Minnesota
|
41-0216800
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
3680 Victoria St. N., Shoreview, Minnesota
|
55126-2966
|
(Address of principal executive offices)
|
(Zip Code)
|
Common Stock, par value $1.00 per share
|
New York Stock Exchange
|
(Title of each class)
|
(Name of each exchange on which registered)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
Item
|
Description
|
Page
|
Item 1
|
4
|
|
Item 1A
|
12
|
|
Item 1B
|
18
|
|
Item 2
|
18
|
|
Item 3
|
18
|
|
Item 5
|
18
|
|
Item 6
|
20
|
|
Item 7
|
21
|
|
Item 7A
|
45
|
|
Item 8
|
46
|
|
Item 9
|
93
|
|
Item 9A
|
93
|
|
Item 9B
|
93
|
|
Item 10
|
93
|
|
Item 11
|
94
|
|
Item 12
|
94
|
|
Item 13
|
94
|
|
Item 14
|
94
|
|
Item 15
|
95
|
|
100
|
||
101
|
|
·
|
Acquire new customers by leveraging customer referrals that we receive from our Financial Services segment’s financial institution clients and our telecommunications clients, as well as from other marketing initiatives, including internet and direct mail solicitations;
|
|
·
|
Expand sales of higher growth business services, including web design, hosting and other web services, fraud protection, payroll, logo design, search engine marketing and business networking, as well as expand sales in areas such as full color, web-to-print and imaging;
|
|
·
|
Increase our share of the amount small businesses spend on the types of products and services in our portfolio through improved customer segmentation and analytics; and
|
|
·
|
Continue to optimize our cost and expense structure.
|
|
·
|
Optimize core check revenue streams and acquire new clients;
|
|
·
|
Provide services and products that differentiate us from the competition by helping financial institutions acquire customers, improve profitability and manage regulatory compliance; and
|
|
·
|
Continue to optimize our cost and expense structure.
|
·
|
Deluxe Calling
SM
– an outbound calling program aimed at helping financial institutions generate new organic revenue growth and reduce account holder attrition.
|
·
|
REALChecking
TM
program – a system of deposit products, including reward checking programs, that drives non-interest income, attracts new account holders and increases retention for community financial institutions. We offer this suite of products to our clients through a partnership with BancVue, Ltd. which launched in early 2010.
|
·
|
Analytics driven marketing programs – a service that allows financial institutions to monitor customer profitability and better optimize pricing and customer acquisition strategies.
|
·
|
Marketing solutions – a variety of strategic and tactical marketing solutions which help financial institutions acquire new customers, deepen existing customer relationships and retain customers.
|
·
|
Regulatory compliance –services that assist financial institutions in complying with the current dynamic regulatory environment.
|
·
|
Deluxe Provent
SM
– a comprehensive suite of identity protection services.
|
|
·
|
Optimize cash flow;
|
|
·
|
Maximize the lifetime value of customers by selling new features, accessories and products; and
|
|
·
|
Continue to optimize our cost and expense structure.
|
2010
|
2009
|
2008
|
||||||||||
Checks, including contract settlements
|
63.9% | 63.5% | 63.6% | |||||||||
Other printed products, including forms
|
20.3% | 22.1% | 23.5% | |||||||||
Services, primarily business
|
8.7% | 6.8% | 3.9% | |||||||||
Accessories and promotional products
|
5.6% | 6.0% | 7.0% | |||||||||
Packaging supplies and other
|
1.5% | 1.6% | 2.0% | |||||||||
Total revenue
|
100.0% | 100.0% | 100.0% |
|
·
|
Financial institutions seek to maintain the profits they have historically generated from their check programs, despite the decline in check usage. This has put significant pricing pressure on check printers in the past several years.
|
|
·
|
When financial institutions consolidate through mergers and acquisitions, often the newly combined entity seeks to reduce costs by leveraging economies of scale in purchasing, including its check supply contracts. This results in
|
|
|
check providers competing intensely on price in order to retain not only their previous business with one of the financial institutions, but also to gain the business of the other financial institution in the merger/acquisition.
|
|
·
|
Financial institution mergers and acquisitions can also impact the duration of our contracts. Normally, the length of our contracts with financial institutions ranges from three to six years. However, contracts may be renegotiated or bought out mid-term due to a consolidation of financial institutions.
|
|
·
|
Banks, especially larger ones, may request pre-paid product discounts in the form of cash incentives payable at the beginning of a contract. These contract acquisition payments negatively impact check producers’ cash flows in the short-term.
|
Name
|
Age
|
Present Position
|
Executive
Officer Since
|
Anthony Scarfone
|
49
|
Senior Vice President, General Counsel and Secretary
|
2000
|
Terry Peterson
|
46
|
Senior Vice President, Chief Financial Officer
|
2005
|
Lynn Koldenhoven
|
44
|
Senior Vice President, Sales and Marketing Direct-to-Consumer
|
2006
|
Lee Schram
|
49
|
Chief Executive Officer
|
2006
|
Pete Godich
|
46
|
Vice President, Fulfillment
|
2008
|
Julie Loosbrock
|
51
|
Senior Vice President, Human Resources
|
2008
|
Malcolm McRoberts
|
46
|
Senior Vice President, Chief Information and Technology Officer
|
2008
|
Tom Morefield
|
48
|
Senior Vice President, President of Financial Services
|
2008
|
Laura Radewald
|
50
|
Vice President, Enterprise Brand, Customer Experience and Media Relations
|
2008
|
David Hemler
|
43
|
Senior Vice President, Small Business Services
|
2010
|
Stock price
|
||||||||||||||||
Dividend
|
High
|
Low
|
Close
|
|||||||||||||
2010
|
||||||||||||||||
Quarter 4
|
$ | 0.25 | $ | 24.00 | $ | 18.64 | $ | 23.02 | ||||||||
Quarter 3
|
0.25 | 22.67 | 16.57 | 19.13 | ||||||||||||
Quarter 2
|
0.25 | 23.77 | 18.63 | 18.75 | ||||||||||||
Quarter 1
|
0.25 | 20.37 | 14.96 | 19.42 | ||||||||||||
2009
|
||||||||||||||||
Quarter 4
|
$ | 0.25 | $ | 17.48 | $ | 12.57 | $ | 14.79 | ||||||||
Quarter 3
|
0.25 | 18.11 | 12.10 | 17.10 | ||||||||||||
Quarter 2
|
0.25 | 15.88 | 9.15 | 12.81 | ||||||||||||
Quarter 1
|
0.25 | 15.47 | 6.20 | 9.63 |
(dollars and orders in thousands, except per share and per order amounts)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
Statement of Income Data:
|
||||||||||||||||||||
Revenue
|
$ | 1,402,237 | $ | 1,344,195 | $ | 1,468,662 | $ | 1,588,885 | $ | 1,619,337 | ||||||||||
As a percentage of revenue:
|
||||||||||||||||||||
Gross profit
|
65.2 | % | 62.4 | % | 61.4 | % | 63.8 | % | 62.9 | % | ||||||||||
Selling, general and administrative expense
|
44.5 | % | 45.9 | % | 45.7 | % | 46.8 | % | 47.6 | % | ||||||||||
Operating income
|
20.1 | % | 14.2 | % | 14.2 | % | 17.0 | % | 12.3 | % | ||||||||||
Operating income
|
$ | 281,544 | $ | 190,589 | $ | 209,234 | $ | 269,904 | $ | 198,544 | ||||||||||
Income from continuing operations
|
153,395 | 99,365 | 105,872 | 145,117 | 100,838 | |||||||||||||||
Per share – basic
|
2.98 | 1.94 | 2.06 | 2.79 | 1.96 | |||||||||||||||
Per share – diluted
|
2.97 | 1.94 | 2.05 | 2.78 | 1.95 | |||||||||||||||
Cash dividends per share
|
1.00 | 1.00 | 1.00 | 1.00 | 1.30 | |||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 17,383 | $ | 12,789 | $ | 15,590 | $ | 21,615 | $ | 11,599 | ||||||||||
Return on average assets
(1)
|
12.1 | % | 8.2 | % | 8.4 | % | 11.6 | % | 7.5 | % | ||||||||||
Total assets
|
$ | 1,308,691 | $ | 1,211,210 | $ | 1,218,985 | $ | 1,210,755 | $ | 1,267,132 | ||||||||||
Long-term obligations
(2)
|
748,122 | 742,753 | 775,336 | 776,840 | 903,121 | |||||||||||||||
Total debt
|
755,122 | 768,753 | 853,336 | 844,040 | 1,015,781 | |||||||||||||||
Statement of Cash Flows Data:
|
||||||||||||||||||||
Net cash provided by operating activities of continuing operations
|
$ | 212,615 | $ | 206,438 | $ | 198,487 | $ | 245,075 | $ | 238,895 | ||||||||||
Net cash used by investing activities of continuing operations
|
(136,170 | ) | (81,788 | ) | (135,773 | ) | (10,929 | ) | (32,884 | ) | ||||||||||
Net cash used by financing activities of continuing operations
|
(72,541 | ) | (128,545 | ) | (67,681 | ) | (224,890 | ) | (204,587 | ) | ||||||||||
Purchases of capital assets
|
(43,932 | ) | (44,266 | ) | (31,865 | ) | (32,286 | ) | (41,012 | ) | ||||||||||
Payments for acquisitions, net of cash acquired
|
(98,621 | ) | (30,825 | ) | (104,879 | ) | (2,316 | ) | (16,521 | ) | ||||||||||
Payments for common shares repurchased
|
(2,999 | ) | (1,319 | ) | (21,847 | ) | (11,288 | ) | — | |||||||||||
Other Data (continuing operations):
|
||||||||||||||||||||
Orders
(3)
|
56,736 | 59,174 | 62,823 | 64,753 | 64,670 | |||||||||||||||
Revenue per order
(3)
|
$ | 24.72 | $ | 22.72 | $ | 23.38 | $ | 24.54 | $ | 25.04 | ||||||||||
Number of employees
|
5,765 | 6,089 | 7,172 | 7,910 | 8,728 | |||||||||||||||
Number of printing/fulfillment facilities
|
15 | 14 | 21 | 22 | 23 | |||||||||||||||
Number of call center facilities
|
14 | 12 | 14 | 14 | 17 |
|
·
|
Continuing initiatives to reduce our cost structure, primarily within manufacturing, sales and marketing, and information technology;
|
|
·
|
Asset impairment charges of $24.9 million in the first quarter of 2009 within Small Business Services related to goodwill and an indefinite-lived trade name;
|
|
·
|
Revenue of $24.6 million from a contract settlement executed during the third quarter of 2010;
|
|
·
|
Recognition of deferred revenue from a Financial Services contract settlement executed in the fourth quarter of 2009; and
|
|
·
|
Price increases in Small Business Services and Financial Services.
|
|
·
|
Reduced volume for our personal check businesses due to the continuing decline in check usage, turmoil in the financial services industry, including bank failures, and continued economic softness;
|
|
·
|
Lower volume in Small Business Services due primarily to declines in check and forms usage, as well as changes in our customers’ buying patterns, we believe, as a result of the continued economic downturn;
|
|
·
|
Continued pricing pressure when executing and renewing contracts with financial institution clients;
|
|
·
|
Pre-tax gains of $9.8 million in the first quarter of 2009 from the retirement of long-term notes;
|
|
·
|
Increased marketing investment in brand positioning and awareness and direct marketing tests; and
|
|
·
|
Increases in material costs and delivery rates.
|
|
·
|
Acquire new customers by leveraging customer referrals that we receive from our Financial Services segment’s financial institution clients and our telecommunications clients, as well as from other marketing initiatives, including internet and direct mail solicitations;
|
|
·
|
Expand sales of higher growth business services, including web design, hosting and other web services, fraud protection, payroll, logo design, search engine marketing and business networking, as well as expand sales in areas such as full color, web-to-print and imaging;
|
|
·
|
Increase our share of the amount small businesses spend on the types of products and services in our portfolio through improved customer segmentation and analytics; and
|
|
·
|
Continue to optimize our cost and expense structure.
|
|
·
|
Optimize core check revenue streams and acquire new clients;
|
|
·
|
Provide services and products that differentiate us from the competition by helping financial institutions acquire customers, improve profitability and manage regulatory compliance; and
|
|
·
|
Continue to optimize our cost and expense structure.
|
|
·
|
Deluxe Calling
SM
– an outbound calling program aimed at helping financial institutions generate new organic revenue growth and reduce account holder attrition.
|
|
·
|
REALChecking
TM
program – a system of deposit products, including reward checking programs, that drives non-interest income, attracts new account holders and increases retention for community financial institutions. We offer this suite of products to our clients through a partnership with BancVue, Ltd. which launched in early 2010.
|
|
·
|
Analytics driven marketing programs – a service that allows financial institutions to monitor customer profitability and better optimize pricing and customer acquisition strategies.
|
|
·
|
Marketing solutions – a variety of strategic and tactical marketing solutions which help financial institutions acquire new customers, deepen existing customer relationships and retain customers.
|
|
·
|
Regulatory compliance – services that assist financial institutions in complying with the current dynamic regulatory environment.
|
|
·
|
Deluxe Provent
SM
– a comprehensive suite of identity protection services.
|
|
·
|
Optimize cash flow;
|
|
·
|
Maximize the lifetime value of customers by selling new features, accessories and products; and
|
|
·
|
Continue to optimize our cost and expense structure.
|
Change
|
||||||||||||||||||||
(in thousands, except per order amounts)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Revenue
|
$ | 1,402,237 | $ | 1,344,195 | $ | 1,468,662 | 4.3 | % | (8.5 | %) | ||||||||||
Orders
|
56,736 | 59,174 | 62,823 | (4.1 | %) | (5.8 | %) | |||||||||||||
Revenue per order
|
$ | 24.72 | $ | 22.72 | $ | 23.38 | 8.8 | % | (2.8 | %) |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Checks, including contract settlements
|
$ | 896,563 | $ | 853,729 | $ | 934,367 | 5.0 | % | (8.6 | %) | ||||||||||
Other printed products, including forms
|
284,816 | 296,550 | 345,570 | (4.0 | %) | (14.2 | %) | |||||||||||||
Services, primarily business
|
121,881 | 90,918 | 57,711 | 34.1 | % | 57.5 | % | |||||||||||||
Accessories and promotional products
|
78,659 | 81,249 | 102,203 | (3.2 | %) | (20.5 | %) | |||||||||||||
Packaging supplies and other
|
20,318 | 21,749 | 28,811 | (6.6 | %) | (24.5 | %) | |||||||||||||
Total revenue
|
$ | 1,402,237 | $ | 1,344,195 | $ | 1,468,662 | 4.3 | % | (8.5 | %) |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Gross profit
|
$ | 913,818 | $ | 839,413 | $ | 902,149 | 8.9 | % | (7.0 | %) | ||||||||||
Gross margin
|
65.2 | % | 62.4 | % | 61.4 | % |
2.8 pt.
|
1.0 pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
SG&A expense
|
$ | 624,303 | $ | 616,496 | $ | 670,991 | 1.3 | % | (8.1 | %) | ||||||||||
SG&A expense as a percentage of revenue
|
44.5 | % | 45.9 | % | 45.7 | % |
(1.4 pt.)
|
0.2 pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Net restructuring charges
|
$ | 7,971 | $ | 7,428 | $ | 13,400 | $ | 543 | $ | (5,972 | ) |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Asset impairment charges
|
$ | - | $ | 24,900 | $ | 9,942 | $ | (24,900 | ) | $ | 14,958 |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Net gain on sale of facility
|
$ | — | $ | — | $ | 1,418 | $ | — | $ | (1,418 | ) |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Gain on early debt extinguishment
|
$ | — | $ | 9,834 | $ | — | $ | (9,834 | ) | $ | 9,834 |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Interest expense
|
$ | 44,165 | $ | 46,280 | $ | 50,421 | (4.6 | %) | (8.2 | %) | ||||||||||
Weighted-average debt outstanding
|
793,767 | 818,521 | 859,833 | (3.0 | %) | (4.8 | %) | |||||||||||||
Weighted-average interest rate
|
5.09 | % | 5.14 | % | 5.42 | % |
(0.05) pt.
|
(0.28) pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Income tax provision
|
$ | 82,554 | $ | 55,656 | $ | 54,304 | 48.3 | % | 2.5 | % | ||||||||||
Effective tax rate
|
35.0 | % | 35.9 | % | 33.9 | % |
(0.9) pt.
|
2.0 pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Revenue
|
$ | 796,254 | $ | 785,109 | $ | 851,060 | 1.4 | % | (7.7 | %) | ||||||||||
Operating income
|
137,534 | 60,804 | 90,078 | 126.2 | % | (32.5 | %) | |||||||||||||
Operating margin
|
17.3 | % | 7.7 | % | 10.6 | % |
9.6 pt.
|
(2.9) pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Revenue
|
$ | 390,331 | $ | 396,353 | $ | 430,018 | (1.5 | %) | (7.8 | %) | ||||||||||
Operating income
|
84,158 | 75,091 | 65,540 | 12.1 | % | 14.6 | % | |||||||||||||
Operating margin
|
21.6 | % | 18.9 | % | 15.2 | % |
2.7 pt.
|
3.7 pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Revenue
|
$ | 215,652 | $ | 162,733 | $ | 187,584 | 32.5 | % | (13.2 | %) | ||||||||||
Operating income
|
59,852 | 54,694 | 53,616 | 9.4 | % | 2.0 | % | |||||||||||||
Operating margin
|
27.8 | % | 33.6 | % | 28.6 | % |
(5.8) pt.
|
5.0 pt.
