Real Time M & A exercise.

1. M&F Worldwide Corp / John H. Harland Co. Transaction
Group Four Merger Negotiations
Denis Cranstoun
Elias Debbas
Brent Morowitz
Kumar Pallav
Valentina Shagisultanova
Prasun Singhal
April 12. 2010

2. Table of Contents
1. Company Overview
2. Transaction Overview
3. Strategic Considerations
4. Valuation
5. Capital Structure
6. Negotiations
7. Antitrust Issues
8. Employees Issues
9. Legal Structure
10 Results
.

3. 1. Company Overview

4. MacAndrews and Forbes Holdings, Inc.
Private company wholly owned by Ronald Perelman
Owns a variety of businesses in many different product lines

5. Ron Perelman
Chairman and CEO of MacAndrews
and Forbes Holdings, Inc.
Participated in his first acquisition in
1961, while still a freshman in college
Well known for his role in large
acquisitions, such as Revlon in 1985

6. MacAndrews and Forbes Holdings, Inc.
Business Model
– Leveraged buyout model
– High debt-to-equity ratio in the capital structure
– Uses high-yield debt (rated BB+ or lower by S&P)
– Holds majority equity stakes in acquired companies
Competitive Advantages
– Viable alternative to PE shops
– Financial Acumen
– Tax expertise
– Relationships with banks
– Diverse operational experience
Past Landmark Deals
– Marvel Entertainment, Technicolor, Pantry Pride

7. Clarke American
Founded in 1874 by Samuel Maverick and Robert Clarke as the
Maverick-Clarke Litho Company in San Antonio, Texas
Grew internally at first, and during the 1970’s expanded further
through acquisitions
Clarke American provided checks, check related services, and other
services to financial institutions, and offered financial institution
partners an ability to assist their customers in bank related
transactions
M&F acquired Clarke American and several related businesses in
2005 from Honeywell, Inc. for $800 Million in cash

8. Harland Corporation
John H. Harland Corporation was founded in 1923 in Atlanta,
Georgia
Originally consisted of a printing plant and office supplies store
Began to focus on check printing in the 1950’s and went public in
1969
Purchased Scantron in 1988
Diversified in the 1990’s with acquisitions in financial services and
technology

9. 2. Transaction Overview

10. Executive Summary
Situation Overview
 M&F Worldwide in search of an acquisition opportunity
 Select number of players in the highly consolidated industry (3 majors)
 One weaker but willing target; the other one – stronger, but harder to get
Analysis
 Transaction financing seamless due to combination of markets and corporate reputation
 Harland becomes a willing negotiating party when price is right
 Antitrust concerns alleviated by M&F Worlwide “seal the deal”
Strategic Nature
 Clarke American and Harland are two of the three major players in a consolidated industry
 Economies of scope realized through cross-selling to respective customer databases
 Economies of scale realized through cost-cutting and improved efficiency at Harland
3

11. 3. Strategic Considerations

12. Harland Company Profile
Harland can be thought of as three discrete business units
Printed Products
Checks, Direct Marketing,
& Contact Center
Services for
Financial/Commercial
Institutions and Individual
Customers
Harland Financial Scantron
Solutions “HFS
Testing and Surveys for
Software & Services for Schools & Companies
Banks, Credit Unions and
Thrifts
3

13. Synergies Overview
 Acquisition of Harland by Clarke American will create a new entity
– Approximately $1.7 billion of revenue
– $508.0 million of 2006 PF Adjusted Cash EBITDA
– Over $175 million of Pro Forma Free Cash Flow
What is Free Cash Flow?
Free Cash Flow to the Firm (FCFF)
EBIT (1-t)
- (CapEx – Depr)
- Change in WC
= FCFF
 The strategic nature of the combination will generate significant cost synergies
– $106.4 million of run-rate EBITDA within 18 months of closing
– $112.6 million of run-rate EBITDA within 24 months of closing
Performance goals surpassed following integration
6

14. Source of Cost Savings
COST SAVINGS SUMMARY DESCRIPTION
Non-facility related headcount $78.3
Facilities $15.5
Procurement $9.8
Other $9.0
Total $112.6
6

