2008-2010 2008-2010 2008-2010
  2008-2010
  2008-2010 2008-2010 2008-2010 2008-2010
  The
    2011-2013
    M & F Worldwide Long-Term Incentive Compensation
    Plan
  2011-2013 (2011-2013 2011-2013 2011-2013 2011-2013
  2011-2013 2011-2013
 59




---



##### Table of Contents



2011-2013 2011-2013
  2011-2013
  2011-2013
    LTIP Aggregate Target Amounts
  Executive

Aggregate Target Amount (at end of 2013)Mr. Dawson

$
4,050,000Mr. Fera

$
1,350,000Mr. Singleton

$
1,800,000Mr. Shivdasani

$
1,500,000Mr. Hansen

$
1,275,000   Performance
    Measures and Performance Targets
  Adjusted
    EBITDA for Compensation Purposes Targets
  expense-net,
   60




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##### Table of Contents



Non-Check
    Revenue Performance Measures Commencing in 2011
    Post-Employment
    Compensation
    gross-ups
    Other
    Benefits and Perquisites
    Tax
    Considerations Relating to Executive Compensation
  Section 162(m)
    of the Internal Revenue Code
  2008-2010 2011-2013
 61




---



##### Table of Contents



Report
    of the Board of Directors
  Form 10-K
  Submitted by:

Charles T. Dawson
    Paul G. Savas
    Barry F. Schwartz, Chairman   SUMMARY
    COMPENSATION TABLE FOR FISCAL YEAR 2010
  NonqualifiedNon-Equity

DeferredIncentive Plan

Compensation

All OtherSalary(i)

Compensation(ii)

Earnings(iii)

Compensation(iv)

TotalName and Principal Position

Year

($)

($)

($)

($)

($)Charles T. Dawson
    President & Chief
    Executive Officer


2010



1,000,000



5,307,693



909



202,196



6,510,7982009



1,038,462



1,250,000







166,914



2,455,3762008



993,654



1,250,000







248,682



2,492,336Peter A. Fera, Jr.
    Executive Vice President &
    Chief Financial Officer


2010



450,000



1,521,741



200



57,594



2,029,5352009



467,308



450,000







54,674



971,9822008



445,769



450,000







63,937



959,706James D. Singleton
    President and Chief Operating
    Officer of Harland Clarke


2010



500,000



1,896,509



220



74,202



2,470,9312009



519,231



500,000







65,333



1,084,5642008



493,654



500,000







71,999



1,065,653Raju M. Shivdasani
    President of Harland
    Financial Solutions


2010



424,231



1,623,902



63



48,864



2,097,0602009



389,423



255,075







40,200



684,6982008



375,000



270,075







31,347



676,422William D. Hansen
    Chairman of Scantron


2010



425,000



977,165



6



33,329



1,435,5002009



196,154



150,205







14,927



361,286     (i)
    
    Fiscal Year 2009 contained 27 pay
    periods instead of the standard 26, therefore actual pay is
    correspondingly more than the annual rate for all NEOs. 2010
    actual pay includes several days of the 2009 pay rate, resulting
    in the difference between the actual and current annual salary
    rate for Mr. Shivdasani.(ii)
    
    The compensation in this column for
    2010 consists of: amounts earned during
    2010, and anticipated to be paid by March 11, 2011, under
    the Annual Executive Bonus Plan as follows: Mr. Dawson
    $1,250,000, Mr. Fera $450,000, Mr. Singleton $500,000,
    Mr. Shivdasani $318,750, and Mr. Hansen $318,750; amounts earned over the
    course of the three years from
    2008-2010
    and anticipated to be paid by March 11, 2011 in connection
    with the 2008  2010 LTIP as follows: Mr. Dawson
    $4,057,693, Mr. Fera $1,071,741, Mr. Singleton
    $1,396,509, Mr. Shivdasani $1,275,077, and Mr. Hansen
    $658,415; and Mr. Shivdasani
    received $30,075 under the legacy John H. Harland 2007 Long-Term
    Cash Incentive Plan in 2010. An additional $30,075 will be paid
    to Mr. Shivdasani under the legacy John H. Harland 2007
    Cash Long-Term Incentive Plan on or shortly after April 25,
    2011, subject to Mr. Shivdasanis continued employment.(iii)
    
    Represents the above-market
    interest, if any, credited under our Benefits Equalization Plan
    (the BEP). We determined the above-market interest
    credited by determining the difference between the interest on
    BEP accounts calculated using the actual rate used in the plan,
    and 120% of the applicable federal long-term rate, with
    quarterly compounding for January of the applicable year, as
    prescribed under section 1274(d) of the Internal Revenue
    Code. Interest rates credited to the BEP accounts were 5.0%,
    3.5% and 5.0% for 2010, 2009, and 2008, respectively. 62




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##### Table of Contents



(iv)
    
    All Other Compensation:  All Other
    Compensation
  Term Life,Executive

EmployerAD&D, and

Contributions toExecutive

401(k) Plan andCountry

Disability

SupplementalCar

Club

Insurance

Excess Benefit

Tax

OtherAllowance

Fees

Premiums

Plan

Gross-Up

Compensation

TotalName

Year

($)(i)

($)(ii)

($)(iii)

($)(iv)

($)(v)

($)(vi)

($)Charles T. Dawson


2010



35,617



5,765



2,278



90,000



36,136



32,400



202,196Peter A. Fera, Jr.


2010



5,940



4,051



626



36,000



2,904



8,073



57,594James D. Singleton


2010



12,000



5,340



626



40,000



5,269



10,967



74,202Raju M. Shivdasani


2010



12,000







5,001



25,969



3,586



2,308



48,864William D. Hansen


2010



12,000







626



19,216



479



1,008



33,329     (i)
    
    Comprised of (i) car allowance
    in the case of Messrs. Fera, Singleton, Shivdasani, and
    Hansen and (ii) the aggregate incremental cost to the
    Company of the leased vehicle in the case of Mr. Dawson,
    which is calculated as the total cost of the lease payments on
    the car, the insurance relating to the car, gasoline used in the
    car, and cleaning and maintenance of the car. Messrs. Fera,
    Singleton, Shivdasani, and Hansen are eligible to receive a
    pre-set amount per month as a car allowance.(ii)
    
    The Company reimburses each
    executives monthly country club dues.(iii)
    
    Amount includes (i) executive
    life premiums, (ii) executive AD&D premiums for all
    NEOs and (iii) executive disability premiums for
    Mr. Shivdasani.(iv)
    
    Consists of (1) employer
    contributions to the 401(k) plan of $9,800 for each NEO and
    (ii) employer contributions to a supplemental non-qualified
    excess benefit plan, the BEP (described below and in the
    Nonqualified Deferred Compensation Table), in the following
    amounts: Mr. Dawson $80,200, Mr. Fera $26,200,
    Mr. Singleton $30,200, Mr. Shivdasani $16,169 and
    Mr. Hansen $9,416.(v)
    
    Consists of (i) the tax
    gross-up on
    the personal use of a company vehicle by Mr. Dawson of
    $17,554, (ii) the tax
    gross-up on
    executive disability premiums for Mr. Shivdasani of $2,756,
    (iii) the tax
    gross-up for
    the spousal travel and entertainment for Mr. Dawson of
    $14,012, Mr. Fera of $2,903, Mr. Singleton of $5,268,
    Mr. Shivdasani of $830 and Mr. Hansen of $479 and
    (iv) the tax
    gross-up for
    Mr. Dawson on home security of $4,570.(vi)
    
    Consists of (i) spousal travel
    and entertainment for Mr. Dawson of $24,430, Mr. Fera
    of $8,073, Mr. Singleton of $10,967, Mr. Shivdasani of
    $2,308 and Mr. Hansen of $1,008 and (ii) home security
    for Mr. Dawson of $7,970. 63




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##### Table of Contents



GRANTS OF
    PLAN BASED AWARDS
    FOR FISCAL YEAR 2010
  Threshold

Target

MaximumName

Award
    Type(i),(ii)

($)

($)

($)(iv)Charles T. Dawson
    (iii)

Annual Bonus


900,000




1,250,000



1,750,000Segment
    2008-2010 LTIP


787,500




1,575,000



3,289,811Consolidated
    2008-2010 LTIP


1,087,500




2,175,000



4,200,133Peter A. Fera, Jr.