|
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Continuing operations:
|
||||||||||||||||||||
Net cash provided by operating activities
|
$ | 212,615 | $ | 206,438 | $ | 198,487 | $ | 6,177 | $ | 7,951 | ||||||||||
Net cash used by investing activities
|
(136,170 | ) | (81,788 | ) | (135,773 | ) | (54,382 | ) | 53,985 | |||||||||||
Net cash used by financing activities
|
(72,541 | ) | (128,545 | ) | (67,681 | ) | 56,004 | (60,864 | ) | |||||||||||
Effect of exchange rate change on cash
|
690 | 1,594 | (2,053 | ) | (904 | ) | 3,647 | |||||||||||||
Net cash provided (used) by continuing operations
|
4,594 | (2,301 | ) | (7,020 | ) | 6,895 | 4,719 | |||||||||||||
Net cash (used) provided by operating activities of discontinued operations
|
— | (470 | ) | 995 | 470 | (1,465 | ) | |||||||||||||
Net cash used by financing activities of discontinued operations
|
— | (30 | ) | — | 30 | (30 | ) | |||||||||||||
Net change in cash and cash equivalents
|
$ | 4,594 | $ | (2,801 | ) | $ | (6,025 | ) | $ | 7,395 | $ | 3,224 |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Income tax payments
|
$ | 70,246 | $ | 56,060 | $ | 59,997 | $ | 14,186 | $ | (3,937 | ) | |||||||||
Interest payments
|
44,054 | 43,513 | 50,441 | 541 | (6,928 | ) | ||||||||||||||
Voluntary employee beneficiary association (VEBA) trust contributions to fund medical benefits
|
39,400 | 40,300 | 36,100 | (900 | ) | 4,200 | ||||||||||||||
Pension contributions and employee profit sharing/cash bonus payments
|
29,790 | 11,430 | 35,126 | 18,360 | (23,696 | ) | ||||||||||||||
Contract acquisition payments
|
22,087 | 29,250 | 9,008 | (7,163 | ) | 20,242 | ||||||||||||||
Severance payments
|
11,558 | 16,558 | 8,645 | (5,000 | ) | 7,913 |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Proceeds from life insurance policies
|
$ | 6,143 | $ | — | $ | — | $ | 6,143 | $ | — | ||||||||||
Proceeds from issuing shares under
employee plans
|
3,267 | 1,972 | 2,801 | 1,295 | (829 | ) | ||||||||||||||
Proceeds from sales of marketable
securities
|
1,970 | 914 | — | 1,056 | 914 | |||||||||||||||
Net proceeds from short-term debt
|
— | — | 10,800 | — | (10,800 | ) | ||||||||||||||
Proceeds from sale of facility
|
— | — | 4,181 | — | (4,181 | ) |
Change
|
||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010 vs. 2009
|
2009 vs. 2008
|
|||||||||||||||
Payments for acquisitions, net of cash acquired
|
$ | 98,621 | $ | 30,825 | $ | 104,879 | $ | 67,796 | $ | (74,054 | ) | |||||||||
Cash dividends paid to shareholders
|
51,435 | 51,279 | 51,422 | 156 | (143 | ) | ||||||||||||||
Purchases of capital assets
|
43,932 | 44,266 | 31,865 | (334 | ) | 12,401 | ||||||||||||||
Net payments on short-term debt
|
19,000 | 52,000 | — | (33,000 | ) | 52,000 | ||||||||||||||
Payments for common shares repurchased
|
2,999 | 1,319 | 21,847 | 1,680 | (20,528 | ) | ||||||||||||||
Payments for debt issue costs, credit facility
|
2,361 | — | — | 2,361 | — | |||||||||||||||
Purchases of marketable securities
|
14 | 4,581 | — | (4,567 | ) | 4,581 | ||||||||||||||
Payments on long-term debt
|
— | 22,627 | 1,755 | (22,627 | ) | 20,872 |
December 31
|
||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||
(in thousands)
|
Amount
|
Weighted-
average interest rate
|
Amount
|
Weighted-
average interest rate
|
Change
|
|||||||||||||||
Fixed interest rate
|
$ | 533,502 | 6.0 | % | $ | 533,399 | 6.0 | % | $ | 103 | ||||||||||
Floating interest rate
|
221,620 | 3.4 | % | 235,354 | 3.0 | % | (13,734 | ) | ||||||||||||
Total debt
|
755,122 | 5.2 | % | 768,753 | 5.1 | % | (13,631 | ) | ||||||||||||
Shareholders’ equity
|
226,198 | 117,210 | 108,988 | |||||||||||||||||
Total capital
|
$ | 981,320 | $ | 885,963 | $ | 95,357 |
(in thousands)
|
Total available
|
|||
Credit facility commitment
|
$ | 200,000 | ||
Amounts drawn on credit facility
|
(7,000 | ) | ||
Outstanding letters of credit
|
(9,256 | ) | ||
Net available for borrowing as of December 31, 2010
|
$ | 183,744 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Balance, beginning of year
|
$ | 45,701 | $ | 37,706 | $ | 55,516 | ||||||
Additions
|
31,520 | 32,545 | 8,808 | |||||||||
Amortization
|
(19,745 | ) | (24,550 | ) | (26,618 | ) | ||||||
Balance, end of year
|
$ | 57,476 | $ | 45,701 | $ | 37,706 |
(in thousands)
|
Total
|
2011
|
2012 and
2013
|
2014 and
2015
|
2016 and thereafter
|
|||||||||||||||
Long-term debt and related interest
|
$ | 884,960 | $ | 41,087 | $ | 349,117 | $ | 494,756 | $ | — | ||||||||||
Amounts drawn on credit facility
|
7,000 | 7,000 | — | — | — | |||||||||||||||
Operating lease obligations
|
20,875 | 9,365 | 10,098 | 1,412 | — | |||||||||||||||
Purchase obligations
|
49,927 | 26,354 | 23,107 | 421 | 45 | |||||||||||||||
Other long-term liabilities
|
36,758 | 15,154 | 11,049 | 6,680 | 3,875 | |||||||||||||||
Total
|
$ | 999,520 | $ | 98,960 | $ | 393,371 | $ | 503,269 | $ | 3,920 |
|
·
|
Benefit payments for our postretirement benefit plan – We have contributed funds to this plan for the purpose of funding our obligations. Thus, we have the option of paying benefits from the assets of the plan or from the general funds of the company. Additionally, we expect the plan assets to earn income over time. As such, we cannot predict when or if payments from our general funds will be required. As of December 31, 2010, our postretirement benefit plan was underfunded $40.0 million.
|
|
·
|
Payments for uncertain tax positions – Due to the nature of the underlying liabilities and the extended timeframe often needed to resolve income tax uncertainties, we cannot make reliable estimates of the amount or timing of cash payments that may be required to settle these liabilities. Our liability for uncertain tax positions, including accrued interest and penalties, was $7.9 million as of December 31, 2010, excluding tax benefits of deductible interest.
|
|
·
|
Insured environmental remediation costs – As of December 31, 2010, $7.2 million of the costs included in our environmental accruals are covered by an environmental insurance policy which we purchased in 2002. The
|
|
|
related receivables from the insurance company are reflected in other current assets and other non-current assets in our consolidated balance sheets based on the amounts of our environmental accruals for insured sites. Uninsured environmental accruals of $2.1 million as of December 31, 2010 are included in the table above.
|
|
·
|
A portion of the amount due under our deferred compensation plan – Under this plan, some employees may begin receiving payments upon the termination of employment or disability, and we cannot predict when these events will occur. As such, $1.1 million of our deferred compensation liability as of December 31, 2010 is excluded from the obligations shown in the table above.
|
|
·
|
Payments to our defined contribution pension and 401(k) plans – The amounts payable under our defined contribution pension and 401(k) plans are dependent on the number of employees providing services throughout the year, their wage rates and, in the case of the 401(k) plan, whether employees elect to participate in the plan. Beginning with the 2011 plan year, we will discontinue making contributions to the defined contribution pension plan. We expect the contribution made in early 2011 for the 2010 plan year to be our last contribution under this plan.
|
|
·
|
Profit sharing and cash bonus payments – Amounts payable under our profit sharing and cash bonus plans are dependent on our operating performance.
|
|
·
|
Income tax payments, which are dependent upon our earnings.
|
(in thousands)
|
||||
Acquisition of New England Business Service (NEBS) in June 2004
|
$ | 472,082 | ||
Acquisition of Designer Checks in February 2000
|
77,970 | |||
Acquisition of Hostopia.com Inc. in August 2008
|
68,555 | |||
Acquisition of Custom Direct, Inc. in April 2010
|
66,269 | |||
Acquisition of Abacus America, Inc. in July 2009
|
24,225 | |||
Acquisition of the Johnson Group in October 2006
|
7,320 | |||
Acquisition of Direct Checks in December 1987
|
4,267 | |||
Acquisition of Logo Design Mojo in April 2008
|
1,363 | |||
Acquisition of MerchEngines.com in July 2009
|
1,140 | |||
Acquisition of Dots and Pixels, Inc. in July 2005
|
1,045 | |||
Acquisition of Cornerstone Customer Solutions in March 2010
|
897 | |||
Acquisition of All Trade Computer Forms, Inc. in February 2007
|
804 | |||
Goodwill
|
$ | 725,937 |
(in thousands)
|
One-percentage-
point increase
|
One-percentage-point decrease
|
||||||
Effect on total of service and interest cost
|
$ | 107 | $ | (103 | ) | |||
Effect on benefit obligation
|
2,178 | (2,096 | ) |
(in thousands)
|
Carrying amount
|
Fair value
(1)
|
Weighted-average interest rate
|
|||||||||
Long-term notes maturing December 2012
|
$ | 284,843 | $ | 284,728 | 3.76 | % | ||||||
Long-term notes maturing October 2014
|
263,279 | 263,500 | 5.13 | % | ||||||||
Long-term notes maturing June 2015
|
200,000 | 203,750 | 7.38 | % | ||||||||
Amounts drawn on credit facility
|
7,000 | 7,000 | 5.25 | % | ||||||||
Total debt
|
$ | 755,122 | $ | 758,978 | 5.20 | % |
(1)
|
Based on quoted market prices as of December 31, 2010 for identical liabilities when traded as assets, with the exception of amounts drawn on our credit facility for which fair value equals carrying value due to its short-term nature.
|
December 31, | ||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 17,383 | $ | 12,789 | ||||
Trade accounts receivable-net of allowances for uncollectible accounts
|
66,471 | 65,564 | ||||||
Inventories and supplies
|
21,660 | 22,122 | ||||||
Deferred income taxes
|
9,390 | 10,841 | ||||||
Funds held for customers
|
35,720 | 26,901 | ||||||
Other current assets
|
20,613 | 21,282 | ||||||
Total current assets
|
171,237 | 159,499 | ||||||
Long-Term Investments (including $2,283 and $2,231, respectively, of investments at fair value)
|
37,410 | 39,200 | ||||||
Property, Plant, and Equipment-net of accumulated depreciation
|
120,221 | 121,797 | ||||||
Assets Held for Sale
|
4,527 | 4,527 | ||||||
Intangibles-net of accumulated amortization
|
155,112 | 145,910 | ||||||
Goodwill
|
725,937 | 658,666 | ||||||
Other Non-Current Assets
|
94,247 | 81,611 | ||||||
Total assets
|
$ | 1,308,691 | $ | 1,211,210 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 60,478 | $ | 60,640 | ||||
Accrued liabilities
|
144,034 | 156,408 | ||||||
Short-term debt
|
7,000 | 26,000 | ||||||
Total current liabilities
|
211,512 | 243,048 | ||||||
Long-Term Debt
|
748,122 | 742,753 | ||||||
Deferred Income Taxes
|
46,752 | 24,800 | ||||||
Other Non-Current Liabilities
|
76,107 | 83,399 | ||||||
Commitments and Contingencies (Notes 9, 13, 14 and 17)
|
||||||||
Shareholders’ Equity:
|
||||||||
Common shares $1 par value (authorized: 500,000 shares; outstanding: 2010 – 51,338; 2009 – 51,189)
|
51,338 | 51,189 | ||||||
Additional paid-in capital
|
62,915 | 58,071 | ||||||
Retained earnings
|
161,957 | 60,768 | ||||||
Accumulated other comprehensive loss
|
(50,012 | ) | (52,818 | ) | ||||
Total shareholders’ equity
|
226,198 | 117,210 | ||||||
Total liabilities and shareholders’ equity
|
$ | 1,308,691 | $ | 1,211,210 |
Year Ended December 31, | ||||||||||||
2010
|
2009
|
2008
|
||||||||||
Revenue
|
$ | 1,402,237 | $ | 1,344,195 | $ | 1,468,662 | ||||||
Net restructuring charges
|
2,356 | 4,558 | 14,867 | |||||||||
Other cost of goods sold
|
486,063 | 500,224 | 551,646 | |||||||||
Total cost of goods sold
|
488,419 | 504,782 | 566,513 | |||||||||
Gross Profit
|
913,818 | 839,413 | 902,149 | |||||||||
Selling, general and administrative expense
|
624,303 | 616,496 | 670,991 | |||||||||
Net restructuring charges
|
7,971 | 7,428 | 13,400 | |||||||||
Asset impairment charges
|
— | 24,900 | 9,942 | |||||||||
Net gain on sale of facility
|
— | — | (1,418 | ) | ||||||||
Operating Income
|
281,544 | 190,589 | 209,234 | |||||||||
Gain on early debt extinguishment
|
— | 9,834 | — | |||||||||
Interest expense
|
(44,165 | ) | (46,280 | ) | (50,421 | ) | ||||||
Other (expense) income
|
(1,430 | ) | 878 | 1,363 | ||||||||
Income Before Income Taxes
|
235,949 | 155,021 | 160,176 | |||||||||
Income tax provision
|
82,554 | 55,656 | 54,304 | |||||||||
Income From Continuing Operations
|
153,395 | 99,365 | 105,872 | |||||||||
Net Loss From Discontinued Operations
|
(771 | ) | — | (4,238 | ) | |||||||
Net Income
|
$ | 152,624 | $ | 99,365 | $ | 101,634 | ||||||
Basic Earnings (Loss) Per Share:
|
||||||||||||
Income from continuing operations
|
$ | 2.98 | $ | 1.94 | $ | 2.06 | ||||||
Net loss from discontinued operations
|
(0.02 | ) | — | (0.08 | ) | |||||||
Basic earnings per share
|
2.97 | 1.94 | 1.97 | |||||||||
Diluted Earnings (Loss) Per Share:
|
||||||||||||
Income from continuing operations
|
$ | 2.97 | $ | 1.94 | $ | 2.05 | ||||||
Net loss from discontinued operations
|
(0.01 | ) | — | (0.08 | ) | |||||||
Diluted earnings per share
|
2.96 | 1.94 | 1.97 | |||||||||
Cash Dividends Per Share
|
$ | 1.00 | $ | 1.00 | $ | 1.00 |
Year Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Net Income
|
$ | 152,624 | $ | 99,365 | $ | 101,634 | ||||||
Other Comprehensive Income:
|
||||||||||||
Reclassification of loss on derivative instruments from other comprehensive income to net income, net of tax
|
1,319 | 1,657 | 1,383 | |||||||||
Pension and postretirement benefit plans, net of tax:
|
||||||||||||
Net actuarial (loss) gain arising during the period
|
(1,376 | ) | 2,190 | (25,540 | ) | |||||||
Reclassification of amounts from other comprehensive income to net income:
|
||||||||||||
Amortization of prior service credit
|
(2,327 | ) | (2,368 | ) | (2,447 | ) | ||||||
Amortization of net actuarial loss
|
3,361 | 5,989 | 5,943 | |||||||||
Unrealized holding gains on securities arising during the year, net of tax
|
13 | — | — | |||||||||
Unrealized foreign currency translation adjustment
|
1,816 | 4,668 | (5,247 | ) | ||||||||
Other Comprehensive Income (Loss)
|
2,806 | 12,136 | (25,908 | ) | ||||||||
Comprehensive Income
|
$ | 155,430 | $ | 111,501 | $ | 75,726 | ||||||
Related Tax (Expense) Benefit of Other Comprehensive Income Included in Above Amounts:
|
||||||||||||
Reclassification of loss on derivative instruments from other comprehensive income to net income
|
$ | (770 | ) | $ | (967 | ) | $ | (837 | ) | |||
Pension and postretirement benefit plans:
|
||||||||||||
Net actuarial (loss) gain arising during the period
|
837 | (1,348 | ) | 15,757 | ||||||||
Reclassification of amounts from other comprehensive income to net income:
|
||||||||||||
Amortization of prior service credit
|
1,416 | 1,447 | 1,512 | |||||||||
Amortization of net actuarial loss
|
(2,045 | ) | (3,584 | ) | (3,666 | ) | ||||||
Unrealized holding gains on securities arising during the year
|
(6 | ) | — | — |
Common shares par value
(1)
|
Additional paid-in capital
|
Retained earnings (accumulated deficit)
|
Accumulated other comprehensive loss
