UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 14, 2015
Harte Hanks, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware |
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1-7120 |
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74-1677284 |
(State or Other Jurisdiction |
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(Commission |
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(I.R.S. Employer |
9601 McAllister Freeway, Suite 610 |
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78216 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(210) 829-9000
(Registrants Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 14, 2015, Harte Hanks, Inc. (the Company or Harte Hanks) announced that Karen A. Puckett would succeed Douglas C. Shepard as the Companys President and Chief Executive Officer, effective September 14, 2015. Mr. Shepard was serving as interim President and Chief Executive Officer and will continue in his role as Chief Financial Officer.
Ms. Puckett, 54, is currently a Class III director of the Company and has served as a director since 2009. Ms. Puckett most recently served as President of Global Markets of CenturyLink, Inc. (CenturyLink) and previously served as CenturyLinks Chief Operating Officer beginning in 2000. Ms. Puckett will continue to serve as a director of the Company but has resigned as a member of the Companys Compensation Committee as of September 14, 2015.
Employment Agreement with Ms. Puckett
On September 13, 2015, the Company entered into an employment agreement with Ms. Puckett (the Employment Agreement), effective September 14, 2015 (the Effective Date), which provides, among other things, for the following: (i) a base salary of $730,000 per year, subject to an annual review and adjustment process; (ii) participation in the Companys annual incentive plan, beginning with the 2016 calendar year, with a target annual incentive equal to 100% of her base salary, and a maximum potential annual incentive equal to 200% of her base salary, subject to achievement of performance goals established by the Companys Compensation Committee each year; (iii) eligibility for the Companys bonus restricted stock program, allowing her to receive 125% of the value of up to 30% (per her election) of her annual incentive earned for a calendar year in the form of restricted shares vesting after one year; (iv) an automobile allowance of $1,325 per month; (v) participation in the Companys non-qualified deferred compensation plan; (vi) eligibility for Company-paid salary continuation benefits consisting of 10 annual payments of $90,000 each over the 10-year period following death while employed; (vii) eligibility for future long-term equity incentive plan awards in accordance with the Companys then-applicable compensation practices for executives (for 2016, at least consistent with the award policy with respect to other executives); (viii) reimbursement of up to $10,000 in legal fees incurred by her for review and negotiation of the Employment Agreement and (ix) other benefits generally available to the Companys employees, such as health insurance and 401(k) matching payments.
Ms. Puckett also will receive reimbursement of up to 12 months of temporary housing expenses (not to exceed $3,000 per month) at a location proximate to a Primary Company Location (as defined in the Employment Agreement). Ms. Puckett is not required to relocate her primary personal residence; however, if, during the first 30 months of her tenure with the Company, she establishes a primary personal residence within 30 miles of a Primary Company Location, then the Company will reimburse her at her election (i) the reasonable moving and closing costs for the purchase of her new primary residence and sale of her current primary residence or (ii) half of the amount of any loss she incurs on the sale of her current primary personal residence, not to exceed $250,000.
The Employment Agreement provides for two-year non-competition and non-solicitation covenants (each of which may be extended in some circumstances when severance payments to be made reflect a longer severance period) in addition to confidentiality and non-disclosure covenants and a mutual non-disparagement covenant, as well as a clawback provision applicable to incentive compensation within the meaning of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations promulgated thereunder, including any applicable stock exchange rules. The Company also agreed that the indemnification agreement with Ms. Puckett, in the form of the Companys standard executive and officer indemnification agreement, will continue in full force and effect.
Executive Severance Policy
As provided in the Employment Agreement, the Company has designated Ms. Puckett as a beneficiary of the Companys Executive Severance Policy as filed on January 30, 2015 as Exhibit 10.1 to Form 8-K, and as may be amended by the Company from time to time (the Severance Policy). Under the Severance Policy, Ms. Puckett will receive certain benefits in the event she is terminated without cause (as defined in the Severance Policy). In addition, Ms. Puckett also will be eligible for the compensation and benefits payable under the Severance Policy in the event she terminates her employment for good reason (as defined in the Employment Agreement). Benefits under the Severance Policy include a severance payment equal to her then-current base salary for two years. Also, subject to certain conditions, through the earlier to occur of (i) the eligibility of Ms. Puckett to participate in another employers group health plan or (ii) the end of the two-year severance period, the Company will pay for a substantial portion of a Ms. Pucketts health continuation coverage elected under and in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). As a condition precedent to the obligation of the Company to provide the benefits to Ms. Puckett, she must first execute and deliver an effective and irrevocable termination agreement that shall include certain terms and conditions, including the following: (i) a general waiver and release of all claims against the Company and its affiliates and (ii) ratification and confirmation of protective covenants set forth in the Employment Agreement.