15. Clarke American / Harland
 A leading provider of check-related products, direct marketing and contact center services
Leading Market
 A leading provider of software and services to financial institutions
Presence
 A leading provider of testing and survey technologies
 Broad client portfolio includes over 14,000 financial institution customers such as:
Diversified,
Blue-chip Client
Portfolio
 Trusted, integrated relationships with clients
Strong, Long-
Term Client  Provider of mission-critical software products
Relationships  Strong partnerships with long-term contracts (cover ~80% of revenue)
 Printed products: 7 full-service contact centers and 22 state-of-the-art plants
Leading Market
 HFS: 16 fully networked facilities
Presence
 Scantron: 2 state of the art facilities
6

16. Compelling Strategic Rationale
 Diversifies business and products
 Diversifies and expands client relationships with long-term contracts
 Capitalizes on the combined platform
 Significant cost savings
 Strong management ties
 Strong free cash flow generation
6

17. Integrated Planning Approach
Key Personnel Decisions
Clarke assembled a team of dedicated integration associates immediately upon signing
 Decision announced on December 21, 2006
 Team members selected based on their knowledge of specific key business and industry aspects
Integrations plans to be developed for each functional area and each process
 Other Clarke “non-dedicated subject matter experts” involved on an ‘as needed’ basis
 Inputs to be used by non-dedicated team sanitized by removing sensitive information

18. 4. Valuation of Harland

19. Harland Corp. Stock Performance
52 week high: $50.43
12/19/2006 –
52 week low: $33.62 Acquisition
Announcement
Announcement to
launch Validify, a
solution designed
to significantly
reduce check fraud,
$ 0.15, Cash Dividend, in January 2007
May-15-2006
Q1 2006 Earnings Q2 2006
Call, April-04 2006 Earnings Call – 13/11/06: $ 0.175,
12% drop in NI Cash Dividend
Aug-04 2006

20. Harland Corp. Relative Stock Performance
Harland stock price relative to the S&P 600 Commercial Printing Index
January 2, 2006 – December 29, 2006
December 20, 2006

21. Valuation Summary
Purchase Price Per Share
$49 $61 11/30 Price: $43.3
LTM Average Price: $ 36.0
High / Low
52 Week
$33.6
$50.43
Market Multiples
$43.9 $60.56
Public
10% to 30% Premium
to Average Price
$39.9 $62.3
$48.9 $54.0
DCF
9 $20 $30 $40 $50 $60 $70

22. Comparable Companies
Price E.P.S P/E EV EBITDA EV/EBITDA Revenues EV/Revenues
42.3 2.6 16.3 685.6 109.1 6.3 1,044.0 0.7
19.5 2.5 7.8 1,749.8 295.2 5.9 1,314.8 1.3
12.9 0.9 14.3 972.6 119.4 8.1 821.7 1.2
24.4 1.4 17.4 2,093.4 235.8 8.9 878.8 2.4
34.8 2.3 15.1 1,881.3 206.3 9.1 1,405.7 1.3
21.5 1.5 14.3 7,265.8 1,288.0 5.6 9,812.7 0.7
16.9 1.2 14.1 944.0 172.2 5.5 1,152.9 0.8
8.6 0.6 14.4 501.8 55.1 9.1 805.4 0.6
4.9 0.8 6.1 2,303.9 372.1 6.2 1,361.3 1.7
Top 3 in industry 20.6 1.5 16.3 2,044.3 317.0 9.0 2,066.4 1.8
Harland Clarke Corp. 2.7 192.7 1,050.2
Imputed 1,332.8 1,741.0 1,894.8
Share Price 43.9 55.0 60.5
Source: Company filings, Capital IQ data
(1) Stock Price and Capital IO forward median estimates as of December 26, 2006
10 (2) Equity Value equals fully diluted shares at the stock price less any option proceeds
(3) Firm Value equals Equity Value plus straight debt, minority interest