|
Total
|
||||||||||||||||
Balance at December 31, 2007
|
$ | 51,887 | $ | 65,796 | $ | (37,530 | ) | $ | (39,046 | ) | $ | 41,107 | ||||||||
Net income
|
— | — | 101,634 | — | 101,634 | |||||||||||||||
Cash dividends
|
— | — | (51,422 | ) | — | (51,422 | ) | |||||||||||||
Common shares issued
|
380 | 2,542 | — | — | 2,922 | |||||||||||||||
Tax impact of share-based awards
|
— | (2,468 | ) | — | — | (2,468 | ) | |||||||||||||
Common shares repurchased
|
(1,054 | ) | (20,793 | ) | — | — | (21,847 | ) | ||||||||||||
Other common shares retired
|
(82 | ) | (1,639 | ) | — | — | (1,721 | ) | ||||||||||||
Fair value of share-based compensation
|
— | 10,769 | — | — | 10,769 | |||||||||||||||
Amounts related to postretirement benefit plans, net of tax (Note 12)
|
— | — | — | (22,044 | ) | (22,044 | ) | |||||||||||||
Amortization of loss on derivatives, net of tax
|
— | — | — | 1,383 | 1,383 | |||||||||||||||
Currency translation adjustment
|
— | — | — | (5,247 | ) | (5,247 | ) | |||||||||||||
Balance at December 31, 2008
|
51,131 | 54,207 | 12,682 | (64,954 | ) | 53,066 | ||||||||||||||
Net income
|
— | — | 99,365 | — | 99,365 | |||||||||||||||
Cash dividends
|
— | — | (51,279 | ) | — | (51,279 | ) | |||||||||||||
Common shares issued
|
237 | 1,735 | — | — | 1,972 | |||||||||||||||
Tax impact of share-based awards
|
— | (2,591 | ) | — | — | (2,591 | ) | |||||||||||||
Common shares repurchased
|
(120 | ) | (1,199 | ) | — | — | (1,319 | ) | ||||||||||||
Other common shares retired
|
(59 | ) | (608 | ) | — | — | (667 | ) | ||||||||||||
Fair value of share-based compensation
|
— | 6,527 | — | — | 6,527 | |||||||||||||||
Amounts related to postretirement benefit plans, net of tax (Note 12)
|
— | — | — | 5,811 | 5,811 | |||||||||||||||
Amortization of loss on derivatives, net of tax
|
— | — | — | 1,657 | 1,657 | |||||||||||||||
Currency translation adjustment
|
— | — | — | 4,668 | 4,668 | |||||||||||||||
Balance at December 31, 2009
|
51,189 | 58,071 | 60,768 | (52,818 | ) | 117,210 | ||||||||||||||
Net income
|
— | — | 152,624 | — | 152,624 | |||||||||||||||
Cash dividends
|
— | — | (51,435 | ) | — | (51,435 | ) | |||||||||||||
Common shares issued
|
408 | 4,189 | — | — | 4,597 | |||||||||||||||
Tax impact of share-based awards
|
— | (677 | ) | — | — | (677 | ) | |||||||||||||
Common shares repurchased
|
(167 | ) | (2,832 | ) | — | — | (2,999 | ) | ||||||||||||
Other common shares retired
|
(94 | ) | (1,716 | ) | — | — | (1,810 | ) | ||||||||||||
Fair value of share-based compensation
|
2 | 5,880 | — | — | 5,882 | |||||||||||||||
Amounts related to postretirement benefit plans, net of tax (Note 12)
|
— | — | — | (342 | ) | (342 | ) | |||||||||||||
Amortization of loss on derivatives, net of tax
|
— | — | — | 1,319 | 1,319 | |||||||||||||||
Net unrealized gain on marketable securities, net of tax
|
— | — | — | 13 | 13 | |||||||||||||||
Currency translation adjustment
|
— | — | — | 1,816 | 1,816 | |||||||||||||||
Balance at December 31, 2010
|
$ | 51,338 | $ | 62,915 | $ | 161,957 | $ | (50,012 | ) | $ | 226,198 |
Year Ended December 31,
|
||||||||||||||
2010
|
2009
|
2008
|
||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||||
Net income
|
$ | 152,624 | $ | 99,365 | $ | 101,634 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
|
||||||||||||||
Net loss from discontinued operations
|
771 | — | 4,238 | |||||||||||
Depreciation
|
20,946 | 22,463 | 21,881 | |||||||||||
Amortization of intangibles
|
52,969 | 45,302 | 42,079 | |||||||||||
Asset impairment charges
|
— | 24,900 | 9,942 | |||||||||||
Amortization of contract acquisition costs
|
19,745 | 24,550 | 26,618 | |||||||||||
Deferred income taxes
|
20,362 | 12,039 | (790 | ) | ||||||||||
Employee share-based compensation expense
|
6,150 | 6,663 | 9,683 | |||||||||||
Gain on early debt extinguishment
|
— | (9,834 | ) | — | ||||||||||
Other non-cash items, net
|
12,802 | 15,111 | 21,912 | |||||||||||
Changes in assets and liabilities, net of effects of acquisitions and discontinued operations:
|
||||||||||||||
Trade accounts receivable
|
(3,962 | ) | (1,481 | ) | 10,578 | |||||||||
Inventories and supplies
|
(470 | ) | 2,793 | 321 | ||||||||||
Other current assets
|
1,864 | (2,109 | ) | (1,807 | ) | |||||||||
Non-current assets
|
928 | 5,403 | 5,404 | |||||||||||
Accounts payable
|
(5,193 | ) | 1,868 | (9,768 | ) | |||||||||
Contract acquisition payments
|
(22,087 | ) | (29,250 | ) | (9,008 | ) | ||||||||
Other accrued and non-current liabilities
|
(44,834 | ) | (11,345 | ) | (34,430 | ) | ||||||||
Net cash provided by operating activities of continuing operations
|
212,615 | 206,438 | 198,487 | |||||||||||
Cash Flows From Investing Activities:
|
||||||||||||||
Purchases of capital assets
|
(43,932 | ) | (44,266 | ) | (31,865 | ) | ||||||||
Payments for acquisitions, net of cash acquired
|
(98,621 | ) | (30,825 | ) | (104,879 | ) | ||||||||
Purchases of customer lists
|
(265 | ) | (1,639 | ) | (3,637 | ) | ||||||||
Purchases of marketable securities
|
(14 | ) | (4,581 | ) | — | |||||||||
Proceeds from sales of marketable securities
|
1,970 | 914 | — | |||||||||||
Proceeds from life insurance policies
|
6,143 | — | — | |||||||||||
Proceeds from sale of facility
|
— | — | 4,181 | |||||||||||
Other
|
(1,451 | ) | (1,391 | ) | 427 | |||||||||
Net cash used by investing activities of continuing operations
|
(136,170 | ) | (81,788 | ) | (135,773 | ) | ||||||||
Cash Flows From Financing Activities:
|
||||||||||||||
Net (payments) proceeds from short-term debt
|
(19,000 | ) | (52,000 | ) | 10,800 | |||||||||
Payments on long-term debt
|
— | (22,627 | ) | (1,755 | ) | |||||||||
Payments for debt issue costs, credit facility
|
(2,361 | ) | — | — | ||||||||||
Change in book overdrafts
|
(693 | ) | (3,360 | ) | (6,370 | ) | ||||||||
Proceeds from issuing shares under employee plans
|
3,267 | 1,972 | 2,801 | |||||||||||
Excess tax benefit from share-based employee awards
|
680 | 68 | 112 | |||||||||||
Payments for common shares repurchased
|
(2,999 | ) | (1,319 | ) | (21,847 | ) | ||||||||
Cash dividends paid to shareholders
|
(51,435 | ) | (51,279 | ) | (51,422 | ) | ||||||||
Net cash used by financing activities of continuing operations
|
(72,541 | ) | (128,545 | ) | (67,681 | ) | ||||||||
Effect Of Exchange Rate Change On Cash
|
690 | 1,594 | (2,053 | ) | ||||||||||
Cash (Used) Provided By Operating Activities Of Discontinued Operations
|
— | (470 | ) | 995 | ||||||||||
Cash Used By Investing Activities Of Discontinued Operations
|
— | (30 | ) | — | ||||||||||
Net Change In Cash And Cash Equivalents
|
4,594 | (2,801 | ) | (6,025 | ) | |||||||||
Cash And Cash Equivalents:
|
Beginning Of Year | 12,789 | 15,590 | 21,615 | ||||||||||
End Of Year
|
$ | 17,383 | $ | 12,789 | $ | 15,590 |
(in thousands)
|
2010
|
2009
|
||||||
Trade accounts receivable
|
$ | 70,601 | $ | 70,555 | ||||
Allowances for uncollectible accounts
|
(4,130 | ) | (4,991 | ) | ||||
Trade accounts receivable – net
|
$ | 66,471 | $ | 65,564 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Balance, beginning of year
|
$ | 4,991 | $ | 5,930 | $ | 6,877 | ||||||
Bad debt expense
|
4,686 | 5,842 | 7,756 | |||||||||
Write-offs, net of recoveries
|
(5,547 | ) | (6,781 | ) | (8,703 | ) | ||||||
Balance, end of year
|
$ | 4,130 | $ | 4,991 | $ | 5,930 |
(in thousands)
|
2010
|
2009
|
||||||
Raw materials
|
$ | 4,879 | $ | 4,048 | ||||
Semi-finished goods
|
8,393 | 8,750 | ||||||
Finished goods
|
5,083 | 5,602 | ||||||
Total inventories
|
18,355 | 18,400 | ||||||
Supplies, primarily production
|
3,305 | 3,722 | ||||||
Inventories and supplies
|
$ | 21,660 | $ | 22,122 |
December 31, 2010
|
||||||||||||||||
(in thousands)
|
Cost
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair value
|
||||||||||||
Corporate investments:
|
||||||||||||||||
Money market securities
|
$ | 2,029 | $ | — | $ | — | $ | 2,029 | ||||||||
Funds held for customers:
(1)
|
||||||||||||||||
Money market securities
|
5,078 | — | — | 5,078 | ||||||||||||
Canadian and provincial government securities
|
5,148 | 23 | — | 5,171 | ||||||||||||
Marketable securities – funds held for customers
|
10,226 | 23 | — | 10,249 | ||||||||||||
Total marketable securities
|
$ | 12,255 | $ | 23 | $ | — | $ | 12,278 |
(1)
Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010, also included cash and cash equivalents of $25,471.
|
December 31, 2009
|
||||||||||||||||
(
in thousands)
|
Cost
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair value
|
||||||||||||
Corporate investments:
|
||||||||||||||||
Money market securities
|
$ | 3,667 | $ | — | $ | — | $ | 3,667 | ||||||||
Funds held for customers:
(1)
|
||||||||||||||||
Money market securities
|
9,522 | — | — | 9,522 | ||||||||||||
Total marketable securities
|
$ | 13,189 | $ | — | $ | — | $ | 13,189 |
(1)
Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2009, also included cash and cash equivalents of $17,379.
|
(in thousands)
|
Fair value
|
|||
Due in one year or less
|
$ | 7,225 | ||
Due in one to three years
|
727 | |||
Due in three to five years
|
1,260 | |||
Due after five years
|
3,066 | |||
Total marketable securities
|
$ | 12,278 |
(in thousands)
|
2010
|
2009
|
||||||
Land and land improvements
|
$ | 33,981 | $ | 33,917 | ||||
Buildings and building improvements
|
120,672 | 120,222 | ||||||
Machinery and equipment
|
303,987 | 303,073 | ||||||
Total
|
458,640 | 457,212 | ||||||
Accumulated depreciation
|
(338,419 | ) | (335,415 | ) | ||||
Property, plant and equipment – net
|
$ | 120,221 | $ | 121,797 |
2010
|
2009 | |||||||||||||||||||||||
(in thousands)
|
Gross carrying amount
|
Accumulated amortization
|
Net carrying amount
|
Gross carrying amount
|
Accumulated amortization
|
Net carrying amount
|
||||||||||||||||||
Indefinite-lived:
|
||||||||||||||||||||||||
Trade name
|
$ | 19,100 | $ | — | $ | 19,100 | $ | 19,100 | $ | — | $ | 19,100 | ||||||||||||
Amortizable intangibles:
|
||||||||||||||||||||||||
Internal-use software
|
378,269 | (314,267 | ) | 64,002 | 341,822 | (285,181 | ) | 56,641 | ||||||||||||||||
Customer lists/ relationships
|
72,292 | (43,660 | ) | 28,632 | 55,745 | (25,777 | ) | 29,968 | ||||||||||||||||
Distributor contracts
|
30,900 | (26,396 | ) | 4,504 | 30,900 | (24,594 | ) | 6,306 | ||||||||||||||||
Trade names
|
59,361 | (22,009 | ) | 37,352 | 51,861 | (20,375 | ) | 31,486 | ||||||||||||||||
Other
|
8,602 | (7,080 | ) | 1,522 | 8,683 | (6,274 | ) | 2,409 | ||||||||||||||||
Amortizable intangibles
|
549,424 | (413,412 | ) | 136,012 | 489,011 | (362,201 | ) | 126,810 | ||||||||||||||||
Intangibles
|
$ | 568,524 | $ | (413,412 | ) | $ | 155,112 | $ | 508,111 | $ | (362,201 | ) | $ | 145,910 |
(in thousands)
|
||||
2011
|
$ | 36,675 | ||
2012
|
22,898 | |||
2013
|
12,695 | |||
2014
|
8,004 | |||
2015
|
5,136 |
2010 | 2009 | 2008 | ||||||||||||||||||
(in thousands)
|
Amount
|
Weighted-average amortization period
|
Amount
|
Weighted-average amortization period
|
Amount
|
Weighted-average amortization period
|
||||||||||||||
Internal-use software
|
$ | 36,442 |
4 years
|
$ | 24,911 |
3 years
|
$ | 39,418 |
3 years
|
|||||||||||
Customer lists/ relationships
|
16,690 |
1 year
|
13,943 |
7 years
|
19,292 |
11 years
|
||||||||||||||
Trade names
|
9,100 |
10 years
|
900 |
10 years
|
1,016 |
9 years
|
||||||||||||||
Other
|
— | — | — | — | 900 |
3 years
|
||||||||||||||
Acquired intangibles
|
$ | 62,232 |
4 years
|
$ | 39,754 |
5 years
|
$ | 60,626 |
6 years
|
(in thousands)
|
||||
Acquisition of NEBS in June 2004
|
$ | 472,082 | ||
Acquisition of Designer Checks in February 2000
(1)
|
77,970 | |||
Acquisition of Hostopia.com Inc. in August 2008
|
68,555 | |||
Acquisition of Custom Direct, Inc. in April 2010
|
66,269 | |||
Acquisition of Abacus America, Inc. in July 2009
|
24,225 | |||
Acquisition of the Johnson Group in October 2006
(1)
|
7,320 | |||
Acquisition of Direct Checks in December 1987
|
4,267 | |||
Acquisition of Logo Design Mojo in April 2008
(1)
|
1,363 | |||
Acquisition of MerchEngines.com in July 2009
(1)
|
1,140 | |||
Acquisition of Dots and Pixels, Inc. in July 2005
|
1,045 | |||
Acquisition of Cornerstone Customer Solutions in March 2010
(1)
|
897 | |||
Acquisition of All Trade Computer Forms, Inc. in February 2007
|
804 | |||
Goodwill
|
$ | 725,937 |
(in thousands)
|
Small
Business
Services
|
Financial Services
|
Direct Checks
|
Total
|
||||||||||||
Balance, December 31, 2008
|
$ | 570,807 | $ | — | $ | 82,237 | $ | 653,044 | ||||||||
Impairment charge (see Note 7)
|
(20,000 | ) | — | — | (20,000 | ) | ||||||||||
Acquisition of Abacus America, Inc. (see Note 4)
|
24,225 | — | — | 24,225 | ||||||||||||
Acquisition of MerchEngines.com (see Note 4)
|
1,140 | — | — | 1,140 | ||||||||||||
Currency translation adjustment
|
257 | — | — | 257 | ||||||||||||
Balance, December 31, 2009:
|
||||||||||||||||
Goodwill
|
596,429 | — | 82,237 | 678,666 | ||||||||||||
Accumulated impairment charges
|
(20,000 | ) | — | — | (20,000 | ) | ||||||||||
576,429 | — | 82,237 | 658,666 | |||||||||||||
Acquisition of Custom Direct, Inc. (see Note 4)
|
— | — | 66,269 | 66,269 | ||||||||||||
Acquisition of Cornerstone Customer Solutions, LLC (see Note 4)
|
— | 897 | — | 897 | ||||||||||||
Currency translation adjustment
|
105 | — | — | 105 | ||||||||||||
Balance, December 31, 2010:
|
||||||||||||||||
Goodwill
|
596,534 | 897 | 148,506 | 745,937 | ||||||||||||
Accumulated impairment charges
|
(20,000 | ) | — | — | (20,000 | ) | ||||||||||
$ | 576,534 | $ | 897 | $ | 148,506 | $ | 725,937 |
(in thousands)
|
2010
|
2009
|
||||||
Contract acquisition costs
|
$ | 57,476 | $ | 45,701 | ||||
Deferred advertising costs
|
15,832 | 14,455 | ||||||
Other
|
20,939 | 21,455 | ||||||
Other non-current assets
|
$ | 94,247 | $ | 81,611 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Balance, beginning of year
|
$ | 45,701 | $ | 37,706 | $ | 55,516 | ||||||
Additions
(1)
|
31,520 | 32,545 | 8,808 | |||||||||
Amortization
|
(19,745 | ) | (24,550 | ) | (26,618 | ) | ||||||
Balance, end of year
|
$ | 57,476 | $ | 45,701 | $ | 37,706 |
(in thousands)
|
2010
|
2009
|
||||||
Funds held for customers
|
$ | 35,475 | $ | 26,901 | ||||
Employee profit sharing/cash bonus and pension
|
34,109 | 36,594 | ||||||
Customer rebates
|
19,201 | 21,861 | ||||||
Contract acquisition costs due within one year
|
8,550 | 2,795 | ||||||
Deferred revenue
|
6,875 | 23,720 | ||||||
Restructuring due within one year (see Note 8)
|
6,435 | 11,151 | ||||||
Wages, including vacation
|
5,898 | 5,272 | ||||||
Interest
|
5,227 | 5,227 | ||||||
Other
|
22,264 | 22,887 | ||||||
Accrued liabilities
|
$ | 144,034 | $ | 156,408 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Interest paid
|
$ | 44,054 | $ | 43,513 | $ | 50,441 | ||||||
Income taxes paid
|
70,246 | 56,060 | 59,997 |
(in thousands, except per share amounts)
|
2010
|
2009
|
2008
|
|||||||||
Earnings per share – basic:
|
||||||||||||
Income from continuing operations