Change in Control Severance Agreement
Further pursuant to the Employment Agreement, the Company and Ms. Puckett have entered into a change in control severance agreement substantially in the form of the Companys change in control severance agreement filed on March 19, 2015 as Exhibit 10.1 to Form 8-K (the Change in Control Severance Agreement). Under the Change in Control Severance Agreement, Ms. Puckett shall receive certain compensation and benefits in the event she is terminated without cause within two years after a change in control or one year before a change in control (but after the commencement of change in control discussions), or she terminates for good reason within two years after a change in control (as all such terms are defined in the Change in Control Severance Agreement). In the event of such a termination, (i) Ms. Puckett shall be entitled to receive three times the sum of her annual base salary (as in effect before the change in control or upon termination, whichever is larger) and her target bonus or target incentive compensation (for the year of the change in control or the year of termination, whichever is larger); (ii) all of her equity awards will vest and become fully exercisable (at 100% of target in the case of performance-based awards) or she will receive the cash value of her equity awards forfeited upon termination if she had a qualifying termination prior to the change in control; and (iii) a payment equivalent to Ms. Pucketts cost of continuation coverage under COBRA for a period of 24 months, as well as a tax gross up on that payment. Compensation and benefits under the Change in Control Severance Agreement are offset to the extent Ms. Puckett terminated prior to the change in control and already received Company severance
benefits prior to becoming entitled to compensation and benefits under the Change in Control Severance Agreement. These payments and benefits under the Change in Control Severance Agreement are contingent on Ms. Pucketts delivery of an irrevocable release of the Company and affiliated parties from any and all known and unknown claims and from any and all causes of action of any kind. The Change in Control Severance Agreement also provides that equity awards not assumed or replaced after a change in control will vest and become fully exercisable. If any amounts that become payable to Ms. Puckett under the Change in Control Severance Agreement would constitute parachute payments under Section 280G of the Internal Revenue Code, then Ms. Puckett will either receive the full amount of the payments due or an amount of those payments that would not exceed 2.99 times her base amount within the meaning of Section 280G of the Internal Revenue Code, whichever would yield the greatest net after-tax amount.
Equity Awards
Ms. Puckett also will be granted the following equity awards on September 17, 2015 which are inducement awards approved by the Board pursuant to the award agreements filed herewith: (i) a non-qualified stock option award with the number of shares subject to the option determined by dividing the per share Black-Scholes value of a Company non-qualified stock option as of the grant date by $575,000 and an exercise price equal to the closing market price per share of the Companys common stock on the grant date, which option shall vest in four equal installments on the first four anniversaries of the grant date and expire on the tenth anniversary of the grant date, but which also vests in full in the event of death or disability (as defined in the Employment Agreement) prior to termination or pursuant to the Change in Control Agreement, or vests as if she terminated after the next anniversary of the grant date following her termination without cause (as defined in the Severance Policy) or for good reason (as defined in the Employment Agreement); (ii) an award of shares of restricted common stock of the Company for which she will be entitled to receive dividends as declared by the Board, with the number of shares determined by dividing $805,000 by the closing price of the Companys common stock on the grant date and which vest in three equal installments on the first three anniversaries of the grant date, but which also vests in full in the event of death or Disability (as defined in the Employment Agreement) prior to termination or pursuant to the Change in Control Agreement, or vests as if she terminated after the next anniversary of the grant date following her termination without cause (as defined in the Severance Policy) or for good reason (as defined in the Employment Agreement); and (iii) a performance unit award, with the maximum number of units determined by dividing $920,000 by the per share value of a Company performance unit on the grant date discounting the net present value of expected dividends during the term of the award, which award shall vest on March 15, 2019 to the extent that the Company meets the performance criteria of total shareholder return relative to the S&P Small Cap 600 (with 25% of the maximum number of units vesting at 50% of target performance (25th percentile versus the S&P Small Cap 600 benchmark), 50% of the maximum number of units vesting at 100% of target performance (50th percentile versus the S&P Small Cap 600 benchmark), and 100% of the maximum number of units vesting at 200% of target performance (75th percentile versus the S&P Small Cap 600 benchmark) and applying linear interpolation between levels), or pursuant to the Change in Control Agreement.