Annual Bonus


405,000




450,000



675,000Segment
    2008-2010 LTIP


247,500




495,000



1,033,941Consolidated
    2008-2010 LTIP


247,500




495,000



955,557James D. Singleton

Annual Bonus


450,000




500,000



750,000Segment
    2008-2010 LTIP


322,500




645,000



1,347,583Consolidated
    2008-2010 LTIP


322,500




645,000



1,244,795Raju M. Shivdasani

Annual Bonus


276,250




318,750



478,125Segment
    2008-2010 LTIP


281,250




562,500



1,117,165Consolidated
    2008-2010 LTIP


281,250




562,500



1,086,074William D. Hansen

Annual Bonus


276,250




318,750



478,125Segment
    2008-2010 LTIP


106,250




212,500



390,594Consolidated
    2008-2010 LTIP


206,199




412,397



988,693     (i)
    
    The amounts listed in this column
    under the heading Annual Bonus represent the threshold, target
    and maximum amount which may be payable to each NEO pursuant to
    the annual executive bonus plan, as described in more detail
    above under Elements of Compensation  The
    Annual Executive Bonus Plan.(ii)
    
    The amounts listed under the
    heading
    2008-2010
    LTIP represent the threshold and target amount which might have
    been payable in 2011 to each NEO at the end of the three year
    performance period
    (2008-2010)
    pursuant to the
    2008-2010
    LTIP, as described in more detail above under Elements of
    Compensation  The 2008 M & F Worldwide
    Long Term Incentive Compensation Plan (the
    2008-2010
    LTIP). The first row labeled
    2008-2010
    LTIP represents the amount of the
    2008-2010
    LTIP attributable to the performance of each NEOs
    individual business segment at the end of the three year
    performance period and the second row represents the amount
    attributable to consolidated Company results at the end of the
    three year performance period.(iii)
    
    Mr. Dawson received an
    additional grant under the
    2008-2010
    LTIP which represents the amount attributable to consolidated
    Company results at the end of the three year performance period
    as a result of increased responsibilities for the Company after
    taking the additional position of President and Chief Executive
    Officer of Harland Clarke Holdings.(iv)
    
    The
    2008-2010
    LTIP, which was designed to meet the requirements of
    Section 162(m) of the Code was approved by the shareholders
    of M & F Worldwide in 2008 for an aggregate
    maximum of $16.5 million. Under the terms of the
    2008-2010
    LTIP, the maximum Payout to any participant was
    $10 million. The actual payouts, as listed below, are
    substantially lower than the maximum potential payout, which was
    provided for purposes of Section 162(m) of the code.  Actual
    Amount Anticipated to be Paid for Plan-Based Awards
  Segment


Consolidated2008-2010


2008-2010Annual Bonus


LTIP


LTIPName

($)


($)


($)Charles T. Dawson


1,250,000



1,710,436



2,347,257Peter A. Fera, Jr.


450,000



537,566



534,175James D. Singleton


500,000



700,490



696,019Raju M. Shivdasani


318,750



668,073



607,004William D. Hansen


318,750



212,500



445,915    64




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##### Table of Contents



Employment
    Contracts
  Mr. Dawson
  Prior
    Employment Agreement
  Change-in-Control 2008-2010 2008-2010 2008-2010 2008-2010
  Amended
    and Restated Employment Agreement
  2011-2013
  Mr. Fera
  Prior
    Employment Agreement
   65




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##### Table of Contents



Change-in-Control 2008-2010 2008-2010 2008-2010
  Amended
    and Restated Employment Agreement
  2011-2013
  Mr. Singleton
  Prior
    Employment Agreement
  Change-in-Control 2008-2010 2008-2010 2008-2010
  Amended
    and Restated Employment Agreement
  2011-2013
 66




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##### Table of Contents



Mr. Shivdasani
  Prior
    Employment Agreement
  Change-in-Control 2008-2010 2008-2010
  Amended
    and Restated Employment Agreement
  2011-2013
  Mr. Hansen
  Prior
    Employment Agreement
  Change-in-Control 2008-2010 2008-2010 2008-2010
  Amended
    and Restated Employment Agreement
   67




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##### Table of Contents



2011-2013
  NONQUALIFIED
    DEFERRED COMPENSATION TABLE FOR FISCAL YEAR 2010
  Executive


Registrant


Aggregate


Aggregate


AggregateContributions


Contributions in


Earnings


Withdrawals/


Balancein Last FY


Last FY


in Last FY


Distributions


at Last FYEName

($)


($)(i)


($)


($)


($)(ii)Charles T. Dawson






80,200



30,285







640,279Peter A. Fera, Jr.






26,200



6,665







144,491James D. Singleton






30,200



7,340







159,180Raju M. Shivdasani






16,169



2,102







49,977William D. Hansen






9,416



187







9,604     (i)
    
    The amounts reported are included as part of All Other
    Compensation in the Summary Compensation(ii)
    
    Reflects the total balance of the executives account as of
    December 31, 2010.  Material
    Features of the Deferred Compensation Plan
      10-Year
    Potential
    Payments Upon Termination or
    Change-in-Control
       68




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##### Table of Contents



2011-2013
  2011-2013
  2011-2013
             69




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##### Table of Contents



2008-2010 Change-in-Control 2008-2010
  TERMINATION
    WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON
    AS OF DECEMBER 31, 2010
  ExecutiveHealth/


Annual





DeferredSeparation





Welfare


Bonus


Outplacement


CompensationName and

Pay(i)


Vacation(ii)


Plans(iii)


Plan(iv)


Assistance(v)


Plan
    Balance(vi)


Total(vii)Principal Position

($)


($)


($)


($)


($)


($)


($)Charles T. Dawson,
    President and CEO


2,000,000



11,077



9,713



1,250,000



30,000



640,279



3,941,069Peter A. Fera, Jr.,
    EVP & CFO


675,000







12,816



450,000



30,000



144,491



1,312,307James D. Singleton,
    President & CEO of Harland Clarke


750,000







13,366



500,000



30,000



159,180



1,452,546Raju M. Shivdasani,
    President of Harland Financial Solutions


637,500







10,069



318,750



30,000



49,977



1,046,296William D. Hansen,
    Chairman of Scantron


637,500







15,974



318,750



30,000



9,604



1,011,828     (i)
    
    For each NEO, upon termination of
    the executive without cause or resignation for good reason (each
    as defined in each employment agreement), the executive is
    entitled to receive continued payment of base salary for the
    following periods: 24 months in the case of
    Messrs. Dawson; and 18 months in the case of
    Messrs. Fera, Singleton, Shivdasani, and Hansen. These
    amounts will be higher for terminations occurring after
    December 31, 2010 as a result of the compensation
    provisions set forth in the amended and restated employment
    agreements effective January 1, 2011.(ii)
    
    Upon termination, the executive is
    entitled to his earned and unused vacation for the current year.
    Effective January 1, 2008, we established a policy pursuant
    to which up to 40 hours of vacation may be carried over
    from year to year. Mr. Dawson is also entitled to his
    balance of frozen vacation of $11,077.(iii)
    
    For each NEO, upon termination of
    the executive without cause, or resignation for good reason, the
    executive is entitled to continued participation in applicable
    welfare benefit plans for 12 months after the termination
    and continued contribution by the Company to the employer
    portion of the employee premiums of welfare benefit plans for
    12 months after the termination. The employer portion
    reflects employer cost for 2010 based on the employees
    enrollment in dental, medical and vision plans as of
    December 31, 2010.(iv)
    
    For each NEO, upon termination of
    the executive without cause, due to death or disability, or in
    the event the NEO resigns for good reason, the executive is
    entitled to receive a pro rata annual bonus for the year in
    which the termination occurred if the executive would have been
    eligible to receive such bonus hereunder (including due to
    satisfaction of the company of performance milestones) had the
    executive been employed at the time such annual bonus is
    normally paid. The amounts provided in this column assume that
    the bonus is paid at a level at which 100% of the target is
    achieved.(v)
    
    Upon termination, each executive is
    entitled to standard outplacement assistance for the key
    executive level up to $30,000 which would be paid to a mutually
    agreed provider of outplacement services for a
    12-month
    outplacement program.(vi)
    
    Upon termination, retirement, death
    or disability, the executives total balance in the BEP is
    to be paid in a single lump sum on the first day of the seventh
    month following the occurrence of such an event. These amounts
    reflect the executives account balance as of
    December 31, 2010.(vii)
    