|
$ | 153,395 | $ | 99,365 | $ | 105,872 | ||||||
Income allocated to participating securities
|
(804 | ) | (751 | ) | (1,231 | ) | ||||||
Income available to common shareholders
|
152,591 | 98,614 | 104,641 | |||||||||
Weighted-average shares outstanding
|
51,123 | 50,837 | 50,905 | |||||||||
Earnings per share – basic
|
$ | 2.98 | $ | 1.94 | $ | 2.06 | ||||||
Earnings per share – diluted:
|
||||||||||||
Income from continuing operations
|
$ | 153,395 | $ | 99,365 | $ | 105,872 | ||||||
Income allocated to participating securities
|
(802 | ) | (751 | ) | (1,231 | ) | ||||||
Re-measurement of share-based awards classified as liabilities
|
79 | (18 | ) | (362 | ) | |||||||
Income available to common shareholders
|
$ | 152,672 | $ | 98,596 | $ | 104,279 | ||||||
Weighted-average shares outstanding
|
51,123 | 50,837 | 50,905 | |||||||||
Dilutive impact of options and employee stock purchase plan
|
202 | 88 | 15 | |||||||||
Weighted-average shares and potential dilutive shares outstanding
|
51,325 | 50,925 | 50,920 | |||||||||
Earnings per share – diluted
|
$ | 2.97 | $ | 1.94 | $ | 2.05 | ||||||
Antidilutive options excluded from calculation
|
2,324 | 2,128 | 3,105 |
(in thousands)
|
||||
Cash and cash equivalents
|
$ | 24 | ||
Other current assets
|
11,249 | |||
Intangibles
|
36,487 | |||
Goodwill
|
66,269 | |||
Other non-current assets
|
5,082 | |||
Current liabilities
|
(8,686 | ) | ||
Non-current liabilities
|
(12,480 | ) | ||
Total purchase price
|
97,945 | |||
Less: cash acquired
|
(24 | ) | ||
Purchase price, net of cash acquired
|
$ | 97,921 |
(in thousands)
|
||||
Cash and cash equivalents
|
$ | 23,747 | ||
Other current assets
|
5,011 | |||
Intangibles
|
35,000 | |||
Goodwill
|
68,555 | |||
Other non-current assets
|
4,104 | |||
Current liabilities
|
(3,583 | ) | ||
Non-current liabilities
|
(9,737 | ) | ||
Total purchase price
|
123,097 | |||
Less: cash acquired
|
(23,747 | ) | ||
Purchase price, net of cash acquired
|
$ | 99,350 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Revenue
|
$ | — | $ | 816 | $ | 14,378 | ||||||
Loss from operations
|
$ | — | $ | (155 | ) | $ | (3,031 | ) | ||||
(Loss) gain on disposal
|
(1,244 | ) | 155 | (3,416 | ) | |||||||
Income tax benefit
|
473 | — | 2,209 | |||||||||
Net loss from discontinued operations
|
$ | (771 | ) | $ | — | $ | (4,238 | ) |
Fair value measurements using
|
||||||||||||||||||||
(in thousands)
|
Fair value
as of measurement date
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs (Level 2)
|
Significant unobservable inputs
(Level 3)
|
Impairment charge
|
|||||||||||||||
2009:
|
||||||||||||||||||||
Goodwill
(1)
|
$ | 20,245 | $ | — | $ | — | $ | 20,245 | $ | 20,000 | ||||||||||
Indefinite-lived trade name
(2)
|
19,100 | — | — | 19,100 | 4,900 | |||||||||||||||
Total impairment charges
|
$ | 24,900 | ||||||||||||||||||
2008:
|
||||||||||||||||||||
Indefinite-lived trade names
(3)
|
$ | 50,100 | $ | — | $ | — | $ | 50,100 | $ | 9,300 | ||||||||||
Indefinite-lived trade name
(4)
|
25,845 | — | — | 25,845 | 255 | |||||||||||||||
Amortizable trade name
|
— | — | — | — | 387 | |||||||||||||||
Total impairment charges
|
$ | 9,942 | ||||||||||||||||||
Discontinued operations
|
$ | 678 | $ | — | $ | 678 | $ | — | $ | 3,416 |
Fair value measurements using
|
||||||||||||||||
(in thousands)
|
Fair value
as of
December 31, 2010
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs (Level 2)
|
Significant unobservable inputs
(Level 3)
|
||||||||||||
Marketable securities – funds held for customers
|
$ | 10,249 | $ | — | $ | 10,249 | $ | — | ||||||||
Marketable securities – corporate investments
|
2,029 | — | 2,029 | — | ||||||||||||
Long-term investment in mutual funds
|
2,283 | 2,283 | — | — | ||||||||||||
Derivative assets
|
5,456 | — | 5,456 | — |
Fair value measurements using
|
||||||||||||||||
(in thousands)
|
Fair value
as of
December 31, 2009
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs (Level 2)
|
Significant unobservable inputs
(Level 3)
|
||||||||||||
Marketable securities – funds held for customers
|
$ | 9,522 | $ | — | $ | 9,522 | $ | — | ||||||||
Marketable securities – corporate investments
|
3,667 | — | 3,667 | — | ||||||||||||
Long-term investment in mutual funds
|
2,231 | 2,231 | — | — | ||||||||||||
Derivative liabilities
|
152 | — | 152 | — |
2010
|
2009
|
|||||||||||||||
(in thousands)
|
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
|
||||||||||||
Cash and cash equivalents
|
$ | 17,383 | $ | 17,383 | $ | 12,789 | $ | 12,789 | ||||||||
Cash and cash equivalents - funds held for customers
|
25,471 | 25,471 | 17,379 | 17,379 | ||||||||||||
Short-term debt
|
7,000 | 7,000 | 26,000 | 26,000 | ||||||||||||
Long-term debt
|
748,122 | 751,978 | 742,753 | 719,283 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Severance accruals
|
$ | 9,331 | $ | 10,625 | $ | 26,183 | ||||||
Severance reversals
|
(2,398 | ) | (3,523 | ) | (2,401 | ) | ||||||
Operating lease obligations
|
933 | 1,177 | 209 | |||||||||
Operating lease obligation reversals
|
(380 | ) | (32 | ) | (1 | ) | ||||||
Net restructuring accruals
|
7,486 | 8,247 | 23,990 | |||||||||
Write-off of spare parts inventory
|
— | — | 3,059 | |||||||||
Other costs
|
2,841 | 3,739 | 1,218 | |||||||||
Net restructuring charges
|
$ | 10,327 | $ | 11,986 | $ | 28,267 |
(in thousands)
|
NEBS
acquisition related
|
2006
initiatives
|
2007
initiatives
|
2008
initiatives
|
2009
initiatives
|
2010
initiatives
|
Total
|
|||||||||||||||||||||
Balance, December 31, 2007
|
$ | 36 | $ | 325 | $ | 4,689 | $ | — | $ | — | $ | — | $ | 5,050 | ||||||||||||||
Restructuring charges
|
— | 5 | 253 | 26,134 | — | — | 26,392 | |||||||||||||||||||||
Restructuring reversals
|
(1 | ) | (27 | ) | (843 | ) | (1,531 | ) | — | — | (2,402 | ) | ||||||||||||||||
Payments, primarily severance
|
(16 | ) | (108 | ) | (3,764 | ) | (4,773 | ) | — | — | (8,661 | ) | ||||||||||||||||
Balance, December 31, 2008
|
19 | 195 | 335 | 19,830 | — | — | 20,379 | |||||||||||||||||||||
Restructuring charges
|
— | — | — | 886 | 10,916 | — | 11,802 | |||||||||||||||||||||
Restructuring reversals
|
(19 | ) | — | (34 | ) | (3,354 | ) | (148 | ) | — | (3,555 | ) | ||||||||||||||||
Payments, primarily severance
|
— | (195 | ) | (237 | ) | (15,187 | ) | (1,515 | ) | — | (17,134 | ) | ||||||||||||||||
Balance, December 31, 2009
|
— | — | 64 | 2,175 | 9,253 | — | 11,492 | |||||||||||||||||||||
Restructuring charges
|
— | — | — | 525 | 99 | 9,640 | 10,264 | |||||||||||||||||||||
Restructuring reversals
|
— | — | (64 | ) | (985 | ) | (1,465 | ) | (264 | ) | (2,778 | ) | ||||||||||||||||
Payments, primarily severance
|
— | — | — | (1,598 | ) | (7,235 | ) | (3,347 | ) | (12,180 | ) | |||||||||||||||||
Balance, December 31, 2010
|
$ | — | $ | — | $ | — | $ | 117 | $ | 652 | $ | 6,029 | $ | 6,798 | ||||||||||||||
Cumulative amounts:
|
||||||||||||||||||||||||||||
Restructuring charges
|
$ | 30,243 | $ | 10,864 | $ | 7,181 | $ | 27,545 | $ | 11,015 | $ | 9,640 | $ | 96,488 | ||||||||||||||
Restructuring reversals
|
(859 | ) | (1,671 | ) | (1,503 | ) | (5,870 | ) | (1,613 | ) | (264 | ) | (11,780 | ) | ||||||||||||||
Payments, primarily severance
|
(29,384 | ) | (9,193 | ) | (5,678 | ) | (21,558 | ) | (8,750 | ) | (3,347 | ) | (77,910 | ) | ||||||||||||||
Balance, December 31, 2010
|
$ | — | $ | — | $ | — | $ | 117 | $ | 652 | $ | 6,029 | $ | 6,798 |
Employee severance benefits
|
Operating lease obligations
|
|||||||||||||||||||||||||||
(in thousands)
|
Small Business Services
|
Financial Services
|
Direct Checks
|
Corporate
(1)
|
Small Business Services
|
Direct Checks
|
Total
|
|||||||||||||||||||||
Balance, December 31, 2007
|
$ | 2,001 | $ | 953 | $ | — | $ | 2,060 | $ | 36 | $ | — | $ | 5,050 | ||||||||||||||
Restructuring charges
|
7,076 | 3,579 | 341 | 15,187 | 209 | — | 26,392 | |||||||||||||||||||||
Restructuring reversals
|
(637 | ) | (405 | ) | (2 | ) | (1,357 | ) | (1 | ) | — | (2,402 | ) | |||||||||||||||
Inter-segment transfer
|
378 | 739 | 61 | (1,178 | ) | — | — | — | ||||||||||||||||||||
Payments
|
(4,844 | ) | (1,249 | ) | (249 | ) | (2,303 | ) | (16 | ) | — | (8,661 | ) | |||||||||||||||
Balance, December 31, 2008
|
3,974 | 3,617 | 151 | 12,409 | 228 | — | 20,379 | |||||||||||||||||||||
Restructuring charges
|
5,310 | 1,063 | 134 | 4,118 | 1,177 | — | 11,802 | |||||||||||||||||||||
Restructuring reversals
|
(672 | ) | (674 | ) | (7 | ) | (2,170 | ) | (32 | ) | — | (3,555 | ) | |||||||||||||||
Inter-segment transfer
|
1,174 | — | — | (1,174 | ) | — | — | — | ||||||||||||||||||||
Payments
|
(5,041 | ) | (2,953 | ) | (162 | ) | (8,402 | ) | (576 | ) | — | (17,134 | ) | |||||||||||||||
Balance, December 31, 2009
|
4,745 | 1,053 | 116 | 4,781 | 797 | — | 11,492 | |||||||||||||||||||||
Restructuring charges
|
1,807 | 2,134 | 2,344 | 3,046 | 424 | 509 | 10,264 | |||||||||||||||||||||
Restructuring reversals
|
(875 | ) | (206 | ) | (116 | ) | (1,201 | ) | (380 | ) | — | (2,778 | ) | |||||||||||||||
Payments
|
(4,429 | ) | (1,027 | ) | (2,092 | ) | (4,010 | ) | (605 | ) | (17 | ) | (12,180 | ) | ||||||||||||||
Balance, December 31, 2010
|
$ | 1,248 | $ | 1,954 | $ | 252 | $ | 2,616 | $ | 236 | $ | 492 | $ | 6,798 | ||||||||||||||
Cumulative amounts:
|
||||||||||||||||||||||||||||
Restructuring charges
|
$ | 46,506 | $ | 11,086 | $ | 2,947 | $ | 30,712 | $ | 4,728 | $ | 509 | $ | 96,488 | ||||||||||||||
Restructuring reversals
|
(2,604 | ) | (1,921 | ) | (267 | ) | (6,024 | ) | (964 | ) | — | (11,780 | ) | |||||||||||||||
Inter-segment transfer
|
2,185 | 1,117 | 93 | (3,395 | ) | — | — | — | ||||||||||||||||||||
Payments
|
(44,839 | ) | (8,328 | ) | (2,521 | ) | (18,677 | ) | (3,528 | ) | (17 | ) | (77,910 | ) | ||||||||||||||
Balance, December 31, 2010
|
$ | 1,248 | $ | 1,954 | $ | 252 | $ | 2,616 | $ | 236 | $ | 492 | $ | 6,798 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Current tax provision:
|
||||||||||||
Federal
|
$ | 53,768 | $ | 39,294 | $ | 47,714 | ||||||
State
|
8,424 | 4,323 | 7,380 | |||||||||
Total
|
62,192 | 43,617 | 55,094 | |||||||||
Deferred tax provision (benefit)
|
20,362 | 12,039 | (790 | ) | ||||||||
Provision for income taxes
|
$ | 82,554 | $ | 55,656 | $ | 54,304 |
2010
|
2009
|
2008
|
||||||||||
Income tax at federal statutory rate
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income tax expense, net of federal income tax benefit
|
2.8 | % | 3.5 | % | 2.7 | % | ||||||
Impact of health care legislation on deferred income taxes
|
1.7 | % | — | — | ||||||||
Non-deductible portion of goodwill impairment charge (see Note 7)
|
— | 2.9 | % | — | ||||||||
Qualified production activity deduction
|
(2.4 | %) | (1.8 | %) | (1.7 | %) | ||||||
Change in unrecognized tax benefits, including interest and penalties
|
(1.3 | %) | 0.1 | % | 1.1 | % | ||||||
Receivables for prior year tax returns
(1)
|
— | (2.2 | %) | (1.5 | %) | |||||||
Other
|
(0.8 | %) | (1.6 | %) | (1.7 | %) | ||||||
Income tax provision
|
35.0 | % | 35.9 | % | 33.9 | % |
(in thousands)
|
||||
Balance, December 31, 2007
|
$ | 14,395 | ||
Additions for tax positions of current year
|
975 | |||
Additions for tax positions of prior years
|
3,136 | |||
Reductions for tax positions of prior years
|
(2,845 | ) | ||
Settlements
|
(2,291 | ) | ||
Lapse of statutes of limitations
|
(1,913 | ) | ||
Balance, December 31, 2008
|
11,457 | |||
Additions for tax positions of current year
|
606 | |||
Additions for tax positions of prior years
|
2,316 | |||
Reductions for tax positions of prior years
|
(2,152 | ) | ||
Settlements
|
(3,186 | ) | ||
Lapse of statutes of limitations
|
(1,063 | ) | ||
Balance, December 31, 2009
|
7,978 | |||
Additions for tax positions of current year
|
641 | |||
Additions for tax positions of prior years
|
1,406 | |||
Fair value of acquired tax positions (see Note 4)
|
1,069 | |||
Reductions for tax positions of prior years
|
(2,634 | ) | ||
Settlements
|
(640 | ) | ||
Lapse of statutes of limitations
|
(1,282 | ) | ||
Balance, December 31, 2010
|
$ | 6,538 |
2010
|
2009
|
|||||||||||||
(in thousands)
|
Deferred tax assets
|
Deferred tax liabilities
|
Deferred tax assets
|
Deferred tax liabilities
|
||||||||||
Goodwill
|
$ | — | $ | 34,818 | $ | — | $ | 29,766 | ||||||
Intangible assets
|
— | 33,774 | — | 25,693 | ||||||||||
Deferred advertising costs
|
— | 5,964 | — | 5,342 | ||||||||||
Property, plant and equipment
|
— | 4,201 | — | 2,489 | ||||||||||
Early extinguishment of debt (see Note 13)
|
— | 3,784 | — | 3,798 | ||||||||||
Employee benefit plans
|
29,593 | — | 35,106 | — | ||||||||||
Net operating loss and tax credit carryforwards
|
5,760 | — | 3,861 | — | ||||||||||
Reserves and accruals
|
5,457 | — | 8,191 | — | ||||||||||
Inventories
|
2,771 | — | 2,565 | — | ||||||||||
Interest rate lock agreements (see Note 6)
|
2,709 | — | 3,512 | — | ||||||||||
Federal benefit of state uncertain tax positions
|
1,719 | — | 2,493 | — | ||||||||||
All other
|
1,370 | 3,061 | 1,298 | 2,971 | ||||||||||
Total deferred taxes
|
49,379 | 85,602 | 57,026 | 70,059 | ||||||||||
Valuation allowance
|
(1,139 |
)
|
— | (926 |
)
|
— | ||||||||
Net deferred taxes
|
$ | 48,240 | $ | 85,602 | $ | 56,100 | $ | 70,059 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Stock options
|
$ | 2,967 | $ | 3,213 | $ | 4,296 | ||||||
Restricted shares and restricted stock units
|
2,866 | 3,135 | 4,987 | |||||||||
Employee stock purchase plan
|
317 | 315 | 400 | |||||||||
Total share-based compensation expense
|
$ | 6,150 | $ | 6,663 | $ | 9,683 | ||||||
Income tax benefit
|
$ | (2,123 | ) | $ | (2,375 | ) | $ | (3,475 | ) |
2010
|
2009
|
2008
|
||||
Risk-free interest rate (%)
|
2.2
|
1.6
|
3.0
|
|||
Dividend yield (%)
|
3.2
|
3.4
|
3.8
|
|||
Expected volatility (%)
|
54.0
|
44.2
|
33.2
|
|||
Weighted-average option life (years)
|
4.8
|
4.6
|
4.6
|
Number of option shares
|
Weighted- average exercise price
|
Aggregate
intrinsic value
(in thousands)
|
Weighted- average remaining contractual term
(in years)
|
|||||||||||||
Outstanding at December 31, 2007
|
3,284,229 | $ | 36.85 | |||||||||||||
Granted
|
662,164 | 22.15 | ||||||||||||||
Exercised
|
(19,164 | ) | 20.24 | |||||||||||||
Forfeited or expired
|
(821,834 | ) | 38.05 | |||||||||||||
Outstanding at December 31, 2008
|
3,105,395 | 33.50 | ||||||||||||||
Granted
|
789,462 | 9.75 | ||||||||||||||
Exercised
|
(2,700 | ) | 9.73 | |||||||||||||
Forfeited or expired
|
(1,050,870 | ) | 39.68 | |||||||||||||
Outstanding at December 31, 2009
|
2,841,287 | 24.64 | ||||||||||||||
Granted
|
694,994 | 18.37 | ||||||||||||||
Exercised
|
(185,074 | ) | 11.08 | |||||||||||||
Forfeited or expired
|
(438,291 | ) | 33.94 | |||||||||||||
Outstanding at December 31, 2010
|
2,912,916 | 22.60 | $ | 10,881 | 4.0 | |||||||||||
Exercisable at December 31, 2008
|
1,977,119 | $ | 37.43 | |||||||||||||
Exercisable at December 31, 2009
|
1,642,766 | 30.60 | ||||||||||||||
Exercisable at December 31, 2010
|