As previously disclosed in the Companys 2014 and 2015 proxy statements, CenturyLink is both a client and a vendor of the Company. In 2014, CenturyLink purchased or licensed approximately $720,000 of software, data and services from the Companys Trillium Software and Customer Interaction Divisions, and the Company purchased approximately $840,000 of
telecommunications services from CenturyLink, all in the ordinary course of business. Ms. Puckett was not compensated directly or indirectly as a result of these transactions other than that the Companys payments to CenturyLink add to the overall revenue of CenturyLink. Moreover, Ms. Puckett did not actively participate in negotiating or consummating the terms of the applicable transactions between the Company and CenturyLink and did not have any direct or indirect material interest in such transactions. There are no transactions in which Ms. Puckett has an interest requiring disclosure under Item 404(a) of Regulation S-K.
There are no other arrangements or understandings between Ms. Puckett and any other person pursuant to which she was selected as an officer or director. Ms. Puckett does not have any family relationship with any director or executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer.
The foregoing descriptions of the Employment Agreement, the Severance Policy, the Change in Control Severance Agreement, and the equity awards do not purport to be complete descriptions and are qualified in their entirety by reference to the full text of the agreements filed as an exhibit to this Form 8-K, the Companys Executive Severance Policy as filed on January 30, 2015 as Exhibit 10.1 to Form 8-K and the form of the Companys change in control severance agreement filed on March 19, 2015 as Exhibit 10.1 to Form 8-K, each as incorporated by reference in this Item 5.02.
A copy of the press releases issued by Harte Hanks on September 14, 2015 announcing certain of the matters described above are attached as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibit Number |
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Exhibit Title |
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10.1 |
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Employment Agreement between Harte Hanks, Inc. and Karen A. Puckett dated September 14, 2015 |
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10.2 |
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Non-Qualified Stock Option Agreement between Harte Hanks, Inc. and Karen A. Puckett |
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10.3 |
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Restricted Stock Award Agreement between Harte Hanks, Inc. and Karen A. Puckett |
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10.4 |
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Performance Unit Award Agreement between Harte Hanks, Inc. and Karen A. Puckett |
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99.1 |
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Press Release of Harte Hanks, Inc. (Announcing New CEO) dated September 14, 2015 |
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99.2 |
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Press Release of Harte Hanks, Inc. (Disclosing Inducement Awards) dated September 14, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 14, 2015 |
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HARTE HANKS, INC. |
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By: |
/s/ Robert. L. R. Munden |
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Senior Vice President, |
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General Counsel & Secretary |
EXHIBIT INDEX
Exhibit Number |
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Exhibit Title |
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10.1 |
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Employment Agreement between Harte Hanks, Inc. and Karen A. Puckett dated September 14, 2015 |
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10.2 |
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Non-Qualified Stock Option Agreement between Harte Hanks, Inc. and Karen A. Puckett |
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10.3 |
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Restricted Stock Award Agreement between Harte Hanks, Inc. and Karen A. Puckett |
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10.4 |
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Performance Unit Award Agreement between Harte Hanks, Inc. and Karen A. Puckett |
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99.1 |
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Press Release of Harte Hanks, Inc. (Announcing New CEO) dated September 14, 2015 |
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99.2 |
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Press Release of Harte Hanks, Inc. (Disclosing Inducement Awards) dated September 14, 2015 |
Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (Agreement) is made by and between Harte Hanks, Inc., a Delaware corporation (Company), and Karen A. Puckett (Executive).
W I T N E S S E T H:
WHEREAS, Company desires to employ Executive on the terms and conditions, and for the consideration, hereinafter set forth and Executive desires to be employed on such terms and conditions and for such consideration.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:
ARTICLE I
EMPLOYMENT AND DUTIES
1.1 Employment; Effective Date. Company agrees to employ Executive and Executive agrees to be employed by Company, beginning as of September 14, 2015 (the Effective Date) and continuing for the period of time set forth in Article II of this Agreement, subject to the terms and conditions of this Agreement.