23. FCF Analysis
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 TV
Total Revenue 743.2 767.8 786.7 790.3 976.6 1,050.2 1,129.3 1,214.3 1,287.2 1,351.5 1,392.1 1,433.8
Growth Over Prior Year 3.1% 3.3% 2.5% 0.5% 23.6% 7.5% 7.5% 7.5% 6.0% 5.0% 3.0% 3.0%
Gross Profit 340.7 364.4 387.6 395.3 485.5 529.2 550.9 592.4 633.3 668.3 688.7 708.3
Margin % 45.8% 47.5% 49.3% 50.0% 49.7% 50.4% 48.8% 48.8% 49.2% 49.4% 49.5% 49.4%
EBITDA 150.2 141.4 143.4 149.9 185.3 192.7 212.9 229.0 240.2 252.7 261.2 268.7
Margin % 20.2% 18.4% 18.2% 19.0% 19.0% 18.3% 18.9% 18.9% 18.7% 18.7% 18.8% 18.7%
EBIT 88.9 96.6 95.1 104.9 131.5 136.4 143.7 154.6 165.2 174.0 180.8 185.6
Margin % 12.0% 12.6% 12.1% 13.3% 13.5% 13.0% 12.7% 12.7% 12.8% 12.9% 13.0% 12.9%
Net Income 39.0 52.4 56.0 55.1 75.5 68.1 76.0 81.7 89.3 94.0 96.5 99.4
Margin % 5.2% 6.8% 7.1% 7.0% 7.7% 6.5% 6.7% 6.7% 6.9% 7.0% 6.9% 6.9%
FCFF
EBIT (1-t) 66.7 72.4 71.3 78.7 98.6 102.3 107.8 115.9 123.9 130.5 135.6 139.2
Add Depreciation 33.3 36.9 39.5 36.0 36.8 33.7 36.0 36.0 36.4 36.4 35.9 35.9
Minus Capex 47.5 32.1 28.1 28.9 23.9 23.5 30.7 27.9 27.2 27.0 26.7 27.1
Minus Change in WC 6.0 4.0 0 (1.0) 0 0 0 0 0 0 0 0
Free Cash Flow 46.5 73.2 82.7 86.8 111.5 112.5 113.2 124.1 133.2 139.9 144.8 148.0
Source: Company filings, Factset data
Notes:
(1) Revenue expected to grow at current trends
(2) Gross Margin: Average of last three years, remaining steady
(3) SG&A based on current trends – Getting lower as a % of revenue
(4) W/C bases on current trends

24. WACC Analysis
Harland has a Levered Beta of 1.3 and Weighted Average Cost of Capital of approximately 8.8%, which is
likely to increase in the near future due to rising equity risk premiums
WACC Computation High Low
Risk Free Rate 4.9% 4.9%
Risk Premium 4.5% 4.5%
Beta 1.3 1.5
Cost of Equity 11% 12%
Cost of Debt 8% 8%
Total Debt 211.2 40.6%
Total Common Equity 308.5 59.4%
WACC 8.8% 9.4%
Notes:
(1) Risk Free Rate is the Yield on the relevant T-Bond, from FactSet, as of 12/26/2007
(2) Equity Risk Premium is between 4-6%.
(3) Betas based on 5 year weekly returns against the MSCI. Beta is average adjusted equity beta from key industry competitors.
Adjusted equity betas are the raw betas adjusted for a long term reversion towards 1 through the following calculation: (2/3 x Raw Beta) + (1/3 x 1).
12 (4) Discount rate = RFR + Beta * MRP. Assumes competitors have access to the global capital markets and that cash flows will be discounted in USD.
(5) Credit Spread calculated using average YTM on 5-10 year Eagle bonds minus 10-year Treasury rate

25. Enterprise Value
Intrinsic valuation of Harland suggests a total firm value of approximately $2.17bn, corresponding to a
share price of $52.7
Enterprise Value 2007 2008 2009 2010 2011
FCFF 113.2 124.1 133.2 139.9 2,684.6
WACC 8.8%
EV ($ mn) $2,170.7
Debt 211.2
Cash 11.0
Equity Value ($ mn) $1,970.5
Number of shares o/s 37.4
Share Price 52.7
Source: Company filings, Factset data
Notes:
(1) Revenue expected to grow at current trends
(2) Gross Margin: Average of last three years, remaining steady
11 (3) SG&A based on current trends – Getting lower as a % of revenue because of increased off-shore operations which lowers SG&A costs
(4) W/C bases on current trends