1,674,841 | 27.66 | $ | 1,895 | 2.8 |
Number of units
|
Weighted- average grant date fair value
|
Aggregate
intrinsic value
(in thousands)
|
Weighted- average remaining contractual term
(in years)
|
|||||||||||||
Outstanding at December 31, 2007
|
53,110 | $ | 32.73 | |||||||||||||
Granted
|
102,991 | 23.42 | ||||||||||||||
Vested
|
(10,720 | ) | 25.79 | |||||||||||||
Outstanding at December 31, 2008
|
145,381 | 26.65 | ||||||||||||||
Granted
|
17,248 | 12.27 | ||||||||||||||
Vested
|
(39,685 | ) | 24.04 | |||||||||||||
Forfeited
|
(2,636 | ) | 25.57 | |||||||||||||
Outstanding at December 31, 2009
|
120,308 | 25.48 | ||||||||||||||
Granted
|
34,134 | 19.85 | ||||||||||||||
Vested
|
(68,607 | ) | 25.57 | |||||||||||||
Outstanding at December 31, 2010
|
85,835 | 23.58 | $ | 1,976 | 8.1 |
Number of shares
|
Weighted- average grant date fair value
|
|||||||
Unvested at December 31, 2007
|
504,133 | $ | 29.78 | |||||
Granted
|
242,993 | 22.08 | ||||||
Vested
|
(245,331 | ) | 30.46 | |||||
Forfeited
|
(48,866 | ) | 27.48 | |||||
Unvested at December 31, 2008
|
452,929 | 25.53 | ||||||
Granted
|
44,257 | 14.81 | ||||||
Vested
|
(205,685 | ) | 25.19 | |||||
Forfeited
|
(23,292 | ) | 25.82 | |||||
Unvested at December 31, 2009
|
268,209 | 24.00 | ||||||
Granted
|
52,400 | 20.00 | ||||||
Vested
|
(131,340 | ) | 26.01 | |||||
Forfeited
|
(7,595 | ) | 21.83 | |||||
Unvested at December 31, 2010
|
181,674 | 21.48 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Profit sharing/cash bonus plans
|
$ | 18,500 | $ | 22,751 | $ | 623 | ||||||
Defined contribution pension plan
|
8,664 | 9,953 | 11,614 | |||||||||
401(k) plan
|
5,636 | 6,312 | 7,936 |
(in thousands)
|
Postretirement benefit plan
|
Pension plans
|
||||||
Change in benefit obligation:
|
||||||||
Benefit obligation, December 31, 2008
|
$ | 129,165 | $ | 9,261 | ||||
Interest cost
|
8,560 | 261 | ||||||
Actuarial loss (gain) – net
|
7,741 | (252 | ) | |||||
Benefits paid from plan assets, the VEBA trust (see Note 11) and company funds
|
(11,320 | ) | (368 | ) | ||||
Plan amendments
|
4,065 | — | ||||||
Settlement
|
— | (5,252 | ) | |||||
Medicare Part D reimbursements
|
704 | — | ||||||
Currency translation adjustment
|
— | (195 | ) | |||||
Benefit obligation, December 31, 2009
|
138,915 | 3,455 | ||||||
Interest cost
|
7,282 | 179 | ||||||
Actuarial loss – net
|
5,781 | 198 | ||||||
Benefits paid from the VEBA trust (see Note 11) and company funds
|
(11,363 | ) | (324 | ) | ||||
Medicare Part D reimbursements
|
726 | — | ||||||
Benefit obligation, December 31, 2010
|
$ | 141,341 | $ | 3,508 | ||||
Change in plan assets:
|
||||||||
Fair value of plan assets, December 31, 2008
|
$ | 68,728 | $ | 5,212 | ||||
Actual gain on plan assets
|
21,592 | 172 | ||||||
Company contributions
|
— | 84 | ||||||
Benefits and expenses paid
|
— | (44 | ) | |||||
Settlement
|
— | (5,252 | ) | |||||
Currency translation adjustment
|
— | (172 | ) | |||||
Fair value of plan assets, December 31, 2009
|
90,320 | — | ||||||
Actual gain on plan assets
|
10,990 | — | ||||||
Fair value of plan assets, December 31, 2010
|
$ | 101,310 | $ | — | ||||
Funded status, December 31, 2009
|
$ | (48,595 | ) | $ | (3,455 | ) | ||
Funded status, December 31, 2010
|
$ | (40,031 | ) | $ | (3,508 | ) |
Postretirement benefit
plan
|
Pension plan
|
|||||||||||||||
(in thousands)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Accrued liabilities
|
$ | — | $ | — | $ | 324 | $ | 324 | ||||||||
Other non-current liabilities
|
40,031 | 48,595 | 3,184 | 3,131 |
Postretirement benefit plan
|
Pension plan
|
|||||||||||||||
(in thousands)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Unrecognized prior service credit
|
$ | (24,440 | ) | $ | (28,182 | ) | $ | — | $ | — | ||||||
Unrecognized net actuarial loss (gain)
|
108,358 | 111,748 | 161 | (36 | ) | |||||||||||
Tax effect
|
(31,334 | ) | (31,201 | ) | (53 | ) | 21 | |||||||||
Amount recognized in accumulated other comprehensive loss, net of tax
|
$ | 52,584 | $ | 52,365 | $ | 108 | $ | (15 | ) |
(in thousands)
|
Postretirement
benefit plan
|
|||
Prior service credit
|
$ | (3,742 | ) | |
Net actuarial loss
|
5,415 | |||
Total
|
$ | 1,673 |
Postretirement benefit plan
|
Pension plans
|
|||||||||||||||||||||||
(in thousands)
|
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
||||||||||||||||||
Service cost
|
$ | — | $ | — | $ | 94 | $ | — | $ | — | $ | — | ||||||||||||
Interest cost
|
7,282 | 8,560 | 7,955 | 179 | 262 | 497 | ||||||||||||||||||
Expected return on plan assets
|
(7,226 | ) | (5,919 | ) | (8,732 | ) | — | (57 | ) | (265 | ) | |||||||||||||
Amortization of prior service credit
|
(3,742 | ) | (3,815 | ) | (3,959 | ) | — | — | — | |||||||||||||||
Amortization of net actuarial loss
|
5,406 | 8,383 | 9,477 | — | 9 | 8 | ||||||||||||||||||
Total periodic benefit expense
|
1,720 | 7,209 | 4,835 | 179 | 214 | 240 | ||||||||||||||||||
Settlement loss
|
— | — | — | — | 402 | 221 | ||||||||||||||||||
Net periodic benefit expense
|
$ | 1,720 | $ | 7,209 | $ | 4,835 | $ | 179 | $ | 616 | $ | 461 |
Postretirement benefit plan
|
Pension plan
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Discount rate
|
4.90 | % | 5.45 | % | 4.90 | % | 5.45 | % |
Postretirement benefit plan
|
Pension plans | ||||||||||||||||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
||||||||||||||||||||
Discount rate
(1)
|
5.45 | % | 7.25 | % | 6.20 | % | 5.45% | 4.06% - 6.60% | 4.43% - 6.20% | ||||||||||||||||
Expected return on plan assets
|
8.00 | % | 8.50 | % | 8.50 | % | — | 4.50% | 4.50% |
2010
|
2009
|
2008
|
||||||||||||||
All
participants
|
All
participants
|
Participants under age 65
|
Participants over age 65
|
|||||||||||||
Health care cost trend rate assumed for next year
|
7.75% | 8.00% | 7.50% | 8.50% | ||||||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
5.00% | 5.00% | 5.25% | 5.25% | ||||||||||||
Year that the rate reaches the ultimate trend rate
|
2017 | 2017 | 2012 | 2014 |
(in thousands)
|
One-percentage-
point increase
|
One-percentage-point decrease
|
||||||
Effect on total of service and interest cost
|
$ | 107 | $ | (103 | ) | |||
Effect on benefit obligation
|
2,178 | (2,096 | ) |
Postretirement benefit
plan
|
||||||||
2010
|
2009
|
|||||||
U.S. large capitalization equity securities
|
34 | % | 33 | % | ||||
International equity securities
|
18 | % | 18 | % | ||||
Mortgage-backed securities
|
14 | % | 14 | % | ||||
Government debt securities
|
13 | % | 8 | % | ||||
U.S. corporate debt securities
|
10 | % | 14 | % | ||||
U.S. small and mid-capitalization equity securities
|
8 | % | 7 | % | ||||
Other debt securities
|
3 | % | 6 | % | ||||
Total
|
100 | % | 100 | % |
Fair value measurements using
|
||||||||||||||||
(in thousands)
|
Fair value
as of
December 31, 2010
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs (Level 2)
|
Significant unobservable inputs
(Level 3)
|
||||||||||||
U.S. large capitalization equity securities
|
$ | 34,332 | $ | 34,332 | $ | — | $ | — | ||||||||
International equity securities
|
18,357 | 18,357 | — | — | ||||||||||||
Mortgage-backed securities
|
14,113 | — | 14,113 | — | ||||||||||||
Government debt securities
|
13,531 | 7,544 | 5,987 | — | ||||||||||||
U.S. corporate debt securities
|
9,725 | 8,611 | 1,114 | — | ||||||||||||
U.S. small and mid-capitalization equity securities
|
8,153 | 8,153 | — | — | ||||||||||||
Other debt securities
|
3,099 | 2,825 | 274 | — | ||||||||||||
Total
|
$ | 101,310 | $ | 79,822 | $ | 21,488 | $ | — |
Fair value measurements using
|
||||||||||||||||
(in thousands)
|
Fair value
as of
December 31, 2009
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs (Level 2)
|
Significant unobservable inputs
(Level 3)
|
||||||||||||
U.S. large capitalization equity securities
|
$ | 29,941 | $ | 29,941 | $ | — | $ | — | ||||||||
International equity securities
|
16,219 | 16,219 | — | — | ||||||||||||
U.S. corporate debt securities
|
12,845 | 9,347 | 3,498 | — | ||||||||||||
Mortgage-backed securities
|
12,647 | — | 12,647 | — | ||||||||||||
Government debt securities
|
6,665 | 5,270 | 1,395 | — | ||||||||||||
U.S. small and mid-capitalization equity securities
|
6,484 | 6,484 | — | — | ||||||||||||
Other debt securities
|
5,519 | 4,874 | 645 | — | ||||||||||||
Total
|
$ | 90,320 | $ | 72,135 | $ | 18,185 | $ | — |
Postretirement benefit plan
|
Pension plan | ||||||||||||||||
(in thousands)
|
Gross benefit payments
|
Expected Medicare subsidy
|
Net benefit payments
|
Gross benefit payments
|
|||||||||||||
2011
|
$ | 11,300 | $ | 900 | $ | 10,400 | $ | 320 | |||||||||
2012
|
11,900 | 1,000 | 10,900 | 310 | |||||||||||||
2013
|
12,700 | 1,100 | 11,600 | 300 | |||||||||||||
2014
|
13,500 | 1,200 | 12,300 | 300 | |||||||||||||
2015
|
13,500 | 1,200 | 12,300 | 290 | |||||||||||||
2016 – 2020
|
64,400 | 7,100 | 57,300 | 1,330 |
(in thousands)
|
2010
|
2009
|
||||||
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2010 - $4,879 increase; 2009 - $254 decrease
|
$ | 284,843 | $ | 279,533 | ||||
5.125% senior, unsecured notes due October 1, 2014, net of discount
|
263,279 | 263,220 | ||||||
7.375% senior, unsecured notes due June 1, 2015
|
200,000 | 200,000 | ||||||
Long-term portion of debt
|
748,122 | 742,753 | ||||||
Amounts drawn on credit facilities
|
7,000 | 26,000 | ||||||
Total debt
|
$ | 755,122 | $ | 768,753 |
(in thousands)
|
Total
available
|
|||
Credit facility commitment
|
$ | 200,000 | ||
Amounts drawn on credit facility
|
(7,000 | ) | ||
Outstanding letters of credit
|
(9,256 | ) | ||
Net available for borrowing as of December 31, 2010
|
$ | 183,744 |
(in thousands)
|
Operating leases
|
|||
2011
|
$ | 9,365 | ||
2012
|
5,858 | |||
2013
|
4,240 | |||
2014
|
1,327 | |||
2015
|
85 | |||
Total minimum lease payments
|
$ | 20,875 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Minimum rentals
|
$ | 10,313 | $ | 8,180 | $ | 9,811 | ||||||
Sublease rentals
|
(190 | ) | (1,677 | ) | (2,028 | ) | ||||||
Net rental expense
|
$ | 10,123 | $ | 6,503 | $ | 7,783 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Balance, beginning of year
|
$ | 51,189 | $ | 51,131 | $ | 51,887 | ||||||
Issued
|
410 | 237 | 380 | |||||||||
Repurchased
|
(167 | ) | (120 | ) | (1,054 | ) | ||||||
Retired
|
(94 | ) | (59 | ) | (82 | ) | ||||||
Balance, end of year
|
$ | 51,338 | $ | 51,189 | $ | 51,131 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Postretirement and defined benefit pension plans:
|
||||||||||||
Unrealized prior service credit
|
$ | 15,651 | $ | 17,978 | $ | 22,858 | ||||||
Unrealized net actuarial losses
|
(68,343 | ) | (70,328 | ) | (81,019 | ) | ||||||
Postretirement and defined benefit pension plans, net of tax
|
(52,692 | ) | (52,350 | ) | (58,161 | ) | ||||||
Loss on derivatives, net of tax
(1)
|
(4,522 | ) | (5,841 | ) | (7,498 | ) | ||||||
Net unrealized gain on marketable securities, net of tax
|
13 | — | — | |||||||||
Currency translation adjustment
|
7,189 | 5,373 | 705 | |||||||||
Accumulated other comprehensive loss
|
$ | (50,012 | ) | $ | (52,818 | ) | $ | (64,954 | ) |
Reportable business segments
|
||||||||||||||
(in thousands)
|
Small Business Services
|
Financial Services
|
Direct Checks
|
Corporate
|
Consolidated
|
|||||||||
Revenue from external customers:
|
|
|
2010
|
|
$
|
796,254
|
$
|
390,331
|
$
|
215,652
|
$
|
—
|
$
|
1,402,237
|
|
|
2009
|
|
|
785,109
|
396,353
|
162,733
|
—
|
1,344,195
|
|||||
2008
|
|
851,060
|
430,018
|
187,584
|
—
|
1,468,662
|
||||||||
Operating income:
|
|
|
2010
|
|
|
137,534
|
84,158
|
59,852
|
—
|
281,544
|
||||
|
|
2009
|
|
|
60,804
|
75,091
|
54,694
|
—
|
190,589
|
|||||
2008
|
|
90,078
|
65,540
|
53,616
|
—
|
209,234
|
||||||||
Depreciation and amortization
expense:
|
|
|
2010
|
|
|
45,163
|
11,788
|
16,964
|
—
|
73,915
|
||||
|
|
2009
|
|
|
52,507
|
10,946
|
4,312
|
—
|
67,765
|
|||||
2008
|
|
|
49,947
|
9,664
|
4,349
|
—
|
63,960
|
|||||||
Asset impairment charges:
|
2010
|
—
|
—
|
—
|
—
|
—
|
||||||||
2009
|
24,900
|
—
|
—
|
—
|
24,900
|
|||||||||
2008
|
9,942
|
—
|
—
|
—
|
9,942
|
|||||||||
Total assets:
|
|
|
2010
|
|
|
772,799
|
66,065
|
178,880
|
290,947
|
1,308,691
|
||||
|
|
2009
|
|
|
778,191
|
57,716
|
96,288
|
279,015
|
1,211,210
|
|||||
2008
|
|
785,555
|
47,872
|
100,535
|
285,023
|
1,218,985
|
||||||||
Capital asset purchases:
|
|
|
2010
|
|
|
—
|
—
|
—
|
43,932
|
43,932
|
||||
|
|
2009
|
|
|
—
|
—
|
—
|
44,266
|
44,266
|
|||||
2008
|
|
|
—
|
—
|
—
|
31,865
|
31,865
|
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Checks, including contract settlements
|
$ | 896,563 | $ | 853,729 | $ | 934,367 | ||||||
Other printed products, including forms
|
284,816 | 296,550 | 345,570 | |||||||||
Services, primarily business
|
121,881 | 90,918 | 57,711 | |||||||||
Accessories and promotional products
|
78,659 | 81,249 | 102,203 | |||||||||
Packaging supplies and other
|
20,318 | 21,749 | 28,811 | |||||||||
Total revenue
|
$ | 1,402,237 | $ | 1,344,195 | $ | 1,468,662 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Revenue from external customers:
|
||||||||||||
United States
|
$ | 1,325,163 | $ | 1,275,885 | $ | 1,397,759 | ||||||
Foreign, primarily Canada
|
77,074 | 68,310 | 70,903 | |||||||||
Total revenue
|
$ | 1,402,237 | $ | 1,344,195 | $ | 1,468,662 | ||||||
Long-lived assets:
|
||||||||||||
United States
|
$ | 1,124,095 | $ | 1,035,705 | $ | 1,036,140 | ||||||
Foreign, primarily Canada
|
13,359 | 16,006 | 15,759 | |||||||||
Total long-lived assets
|
$ | 1,137,454 | $ | 1,051,711 | $ | 1,051,899 |
2010 Quarter Ended
|
||||||||||||||||
March 31
(1)
|
June 30
(2
)
|
September 30
(3)
|
December 31
(4)
|
|||||||||||||
Revenue
|
$ | 335,120 | $ | 347,996 | $ | 367,633 | $ | 351,488 | ||||||||
Gross profit
|
216,757 | 226,056 | 246,200 | 224,805 | ||||||||||||
Net income
|
33,384 | 33,614 | 50,800 | 34,826 | ||||||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
0.65 | 0.65 | 0.99 | 0.68 | ||||||||||||
Diluted
|
0.65 | 0.65 | 0.98 | 0.68 | ||||||||||||
Cash dividends per share
|
0.25 | 0.25 | 0.25 | 0.25 |
2009 Quarter Ended
|
||||||||||||||||
March 31
(5
)
|
June 30
|
September 30
(6)
|
December 31
(7)
|
|||||||||||||
Revenue
|
$ | 339,520 | $ | 332,069 | $ | 332,297 | $ | 340,309 | ||||||||
Gross profit
|
210,261 | 205,105 | 210,386 | 213,661 | ||||||||||||
Net income
|
12,504 | 27,776 | 28,555 | 30,530 | ||||||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
0.24 | 0.54 | 0.56 | 0.60 | ||||||||||||
Diluted
|
0.24 | 0.54 | 0.56 | 0.59 | ||||||||||||
Cash dividends per share
|
0.25 | 0.25 | 0.25 | 0.25 |
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
|
|||||||||
Equity compensation plans approved by shareholders
|
2,998,751 (1) | $ | 21.95 (1) | 5,948,586 (2) | ||||||||
Equity compensation plans not approved by shareholders
|
None
|
None
|
None
|
|||||||||
Total
|
2,998,751 | $ | 21.95 | 5,948,586 |
Exhibit
Number
|
Description
|
Method of
Filing
|
3.1
|
Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