1.2 Positions. From and after the Effective Date, Executive shall be employed in the position of President and Chief Executive Officer of Company or in such other position or positions as the parties mutually may agree, and Executive shall report to Companys Board of Directors (the Board). During the Employment Period, Company expects that Executive will continue to serve as a member of the Board, subject to any required approval of Companys stockholders, without any additional compensation. Executive hereby resigns as a member of the Compensation Committee of the Board as of the Effective Date.
1.3 Duties and Services. Executive agrees to serve in the position(s) referred to in Section 1.2 and to perform diligently and to the best of Executives abilities the duties and services appertaining to such position(s), as well as such additional duties and services appropriate to such position(s) that the parties mutually may agree upon from time to time. Executives employment shall be subject to the policies maintained and established by Company, as such policies may exist from time to time.
1.4 Other Interests. Executive agrees, during the Employment Period, to devote Executives full business time, energy and best efforts to the business and affairs of Company and, as applicable, its affiliates. Notwithstanding the foregoing, the parties acknowledge and agree that Executive may (a) engage in and manage Executives passive personal investments, (b) engage in charitable and civic activities, and (c) serve as a member of the board of directors (or similar governing body) of one public or private company or entity (other than the Board) and may, with the consent of the Board, serve as a member of the board of directors (or similar governing body) of
one additional public or private company or entity (other than the Board) after one year of employment; provided, however, that such activities shall be permitted only so long as such activities do not violate the terms of Article V or VI of this Agreement, conflict with the business and affairs of Company or interfere with Executives performance of Executives duties hereunder. Executive has disclosed and represented to Company that Executive serves as a director of Entergy Corporation.
1.5 Duty of Loyalty. Executive acknowledges that Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act in the best interests of Company and to do no act that would injure the business, interests, or reputation of Company or any of its affiliates. Consistent with those duties, Executive agrees to disclose to Company all business opportunities pertaining to Companys and its affiliates business and shall not appropriate for Executives own benefit business opportunities concerning Companys or its affiliates business. If Executives other business interests present a conflict of interest with Companys business, Executive shall fully disclose the conflict.
ARTICLE II
TERM AND TERMINATION OF EMPLOYMENT
2.1 Term. Until terminated in accordance with the further provisions of this Article II, Company agrees to employ Executive hereunder for the period beginning on the Effective Date (the Employment Period).
2.2 Companys Right to Terminate. Executives employment by Company shall automatically terminate upon the death of Executive, and Company shall have the right to terminate Executives employment under this Agreement at any time for any reason whatsoever or for no reason at all, in the sole discretion of Company.
2.3 Executives Right to Terminate. Executive shall have the right to terminate Executives employment hereunder at any time for any reason whatsoever or for no reason at all.
2.4 Notice of Termination and Effective Date of Termination.
(a) Notice of Termination. If Company or Executive desires to terminate Executives employment hereunder, Company or Executive shall do so by giving written notice to the other party that Company or Executive has elected to terminate Executives employment hereunder and stating the effective date of the termination and reason for such termination; provided, however, that (i) Executive shall endeavor to provide any such notice to the Company at least 180 days prior to the specified effective date of termination, and (ii) any such notice provided by Company to Executive shall be provided at least 30 days prior to the specified effective date of termination. In the event that Executive has provided notice to Company of Executives termination of employment, Company may determine, in its sole discretion, that such termination shall be effective on any date prior to the effective date of termination provided in such notice (and, if such earlier date is so required, then it shall not change the basis for Executives
termination of employment nor be construed or interpreted as a termination of employment pursuant to Section 2.2), in which case Company shall pay Executive in respect of her Base Salary for the period through the date of termination specified in such notice by the Executive, not to exceed 145 days. No action by either party pursuant to this Section 2.4(a) shall alter or amend any other provisions hereof or rights arising hereunder, including the provisions of Articles IV, V and VI hereof.
(b) Date of Termination. The effective date of Executives termination (the Termination Date) shall be as follows: (i) if Executives employment is terminated by Executives death, the date of Executives death; (ii) if Executives employment is terminated by Company for any reason, then the date specified in the notice of termination delivered to Executive by Company; and (iii) if Executives employment is terminated by Executive pursuant to Section 2.3 above, then, unless Company exercises its right pursuant to Section 2.4(a) above to specify an alternative date, the date specified in the notice of such termination delivered to Company by Executive (and, in the case of a termination by Executive for Good Reason as provided in Section 4.1(b) of this Agreement or as provided in the Change in Control Severance Agreement (as defined hereafter in Section 4.1(c), and as may be amended from time to time with the consent of Executive), the day following the last day of the applicable cure period if Company fails to cure the alleged Good Reason conditions). For purposes of this Agreement, references to Executives termination of employment (including references to Executives Termination Date) shall mean, and be interpreted in accordance with, Executives separation from service from Company within the meaning of Treasury regulation § 1.409A-1(h)(1)(ii).