    To the extent actually earned but
    not yet paid at the time of termination, the executives would
    also be entitled to the following
    2008-2010
    LTIP payments, representing actual amounts earned during the
    three year cycle of
    2008-2010:
    (i) Mr. Dawson, $4,057,693, (ii) Mr. Fera,
    $1,071,741, (iii) Mr. Singleton, $1,396,509,
    (iv) Mr. Shivdasani, $1,275,077 and
    (v) Mr. Hansen, $658,415. In the case of termination
    after December 31, 2010, the NEOs would also be entitled to
    a pro rata portion of the
    2011-2013
    LTIP to the extent earned and paid in accordance with the terms
    of such plan. 70




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##### Table of Contents



DIRECTORS
    COMPENSATION TABLE FOR FISCAL YEAR 2010
  Pension ValueNon-Equity

and NonqualifiedIncentive

DeferredFees Earned

Stock

Option

Plan

Compensation

All OtherName

or Paid in Cash

Awards

Awards

Compensation

Earnings

Compensation

TotalBarry F.
    Schwartz(i)


























Paul G.
    Savas(i)


























Charles T.
    Dawson(ii)


























     (i)
    
    Messrs. Schwartz and Savas received no compensation
    directly or indirectly from the Company. They provided services
    to the Company under the terms of a Second Amended and Restated
    Management Services Agreement between M & F Worldwide
    and MacAndrews & Forbes. Pursuant to the Second
    Amended and Restated Management Services Agreement,
    M & F Worldwide paid to MacAndrews & Forbes
    LLC, a wholly owned subsidiary of MacAndrews & Forbes
    Holdings, Inc. a fee of $2.5 million per calendar quarter,
    beginning May 1, 2007. The total amount paid to
    MacAndrews & Forbes in 2010, 2009, and 2008 pursuant
    to the Second Amended and Restated Management Services Agreement
    was $10.0 million, $10.0 million, and
    $10.0 million, respectively. In addition, M & F
    Worldwide paid to MacAndrews & Forbes fees of
    $2.0 million in 2008 for services related to sourcing,
    analyzing, negotiating and executing the Data Management
    Acquisition.(ii)
    
    Mr. Dawson did not receive any compensation for his service
    as a director in 2010, 2009, or 2008.  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    71




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##### Table of Contents



Number of Shares

Percent ofName of Beneficial Owner

Beneficially Owned

Outstanding SharesMFW Holdings One LLC
    35 East 62 St., New York, NY 10065


7,248,000
(1)


37.5
%Dimensional Fund Advisors LP
    Palisades West, Building One
    6300 Bee Cave Road, Austin, TX 78746


1,585,824
(2)


8.2
%MFW Holdings Two LLC
    35 East 62 St., New York, NY 10065


1,012,666
(1)


5.2
%Ronald O. Perelman


133,334
(1)


1.0
%Barry F. Schwartz


5,000



0.0
%Charles T. Dawson






0.0
%Paul G. Savas


1,000



0.0
%William D. Hansen






0.0
%James D. Singleton






0.0
%Raju M. Shivdasani






0.0
%All directors and executive officers as a group (8 persons)


8,400,000
(3)


43.4
%     (1)
    
    All of such shares of common stock are beneficially owned by
    Ronald O. Perelman. MFW Holdings One LLC and MFW Holdings Two
    LLC are wholly owned subsidiaries of MacAndrews &
    Forbes Holdings Inc., of which Mr. Perelman owns 100%. In
    addition, MacAndrews & Forbes Holdings Inc. may be
    deemed to share beneficial ownership of the
    8,194,000 shares of common stock beneficially owned by MFW
    Holdings One LLC and MFW Holdings Two LLC and the
    133,334 shares of common stock deemed beneficially owned by
    Mr. Perelman as a result of Mr. Perelmans grant
    of restricted stock (an aggregate of 8,400,000 shares of
    common stock, representing approximately 43.4% of the common
    stock outstanding or deemed outstanding under the rules of the
    SEC), by virtue of MacAndrews & Forbes Holdings
    Inc.s ownership of 100% of the common stock of MFW
    Holdings One LLC and MFW Holdings Two LLC and
    Mr. Perelmans 100% ownership of
    MacAndrews & Forbes Holdings Inc.s common stock.
    The shares so owned and shares of intermediate holding companies
    are, or may from time to time be, pledged to secure obligations
    of MacAndrews & Forbes Holdings Inc. or its affiliates.(2)
    
    Beneficial ownership is based on a statement on
    Schedule 13G filed by Dimensional Fund Advisors LP on
    February 11, 2011.(3)
    
    Includes shares of common stock indirectly owned by
    Mr. Perelman through MacAndrews & Forbes Holdings
    Inc.  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Related
    Person Transactions Policy
   72




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##### Table of Contents



Form 10-K
  Management
    Services Agreement
          Insurance
    Tax
    Sharing Agreement
   73




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##### Table of Contents



Allocations
    Director
    Independence
    Item 14.
    Principal
    Accounting Fees and Services    Audit Fees. Form 10-Q Form 10-Q.
  Audit-Related Fees.
  Tax Fees.
  All Other Fees.
   74




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    page F-1
    ExhibitNumber

Description2
.1

Stock Purchase Agreement by and between M & F
    Worldwide Corp. and Honeywell International Inc., dated
    October 31, 2005 (incorporated by reference to
    Exhibit 2.1 of M & F Worldwide Corp.s
    Current Report on
    Form 8-K
    dated October 31, 2005).2
.2

Membership Interest Purchase Agreement by and among
    M & F Worldwide Corp., NCS Pearson Inc. and Pearson
    Inc., dated as of February 13, 2008 (incorporated by
    reference to Exhibit 2.1 of M & F Worldwide
    Corp.s Current Report on
    Form 8-K,
    dated February 14, 2008).2
.3

Agreement and Plan of Merger by and among John H. Harland
    Company, M & F Worldwide Corp. and H Acquisition
    Corp., dated as of December 19, 2006 (incorporated by
    reference to Exhibit 2.1 of M & F Worldwide
    Corp.s Current Report on
    Form 8-K,
    dated December 20, 2006).2
.4

Securities Purchase Agreement, dated as of December 15,
    2010, by and between Scantron Corporation and KUE Digital
    International LLC (incorporated by reference to Exhibit 2.1
    of M & F Worldwide Corp.s Current Report on
    Form 8-K,
    dated December 16, 2010).3
.1

Certificate of Incorporation of Harland Clarke Holdings Corp.,
    as amended (incorporated by reference to Exhibit 3.1(i) of
    Harland Clarke Holdings Corp.s Registration Statement on
    Form S-4,
    Commission File
    No. 333-133253).3
.2

By-laws of Harland Clarke Holdings Corp. (incorporated by
    reference to Exhibit 3.1(ii) of Harland Clarke Holdings
    Corp.s Registration Statement on
    Form S-4,
    Commission File
    No. 333-133253).4
.1

Indenture dated as of May 1, 2007 among Harland Clarke
    Holdings Corp., the co-issuers and guarantors party thereto and
    Wells Fargo Bank, N.A., as trustee. (incorporated by reference
    to Exhibit 4.1 to Harland Clarke Holdings Corp.
    Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.2

Registration Rights Agreement (relating to the initial notes)
    dated as of May 1, 2007 by and among Harland Clarke
    Holdings Corp., the Guarantors (listed therein), Credit Suisse
    Securities (USA) LLC, Bear, Stearns & Co., Inc.,
    Citigroup Global Markets Inc. and J.P. Morgan Securities
    Inc. (incorporated by reference to Exhibit 4.4 to Harland
    Clarke Holdings Corp. Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.3

Credit Agreement, dated as of April 4, 2007 among Harland
    Clarke Holdings Corp., the Subsidiary Borrowers (listed
    therein), the Lenders (listed therein) and Credit Suisse, Cayman
    Islands Branch, as administrative agent. (incorporated by
    reference to Exhibit 4.5 to Harland Clarke Holdings Corp.
    Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.4

First Amendment to Credit Agreement, dated as of May 4,
    2007, by and among Harland Clarke Holdings Corp., the lender
    parties (listed therein) and Credit Suisse, Cayman Islands
    Branch, as administrative and collateral agent. (incorporated by
    reference to Exhibit 4.6 to Harland Clarke Holdings Corp.
    Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.5