26. Discounted Cash Flow Analysis
WACC
(52.7) 7.5% 8.0% 8.5% 9.0% 9.5%
2.0% 54.0 48.6 44.0 40.1 36.7
TV Growth 2.5% 59.1 52.7 47.4 42.9 39.1
Rate 3.0% 65.2 57.6 51.4 46.2 41.9
3.5% 72.9 63.6 56.2 50.2 45.1
4.0% 82.7 71.1 62.1 54.9 48.9
Source: Company filings, Factset data
Notes:
(1) Revenue expected to grow at current trends
(2) Gross Margin: Average of last three years, remaining steady
11 (3) SG&A based on current trends – Getting lower as a % of revenue because of increased off-shore operations which lowers SG&A costs
(4) W/C bases on current trends

27. 5. Capital Structure

28. Current economic environment: Late 2006
US High-Yield Bond Market 1978 – 2009 (Mid-year US$ billions)
$700
$1,400
$600
$1,200
The U.S. Leveraged Loan Market(a)
1990 – 2007 (1H) $500
(U.S. $ in Billions)
$1,000
New Issue Volume
(U.S. $ in Billions)
$400
Market Size
$800
$300
$600
$400 $200
$200 $100
$0 $0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H
2007
Leveraged Loan M arket Size New Leveraged Loan Volume
(a) Defined as speculative grade with a LIBOR spread of 150 basis points or greater.
Source: Credit Suisse Source: Ed Altman NYU Stern

29. Deal Financing
$615,000,000
1. Track record of operating Clarke American (1.5+ yrs)
2. Harland Clarke combination a strategic fit
3. Other MacAndrews Forbes companies have performed well on their financial obligations
4. Skillful negotiations for a favorable deal
5. Great management team -> good story on the road
6. Access to relatively cheap capital in the economic environment of the times
$305,000,000 Senior Floating Rate Notes due May 15, 2015
$310,000,000 9.50% Senior Fixed Rate Notes due May 15, 2015
No issues securing financing for the deal:
In late 2007, it is a buyers market
Credit Suisse happily lends to a stable business with ample
cash flows

30. Sec. 280G. Golden parachute payments (a) General rule No
Sources and Uses deduction shall be allowed under this chapter for any excess
parachute payment. (b) Excess parachute payment For purposes of
this section - (1) In general The term ''excess parachute payment''
means an amount equal to the excess of any parachute payment
Equity Purchase over the portion of the base amount allocated to such payment. (2)
Parachute payment defined (A) In general The term ''parachute
- Harland shareholders paid $52.75 in cash payment'' means any payment in the nature of compensation to (or
for the benefit of) a disqualified individual if - (i) such payment is
- Taxable as capital gains or loss depending contingent on a change - (I) in the ownership or effective control of
on their tax basis the corporation, or (II) in the ownership of a substantial portion of
the assets of the corporation, and (ii) the aggregate present value of
- Executive compensation on change of the payments in the nature of compensation to (or for the benefit of)
control (“golden parachutes”) over 3x last such individual which are contingent on such change equals or
exceeds an amount equal to
3 years’ earnings incur an extra 20% 3 times the base amount
income tax under Regulation 280G
SOURCES USES
Revolver - Equity Purchase Price $1,436.0
Term Loan B (due 2014) $1,800.0 Refinance Existing Harland Debt 211.2
Senior Unsecured Notes (due 2015) 615.0 Total Purchase Price Before Fees $1,647.2
Refinance Existing Clarke Debt 600.0
Prepayment Penalties 38.0
Total Clarke Refinancing $638.0
Change of Control (Harland) 34.0
Transaction Expenses 95.8
Total Uses $2,415.0 Total Uses $2,415.0