*
|
3.2
|
Bylaws (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Commission on October 23, 2008)
|
*
|
4.1
|
Amended and Restated Rights Agreement, dated as of December 20, 2006, by and between us and Wells Fargo Bank, National Association, as Rights Agent, which includes as Exhibit A thereto, the Form of Rights Certificate (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on December 21, 2006)
|
*
|
4.2
|
First Supplemental Indenture dated as of December 4, 2002, by and between us and Wells Fargo Bank Minnesota, N.A. (formerly, Norwest Bank Minnesota, National Association), as trustee (incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the Commission on December 5, 2002)
|
*
|
4.3
|
Indenture, dated as of April 30, 2003, by and between us and Wells Fargo Bank Minnesota, N.A. (formerly Norwest Bank Minnesota, National Association), as trustee (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-3 (Registration No. 333-104858) filed with the Commission on April 30, 2003)
|
*
|
4.4
|
Form of Officer’s Certificate and Company Order authorizing the 2014 Notes, series B (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-4 (Registration No. 333-120381) filed with the Commission on November 12, 2004)
|
*
|
4.5
|
Specimen of 5 1/8% notes due 2014, series B (incorporated by reference to Exhibit 4.10 to the Registration Statement on Form S-4 (Registration No. 333-120381) filed with the Commission on November 12, 2004)
|
*
|
4.6
|
Indenture, dated as of May 14, 2007, by and between us and The Bank of New York Trust Company, N.A., as trustee (including form of 7.375% Senior Notes due 2015) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on May 15, 2007)
|
*
|
4.7
|
Registration Rights Agreement, dated May 14, 2007, by and between us and J.P. Morgan Securities Inc., as representative of the several initial purchasers listed in Schedule I to the Purchase Agreement related to the 7.375% Senior Notes due 2015 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Commission on May 15, 2007)
|
*
|
4.8
|
Specimen of 7.375% Senior Notes due 2015 (included in Exhibit 4.6)
|
*
|
4.9
|
Supplemental Indenture, dated as of March 12, 2010, among us, the guarantors listed on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee
|
Filed herewith
|
4.10
|
Supplemental Indenture, dated as of September 9, 2010, among us, the guarantors listed on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee
|
Filed herewith
|
10.1
|
Deluxe Corporation 2008 Annual Incentive Plan (incorporated by reference to Appendix A of our definitive proxy statement filed with the Commission on March 13, 2008)**
|
*
|
10.2
|
First Amendment to the Deluxe Corporation 2008 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on December 14, 2009)**
|
*
|
10.3
|
Deluxe Corporation 2008 Stock Incentive Plan, including as Annex I the Deluxe Corporation Non-employee Director Stock and Deferral Plan (incorporated by reference to Appendix B of our definitive proxy statement filed with the Commission on March 13, 2008)**
|
*
|
10.4
|
First Amendment to the Deluxe Corporation 2008 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on December 14, 2009)**
|
*
|
10.5
|
First Amendment to Deluxe Corporation Non-employee Director Stock and Deferral Plan (incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 2008)**
|
*
|
10.6
|
Amended and Restated 2000 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K for the year ended December 31, 2001)**
|
*
|
10.7
|
Deluxe Corporation Deferred Compensation Plan (2011 Restatement)**
|
Filed herewith
|
10.8
|
Deluxe Corporation Deferred Compensation Plan Trust (incorporated by reference to Exhibit 4.3 to the Form S-8 filed with the Commission on January 7, 2002)**
|
*
|
10.9
|
Deluxe Corporation Executive Deferred Compensation Plan for Employee Retention and Other Eligible Arrangements (incorporated by reference to Exhibit 10.24 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2000)**
|
*
|
10.10
|
Description of modification to the Deluxe Corporation Non-Employee Director Retirement and Deferred Compensation Plan (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year ended December 31, 1997)**
|
*
|
10.11
|
Description of Non-Employee Director Compensation Arrangements, updated April 30, 2008 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)**
|
*
|
10.12
|
Form of Severance Agreement entered into between Deluxe and the following executive officers: Anthony Scarfone, Terry Peterson, Lynn Koldenhoven, Pete Godich, Julie Loosbrock, Malcolm McRoberts, Tom Morefield, Laura Radewald and David Hemler (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K for the year ended December 31, 2000)**
|
*
|
10.13
|
Employment Agreement dated as of April 10, 2006, between Deluxe and Lee Schram (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Commission on April 17, 2006)**
|
*
|
10.14
|
Form of Executive Retention Agreement entered into between Deluxe and Lee Schram (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Commission on August 10, 2007)**
|
*
|
10.15
|
Form of Executive Retention Agreement entered into between Deluxe and Senior Vice Presidents appointed prior to 2010 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed with the Commission on August 10, 2007)**
|
*
|
10.16
|
Form of Executive Retention Agreement entered into between Deluxe and each Vice President designated as an executive officer prior to 2010 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed with the Commission on August 10, 2007)**
|
*
|
10.17
|
Form of Addendum to Executive Retention and Severance Agreements Relating to Section 409A of the Internal Revenue Code (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K for the year ended December 31, 2008)**
|
*
|
10.18
|
Form of Agreement for Awards Payable in Restricted Stock Units (rev. 12/08) (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K for the year ended December 31, 2008)**
|
*
|
10.19
|
Form of Non-Employee Director Non-qualified Stock Option Agreement (incorporated by reference to Exhibit 10.19 to the Annual Report on Form 10-K for the year ended December 31, 2004)**
|
*
|
10.20
|
Form of Non-Employee Director Restricted Stock Award Agreement (ver. 4/07) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2007)**
|
*
|
10.21
|
Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K for the year ended December 31, 2004)**
|
*
|
10.22
|
Form of Non-Qualified Stock Option Agreement (as amended February 2006) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on February 21, 2006)**
|
*
|
10.23
|
Form of Non-Qualified Stock Option Agreement (version 2/07) (incorporated by reference to exhibit 10.28 to the Annual Report on Form 10-K for the year ended December 31, 2006)**
|
*
|
10.24
|
Form of Non-Qualified Stock Option Agreement (version 2/09) (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)**
|
*
|
10.25
|
Form of Performance Accelerated Restricted Stock Award Agreement (version 2/07) (incorporated by reference to Exhibit 10.29 to the Annual Report on Form 10-K for the year ended December 31, 2006)**
|
*
|
10.26
|
Form of Cash Performance Award Agreement (version 2/09) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)**
|
*
|
10.27
|
Form of Cash Performance Award Agreement (version 2/10) (incorporated by reference to Exhibit 10.30 to the Annual Report on Form 10-K for the year ended December 31, 2009)**
|
*
|
10.28
|
Revolving credit agreement dated as of March 12, 2010, among us, JPMorgan Chase Bank, N.A. as administrative agent, Fifth Third Bank as Syndication Agent, U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd. as co-documentation agents, and the other financial institutions party thereto, related to a $200,000,000 three-year revolving credit agreement (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Commission on March 15, 2010)
|
*
|
12.1
|
Statement re: Computation of Ratios
|
Filed herewith
|
21.1
|
Subsidiaries of the Registrant
|
Filed herewith
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
Filed herewith
|
24.1
|
Power of Attorney
|
Filed herewith
|
31.1
|
CEO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
31.2
|
CFO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
32.1
|
CEO and CFO Certification of Periodic Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of December 31, 2010 and 2009, (ii) Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008, (iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2010, 2009 and 2008, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text
|
Furnished herewith
|
DELUXE CORPORATION
|
||
Date: February 22, 2011
|
By:
/s/ Lee Schram
|
|
Lee Schram
|
||
Chief Executive Officer
|
Signature
|
Title
|
||
By:
|
/s/ Lee Schram
|
|
Chief Executive Officer
|
Lee Schram
|
(Principal Executive Officer)
|
||
By:
|
/s/ Terry D. Peterson
|
Senior Vice President, Chief Financial Officer
|
|
Terry D. Peterson
|
(Principal Financial Officer and Principal Accounting Officer)
|
||
*
|
|||
Ronald C. Baldwin
|
Director
|
||
*
|
|||
Charles A. Haggerty
|
Director
|
||
*
|
|||
Isaiah Harris, Jr.
|
Director
|
||
*
|
|||
Don J. McGrath
|
Director
|
||
*
|
|||
Cheryl Mayberry McKissack
|
Director
|
||
*
|
|||
Neil J. Metviner
|
Director
|
||
*
|
|||
Stephen P. Nachtsheim
|
Director
|
||
*
|
|||
Mary Ann O’Dwyer
|
Director
|
||
*
|
|||
Martyn R. Redgrave
|
Director
|
||
*By:
|
/s/ Lee Schram
|
||
Lee Schram
|
|||
Attorney-in-Fact
|
Exhibit No.
|
Description
|
|
Supplemental Indenture, dated as of March 12, 2010, among us, the guarantors listed on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee
|
||
Supplemental Indenture, dated as of September 9, 2010, among us, the guarantors listed on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee
|
||
10.7 | Deluxe Corporation Deferred Compensation Plan (2011 Restatement) | |
Statement re: Computation of Ratios
|
||
Subsidiaries of the Registrant
|
||
Consent of Independent Registered Public Accounting Firm
|
||
Power of Attorney
|
||
CEO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
CFO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
CEO and CFO Certification of Periodic Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of December 31, 2010 and 2009, (ii) Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008, (iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2010, 2009 and 2008, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text
|
ABACUS AMERICA, INC.,
|
||
as a Subsidiary Guarantor
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE ENTERPRISE OPERATIONS, INC.,
|
||
as a Subsidiary Guarantor
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE FINANCIAL SERVICES, INC.,
|
||
as a Subsidiary Guarantor
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE MANUFACTURING OPERATIONS, INC.,
|
||
as a Subsidiary Guarantor
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE SMALL BUSINESS SALES, INC.,
|
||
as a Subsidiary Guarantor
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
HOSTOPIA.COM INC.,
|
||
as a Subsidiary Guarantor
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
SAFEGUARD BUSINESS SYSTEMS, INC.,
|
||
as a Subsidiary Guarantor
|
||
By
:
|
/s/ John J. Sorrenti
|
|
Name: John J. Sorrenti, II
|
||
Title: President
|
DELUXE BUSINESS OPERATIONS, INC.
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Treasurer and Vice President
|
SAFEGUARD HOLDINGS, INC.,
|
||
as a Subsidiary Guarantor
|
||
By:
|
/s/ John J. Sorrenti, II
|
|
Name: John J. Sorrenti, II
|
||
Title: President
|
DELUXE CORPORATION
|
||
By:
|
/s/ Terry Peterson
|
|
Name: Terry Peterson
|
||
Title: Chief Financial Officer and Senior Vice President
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Treasurer and Vice President
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
|
||
as Trustee
|
||
By:
|
/s/ D. G. Donovan
|
|
Name: D. G. Donovan
|
||
Title: Vice President
|
CUSTOM DIRECT, INC.,
|
||
as a Subsidiary Guarantor
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
CUSTOM DIRECT LLC,
|
||
as a Subsidiary Guarantor
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE CORPORATION
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
ABACUS AMERICA, INC.
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE ENTERPRISE OPERATIONS, INC.
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE FINANCIAL SERVICES, INC.
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE MANUFACTURING OPERATIONS, INC.
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE SMALL BUSINESS SALES, INC.
|
||
By
:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
HOSTOPIA.COM INC.
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
DELUXE BUSINESS OPERATIONS, INC.
|
||
By:
|
/s/ Jeff Johnson
|
|
Name: Jeff Johnson
|
||
Title: Assistant Treasurer
|
SAFEGUARD HOLDINGS, INC.
|
||
By:
|
/s/ John J. Sorrenti, II
|
|
Name: John J. Sorrenti, II
|
||
Title: President
|
SAFEGUARD BUSINESS SYSTEMS, INC.
|
||
By:
|
/s/ John J. Sorrenti, II
|
|
Name: John J. Sorrenti, II
|
||
Title: President
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
|
||
as Trustee
|
||
By:
|
/s/ D. G. Donovan
|
|
Name: D. G. Donovan
|
||
Title: Vice President
|
Page
|
|||
SECTION 1
|
RESTATEMENT AND PURPOSE
|
1
|
|
1.1.
|
Restatement
|
1
|
|
1.2.
|
Purpose
|
1
|
|
1.3.
|
Effective Date
|
1
|
|
1.4.
|
Merger of Supplemental Plan
|
1
|
|
SECTION 2
|
DEFINITIONS
|
2
|
|
2.1.
|
Definitions
|
2
|
|
2.2.
|
Transition Rule
|
5
|
|
SECTION 3
|
ELIGIBILITY FOR PARTICIPATION
|
6
|
|
SECTION 4
|
ENROLLMENT AND ELECTIONS
|
6
|
|
4.1.
|
Initial Enrollment
|
6
|
|
4.2.
|
Election to Defer
|
7
|
|
4.3.
|
Special Rule for New Hires
|
8
|
|
4.4.
|
409A Transition Rule
|
8
|
|
SECTION 5
|
DEFERRAL ACCOUNTS
|
8
|
|
5.1.
|
Participant Deferral Accounts
|
8
|
|
5.2.
|
Employee Benefit Plan Equivalent
|
9
|
|
5.3.
|
Investment Options
|
9
|
|
5.4.
|
Charges Against Deferral Accounts
|
9
|
|
5.5.
|
Contractual Obligation
|
9
|
|
5.6.
|
Unsecured Interest
|
9
|
|
5.7.
|
Enforcement of Clawbacks.
|
10
|
|
SECTION 6
|
PAYMENT OF DEFERRED AMOUNTS
|
10
|
|
6.1.
|
Event of Maturity
|
10
|
|
6.2.
|
Form of Distribution
|
11
|
|
6.2.1.
|
Form of Payment
|
11
|
|
6.2.2.
|
Time of Payment
|
12
|
|
6.2.3.
|
Default
|
13
|
|
6.2.4.
|
New Designation
|
13
|
|
6.2.5.
|
In-Service Distribution Accounts
|
14
|
|
6.2.6.
|
Code Section 162(m) Delay
|
15
|
|
6.3.
|
Distribution of Taxable Amounts
|
15
|
|
6.4.
|
Tax Withholding
|
15
|
|
6.5.
|
Special Rule for eFunds Participants
|
16
|
SECTION 7
|
UNFORESEEABLE EMERGENCY
|
17
|
|
SECTION 8
|
BENEFICIARY
|
18
|
|
SECTION 9
|
NONTRANSFERABILITY
|
18
|
|
SECTION 10
|
DETERMINATIONS — RULES AND REGULATIONS
|
18
|
|
10.1.
|
Determinations
|
18
|
|
10.2.
|
Claims Procedure
|
18
|
|
10.2.1.
|
Initial Claim
|
18
|
|
10.2.2.
|
Notice of Initial Adverse Determination
|
19
|
|
10.2.3.
|
Request for Review
|
19
|
|
10.2.4.
|
Claim on Review
|
19
|
|
10.2.5.