Guarantee and Collateral Agreement, dated as of May 1,
    2007, by and among Harland Clarke Holdings Corp. and certain
    subsidiaries in favor of Credit Suisse, Cayman Islands Branch.
    (incorporated by reference to Exhibit 4.7 to Harland Clarke
    Holdings Corp. Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717). 75




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##### Table of Contents



ExhibitNumber

Description4
.6

Assumption Agreement, dated as of May 1, 2007 by and among
    Harland Clarke Corp., Harland Checks and Services, Inc.,
    Scantron Corporation, Harland Financial Solutions, Inc., HFS
    Core Systems, Inc., Centralia Holding Corp. and John H. Harland
    Company of Puerto Rico in favor of Credit Suisse, Cayman Islands
    Branch, as administrative and collateral agent. (incorporated by
    reference to Exhibit 4.8 to Harland Clarke Holdings Corp.
    Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.7

Intellectual Property Security Agreement, dated as of
    May 1, 2007, by and among B(2)Direct, Inc., Checks in the
    Mail, Inc. and Clarke American Checks, Inc., the Grantors, in
    favor of Credit Suisse, Cayman Islands Branch, as administrative
    and collateral agent. (incorporated by reference to
    Exhibit 4.9 to Harland Clarke Holdings Corp. Registration
    Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.8

Intellectual Property Security Agreement, dated as of
    May 1, 2007, by and among Harland Clarke Corp., Harland
    Checks and Services, Inc., Scantron Corporation, Harland
    Financial Solutions, Inc. and HFS Core Systems, Inc., the
    Grantors, in favor of Credit Suisse, Cayman Islands Branch, as
    administrative and collateral agent. (incorporated by reference
    to Exhibit 4.10 to Harland Clarke Holdings Corp.
    Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.9

Joinder Agreement, dated as of May 1, 2007, by and among
    B(2)Direct, Inc., Checks in the Mail, Inc., Clarke American
    Checks, Inc., New CS, Inc., New SCSFH, Inc., H Acquisition
    Corp., New SCH, Inc., New SFH, Inc. and Credit Suisse, Cayman
    Islands Branch. (incorporated by reference to Exhibit 4.11
    to Harland Clarke Holdings Corp. Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.10

Joinder Agreement, dated as of May 1, 2007, by and among
    Harland Clarke Corp., Harland Checks and Services, Inc.,
    Scantron Corporation, Harland Financial Solutions, Inc., HFS
    Core Systems, Inc. and Credit Suisse, Cayman Islands Branch.
    (incorporated by reference to Exhibit 4.12 to Harland
    Clarke Holdings Corp. Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.11

Deed to Secure Debt by Harland Clarke Corp. to Credit Suisse,
    Cayman Islands Branch (5096 Panola Industrial Blvd, Decatur,
    Georgia and
    2933-2939
    Miller Road, Decatur, Georgia). (incorporated by reference to
    Exhibit 4.14 to Harland Clarke Holdings Corp. Registration
    Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.12

Deed of Trust, Security Agreement, Assignment of Rents and
    Leases and Fixture Filing by Scantron Corporation in favor of
    First American Title Insurance Company, as trustee for the
    benefit of Credit Suisse, Cayman Islands Branch (2020 South 156
    Circle, Omaha, Nebraska). (incorporated by reference to
    Exhibit 4.15 to Harland Clarke Holdings Corp. Registration
    Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.13

Deed of Trust, Security Agreement, Assignment of Rents and
    Leases and Fixture Filing by Checks In The Mail Inc. in favor of
    Peter Graf, Esq., as trustee for the benefit of Credit
    Suisse, Cayman Islands Branch (2435 Goodwin Lane, New Braunfels,
    Texas). (incorporated by reference to Exhibit 4.18 to
    Harland Clarke Holdings Corp. Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).4
.14

Deed of Trust, Security Agreement, Assignment of Rents and
    Leases and Fixture Filing by Harland Clarke Corp. in favor of
    First American Title Insurance Agency, LLC, as trustee for
    the benefit of Credit Suisse, Cayman Islands Branch
    (4867-4883 West
    Harold Gatty Road, Salt Lake City, Utah). (incorporated by
    reference to Exhibit 4.20 to Harland Clarke Holdings Corp.
    Registration Statement on
    Form S-4,
    Commission File
    No. 333-143717).10
.1

Tax Sharing Agreement, dated as of December 15, 2005, by
    and among M & F Worldwide Corp., Harland Clarke
    Holdings Corp. and PCT International Holdings Inc. (incorporated
    by reference to Exhibit 10.15 of M & F Worldwide
    Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2005).10
.2+

M & F Worldwide Corp. 2008 Long Term Incentive Plan
    (incorporated by reference to Exhibit 10.15 to
    M & F Worldwide Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2007). 76




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##### Table of Contents



ExhibitNumber

Description10
.3+

Amendment No. 1 to the M & F Worldwide Corp. 2008
    Long Term Incentive Plan, dated as of December 31, 2008
    (incorporated by reference to Exhibit 10.2 to M &
    F Worldwide Corp.s Current Report on
    Form 8-K
    filed on January 7, 2009).10
.4+

M & F Worldwide Corp. 2008 Long Term Incentive
    Plan  Award Agreement for Participating Executives
    (incorporated by reference to Exhibit 10.16 to
    M & F Worldwide Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2007).10
.5+

Employment Agreement, dated as of February 13, 2008,
    between Harland Clarke Holdings Corp. and Charles T. Dawson
    (incorporated by reference to Exhibit 10.1 to Harland
    Clarke Holdings Corp.s Current Report on
    Form 8-K
    filed on February 15, 2008).10
.6+

Amendment, dated as of December 31, 2008, to the Employment
    Agreement, dated as of February 13, 2008, between Harland
    Clarke Holdings Corp. and Charles T. Dawson (incorporated by
    reference to Exhibit 10.2 to M & F Worldwide
    Corp.s Current Report on
    Form 8-K
    filed on January 7, 2009).10
.7+

Employment Agreement dated February 13, 2008 between
    Harland Clarke Corp. and Peter A. Fera, Jr. (incorporated by
    reference to Exhibit 10.2 to Harland Clarke Holdings
    Corp.s Current Report on
    Form 8-K
    filed on February 15, 2008).10
.8+

Amendment, dated as of December 31, 2008, to the Employment
    Agreement, dated as of February 13, 2008, between Harland
    Clarke Corp. and Peter A. Fera, Jr. (incorporated by reference
    to Exhibit 10.3 to Harland Clarke Holdings Corp.s
    Current Report on
    Form 8-K
    filed on January 7, 2009).10
.9+

Employment Agreement, dated as of February 7, 2008, between
    Harland Clarke Holdings Corp. and Daniel Singleton (incorporated
    by reference to Exhibit 10.14 to Harland Clarke Holdings
    Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2008).10
.10+

Employment Agreement, dated as of May 5, 2008, between
    Harland Clarke Holdings Corp., Harland Financial Solutions and
    Raju M. Shivdasani (incorporated by reference to
    Exhibit 10.15 to Harland Clarke Holdings Corp.s
    Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2008).10
.11

Second Amended and Restated Management Services Agreement, dated
    as of June 30, 2007, by and between MacAndrews &
    Forbes Inc. and M & F Worldwide Corp. (incorporated by
    reference to Exhibit 10.1 to M & F Worldwide
    Corp.s Current Report on
    Form 8-K
    dated June 25, 2007).10
.12+

Amendment, dated as of December 31, 2008, to the Employment
    Agreement, dated as of February 7, 2008, between Harland
    Clarke Holdings Corp. and Daniel Singleton (incorporated by
    reference to Exhibit 10.18 to Harland Clarke Holdings
    Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2008).10
.13+

Amendment, dated as of December 31, 2008, to the Employment
    Agreement, dated as of May 5, 2008, among Harland Clarke
    Holdings Corp., Harland Financial Solutions and Raju Shivdasani
    (incorporated by reference to Exhibit 10.19 to Harland
    Clarke Holdings Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2008).10
.14+

Amendment, dated as of February 2, 2010, to the Employment
    Agreement, dated as of February 13, 2008, between Harland
    Clarke Holdings Corp. and Charles T. Dawson (incorporated by
    reference to Exhibit 10.21 to Harland Clarke Holdings
    Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2009).10
.15+