31. Pro Forma Capitalization
Pro Forma for the Acquisition, Clarke will have a strong credit profile:
•Net Senior debt to 12/31/06 PF Adjusted Cash EBITDA of 3.5x
•Net Total Debt to 12/31/06 PF Adjusted Cash EBITDA of 4.7x
($ in millions)
Pro Forma Net Cum.
Combined Mult. EBITDA
Cash $41.0
Revolver - -
New Term Loan B 1,800.0 3.5 x
Total Senior Secured Debt $1,800.0 3.5 x
New Senior Unsecured Debt 615.0
Total Debt $2,415.0
PF Adjusted Cash EBITDA $508.0
PF Adjusted Cash EBITDA / Cash Interest 2.4 x
PF Adjusted Cash EBITDA - CapEx / Cash Interest 2.2 x

32. 6. Negotiations

33. Alternatives Considered by Harland and MFW
Alternatives considered by Harland: Alternatives considered by MFW:
• continuedexecution of the strategic Eventual targets considered by
operating plan; MFW:
• a sale of the company; • Harland;
• acquisition; • Deluxe
• a leverage buyout with a private
equity firm; and
• recapitalization accompanied by a
significant stock repurchase
In March 2006, Mr. Timothy Tuff, Chairman of Harland, President and Chief
Executive Officer, was advised by the representatives of Goldman Sachs, the
financial advisor of Harland, that they were approached by MFW about a
possible business combination with Harland.
8

34. Participants in Negotiations
On behalf of Harland:
Mr. Timothy Tuff, Chairman, President and Chief Executive Officer;
Mr. Charles Carden, Chief Financial Officer;
Mr. John Walters, General Counsel;
Consultants:
On behalf of MFW:
Mr. Ronald O. Perelman, a member of the Board of Directors of
MFW, the beneficial owner of about 37% of the outstanding
common stock of MFW;
Mr. Barry F. Schwartz, Executive Vice President and General
Counsel of MFW;
Mr. Samuel L. Katz, a senior executive of MacAndrews & Forbes ;
Consultant:
9

35. Negotiation, Phase I (March – May, 2006)
March 2006: • MFW contacted Goldman Sachs and informed them about their
interest in business combination with Harland;
• Harland and Clarke American signed a mutual nondisclosure
agreement
April, 2006 •The parties met and discussed the potential operating
synergies;
•Mr. Perelman informed Mr. Tuff that MFW would be prepared to
offer consideration in the range of $45 to $50 per share of
common stock;
• Management of Harland met with the Board of Director of
Harland, it was decided that the offered range of prices is not
sufficient to justify further negotiations.
Harland informed MFW that it was not
interested in further negotiations
10

36. Negotiation, Phase II (August – September, 2006)
August 2006: • Mr. Tuff received a letter from Mr. Perelman stating that MFW is
still interested in Harland;
• Mr. Tuff informed about this express of interest the Board of
Directors of Harland during its regular meeting
August - Harland considers possible alternatives:
September • discussions of potential strategic combinations with two other
2006: companies;
• expression of interest from two private equity firms;
• internal discussions of continued execution of ongoing strategic plan
The Board of Directors of Harland decides that the
company should remain independent and pursue its
existing strategic plan

37. Negotiation, Phase III (October – December, 2006)
October 2006: • Goldman Sachs once again informed Mr. Tuff that MFW
expressed its interest in acquisition of Harland;
• MFW indicated that it was ready to provide:
 $50 per share;
 Reverse break-up fee if the transaction is not consummated for
regulatory reasons;
 Retention bonuses for the personnel
•The Board of Harland responded that the price suggested was
not adequate and the regulatory issues are not properly
addressed
November • Consultants of both parties discuss the regulatory issues;
2006: • New suggestion from MFW:
 $52.50 per share;
$40M if the antitrust clearance of the deal is not received;
 ready to discuss retention bonuses
•The Board of Harland is still concerned that the price is not
adequate