2.5 Deemed Resignations. Unless otherwise agreed to in writing by Company and Executive prior to the termination of Executives employment, any termination of Executives employment shall constitute an automatic resignation of Executive as an officer of Company and each of its affiliates (if applicable), and an automatic resignation of Executive from the Board and from the board of directors (or similar governing body) of each of Companys affiliates (if applicable) and of any corporation, limited liability company or other entity in which Company holds an equity interest and with respect to which board (or similar governing body) Executive serves as the designee or other representative of Company.
ARTICLE III
COMPENSATION AND BENEFITS
3.1 Base Salary. During the Employment Period, Executive shall receive an annualized base salary of $730,000 (the Base Salary). Executives Base Salary shall be paid in equal installments in accordance with Companys policy regarding payment of compensation to similarly situated executives as may exist from time to time, but no less frequently than monthly.
3.2 Annual Bonuses.
(a) Annual Performance Bonus. During the Employment Period, Executive shall be eligible to receive an annual performance bonus payment (the Annual Bonus) for each calendar year beginning on and after January 1, 2016 pursuant to Companys annual cash performance bonus program. Each Annual Bonus shall be payable based on the achievement of reasonable Company and/or Executive performance objectives established by the independent members of the Board (or a committee thereof). For each calendar year, Executives target Annual Bonus shall be equal to 100% of Executives annual Base Salary in effect on the last day of the applicable calendar year (the Target Bonus), and Executive shall be eligible to receive an Annual Bonus of up to 200% of the Target Bonus. Company shall pay each Annual Bonus, if any, with respect to a calendar year (the Bonus Year) in accordance with and subject to Companys practices as applied to other executive officers. Executive shall be entitled to receive payment of an Annual Bonus for a Bonus Year, if any, only if Executive is employed by Company on the date such Annual Bonus is paid to other executive officers.
(b) Bonus Restricted Stock Election. Executive may elect to participate in Companys Bonus Restricted Stock program, as then established by the Board (and/or a committee thereof). (As currently adopted by Company, Executive could receive up to 30% of the total dollar value of an Annual Bonus in the form of restricted shares (each, a Bonus Restricted Stock Award) of Companys common stock (Common Stock), with the number of shares of Common Stock subject to any Bonus Restricted Stock Award equaling (i) 125% of the dollar value of the portion of the Annual Bonus elected by Executive divided by (ii) the Fair Market Value of the Common Stock on the date of grant (as defined by and in accordance with Companys then-applicable equity incentive plan).) Bonus Restricted Stock Awards currently vest in full on the first anniversary of grant date.)
3.3 Review. At least annually during the Employment Period, the independent members of the Board (or a duly empowered committee thereof) shall conduct a formal review of Executives performance, including a review of the amounts of Executives Base Salary and Target Bonus, which such amounts may, in the sole and absolute discretion of the independent members of the Board (or a duly empowered committee thereof), be increased; provided, however, that the independent members of the Board (or a duly empowered committee thereof) may decrease Executives Base Salary at any time and from time to time only so long as any such decrease is part of similar reductions of the same degree applicable to all of Companys executive officers.
3.4 Expenses.
(a) Business Expenses. Company shall promptly reimburse Executive for all reasonable business expenses actually incurred by Executive in performing services hereunder, including all such expenses of travel and living
expenses while away from home on business or at the request of Company, subject to Section 3.9; in each case, that are incurred and accounted for in accordance with the policies and procedures established by Company in effect from time to time.
(b) Legal Fees. Company will reimburse Executive for up to $10,000 in legal fees incurred by Executive for review and negotiation of this Agreement. Executive should provide an invoice from her attorney stating the fee actually charged for such review and negotiation and how that fee was determined.