Amendment, dated as of February 2, 2010, to the Employment
    Agreement, dated as of February 7, 2008, between Harland
    Clarke Holdings Corp. and Daniel Singleton (incorporated by
    reference to Exhibit 10.22 to Harland Clarke Holdings
    Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2009).10
.16+

Amendment, dated as of February 2, 2010, to the Employment
    Agreement, dated as of February 13, 2008, between Harland
    Clarke Holdings Corp. and Peter A. Fera, Jr. (incorporated by
    reference to Exhibit 10.23 to Harland Clarke Holdings
    Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2009). 77




---



##### Table of Contents



ExhibitNumber

Description10
.17+

Amendment, dated as of February 22, 2010, to the Employment
    Agreement, dated as of May 5, 2008, among Harland Clarke
    Holdings Corp., Harland Financial Solutions and Raju Shivdasani
    (incorporated by reference to Exhibit 10.24 to Harland
    Clarke Holdings Corp.s Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2009).10
.18+

Employment Agreement, dated as of January 1, 2011, by and
    among M & F Worldwide Corp., Harland Clarke Holdings
    Corp. and Charles Dawson (incorporated by reference to
    Exhibit 10.1 to M & F Worldwide Corp.s
    Current Report on
    Form 8-K
    filed on January 6, 2011).10
.19+

Employment Agreement, dated as of January 1, 2011, between
    Harland Clarke Holdings Corp. and Peter Fera (incorporated by
    reference to Exhibit 10.2 to Harland Clarke Holdings
    Corp.s Current Report on
    Form 8-K
    filed on January 6, 2011).10
.20+

Employment Agreement, dated as of January 1, 2011, between
    Harland Clarke Holdings Corp. and Daniel Singleton (incorporated
    by reference to Exhibit 10.3 to Harland Clarke Holdings
    Corp.s Current Report on
    Form 8-K
    filed on January 6, 2011).10
.21+

Employment Agreement, dated as of January 1, 2011, by and
    among Harland Clarke Holdings Corp., Harland Financial
    Solutions, Inc. and Raju Shivdasani (incorporated by reference
    to Exhibit 10.4 to Harland Clarke Holdings Corp.s
    Current Report on
    Form 8-K
    filed on January 6, 2011).10
.22+

Employment Agreement, dated as of January 1, 2011, by and
    among Harland Clarke Holdings Corp., Scantron Corporation and
    William D. Hansen (incorporated by reference to
    Exhibit 10.5 to Harland Clarke Holdings Corp.s
    Current Report on
    Form 8-K
    filed on January 6, 2011).21
.1*

Subsidiaries of Harland Clarke Holdings Corp.31
.1*

Certification of Charles T. Dawson, Chief Executive Officer,
    dated March 4, 2011.31
.2*

Certification of Peter A. Fera, Jr., Chief Financial Officer,
    dated March 4, 2011.     *
    
    Filed herewith.+
    
    Denotes management contract or compensatory plan or arrangement
    required to be filed as an exhibit hereto. 78




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##### Table of Contents



SIGNATURES
     HARLAND CLARKE HOLDINGS
    CORP.Dated: March 4, 2011

By: /s/  Charles
    T. DawsonCharles T. Dawson
     President, Chief Executive Officer and Director
     (Principal Executive Officer)Dated: March 4, 2011

By: /s/  Peter
    A. Fera, Jr.Peter A. Fera, Jr.
     Executive Vice President and Chief Financial
     Officer (Principal Financial Officer)Dated: March 4, 2011

By: /s/  J.
    Michael RileyJ. Michael Riley
     Vice President and Controller
     (Principal Accounting Officer)  79




---



##### Table of Contents



Signature

Title

Date/s/  Charles
    T. DawsonCharles
    T. Dawson

President, Chief Executive Officer and Director

March 4, 2011/s/  Paul
    G. SavasPaul
    G. Savas

Director

March 4, 2011/s/  Barry
    F. SchwartzBarry
    F. Schwartz

Director

March 4, 2011  80




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
    AND FINANCIAL STATEMENT SCHEDULE
    YEAR ENDED DECEMBER 31, 2010
       
 PagesReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Income


F-4Consolidated Statements of Stockholders
    Equity


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7Schedule II  Valuation and
    Qualifying Accounts and Reserves


F-42     F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    F-2




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and SubsidiariesConsolidated Balance Sheets(in millions, except share data)
  December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
211.5


$
63.9Accounts receivable (net of allowances of $2.8 and $3.0 at
    December 31, 2010 and 2009)


124.7



119.7Marketable securities






24.6Inventories


31.6



32.5Income taxes receivable


9.3



13.5Deferred tax assets


19.9



18.6Prepaid expenses and other current assets


56.0



66.1Total current assets


453.0



338.9Property, plant and equipment, net


143.4



161.1Goodwill


1,526.8



1,473.2Other intangible assets, net


1,097.4



1,187.9Contract acquisition payments, net


27.2



28.6Other assets


88.3



62.3Total assets

$
3,336.1


$
3,252.0LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
36.0


$
33.9Deferred revenues


128.9



116.1Current maturities of long-term debt


19.4



19.5Accrued liabilities:Salaries, wages and employee benefits


73.1



52.6Income and other taxes payable


13.4



15.4Customer incentives


29.0



23.5Payable to parent


0.7



Other current liabilities


27.5



30.8Total current liabilities


328.0



291.8Long-term debt


2,200.3



2,219.3Deferred tax liabilities


389.5



415.3Other liabilities


79.5



79.6Commitment and contingenciesStockholders equity:Common stock  200 shares authorized; par value
    $0.01; 100 shares issued and outstanding at
    December 31, 2010 and 2009






Additional paid-in capital


157.0



157.0Retained earnings


181.0



98.0Accumulated other comprehensive (loss) income, net of taxes:Derivative fair-value adjustments


(10.9
)


(8.6
)Foreign currency translation adjustments


(0.1
)


0.3Unrecognized amounts included in postretirement obligations


4.0



(1.6
)Unrealized gains (losses) on investments, net


7.8



0.9Total accumulated other comprehensive loss, net of taxes


0.8



(9.0
)Total stockholders equity


338.8



246.0Total liabilities and stockholders equity

$
3,336.1


$
3,252.0    F-3




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##### Table of Contents



Harland
    Clarke Holdings Corp. and SubsidiariesConsolidated Statements of
    Income(in millions)
  Year Ended December 31,2010


2009


2008Product revenues, net

$
1,344.8


$
1,413.0


$
1,486.9Service revenues, net


326.4



299.3



307.7Total net revenues


1,671.2



1,712.3



1,794.6Cost of products sold


787.3



845.6



908.4Cost of services provided


171.3



152.1



158.5Total cost of revenues


958.6



997.7



1,066.9Gross profit


712.6



714.6



727.7Selling, general and administrative expenses


389.9



387.4



445.9Asset impairment charges


3.7



44.4



2.4Restructuring costs


22.3



32.5



14.6Operating income


296.7



250.3



264.8Interest income


0.7



1.0



2.2Interest expense


(115.5
)


(136.9
)


(186.4
)Gain on early extinguishment of debt






65.0



Other income (expense), net


0.1



0.1



(0.4
)Income before income taxes


182.0



179.5



80.2Provision for income taxes


67.8



67.4



33.0Net income

$
114.2


$
112.1


$
47.2    F-4




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##### Table of Contents



Harland
    Clarke Holdings Corp. and SubsidiariesConsolidated Statements of
    Stockholders Equity(in millions, except share data)
  AccumulatedShares of


Additional


Retained


OtherCommon


Paid-In


Earnings


ComprehensiveStock


Capital


(Deficit)


(Loss) Income


TotalBalance, December 31, 2007


100


$
202.5


$
(0.5
)

$
(11.5
)

$
190.5Net income










47.2







47.2Foreign currency translation adjustments, net of taxes of $0.0














(2.1
)


(2.1
)Derivative fair-value adjustment, net of taxes of $2.0














(2.7
)


(2.7
)Change in unrecognized amounts included in postretirement
    obligations, net of taxes of $0.9














(1.6
)


(1.6
)Unrealized losses on investments, net of taxes of $0.3














(0.5
)


(0.5
)Reclassification for investment write-downs included in net
    income, net of taxes of $0.3














0.5



0.5Total comprehensive income


















40.8Dividend paid to parent






(45.5
)


(19.5
)






(65.0
)Balance, December 31, 2008


100


$
157.0


$
27.2


$
(17.9
)