|
Notice of Adverse Determination for Claim on Review
|
20
|
|
10.3.
|
Rules and Regulations.
|
20
|
|
10.3.1.
|
Adoption of Rules
|
20
|
|
10.3.2.
|
Specific Rules.
|
20
|
|
10.4.
|
Deadline to File Claim
|
21
|
|
10.5.
|
Exhaustion of Administrative Remedies
|
22
|
|
10.5.1.
|
Deadline to File Legal Action
|
22
|
|
10.6.
|
Knowledge of Fact by Participant Imputed to Beneficiary
|
22
|
|
SECTION 11
|
ADMINISTRATION
|
22
|
|
11.1.
|
Company
|
22
|
|
11.1.1.
|
Chief Executive Officer
|
22
|
|
11.1.2.
|
Committee
|
22
|
|
11.1.3.
|
Management Committee.
|
22
|
|
11.2.
|
Conflict of Interest
|
24
|
|
11.3.
|
Dual Capacity
|
24
|
|
11.4.
|
Administrator
|
24
|
|
11.5.
|
Named Fiduciaries
|
24
|
|
11.6.
|
Service of Process
|
25
|
|
11.7.
|
Administrative Expenses
|
25
|
|
11.8.
|
Rules, Policies and Procedures
|
25
|
|
11.9.
|
Method of Executing Instruments
|
25
|
|
11.10.
|
Information Furnished by Participants
|
25
|
|
SECTION 12
|
AMENDMENT AND TERMINATION
|
25
|
|
SECTION 13
|
LIFE INSURANCE CONTRACT
|
26
|
|
SECTION 14
|
CHANGE IN CONTROL
|
26
|
|
14.1.
|
Distributions upon Change in Control
|
26
|
|
14.2.
|
Definitions and Special Rules
|
27
|
|
SECTION 15
|
NO VESTED RIGHTS
|
28
|
|
SECTION 16
|
APPLICABLE LAW
|
28
|
|
(a)
|
“Affiliate” means a business entity which is a member of the Controlled Group and is recognized as an Affiliate by the Management Committee for the purposes of this Plan.
|
|
(b)
|
“Base Salary” means the base salary scheduled to be paid to a Participant during a Plan Year without regard to any Incentive Compensation, or any portion deferred under this Plan.
|
|
(c)
|
“Change in Control” is defined in Section 14.
|
|
(d)
|
“Code” means the Internal Revenue Code of 1986, and all regulations, revenue rulings, and other forms of authoritative guidance issued pursuant thereto.
|
|
(e)
|
“Controlled Group” means the Company and all other business entities, whether or not incorporated, which, together with the Company, would be considered a single employer under section 414(b) or (c) of the Code.
|
|
(f)
|
“Committee” means the Compensation Committee of the Board of Directors of the Company.
|
|
(g)
|
“Deferral Account” means the separate bookkeeping account representing the unfunded and unsecured general obligation of Company established with respect to each Participant to which is credited the dollar amounts specified in Section 5 and from which are subtracted payments made pursuant to Sections 6 and 7.
|
|
(h)
|
“Disability” means, as to a Participant who is an employee of the Company, a determination of disability under Company’s Long Term Disability Plan. If the Participant is an employee of an Affiliate, “Disability” means as to such Participant, a determination of disability under the Long Term Disability Plan of such Affiliate, or, if no such Plan exists, then under the Long Term Disability Plan of the Company as if such Participant were a participant in such plan. If the Company discontinues its Long Term Disability Plan, then “Disability” shall mean long term disability as defined in any other Plan of the Company which generally defines long term disability for purposes of such other plan. In no event, however, shall a Participant be considered to have a Disability for purposes of this Plan until such time as such Participant is entitled to begin (or would be entitled to begin, if such Participant were a participant in the relevant plan) receipt of benefits under such long term disability or other relevant plan. Effective January 1, 2009, a Participant shall not be considered to have a Disability unless the condition constituting Disability is a medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than twelve months, and the Participant either has been receiving disability payments under any plan (including a short-term disability plan or practice) of the Company or an Affiliate for at least three months, or, if he or she is not eligible to participate in any disability plan, is unable to engage in any substantial gainful activity.
|
|
(i)
|
“Eligible Employee” means an employee of the Company or its Affiliates who (i) is an officer or assistant officer, or (ii) has significant management or professional responsibilities, and (iii) who is highly compensated. Subject to the limitations contained in Section 3, the Management Committee from time to time may (i) establish rules governing the eligibility of employees of the Company and its Affiliates to participate in the Plan and, such rules, if adopted, shall be deemed to further define or amend, as the case may be, the definition of “Eligible Employee” herein, and (ii) permit certain employees of the Company and its Affiliates, who would not otherwise be eligible to participate in the Plan, to participate in the Plan.
|
|
(j)
|
“ERISA” means the Employee Retirement Income Security Act of 1974, and all regulations and other forms of authoritative guidance issued pursuant thereto.
|
|
(k)
|
“Event of Maturity” means any of the occurrences described in Section 6.1 by reason of which a Participant or Beneficiary may become entitled to a distribution from the Plan.
|
|
(l)
|
“Incentive Compensation” means the incentive, bonus, and similar compensation that is paid to a Participant based on performance or other factors during a Plan Year without regard to any portion deferred under this Plan. Incentive Compensation shall not include any awards made under the 2000 Stock Incentive Plan, or any subparts thereof, until such time as the Management Committee determines that all or a portion of such compensation is Incentive Compensation.
|
|
(m)
|
“In-Service Distribution Account” means an account to which a Participant allocates a portion of his or her Deferral Account in accordance with Section 6.2.5. Except for distribution in Section 6.2.5, or as otherwise provided in this Plan, an In-Service Distribution Account shall be treated as part of the Participant’s Deferral Account for all purposes of the Plan.
|
|
(n)
|
“Installment Amount” means the portion of a Participant’s Deferral Account that is to be paid during a period designated pursuant to Section 6.2.1 by the Participant in writing at the time of his or her enrollment or otherwise made in accordance with this Plan. Installment Amounts may, with the consent of the Management Committee, be expressed either in dollars or as a percentage of the Participant’s total Deferral Account, and if the Installment Amount is expressed in dollars and is less than the total Deferral Account, the Installment Amount shall be equal to the Deferral Account.
|
|
(o)
|
“Management Committee” means the Management Committee formed by the Chief Executive Officer pursuant to Section 11 of the Plan.
|
|
(p)
|
“Participant” means any Eligible Employee who is affirmatively selected by the Management Committee and who either elects to participate in the Plan, is eligible to have an amount credited to his Deferral Account pursuant to Section 5.2, or had an account in the Supplemental Plan on December 31, 2008.
|
|
(q)
|
“Plan Year” means the twelve-month period coinciding with the Company’s fiscal year and ending on each December 31.
|
|
(r)
|
“Selected Distribution Date” shall mean the date that is designated in accordance with this Plan by the Participant in writing at the time of his or her enrollment as the date for the payment or commencement of payments of his or her Deferral Account. To the extent permitted by the Management Committee, a Participant may designate either the date of his Termination of Employment, January 1 of the year following his or her Termination of Employment as the Selected Distribution Date, January 1 of a specified year (whether or not Termination of Employment has occurred), or any other date permitted by the Management Committee that complies with section 409A of the Code. In the absence of an effective election of any other date, a Participant’s Selected Distribution Date shall be the date of his or her Termination of Employment.
|
|
(s)
|
“Supplemental Plan” means the Deluxe Corporation Supplemental Benefit Plan, originally established as of November 8, 1984, restated as of October 26, 2000, and merged into this Plan as of December 31, 2008.
|
|
(t)
|
“Termination of Employment” means a complete severance of a Participant’s employment relationship with the Company and all Affiliates. Effective January 1, 2009, a Participant shall not be considered to have incurred a Termination of Employment until the Participant has incurred a separation from service as determined in accordance with section 409A of the Code. By way of illustration, and without limiting the generality of the foregoing, the following principals shall apply in determining whether a Participant has incurred a separation from service:
|
|
(i)
|
The Participant shall not be considered to have separated from service so long as the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Participant retains a right to reemployment with the Company under an applicable statute or by contract.
|
|
(ii)
|
Regardless of whether his or her employment has been formally terminated, the Participant will be considered to have separated from service as of the date it is reasonably anticipated that no further services will be performed by the Participant for the Company, or that the level of bona fide services the Participant will perform after such date will permanently decrease to less than 50 percent of the average level of bona fide services performed over the immediately preceding 36-month period (or the full period of employment if the Participant has been employed for less than 36 months). For purposes of the preceding test, during any paid leave of absence the Participant shall be considered to have been performing services at the level commensurate with the amount of compensation received, and unpaid leaves of absence shall be disregarded.
|
|
(iii)
|
For purposes of determining whether the Participant has separated from service, all services provided for the Company, or for any entity that is a member of the Controlled Group (including any Affiliate), shall be taken into account, whether provided as an employee or as a consultant or other independent contractor; provided that the Participant shall not be considered to have not separated from service solely by reason of service as a non-employee director of the Company or any other such entity. Solely for purposes of this Section 2.1(r), the term “Controlled Group” shall be modified by substituting “50 percent” for “80 percent” for all purposes of section 414(b) and (c) of the Code (and section 1563 to the extent incorporated therein).
|
|
(iv)
|
A Participant who is employed by an Affiliate, and continues to be employed by the Affiliate following a stock sale, spin-off, or other transaction that causes the Participant’s employer to cease to be a member of the Controlled Group, shall not be considered to have incurred a Termination of Employment as a result of such transaction. A Participant who ceases to be employed by the Company or any member of the Controlled Group as a result of a sale of substantially all of the assets constituting a division, facility, or separate line of business, shall be considered to have incurred a Termination of Employment unless the Company (or Affiliate selling such assets) and the purchaser agree in writing, not later than the closing date of such transaction, that all Participants affected by such transaction shall not be considered to have incurred a Termination of Employment, and that the purchaser agrees to assume the obligation for payment of the Deferral Accounts of all such Participants in accordance with the Plan, unless the transaction constitutes a Change in Control with respect to such Participants and Section 14.1 applies.
|
|
(a)
|
Shall specify the form in which distribution of the Deferral Account attributable to that enrollment shall be made under Section 6 (and if such designation is not clearly made to the contrary, shall be deemed to have been an election of a single lump sum distribution).
|
|
(b)
|
Shall specify the time at which distribution shall be made which shall, subject to Section 6 hereof, be the later of such Participant’s Selected Distribution Date or such Participant’s Termination of Employment.
|
|
(c)
|
Shall be made upon forms furnished by the Company, shall be made at such time as the Company shall determine and shall conform to such other procedural and substantive rules as the Company shall prescribe from time to time.
|
|
(d)
|
Shall be irrevocable once it has been accepted by the Chief Executive Officer of the Company pursuant to Section 4.2(a), except to the extent that a new designation is made effective in accordance with Section 2.2 or 6.2.4.
|
|
(e)
|
Shall contain a deferral election made in accordance with Section 4.2.
|
|
(a)
|
Shall be irrevocable for the Plan Year with respect to which it is made once it has been accepted by the Chief Executive Officer of the Company or his or her designee; provided that an election for a Plan Year that has not been accepted by the last day of the last day of the preceding Plan Year shall be void.
|
|
(b)
|
Shall designate the amount or portion of the Participant’s Incentive Compensation which is earned during that Plan Year (without regard to whether it would be paid during that or a subsequent Plan Year) which shall not be paid to the Participant but instead shall be accumulated in this Plan under Section 5 and distributed from this Plan under Section 6. Such designation shall be in a minimum amount of $1,000. If expressed as a percentage, such percentage shall not exceed fifty percent (50%) of such Participant’s Incentive Compensation. If expressed as a dollar amount, such dollar amount shall not exceed the dollar amount equivalent of fifty percent (50%) of such Participant’s targeted Incentive Compensation. If a dollar amount is elected, such election shall be reduced dollar for dollar if the Incentive Compensation declared, net of any applicable tax withholding, is less than the election.
|
|
(c)
|
Shall designate the amount or portion of the Participant’s Base Salary which is earned during that Plan Year (without regard to whether it would be paid during that or a subsequent Plan Year) which shall not be paid to the Participant but instead shall be accumulated in this Plan under Section 5 and distributed from this Plan under Section 6. Such designation shall be in a minimum amount of $1,000, and may be up to 100 percent (100%) of such Participant’s Base Salary, less (i) all FICA, federal, state and/or local income tax liabilities, and (ii) all other amounts withheld from the Participant’s Base Salary, including without limitation elective deferrals and contributions to any other employee benefit plan, whether before or after tax, and repayment of any loans. The amount withheld pursuant to clause (ii) shall be determined as of the last day of the immediately preceding Plan Year, and by making a deferral election the Participant agrees not to increase the amount of any such withholding if the effect would be to reduce the portion of his or her Base Salary that is deferred.
|
|
(d)
|
Shall be made upon forms furnished by the Company, shall be made at such time as the Company shall determine, shall be made before the beginning of the Plan Year with respect to which it is made and shall conform to such other procedural and substantive rules as the Company shall prescribe from time to time.
|
|
(a)
|
Base Salary deferrals and Incentive Compensation deferrals made pursuant to Section 4, above;
|
|
(b)
|
Employee Benefit Plan Equivalents as provided by Section 5.2 below; and
|
|
(c)
|
Gains or losses on deemed investment options as provided by Section 5.3 below.
|
|
(a)
|
The Participant’s death;
|
|
(b)
|
The Participant’s Disability; or
|
|
(c)
|
The occurrence of the Selected Distribution Date. Notwithstanding the foregoing, if a Selected Distribution Date that was elected prior to January 1, 2009, occurs prior to Termination of Employment other than by reason of death or Disability, the Event of Maturity shall be postponed until the Participant’s Termination of Employment. Effective for Selected Distribution Dates elected on or after January 1, 2009 (including new Selected Distribution Dates elected pursuant to Section 6.2.4), the preceding sentence shall not apply, and the Event of Maturity shall be the Selected Distribution Date even if the Participant is still employed on the Selected Distribution Date. If the Participant’s Selected Distribution Date occurs while the Participant is still employed, and if the Management Committee determines that the Participant is eligible to continue to make deferral elections for Plan Years after the last Plan Year prior to the Selected Distribution Date, a new Deferral Account shall be established for the Participant to which all amounts deferred for such Plan Years, and any earnings thereon, shall be credited, and the Participant may elect a new Selected Distribution Date, and method of distribution, for such new Deferral Account prior to the beginning of the Plan Year that includes the original Selected Distribution Date.
|
|
(a)
|
Term Certain Installments to Participant
. Subject to Section 6.2.1(d), below, if the distributee is a Participant and the Installment Amount on the date of the applicable Event of Maturity (without giving effect to any gains or losses under Section 5.1(c) after such date) is at least Fifty Thousand Dollars ($50,000), in a series of monthly installments payable over a period not less than two (2) years and not more than ten (10) years, commencing as of the day specified in Section 6.2.2 and continuing on the first day of each succeeding month until the Installment Amount is paid in full. If the Participant elects installments, his or her account shall continue to be credited or charged with investment results pursuant to Section 5.3, and the amount of each monthly installment during a year shall be equal to (i) the remaining balance of the Installment Amount on the last day of the preceding year, divided by the number of years for which installments remain to be paid or, in the case of installments to be paid in the first year to a Participant whose Selected Distribution Date was the day of his or her Termination of Employment, the Installment Amount at the end of the month in which the Termination of Employment occurs, in either case divided by (ii) the number of monthly installments to be paid in such year; provided that the final monthly installment shall be equal to the entire remaining balance of the Installment Amount. The entire series of installments shall be considered a single payment for purposes of section 409A of the Code.
|
|
(b)
|
Lump Sum
. If the distributee is either a Participant or Beneficiary (except as provided in Section 6.2.1(a)), in a single lump sum payment. Payment to a Beneficiary shall in all events be made in a lump sum, regardless of whether the Participant elected payment in installments and regardless of whether installment payments have begun at the time of death.
|
|
(c)
|
Lump Sum Distribution Notwithstanding Designation
. If a Participant’s total Installment Amount is less than Fifty Thousand Dollars ($50,000) on the Event of Maturity, then, regardless of whether the Participant elected to have his or her Deferral Account paid in installments pursuant to Section 6.2.1(a), such Participant’s entire Deferral Account shall be paid in a single lump sum pursuant to the provisions of Section 6.2.1(b) above.
|
|
(a)
|
Selected Distribution Date
. Except as otherwise provided in this Section 6.2.2, payment shall be made or commenced within ninety (90) days after the Participant’s Selected Distribution Date.
|
|
(b)
|
Death
. Upon the death of a Participant before his or her entire Deferral Account has been distributed, payment of the remaining balance of the Deferral Account shall be made to the Beneficiary within ninety (90) days after the Participant’s death.
|
|
(c)
|
Disability
. If the payment is made on account of the Participant’s Disability, payment shall be made in a single lump sum as if the Participant had a Termination of Employment as provided in paragraph (a) above, within ninety (90) days of the commencement of such Disability.
|
|
(d)
|
Selected Distribution Date Designated Before 2009
. If a Selected Distribution Date elected prior to January 1, 2009, occurs prior to the Participant’s Termination of Employment, payment shall be made or commenced within ninety (90) days after the Participant’s Termination of Employment.