(c) In no event shall: (i) any reimbursement be made to Executive for expenses incurred after Executives Termination Date, (ii) Executive be permitted to receive a payment or other benefit in lieu of reimbursement, or (iii) the amount of expenses for which Executive is eligible to receive reimbursement during any calendar year affect the amount of expenses for which Executive is eligible to receive reimbursement during any other calendar year within the Employment Period.
3.5 Equity and Equity-Based Awards.
(a) Sign On Awards. On the third business day after the Effective Date, Executive shall be granted the following awards, in each case, treated as employment inducement awards within the meaning of New York Stock Exchange Listed Company Manual Rule 303A.08 and subject to the terms and conditions of the award agreements attached hereto as Exhibits A, B and C, as applicable:
A. Nonqualified stock options to purchase Company Common Stock, vesting in four equal annual installments. The number of shares subject to the nonqualified stock option grant awarded pursuant to this Section 3.5(a)(A) shall be calculated by dividing $575,000 by the per share value of a Company nonqualified stock option determined using Black-Scholes and applying the closing price of a share of Company Common Stock on the New York Stock Exchange for the grant date, and rounding down to the nearest whole share.
B. Shares of restricted Company Common Stock, vesting in three equal annual installments. The number of shares of restricted Company Common Stock awarded pursuant to this Section 3.5(a)(B) shall be calculated by dividing $805,000 by the closing price of a share of Company Common Stock on the New York Stock Exchange for the grant date and rounding down to the nearest whole share.
C. Performance units, vesting on March 15, 2019 based on Companys achievement of the performance objectives for the period ending December 31, 2018 as set by the Compensation Committee of the Board. The number of performance units awarded pursuant to this Section 3.5(a)(C) shall be calculated by dividing $920,000 by the per share value of a Company performance unit determined by discounting from the closing price of a share of Company Common Stock on the New York Stock Exchange for the grant date the net present value of expected dividends during the term of the performance unit award, and rounding down to the nearest whole share.
(b) Future Awards. Executive may periodically in accordance with Companys then current procedures and terms, as determined by the Board (or a designated committee thereof) in its sole discretion, receive grants of equity, equity-based or other awards pursuant to Companys then applicable equity incentive plan(s), subject to the respective terms and conditions thereof. For 2016, the parties expressly agree that Executive shall receive equity, equity-based or other awards at least consistent with the Companys 2016 grant policy for senior executives generally and also taking into account her position as President and Chief Executive Officer of the Company.
3.6 Employee Benefits. During the Employment Period, and subject to the terms and conditions of the applicable plans and programs in effect from time to time, Executive (and, to the extent applicable, Executives spouse, dependents and beneficiaries) shall be eligible to participate in all benefit plans and programs of Company (including but not limited to any 401(k), profit sharing or thrift plan, any medical, dental, disability, or life insurance, and any pension plan or supplemental retirement plan), including improvements or modifications of the same, which are now, or may hereafter be, available to similarly situated executives of Company. Company shall not, however, by reason of this Section 3.6, be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to similarly situated executives generally. For the avoidance of doubt, Executive shall be eligible to defer some or all of Executives Base Salary and Annual Bonus in Companys nonqualified Deferred Compensation Plan in accordance with the terms of such plan.
3.7 Time-Off Benefits. In addition to Companys standard policies regarding bereavement, jury duty, holidays and other paid time off, Executive shall be entitled to substitute holidays upon reasonable notice to the Board, provided that doing so does not conflict with Company work schedules or priorities. Executives entitlement to paid time off is subject to adjustment by Company in the same manner and to the same degree as an adjustment to the paid time off entitlement of other executives.
3.8 Automobile Allowance. During the Employment Period, Executive shall be entitled to receive a non-accountable automobile allowance of $1,325 per month, provided that such automobile allowance may be changed by the Board (or a committee thereof) in the same manner and degree that such automobile allowances are changed for Companys other executive officers.