$
166.3Net income










112.1







112.1Foreign currency translation adjustments, net of taxes of $0.0














0.7



0.7Derivative fair-value adjustment, net of taxes of $5.2














8.2



8.2Change in unrecognized amounts included in postretirement
    obligations, net of taxes of $0.7














(0.9
)


(0.9
)Unrealized gains on investments, net of taxes of $0.6














0.9



0.9Total comprehensive income


















121.0Dividend paid to parent










(41.3
)






(41.3
)Balance, December 31, 2009


100


$
157.0


$
98.0


$
(9.0
)

$
246.0Net income










114.2







114.2Foreign currency translation adjustments, net of taxes of $0.0














(0.4
)


(0.4
)Derivative fair-value adjustment, net of taxes of $1.3














(2.3
)


(2.3
)Change in unrecognized amounts included in postretirement
    obligations, net of taxes of $3.6














5.6



5.6Unrealized gains on investments, net of taxes of $4.4














6.9



6.9Total comprehensive income


















124.0Dividend paid to parent










(31.2
)






(31.2
)Balance, December 31, 2010


100


$
157.0


$
181.0


$
0.8


$
338.8    F-5




---



##### Table of Contents



Harland
    Clarke Corp. and SubsidiariesConsolidated Statements of Cash
    Flows(in millions)
  Year Ended December 31,2010


2009


2008Operating activitiesNet income

$
114.2


$
112.1


$
47.2Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation


48.9



57.9



66.6Amortization of intangible assets


109.0



104.2



97.9Amortization of deferred financing fees


7.0



7.3



7.8Gain on early extinguishment of debt






(65.0
)


Deferred income taxes


(31.9
)


(23.2
)


(31.9
)Asset impairments


3.7



44.4



2.4Changes in operating assets and liabilities, net of effect of
    businesses acquired:Accounts receivable


(1.1
)


11.8



(13.1
)Inventories


0.9



6.0



0.6Prepaid expenses and other assets


(17.0
)


(19.3
)


1.9Contract acquisition payments, net


1.4



11.2



11.8Accounts payable and accrued liabilities


18.7



(54.4
)


(14.4
)Deferred revenues


13.0



11.1



11.2Income and other taxes


0.6



(3.5
)


12.7Payable to parent


0.7



(0.7
)


(1.4
)Other, net


4.9



5.4



1.4Net cash provided by operating activities


273.0



205.3



200.7Investing activitiesPurchase of businesses, net of cash acquired


(61.2
)


(11.4
)


(234.4
)Purchase of marketable securities






(24.6
)


Investment in related party notes receivable










(14.4
)Net repayments of related party notes receivable


3.0



5.2



1.8Proceeds from sale of property, plant and equipment


2.5



0.7



5.7Proceeds from sale of marketable securities


24.7







Capital expenditures


(38.6
)


(42.2
)


(48.2
)Capitalized interest


(0.1
)


(0.3
)


(0.7
)Other, net


(4.2
)


(4.2
)


(0.6
)Net cash used in investing activities


(73.9
)


(76.8
)


(290.8
)Financing activitiesDividend to parent


(31.2
)


(41.3
)


(65.0
)Redemption of notes






(67.6
)


Borrowings on credit agreements










62.0Repayments of credit agreements and other borrowings


(19.6
)


(20.3
)


(82.0
)Payments of contingent consideration arrangements


(0.7
)






Net cash used in financing activities


(51.5
)


(129.2
)


(85.0
)Net increase (decrease) in cash and cash equivalents


147.6



(0.7
)


(175.1
)Cash and cash equivalents at beginning of period


63.9



64.6



239.7Cash and cash equivalents at end of period

$
211.5


$
63.9


$
64.6Supplemental disclosure of cash paid for:Interest, net of amounts capitalized

$
108.0


$
138.0


$
171.2Income taxes, net of refunds


97.7



95.5



54.9    F-6




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and SubsidiariesNotes to Consolidated Financial
    Statements
 (dollars in millions)
  1.
    Description
    of the Business and Basis of Presentation      e-mail
            2.
    Summary
    of Significant Accounting Policies  Use of
    Estimates
   F-7




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  Revenue
    Recognition
  and/or
        percentage-of-completion percentage-of-completion
       F-8




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  Customer
    Incentives
    Shipping
    and Handling
    Cash
    and Cash Equivalents
    Investments
  available-for-sale
    Accounts
    Receivable and Allowance for Doubtful Accounts
    Inventories
  first-in,
  Contract
    Acquisition Payments
   F-9




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Advertising
        Property,
    Plant and Equipment
      Machinery and equipment

3



15 yearsComputer software and hardware

3



5 yearsLeasehold improvements

1



20 yearsBuildings and improvements

20



30 yearsFurniture, fixtures and transportation equipment

5



8 years   Software
    and Other Development Costs
   F-10




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  product-by-product
    Goodwill
    and Acquired Intangible Assets
      and/or
   F-11




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
            Long-Lived
    Assets
    Income
    and Other Taxes
      Pensions
    and Other Postretirement Benefits
   F-12




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Translation
    of Foreign Currencies
    Self-Insurance
    Derivative
    Financial Instruments
     F-13




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  Deferred
    Financing Fees
    Restructuring
    Charges
    Fair
    Value Measurements
    Reclassifications
      Recently
    Issued Accounting Guidance
     F-14




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    3.
    Acquisitions  Acquisition
    of Parsam
  account-to-account person-to-person
         F-15




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  Acquisition
    of Spectrum K12
            Acquisition
    of Protocol IMS and SubscriberMail
   F-16




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
      Acquisition
    of Transaction Holdings
    Acquisition
    of Data Management
   F-17




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Accounts receivable





$
15.9Inventories






7.5Property, plant and equipment






25.5Goodwill






116.2Other intangible assets:Customer relationships

$
65.4Trademarks and tradenames


2.4Patented technology and software


7.5Total other intangible assets






75.3Other assets






0.6Total assets acquired






241.0Deferred revenues






7.6Other liabilities






10.1Net assets acquired





$
223.3           4.
    Inventories    December 31,2010


2009Finished goods

$
8.8


$
9.8Work-in-progress


8.7



9.5Raw materials


14.1



13.2$
31.6


$
32.5  F-18




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  5.
    Property,
    Plant and Equipment    December 31,2010


2009Machinery and equipment

$
101.4


$
110.3Computer software and hardware


153.0



134.0Leasehold improvements


26.3



28.5Buildings and improvements


33.3



33.6Furniture, fixtures and transportation equipment


15.7



15.2Land


9.1



10.1Construction-in-progress


15.0



13.9353.8



345.6Accumulated depreciation


(210.4
)


(184.5
)$
143.4


$
161.1     Construction-in-progress
  6.
    Assets
    Held For Sale    Location

Former Use

Year ClosedAtlanta, GA

Operations support


2008Atlanta, GA

Printing


2008Atlanta, GA

Information Technology


2010      F-19




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
      December 31,2010


2009Land

$
1.5


$
1.4Buildings and improvements


1.9



3.5$
3.4


$
4.9   7.
    Goodwill
    and Other Intangible Assets    HarlandHarland


FinancialClarke


Solutions


Scantron


TotalBalance as of December 31, 2008

$
772.3


$
425.0


$
268.2


$
1,465.52009 acquisitions


7.2











7.2Adjustments to goodwill


(0.1
)






0.3



0.2Effect of exchange rate changes






0.2



0.1



0.3Balance as of December 31, 2009

$
779.4


$
425.2


$
268.6


$
1,473.22010 acquisitions






27.5



26.6



54.1Effect of exchange rate changes






(0.5
)






(0.5
)Balance as of December 31, 2010

$
779.4


$
452.2


$
295.2


$
1,526.8     Gross Carrying Amount


Accumulated AmortizationUseful Life


December 31,


December 31,


December 31,


December 31,(in years)


2010


2009


2010


2009Amortized intangible assets:Customer relationships


3-20


$
1,242.5


$
1,233.4


$
349.5


$
260.5Trademarks and tradenames


2-25



155.0



154.5



12.3



3.4Software and other


2-10



71.9



65.1



37.4



28.2Patents and patents pending


3-20



21.9



20.0



5.7



4.01,491.3



1,473.0



404.9



296.1Indefinite-lived intangible assets:Tradename






11.0



11.0







Total other intangible assets





$
1,502.3


$
1,484.0


$
404.9


$
296.1    F-20




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
        2011

$
103.82012


98.32013


88.42014


80.12015


74.3      F-21




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  8.
    Income
    Taxes    Year Ended December 31,2010