38. Negotiation, Final Step
November • Final suggestion from MFW:
2006: $52.75 per share;
Reverse break-up fee of $52.5M;
Retention bonuses for the personnel in the amount of $12M
•The Board of Harland decided that it is the highest price likely to
be offered by MFW and authorized management to proceed with
direct negotiations
December • Due diligence presentations are made by the management of
2006: Harland;
• MFW conduct due diligence up to December 19;
• Merger Agreement is negotiated;
• Goldman Sachs provides fairness opinion
December 19: the Merger Agreement is executed by the parties;
December 20: the parties issued press-release announcing execution of
the Merger Agreement

39. 7. Antitrust Issues

40. Antitrust Law related to business combination
Hart-Scott-Rodino Antitrust Improvements Act of 1976
Section 7A of the Clayton Act, 15 U.S.C. 18a, as added by Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, requires persons
contemplating certain mergers or acquisitions to give the Federal Trade
Commission and the Assistant Attorney General an advance notice and to
wait designated periods before consummation of such plans. Section 7A (b)
(2) of the Act permits the agencies, in individual cases, to terminate this
waiting period prior to its expiration and requires that notice of this action be
published in the Federal Register.
8

41. Antitrust issues related to business combination

42. Agreement of Merger
ARTICLE 1 : DEFINITIONS
“ Antitrust Law ” means the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act,
the Federal Trade Commission Act, as amended, and all other federal, state and foreign, if any,
statutes, rules, regulations, orders, decrees, administrative and judicial doctrines and other Laws
that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition or the creation or strengthening of a
dominant position through merger or acquisition, in any case that are applicable to the transactions
contemplated by this Agreement.
Conditions to the Merger
The merger is expected to close in the second half of 2007, subject to the satisfaction of
customary closing conditions, including expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act and approval by the shareholders of
Harland.

43. Proxy statement before Securities and Exchange Commission
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
X Preliminary Proxy Statement
O Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
O Definitive Proxy Statement
O Definitive Additional Materials
O Soliciting Material Pursuant to §240.14a-12
John H. Harland Company
“We and MFW will not complete the merger unless a number of conditions are satisfied or waived (to the extent
permitted), as applicable, including the approval by our shareholders of the merger agreement and the expiration or
termination of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, which we refer to as the HSR Act.”

44. Key Facts
• Before the acquisition, market share for each company was just over 30%, putting
the combined market share immediately upon acquisition into the 60-65% range
• We can compare the Herfindahl-Hirschman Index (HHI) of just over 900 before the
transaction to 3600-4225 after
• Clarke's customers (large banks) supporting the acquisition, BofA, their largest
customer, literally wrote a letter to the government stating “Why would they do that
when in theory going from three large suppliers to two could increase prices for
them?” That is to Increased efficiency and better service.
• If BofA hadn't written that letter, MFW may not have gone through with the
transaction
• MFW successfully argued that one strong and one weaker but hungry competitor
would be better for the industry at large that 3 mortal competitors who could
potentially destroy each other.

45. 8. Employees’ issues

46. Pre-Closing Actions
The merger agreement contains provisions restricting the ability of John H. Harland Company to provide
certain increases in compensation and benefits prior to closing.
Interests of Directors and Executive Officers in the Merger
Directors and executive officers of John H. Harland Company may receive interests in the merger including
the following:
Executive officers will receive cash consideration for their vested and unvested stock options and shares of
restricted stock.
 Non-employee directors will receive cash consideration for their stock equivalent units under compensation
plans for non-employee directors.
Employees (including executive officers) who remain with, MFW or of John H. Harland Company or MFW
subsidiaries following the merger will be entitled for a period of 12 months after the merger to compensation
and employee benefits.
In lieu of equity-based awards, executive officers of John H. Harland Company may be granted long-term
cash incentive bonuses.
 The merger agreement provides for indemnification and liability insurance arrangements for each of John
H. Harland Company’s current and former directors and officers.