|
|
(e)
|
Six Month Delay in Distributions to Key Employees
. If a Participant’s Event of Maturity is, or is defined by, the Participant’s Termination of Employment and the Participant is a “key employee”, as hereinafter defined, then no distribution shall be made to the Participant until the first business day that is at least six months after the Termination of Employment. If the distribution is to be made in the form of a lump sum, then the Participant’s Deferral Account shall continue to be credited with earnings or losses based upon the investment options elected (which may be changed during such six month period in accordance with Section 5.3) until distributed. If the distribution is to be made in installments, then all installments that would otherwise have been paid during such six month period shall be accumulated and paid in a lump sum, without interest, at the end of such six month period. If the Participant dies during the six month period, the delay required by this Section 6.2.2(e) shall not apply to payments to the Participant’s Beneficiary. For purposes of this Section 6.2.2(e) a “key employee” shall mean any Participant who is a key employee as defined by section 416(i) of the Code (disregarding section 416(i)(5)). Whether a Participant is a key employee shall determined as of the last day of each Plan Year, based upon the Participant’s total compensation during the Plan Year then ending and the Participant’s status as an officer or shareholder at any time during such Plan Year, and a Participant who is determined to be a key employee on the last day of a Plan Year shall be subject to this Section 6.2.2(e) if the Participant incurs a Termination of Employment during the twelve (12) months commencing on April 1 of the following Plan Year. For purposes of determining a Participant’s status as a key employee, the Participant’s compensation shall mean total compensation required to be reported as taxable income in Box 1 of Form W-2 (or its equivalent), increased by all pre-tax deferrals and contributions pursuant to section 402(g), 125, or 132(f) of the Code, provided that compensation paid to a nonresident alien which is not effectively connected with the conduct of a trade or business within the United States shall not be included. For avoidance of doubt and without limiting the generality of the last sentence of Section 1.3, this Section 6.2.2(e) shall not apply to the portion of a Participant’s Deferral Account that consists of amounts credited to the Deferral Account prior to January 1, 2005 and the earnings thereon, and such portion shall be distributed without the six month delay required by this Section 6.2.2(e).
|
|
(f)
|
No Election of Year of Payment
. In any case in which the ninety (90) day period during which payment is to be made overlaps two calendar years, the Participant or Beneficiary shall not be permitted to elect, directly or indirectly, the year in which the payment shall be made.
|
|
(a)
|
When a Participant first elects to have an amount credited to an In-Service Distribution Account, the Participant shall specify a distribution date for the In-Service Distribution Account (the “In-Service Distribution Date”), which shall be January 1 of a year that is at least three years after the first amount is credited to the In-Service Distribution Account.
|
|
(b)
|
The balance in an In-Service Distribution Account shall be distributed either in a lump sum on the In-Service Distribution Date, or, if the Participant so elects at the same time the In-Service Distribution date is specified, in a series of monthly installments payable over a period not less than two (2) years and not more than five (5) years commencing on the In-Service Distribution Date, calculated in accordance with Section 6.2.1(a) as if the entire balance in the In-Service Distribution Account were the Installment Amount (without regard to the requirement that the minimum account balance for installment payments may not be less than $50,000).
|
|
(c)
|
If a Participant incurs a Termination of Employment for any reason, including death or Disability, either prior to the In-Service Distribution Date, or while an In-Service Distribution Account is being paid in installments, the remaining balance of the In-Service Distribution Account shall be distributed in the same manner as the Participant’s Deferral Account.
|
|
(d)
|
A Participant may not elect to have any portion of the deferrals for any Plan Year allocated to an In-Service Distribution Account beginning with the Plan Year that includes the In-Service Distribution Date, and any such election shall be void and the amount of the deferral shall instead be allocated to the Deferral Account.
|
|
(e)
|
A Participant may have up to two separate In-Service Distribution Accounts at any one time, with different In-Service Distribution Dates and/or distribution methods. A Participant may change the In-Service Distribution Date, or the method of distribution of the In-Service Distribution Account, by filing a new designation in accordance with Section 6.2.4 at least one year prior to the original In-Service Distribution Date; provided that if any portion of the In-Service Distribution Account represents amounts deferred on or after January 1, 2005, no change may be made (including changing the form of payment only) unless the new designation changes the In-Service Distribution Date to a date that is at least five years later than the original In-Service Distribution Date.
|
|
(a)
|
The spin off of eFunds shall not constitute a Termination of Employment for purposes of this Plan and payment shall not be made or commenced to eFunds Participants based on the occurrence of the spin off.
|
|
(b)
|
Unless eligible for distribution before the spin off, eFunds Participants shall not be eligible for payments of Deferral Accounts from the Plan until they have an Event of Maturity occurring after the spin off. Termination of Employment by eFunds (including all of its affiliates, defined as any business entity which is affiliated in ownership with eFunds and is recognized as an affiliate of eFunds by the Management Committee for purposes of this Plan) shall constitute a Termination of Employment for purposes of this Plan with respect to eFunds Participants.
|
|
(c)
|
The deferral elections of eFunds Participants shall immediately and automatically terminate upon occurrence of the spin off and there shall be no further deferrals of compensation for such eFunds Participants into this Plan. There shall also be no further Employee Benefit Plan Equivalents credited to the eFunds Participants’ Deferral Accounts after the spin off, except any credits reflecting deferrals occurring before the spin off. Deferrals related to Incentive Compensation earned before the spin off (even if paid after the spin off) will be credited to the eFunds Participants’ accounts in accordance with the terms of their deferral elections for the 2000 Plan Year.
|
|
(d)
|
All other provisions of the Plan shall remain in effect as to the eFunds Participants who shall become inactive Participants, including but not limited to the ability to allocate Deferral Accounts among Investment Options as provided at Section 5.3 and the crediting or debiting of such Deferral Accounts to reflect such Investment Options as provided at Section 5.1(c).
|
|
(e)
|
The Company may at any time amend the Plan to terminate the participation of the eFunds Participants and distribute the account balances of all of the eFunds Participants in lump sum payments. In the event that any eFunds Participant is subsequently employed by an Affiliate and becomes a Participant, the balance of his or her account attributable to his or her prior employment by eFunds shall remain separate and shall be governed by the provisions of this Section 6.3. It is the intention of the Company that the accounts of the eFunds Participants, having been fully accrued and vested prior to January 1, 2005, shall be exempt from Section 409A of the Code.
|
|
(a)
|
First, reduce the portion of the Participant’s Base Salary or Incentive Compensation that the Participant has elected to defer for the Plan Year by the amount reasonably necessary to satisfy such need.
|
|
(b)
|
Second, to the extent that the financial need cannot be satisfied by terminating the Participant’s deferral election, provide that all or a portion of the Deferral Account shall be paid immediately in a lump sum payment, in an amount not to exceed the amount necessary to satisfy the remaining financial need, and any taxes imposed upon such payment.
|
|
(c)
|
In the case of a Participant receiving installment payments, provide for the present value of all or a portion of such installments to be paid immediately in a lump sum payment, in an amount not to exceed the amount necessary to satisfy the remaining financial need, and any taxes imposed upon such payment.
|
|
(a)
|
If the claim is denied in whole or in part, the Management Committee shall notify the claimant of the adverse benefit determination within ninety (90) days after receipt of the claim.
|
|
(b)
|
The ninety (90) day period for making the claim determination may be extended for ninety (90) days if the Management Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Management Committee notifies the claimant, prior to the expiration of the initial ninety (90) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
|
|
(a)
|
the specific reasons for the adverse determination;
|
|
(b)
|
references to the specific provisions of the Plan (or other applicable Plan document) on which the adverse determination is based;
|
|
(c)
|
a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and
|
|
(d)
|
a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse determination on review, subject to Section 10.6.
|
|
(a)
|
The sixty (60) day period for deciding the claim on review may be extended for sixty (60) days if the Management Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Management Committee notifies the claimant, prior to the expiration of the initial sixty (60) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
|
|
(b)
|
In the event that the time period is extended due to a claimant’s failure to submit information necessary to decide a claim on review, the claimant shall have sixty (60) days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of sixty (60) days.
|
|
(c)
|
The Management Committee’s review of a denied claim shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
|
|
(a)
|
the specific reasons for the denial;
|
|
(b)
|
references to the specific provisions of the Plan (or other applicable Plan document) on which the adverse determination is based;
|
|
(c)
|
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits;
|
|
(d)
|
a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such procedures; and
|
|
(e)
|
a statement of the claimant’s right to bring an action under section 502(a) of ERISA, subject to Section 10.6.
|
|
(a)
|
No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the established claim procedures. The Management Committee may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Management Committee upon request.
|
|
(b)
|
All decisions on claims and on requests for a review of denied claims shall be made by the Management Committee unless delegated as provided for in the Plan, in which case references in this Section 10 to the Management Committee shall be treated as references to the Management Committee’s delegate.
|
|
(c)
|
Claimants may be represented by a lawyer or other representative at their own expense, but the Management Committee reserves the right to require the claimant to furnish written authorization and establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. A claimant’s representative shall be entitled to copies of all notices given to the claimant.
|
|
(d)
|
The decision of the Management Committee on a claim and on a request for a review of a denied claim may be provided to the claimant in electronic form instead of in writing at the discretion of the Management Committee.
|
|
(e)
|
In connection with the review of a denied claim, the claimant or the claimant’s representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.
|
|
(f)
|
The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review is filed in accordance with the claims procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing.
|
|
(g)
|
The claims and review procedures shall be administered with appropriate safeguards so that benefit claim determinations are made in accordance with governing plan documents and, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.
|
|
(h)
|
For the purpose of this Section, a document, record, or other information shall be considered “relevant” if such document, record, or other information: (i) was relied upon in making the benefit determination; (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) demonstrates compliance with the administration processes and safeguards designed to ensure that the benefit claim determination was made in accordance with governing plan documents and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants; and (iv) constitutes a statement of policy or guidance with respect to the Plan concerning the denied treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.
|
|
(i)
|
The Management Committee may, in its discretion, rely on any applicable statute of limitation or deadline as a basis for denial of any claim.
|
|
(a)
|
to amend or to terminate this Plan; and
|
|
(b)
|
to consent to the adoption of the Plan by other business entities; to establish conditions and limitations upon such adoption of the Plan by other business entities.
|
|
(a)
|
Appointment and Removal
. The Management Committee, subject to the direction of the Committee and the Chief Executive Officer, shall have all of the functions and authorities generally assigned in this Plan to the Company. The Management Committee shall consist of one or members as may be determined and appointed from time to time by the Chief Executive Officer of the Company and they shall serve at the pleasure of such Chief Executive Officer and the Committee.
|
|
(b)
|
Automatic Removal
. If any individual who is a member of the Management Committee is a director, officer or employee when appointed as a member of the Management Committee, then such individual shall be automatically removed as a member of the Management Committee at the earliest time such individual ceases to be a director, officer or employee. This removal shall occur automatically and without any requirement for action by the Chief Executive Officer of the Company or any notice to the individual so removed.
|
|
(c)
|
Authority
. The Management Committee may elect such officers as the Management Committee may decide upon. In addition to the other authorities delegated elsewhere in this Plan to the Management Committee, the Management Committee shall:
|
|
(i)
|
establish rules for the functioning of the Management Committee, including the times and places for holding meetings, the notices to be given in respect of such meetings and the number of members who shall constitute a quorum for the transaction of business,
|
|
(ii)
|
organize and delegate to such of its members as it shall select authority to execute or authenticate rules, advisory opinions or instructions, and other instruments adopted or authorized by the Management Committee; adopt such bylaws or regulations as it deems desirable for the conduct of its affairs; appoint a secretary, who need not be a member of the Management Committee, to keep its records and otherwise assist the Management Committee in the performance of its duties; keep a record of all its proceedings and acts and keep all books of account, records and other data as may be necessary for the proper administration of the Plan,
|
|
(iii)
|
determine from the records of the Company and its Affiliates the compensation, service records, status and other facts regarding Participants and other employees,
|
|
(iv)
|
cause to be compiled at least annually, from the records of the Management Committee and the reports and accountings of the Company and its Affiliates, a report or accounting of the status of the Plan and the Deferral Accounts of the Participants, and make it available to each Participant who shall have the right to examine that part of such report or accounting (or a true and correct copy of such part) which sets forth the Participant’s benefits,
|
|
(v)
|
prescribe forms to be used for applications for participation, benefits, notifications, etc., as may be required in the administration of the Plan,
|
|
(vi)
|
set up such rules as are deemed necessary to carry out the terms of this Plan,
|
|
(vii)
|
resolve all questions of administration of the Plan not specifically referred to in this Section,
|
|
(viii)
|
delegate or redelegate to one or more persons, jointly or severally, and whether or not such persons are members of the Management Committee or employees of the Company, such functions assigned to the Management Committee hereunder as it may from time to time deem advisable, and
|
|
(ix)
|
perform all other acts reasonably necessary for administering the Plan and carrying out the provisions of this Plan and performing the duties imposed by the Plan on it.
|
|
(d)
|
Majority Decisions
. If there shall at any time be three (3) or more members of the Management Committee serving hereunder who are qualified to perform a particular act, the same may be performed, on behalf of all, by a majority of those qualified, with or without the concurrence of the minority. No person who failed to join or concur in such act shall be held liable for the consequences thereof, except to the extent that liability is imposed under ERISA.
|
|
(a)
|
The date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Company or Affiliate that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. If any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Company or Affiliate, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation pursuant to this paragraph or paragraph (b)). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. This paragraph applies only when there is a transfer or issuance of stock of the Company or Affiliate and stock in such corporation remains outstanding after the transaction.
|
|
(b)
|
The date any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company or Affiliate possessing 30 percent or more of the total voting power of the stock of such corporation.
|
|
(c)
|
The date a majority of members of the Company’s (but not any Affiliate’s) board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors before the date of the appointment or election.
|
|
(d)
|
The date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company or Affiliate that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions; provided that a Change in Control shall not result from a transfer of assets by the Company or an Affiliate to (i) a shareholder of the corporation (immediately prior to the transfer) in exchange for or with respect to the corporation’s stock, (ii) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the transferor corporation immediately following the transfer, (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the transferring corporation immediately following the transfer, or (iv) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person or group of persons described in clause (iii) For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
|
|
(a)
|
Persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company or Affiliate. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
|
|
(b)
|
If any one person, or more than one person acting as a group, owns stock of the Company or Affiliate possessing 30 percent or more of the total voting power of the stock of such corporation, the acquisition of additional control of the Company or Affiliate by the same person or persons will not be considered to cause a Change in Control pursuant to paragraph (a) or (b) of Section 14.1.
|
|
(c)
|
The definition of Change in Control contained in this Section 14 is intended to conform to the definition of a change in control event as set forth in section 409A and the regulations thereunder, and shall be so construed. To the maximum extent permitted by law, a transaction shall not be considered to constitute a Change in Control unless it also constitutes a change in control event for purposes of section 409A, and a transaction that constitutes a change in control event for purposes of section 409A shall be considered a Change in Control.
|
Year Ended December 31,
|
||||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||
Income from continuing operations before income taxes
|
$ | 235,949 | $ | 155,021 | $ | 160,176 | $ | 220,015 | $ | 142,788 | $ | 250,223 | ||||||||||||
Interest expense (excluding capitalized interest)
(1)
|
44,165 | 46,280 | 50,421 | 55,294 | 56,661 | 56,604 | ||||||||||||||||||
Portion of rent expense under long-term operating leases representative of an interest factor
|
3,438 | 2,716 | 3,147 | 2,900 | 3,526 | 4,642 | ||||||||||||||||||
Total earnings
|
$ | 283,552 | $ | 204,017 | $ | 213,744 | $ | 278,209 | $ | 202,975 | $ | 311,469 | ||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Interest expense (including capitalized interest)
(1)
|
$ | 44,165 | $ | 46,280 | $ | 50,421 | $ | 55,294 | $ | 57,051 | $ | 57,399 | ||||||||||||
Portion of rent expense under long-term operating leases representative of an interest factor
|
3,438 | 2,716 | 3,147 | 2,900 | 3,526 | 4,642 | ||||||||||||||||||
Total fixed charges
|
$ | 47,603 | $ | 48,996 | $ | 53,568 | $ | 58,194 | $ | 60,577 | $ | 62,041 | ||||||||||||
Ratio of earnings to fixed charges
|
6.0 | 4.2 | 4.0 | 4.8 | 3.4 | 5.0 |
Date
|
||
/s/ Lee Schram
|
2/16/2011
|
|
Lee Schram, Director and
Principal Executive Officer
|
||
/s/ Terry D. Peterson
|
2/16/2011
|
|
Terry D. Peterson, Principal Financial
|
||
Officer and Principal Accounting
Officer
|
||
/s/ Ronald C. Baldwin
|
2/16/2011
|
|
Ronald C. Baldwin, Director
|
||
/s/ Charles A. Haggerty
|
2/16/2011
|
|
Charles A. Haggerty, Director
|
||
/s/ Isaiah Harris, Jr
|
2/16/2011
|
|
Isaiah Harris, Jr., Director
|
||
/s/ Don J. McGrath
|
2/16/2011
|
|
Don J. McGrath, Director
|
||
/s/ Cheryl Mayberry McKissack
|
2/16/2011
|
|
Cheryl Mayberry McKissack, Director
|
||
/s/ Neil J. Metviner
|
2/16/2011
|
|
Neil J. Metviner, Director
|
||
/s/ Stephen P. Nachtsheim
|
2/16/2011
|
|
Stephen P. Nachtsheim, Director
|
||
/s/ Mary Ann O’Dwyer
|
2/16/2011
|
|
Mary Ann O’Dwyer, Director
|
||
/s/ Martyn R. Redgrave
|
2/16/2011
|
|
Martyn R. Redgrave, Director
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 22, 2011
|
/s/ Lee Schram
|
|
Lee Schram
|
||
Chief Executive Officer
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 22, 2011
|
/s/ Terry D. Peterson
|
|
Terry D. Peterson
|
||
Chief Financial Officer
|
(1)
|
the Annual Report on Form 10-K of the Company for the year ended December 31, 2010 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 22, 2011
|
/s/ Lee Schram
|
Lee Schram
|
|
Chief Executive Officer
|
|
/s/ Terry D. Peterson
|
|
Terry D. Peterson
|
|
Chief Financial Officer
|