2009


2008Income (loss) before income taxes:Domestic

$
185.6


$
184.0


$
88.4Foreign


(3.6
)


(4.5
)


(8.2
)Total income before income taxes

$
182.0


$
179.5


$
80.2Provision for income taxes:Current:Federal

$
83.8


$
76.0


$
58.1State and local


15.8



14.5



6.7Foreign


0.1



0.1



0.199.7



90.6



64.9Deferred:Federal


(28.7
)


(20.8
)


(29.5
)State and local


(3.0
)


(3.2
)


(0.9
)Foreign


(0.2
)


0.8



(1.5
)(31.9
)


(23.2
)


(31.9
)Total provision for income taxes

$
67.8


$
67.4


$
33.0  F-22




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    December 31,2010


2009Current:Prepaid advertising

$
(1.7
)

$
(1.3
)Deferred revenues


8.1



6.8Net operating loss carryforwards


0.2



0.3Accrued expenses and other liabilities


20.4



14.7Net current deferred tax asset


27.0



20.5Valuation allowance


(7.1
)


(1.9
)19.9



18.6Long-term:Property, plant and equipment


(5.7
)


(7.7
)Postretirement benefits obligation


3.9



7.9Deferred compensation


3.2



3.0Intangible assets


(387.1
)


(414.2
)Net operating loss carryforwards


21.1



5.1Interest rate swap liability


6.9



3.1Deferred gain on debt repurchases


(25.4
)


(24.9
)Other


3.4



15.5Net long-term tax liability


(379.7
)


(412.2
)Valuation allowance


(9.8
)


(3.1
)(389.5
)


(415.3
)Net deferred tax liabilities

$
(369.6
)

$
(396.7
)     2011-2020
   F-23




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Year Ended December 31,2010


2009


2008Statutory rate


35.0
%


35.0
%


35.0
%State and local taxes


4.1
%


3.4
%


3.9
%Foreign rate differential


0.1
%


0.4
%


2.1
%Foreign loss for which no benefit was recorded


0.6
%


1.0
%


Uncertain tax positions


(1.2
)%


(2.0
)%


Other


(1.3
)%


(0.3
)%


0.1
%37.3
%


37.5
%


41.1
%        F-24




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    2010


2009


2008Balance at January 1

$
13.6


$
18.6


$
19.3Additions based on tax positions related to the current year










Additions for tax positions for prior years


0.6



1.7



Reductions for tax positions for prior years


(2.2
)


(6.7
)


(0.7
)Settlements










Balance at December 31

$
12.0


$
13.6


$
18.6         9.
    Retirement
    Plans      10.
    Other
    Postretirement Benefit Plans   F-25




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
        2010


2009APBO at beginning of year

$
18.9


$
17.5Changes in APBO:Interest cost


0.9



1.0Benefits paid


(1.5
)


(2.4
)Retiree contributions


0.9



1.1Health benefits subsidy


0.1



0.1Actuarial (gain) loss


(0.6
)


1.6Plan amendment


(8.6
)


APBO at end of year

$
10.1


$
18.9Included in accrued salaries, wages and employee benefits

$
0.6


$
1.2Included in other liabilities


9.5



17.7APBO at end of year

$
10.1


$
18.9     2010


2009Fair value of plan assets at beginning of year

$



$
Employer contributions


0.5



1.2Retiree contributions


0.9



1.1Health benefits subsidy


0.1



0.1Benefits paid


(1.5
)


(2.4
)Fair value of plan assets at end of year

$



$
Funded status

$
(10.1
)

$
(18.9
)  F-26




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    2010


2009Unrecognized prior service credits

$
(8.5
)

$
Unrecognized actuarial net loss


1.9



2.6$
(6.6
)

$
2.6     Year Ended December 31,2010


2009


2008Interest on accumulated postretirement benefit obligation

$
0.9


$
1.0


$
0.9Amortization of prior service credits


(0.1
)






Amortization of net actuarial loss


0.1







Net postretirement benefit cost


0.9



1.0



0.9Other changes in benefit obligations recognized in other
    comprehensive income:Unrecognized actuarial net (gain) loss


(0.6
)


1.6



2.5Amortization of net actuarial loss


(0.1
)






Prior service credits


(8.6
)






Amortization of prior service credits


0.1







Total recognized in net periodic benefit cost and other
    comprehensive income

$
(8.3
)

$
2.6


$
3.4       1 Percentage

1 PercentagePoint Increase

Point DecreaseEffect on total interest cost for 2010

$



$
Effect on postretirement benefit obligation at December 31,
    2010


0.2



(0.2
)  F-27




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    2011

$
0.62012


0.62013


0.62014


0.62015


0.62016-2020


3.2     11.
    Long-Term
    Debt  December 31,2010


2009$1,900.0 Senior Secured Credit Facilities

$
1,737.0


$
1,755.0Senior Floating Rate Notes due 2015


206.8



206.89.50% Senior Fixed Rate Notes due 2015


271.3



271.3Capital lease obligations and other indebtedness


4.6



5.72,219.7



2,238.8Less: current maturities


(19.4
)


(19.5
)Long-term debt, net of current maturities

$
2,200.3


$
2,219.3   $1,900.0
    Senior Secured Credit Facilities
    and/or
    
    A rate per annum equal to the higher of (a) the prime rate
    of Credit Suisse and (b) the Federal Funds rate plus 0.50%,
    in each case plus an applicable margin of 1.50% per annum for
    revolving loans and for term loans; or
    A rate per annum equal to a reserve-adjusted LIBOR rate, plus an
    applicable margin of 2.50% per annum for revolving loans and for
    term loans. F-28




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
              F-29




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  Senior
    Notes due 2015
      Gain
    on Early Extinguishment of Debt
    Capital
    Lease Obligations and Other Indebtedness
    Annual
    Maturities
    2011

$
19.72012


19.32013


19.22014


1,683.92015


478.2  F-30




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  12.
    Derivative
    Financial Instruments  Interest
    Rate Hedges
              Derivatives Designatedas Cash Flow



December 31,Hedging Instruments:

Balance Sheet Classification

2010


2009Interest rate swaps

Other current liabilities

$



$
6.3Other liabilities


17.8



7.9    F-31




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Year Ended December 31,2010

2009

2010

2009Loss Reclassified fromAccumulated OtherDerivatives Designated



Comprehensive Lossas Cash Flow

Loss Recognized in

into InterestHedging Instruments:

Other Comprehensive Income

ExpenseInterest rate swaps

$
23.3


$
18.3


$
19.7


$
31.6       Balances and Net Changes:

2010


2009Balance at the beginning of the period

$
8.6


$
16.8Loss reclassified from accumulated other comprehensive loss into
    interest expense, net of taxes of $7.7 and $12.2


(12.0
)


(19.4
)Net change in fair value of interest rate swaps, net of taxes of
    $9.0 and $7.1


14.3



11.2Balance at end of period

$
10.9


$
8.6   13.
    Fair
    Value Measurements  Nonrecurring
    Fair Value Measurements
    Fair Value atNovember 1,







Impairment2009

(Level 1)

(Level 2)

(Level 3)

ChargesIndefinite-lived trademarks and tradenames

$
156.8


$



$



$
156.8


$
44.2    F-32




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  Recurring
    Fair Value Measurements
    Balance atDecember 31,2010

(Level 1)

(Level 2)

(Level 3)Corporate equity securities

$
13.1


$
13.1


$



$
Liability for interest rate swaps


17.8







17.8



Liability for contingent consideration related to business
    combinations


8.2











8.2   Balance atDecember 31,2009

(Level 1)

(Level 2)

(Level 3)United States treasury securities

$
24.6


$
24.6


$



$
Corporate equity securities


1.9



1.9







Liability for interest rate swaps


14.2







14.2



Liability for contingent consideration related to business
    combinations


1.8











1.8       December 31,


December 31,2010


2009Balance at beginning of period

$
1.8


$
Transfers to Level 3






Businesses acquired


6.8



1.8Compensation expense recorded in selling, general and
    administrative expenses


0.5



Gain recorded in selling, general and administrative expenses


(0.2
)


Payment on contingent consideration arrangement


(0.7
)