47. POST-CLOSING CONTINUATION OF COMPENSATION AND BENEFITS
THE MERGER AGREEMENT CONTAINS PROVISIONS THAT ARE APPLICABLE TO JOHN H.
HARLAND COMPANY’S EMPLOYEES GENERALLY RELATING TO THE CONTINUATION BY
MFW OF CERTAIN COMPENSATION AND BENEFITS ARRANGEMENTS FOLLOWING
CONSUMMATION OF THE MERGER.
EMPLOYEE COMPENSATION AND BENEFIT PLAN (ERISA)
MERGER AGREEMENT PROVIDES EACH JOHN H. HARLAND COMPANY’S EMPLOYEE TO
PARTICIPATE, EMPLOYEE BENEFIT PLANS SPONSORED BY PARENT AND ITS
SUBSIDIARIES.
(COMPLIED WITH SECTION 3(3) OF ERISA)
SURVIVING CORPORATION OR THE COMPANY SHALL PAY TO EACH EMPLOYEE OF THE
COMPANY OR ITS SUBSIDIARIES THE AMOUNT OF CASH SET FORTH UNDER THE
RETENTION BONUS WITH RESPECT TO SUCH EMPLOYEE.

48. 9. Deal Structure

49. A Reverse Triangular Merger
Merger Sub shall be merged with and
into the Company.
As a result of the Merger,
– the separate corporate existence of
Merger Sub will cease and
– the Company will continue under the
name “John H. Harland Company”
as the Surviving Corporation
– all the property, rights, privileges,
immunities powers and franchises of
the Company and Merger Sub shall
vest in the Surviving Corporation
– all debts, liabilities and duties of the
Company and Merger Sub shall
become the debts, liabilities and
duties of the Surviving Corporation.

50. Articles of Incorporation and Bylaws
At the Effective Time:
– the Articles of Incorporation of the Surviving Corporation shall be
amended to read in their entirety as the Articles of Incorporation of
Merger Sub read immediately prior to the Effective Time, except that
the name of the Surviving Corporation shall be “John H. Harland
Company” and
– the bylaws of the Surviving Corporation shall be amended so as to
read in their entirety as the bylaws of Merger Sub as in effect
immediately prior to the Effective Time, until thereafter amended in
accordance with applicable Law, except that references to Merger
Sub’s name shall be replaced to references to “John H. Harland
Company.”

51. Effect of the Merger on Capital Stock
At the Effective Time, by virtue of the Merger and without any action on
the part of Parent, Merger Sub, the Company, or the holders of any of the
following securities:
– Each share of Common Stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and shall
become one fully paid and nonassessable share of common stock, par
value of $0.01, of the Surviving Corporation.
– Each share of Common Stock, par value $1.00, of the Company issued
and outstanding immediately prior to the Effective Time (shall be
converted into the right to receive in cash an amount per share equal to
$52.75 in cash, without interest (the “Merger Consideration”).

52. Deal Protection—Termination by Parent
Section 8.1(f)(ii)—This Agreement may be terminated and the Merger
may be abandoned (notwithstanding approval thereof of the Requisite
Shareholder Vote) prior to the effective time by Parent if the Board, any
committee thereof or the company shall have:
– Effected a Recommendation Withdrawal
– taken any of the actions described in clauses (ii)(iii)(iv)(v) of Section
6.5(a) (whether or not permitted to do so) or
– failed to call the Shareholders Meeting in accordance with this
Agreement.
In the event that this Agreement is terminated by Parent pursuant to
Section 8.1(f)(ii), then the company shall pay to Parent the Company
Termination Fee as promptly as practicable

53. Deal Protection—The Company Termination Fee
In the event that:
– This Agreement is terminated by Parent or the Company pursuant
to Section 8.1(c) or Section 8.1(d)
– At any time prior to such termination, a Company Takeover
Proposal has been publicly announced or publicly made known
and not irrevocably withdrawn, and
– Within 12 months after such termination, the Company or any of its
Subsidiaries enters into a definitive Contract with respect to, or
consummates, any Company Takeover Proposal
Then the Company shall pay to Parent on the date of, and as a condition
to, such execution or consummation, the Company Termination Fee.
The “Company Termination Fee” means $52,500,000 in cash.