Balance at end of period

$
8.2


$
1.8   Fair
    Value of Financial Instruments
   F-33




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    14.
    Marketable
    Securities  available-for-sale
  Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueBalance at December 31, 2010:Corporate equity securities

$
0.3


$
12.9


$
(0.1
)

$
13.1Balance at December 31, 2009:United States treasury securities

$
24.6


$



$



$
24.6Corporate equity securities


0.3



1.7



(0.1
)


1.9Total marketable securities

$
24.9


$
1.7


$
(0.1
)

$
26.5       Less than 12 Months

More than 12 MonthsFair

Unrealized

Fair

UnrealizedValue

Losses

Value

LossesAt December 31, 2010:Corporate equity securities

$



$



$
0.1


$
0.1At December 31, 2009:Corporate equity securities

$



$



$
0.1


$
0.1   other-than-temporarily
  15.
    Restructuring  Harland
    Clarke and Corporate
   F-34




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
      Established inAcquisitionBeginning


Purchase








Non-cash


EndingBalance


Accounting


Expensed


Paid in Cash


Utilization


BalanceYear Ended December 31, 2010:Severance and severance-related

$
2.5


$



$
5.1


$
(6.1
)

$



$
1.5Facilities closures and other costs


2.5







7.2



(2.5
)


(2.7
)


4.5Total

$
5.0


$



$
12.3


$
(8.6
)

$
(2.7
)

$
6.0Year Ended December 31, 2009:Severance and severance-related

$
7.4


$



$
18.1


$
(23.0
)

$



$
2.5Facilities closures and other costs


2.3







7.6



(2.8
)


(4.6
)


2.5Total

$
9.7


$



$
25.7


$
(25.8
)

$
(4.6
)

$
5.0Year Ended December 31, 2008:Severance and severance-related

$
8.5


$
1.8


$
7.0


$
(9.9
)

$



$
7.4Facilities closures and other costs


2.9



0.8



1.3



(1.7
)


(1.0
)


2.3Total

$
11.4


$
2.6


$
8.3


$
(11.6
)

$
(1.0
)

$
9.7     Harland
    Financial Solutions
     F-35




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Established inAcquisitionBeginning


Purchase








Non-cash


EndingBalance


Accounting


Expensed


Paid in Cash


Utilization


BalanceYear Ended December 31, 2010:Severance and severance-related

$
1.0


$



$
0.7


$
(1.6
)

$



$
0.1Facilities and other costs


0.1







2.1



(0.1
)


0.1



2.2Total

$
1.1


$



$
2.8


$
(1.7
)

$
0.1


$
2.3Year Ended December 31, 2009:Severance and severance-related

$
1.4


$



$
3.3


$
(3.7
)

$



$
1.0Facilities and other costs


0.7







0.5



(1.1
)






0.1Total

$
2.1


$



$
3.8


$
(4.8
)

$



$
1.1Year Ended December 31, 2008:Severance and severance-related

$
0.7


$
(0.1
)

$
3.9


$
(3.1
)

$



$
1.4Facilities and other costs


1.7



(0.4
)






(0.6
)






0.7Total

$
2.4


$
(0.5
)

$
3.9


$
(3.7
)

$



$
2.1     Scantron
     F-36




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Established inAcquisitionBeginning


Purchase








Non-cash


EndingBalance


Accounting


Expensed


Paid in Cash


Utilization


BalanceYear Ended December 31, 2010:Severance and severance-related

$
0.5


$



$
2.5


$
(2.9
)

$



$
0.1Facilities and other costs










4.7



(1.2
)


0.2



3.7Total

$
0.5


$



$
7.2


$
(4.1
)

$
0.2


$
3.8Year Ended December 31, 2009:Severance and severance-related

$
1.0


$



$
2.7


$
(3.0
)

$
(0.2
)

$
0.5Facilities and other costs










0.3







(0.3
)


Total

$
1.0


$



$
3.0


$
(3.0
)

$
(0.5
)

$
0.5Year Ended December 31, 2008:Severance and severance-related

$



$
2.5


$
2.3


$
(3.8
)

$



$
1.0Facilities and other costs










0.1



(0.1
)






Total

$



$
2.5


$
2.4


$
(3.9
)

$



$
1.0     16.
    Commitments
    and Contingencies  Lease
    and Purchase Commitments
    2011

$
27.02012


23.72013


18.52014


15.22015


8.6Thereafter


19.6      F-37




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
    Honeywell
    Indemnification
    Other
  LaserPro
    17.
    Transactions
    with Related Parties    Notes
    Receivable
   F-38




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
      Other
          18.
    Significant
    Customers    19.
    Business
    Segment Information    
    Harland Clarke segment Provides checks and
    related products, direct marketing services and customized
    business and home products to financial, retail and software
    providers, as well as consumers and small businesses. This
    segment operates in the United States and Puerto Rico. F-39




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
   
    Harland Financial Solutions segment Provides
    technology products and services to financial services clients
    worldwide. This segment operates primarily in the United States,
    Israel, Ireland and India.
    Scantron segment Provides data management
    solutions and related services to educational, commercial,
    healthcare and governmental entities worldwide. This segment
    operates in the United States and Canada.    HarlandHarland

Financial



CorporateClarke(1)

Solutions(2)

Scantron(3)

and
    Other(4)

TotalProduct revenues, net:2010

$
1,156.6


$
72.0


$
116.2


$



$
1,344.82009


1,216.8



73.0



123.2







1,413.02008


1,280.5



79.9



126.5







1,486.9Service revenues, net:2010

$
34.3


$
210.7


$
81.4


$



$
326.42009


9.2



205.9



84.2







299.32008


9.6



213.8



84.3







307.7Intersegment revenues:2010

$
0.3


$



$
6.1


$
(6.4
)

$
2009










0.6



(0.6
)


2008


0.3







0.5



(0.8
)


Operating income
    (loss):(5)2010

$
238.0


$
48.6


$
25.3


$
(15.2
)

$
296.72009


195.8



32.8



34.5



(12.8
)


250.32008


217.1



34.1



28.4



(14.8
)


264.8Depreciation and amortization (excluding amortization of
    deferred financing fees):2010

$
103.2


$
28.5


$
26.2


$



$
157.92009


109.3



26.9



25.9







162.12008


112.5



28.7



23.3







164.5Non-cash asset impairment charges:2010

$
3.7


$



$



$



$
3.72009


33.6



10.6



0.2







44.42008


2.4















2.4Capital expenditures (excluding capital leases):2010

$
24.0


$
8.3


$
6.3


$



$
38.62009


28.3



6.5



7.4







42.22008


32.2



4.0



12.0







48.2Total assets:December 31, 2010

$
987.8


$
342.0


$
311.6


$
1,694.7


$
3,336.1December 31, 2009


1,070.3



327.0



290.3



1,564.4



3,252.0     (1)
    
    Includes results of the acquired Transaction Holdings, Protocol
    IMS and SubscriberMail businesses from the date of acquisition.(2)
    
    Includes results of the acquired Parsam business from the date
    of acquisition.(3)
    
    Includes results of the acquired Data Management and Spectrum
    K12 businesses from the date of acquisition.(4)
    
    Total assets include goodwill of $1,526.8 and $1,473.2 as of
    December 31, 2010 and 2009, respectively, which is not
    assigned to the operating segments.(5)
    
    Includes restructuring costs of $22.3, $32.5 and $14.6 for 2010,
    2009 and 2008, respectively (see Note 15) and non-cash
    impairment charges of $3.7, $44.4 and $2.4 for 2010, 2009 and
    2008, respectively. F-40




---



##### Table of Contents



Harland
    Clarke Holdings Corp. and Subsidiaries
    Notes to Consolidated Financial Statements (Continued)
 (dollars in millions)
  20.
    Subsequent
    Event  Acquisition
   F-41




---



##### Table of Contents



Schedule II 
    Valuation and Qualifying Accounts and Reserves(in millions)



The following is a summary of the valuation and qualifying
    accounts and reserves for the years ended December 31,
    2010, 2009 and 2008. Beginning

Amounts

Balance

EndingBalance

Reserved

Written Off

BalanceAllowance for Doubtful Accounts and Sales Returns and
    Allowance ReservesDecember 31, 2010

$
3.0


$
4.0


$
4.2


$
2.8December 31, 2009

$
2.8


$
7.6


$
7.4


$
3.0December 31, 2008

$
2.4


$
8.0


$
7.6


$
2.8  F-42