54. Deal Protection—The Parent Termination Fee
In the event that this Agreement is terminated by Parent or the Company
pursuant to Section 8.1(b) or Section 8.1(c),
– then Parent shall pay to the company as promptly as practicable,
the Parent Termination Fee and up to an aggregate of
$12,000,000 with respect to the retention bonuses described in
Section 6.14, to the extent the company is able to pay such
bonuses to certain employees of the Company and its Subsidiaries
in accordance with Section 6.14
The “Parent Termination Fee” means $52,500,000 in cash.

55. Deal Protection—Limiting the Fees
In the event that this Agreement is terminated under circumstances in
which the Parent Termination Fee has been paid pursuant to Section
8.3(d) and, within 12 months after such termination, the Company or any
of its subsidiaries enters into a definitive Contract with respect to , or
consummates, any Company Takeover Proposal that has consideration
with a value that is equal to or higher than $52.75 per share of the
Company Common Stock, the Company shall reimburse the Parent
Termination Fee to Parent on the date of, and as a condition to, such
execution or consummation.
The parties agree and understand that under no event shall the
Company or the Parent be required to pay the Company Termination Fee
or the Parent Termination Fee, respectively, on more than one occasion.

56. Deal Protection—Limiting the Fees
In the event that this Agreement is terminated under circumstances in
which the Parent Termination Fee has been paid pursuant to Section
8.3(d) and, within 12 months after such termination, the Company or any
of its subsidiaries enters into a definitive Contract with respect to , or
consummates, any Company Takeover Proposal that has consideration
with a value that is equal to or higher than $52.75 per share of the
Company Common Stock, the Company shall reimburse the Parent
Termination Fee to Parent on the date of, and as a condition to, such
execution or consummation.
The parties agree and understand that under no event shall the
Company or the Parent be required to pay the Company Termination Fee
or the Parent Termination Fee, respectively, on more than one occasion.

57. Representations and Warranties of the Company
4.1 Organization
– The Company is duly organized, in good standing in its jurisdiction, and
not in violation of its governing documents.
– The bylaws and articles of incorporation have been correctly filed and
accurately provided to Parent.
Section 4.2—Authority
– The Company has all the necessary corporate power to execute the
Agreement, acting under Board approval; the only thing necessary to
adoption is shareholder approval.

58. Representations and Warranties of the Company
Section 4.2—Authority / Enforceability
– The Board at a duly held meeting has unanimously
 Determined that it is in the best interests of the company and its
shareholders, and declared it advisable, to enter into this Agreement;
 Adopted this Agreement and the consummation of the transactions
contemplated hereby, including the merger and;
 Resolved to recommend that the shareholders of the Company
approve the adoption of this Agreement and directed that such
matter be submitted for consideration of the shareholders of the
Company at the Shareholders Meeting.
– This Agreement has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery by
the other parties, constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms.

59. 10. Results

60. Results of the Acquisition and Merger

61. Harland Clarke
The work of the dedicated integration team enabled
Harland and Clarke American to realize the operating
synergies of the combined entity very quickly
Combined company has approximately 4,800
employees, 13,000 clients, and $1.7 billion of revenue

62. Scantron
Disappointing part of the acquisition
Approximately $20 million of operating synergies never
materialized
M & F overpaid by approximately $75 million

63. Harland Clarke Holdings Today
• Strong revenue generation even through latest
economic downturn
• More efficient spending
• HFS most vibrant, with check printing a cash cow and
Scantron in a decline
Reclassified Reclassified
For the Fiscal Period Ending 12 m onths 12 m onths 12 m onths
Dec-31-2007 Dec-31-2008 Dec-31-2009
Total Revenue $1,369.9 $1,794.6 $1,712.3
Operating Incom e 209.7 290.3 332.0
Net Interest Exp. (159.9) (184.2) (135.9)
Net Incom e ($15.4) $47.2 $112.1
EBITDA $335.9 $454.8 $494.1
EBIT $209.7 $290.3 $332.0
EBITDA Interest Coverage 2.1 x 2.5 x 3.6 x
EBIT Interest Coverage 1.3 x 1.6 x 2.4 x
Source: Capital IQ

64. Transaction Highlights
1. Tremendous Success of Operational Integration
2. Antitrust Approval
3. Financing