3.9 Temporary Living Expenses; Relocation. During the Employment Term, Executive shall not be required to relocate her current primary personal residence; however, Executive shall be required to travel away from her principal residence as reasonably necessary to discharge the duties described in Section 1.3. If, during the first 24 months of the Employment Period, Executive establishes a primary
personal residence within 30 miles of a Primary Company Location, then Company shall reimburse at Executives election either (i) the reasonable moving and closing costs for the purchase of her new primary residence and sale of her current primary residence, or (ii) half of the amount of any loss incurred by Executive on the sale of her current primary personal residence, such loss reimbursement not to exceed $250,000. In addition, for up to 12 months during the Employment Period, Company will pay directly (or reimburse Executive for) the costs to lease an apartment, selected by Executive, within 30 miles of a Primary Company Location, such costs not to exceed $3,000 per month (including rent, utilities, furnishings and other similar items, the Temporary Living Assistance). Company and Executive agree to take reasonable steps to avoid having the Temporary Living Assistance qualify as income to Executive. Primary Company Location for the purpose of this Section 3.9 shall mean any of the following Company locations: Austin, Bensalem/Langhorne (Pennsylvania), Burlington (Massachusetts), San Antonio, San Francisco/San Mateo, or any other location mutually agreed by Company and Executive.
3.10 Indemnification. Executives indemnification agreement with Company, dated August 29, 2012 (the Indemnification Agreement), will continue in full force and effect.
ARTICLE IV
EFFECT OF TERMINATION ON COMPENSATION
4.1 Severance Benefits.
(a) Severance Policy. As of the Effective Date, Executive shall be a designated beneficiary of Companys Executive Severance Policy (the current version of which was filed with the U.S. Securities and Exchange Commission (the SEC) on January 30, 2015 as Exhibit 10.1 to a Form 8-K (Executive Severance Policy dated January 29, 2015)), as may be amended by the Company from time to time (the Severance Policy), and (notwithstanding anything in the Severance Policy to the contrary) Executives Severance Period for the purpose of the Severance Policy shall be two years.
(b) Severance in Event of a Good Reason Termination. In the event Executive terminates her employment for Good Reason (as defined below) and the Change in Control Severance Agreement (as defined in Section 4.1(c)) does not apply, she will be entitled to the compensation and benefits payable under the Severance Policy as if she had been terminated without Cause under the Severance Policy. For the purposes hereof, Good Reason shall mean any one or more of the following events: (1) a material adverse change in the nature or scope of the authority, functions or duties attached to Executives position with Company; (2) a reduction in the Executives salary, bonus or incentive compensation or a reduction in scope or value of other monetary or non-monetary benefits (other than benefits pursuant to a broad-based employee benefit plan) to which the Executive is entitled; (3) a requirement that Executive be principally based at an office or location that is more than 30 miles from
Executives principal office or location; or (4) Company commits any material breach of this Agreement; provided, however, that if any of the above Good Reason conditions exists, Executive must provide notice to Company no more than 90 calendar days following the initial existence of any such condition and Executives intention to terminate employment for Good Reason. Upon such notice, Company shall have 30 calendar days during which it may remedy the condition, so that any such termination of employment by Executive shall not be for Good Reason.
(c) Change in Control Severance Agreement. Company and Executive also shall be subject to the change in control severance agreement filed with the SEC on March 19, 2015 as Exhibit 10.1 to a Form 8-K (Form of Amended & Restated Severance Agreement between Harte Hanks and its Corporate Officers (other than its CEO)) (the Change in Control Severance Agreement) upon the later of the Effective Date or the effective date of the Change in Control Severance Agreement. For the purpose of the Change in Control Severance Agreement, the multiplier for determining Executives CiC Severance Compensation shall be 3 and Executives Employment Restrictions Agreement shall be this Agreement.
4.2 Termination for Reasons Not Entitling Executive to Severance Benefits Under the Severance Policy or Change in Control Severance Agreement or Due to Death or Disability. If Executives employment hereunder is terminated and Executive is not entitled to benefits under the Severance Policy, the Change in Control Severance Agreement (as may be amended from time to time with the consent of Executive), or Sections 4.3 and 4.4 below, then, upon such termination, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the Termination Date, except that Executive shall be entitled to receive: (i) within 10 business days following the Termination Date, accrued but unpaid Base Salary and unused vacation earned through the Termination Date; (ii) any accrued but unpaid Annual Bonus earned for any previously completed calendar year, paid in accordance with Section 3.2 (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with Company); (iii) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Companys policies prior to Executives Termination Date (provided claims for reimbursement are accompanied by appropriate supporting documentation and are submitted to Company within 90 days following the Termination Date, reimbursement shall be made within 60 days of Executives claim for reimbursement); and (iv) employee benefits and equity or equity-based compensation, if any, as to which Executive may be entitled under Companys Incentive Plan and other employee benefit plans and programs or any agreement between Company and Executive (the amounts described in clauses (i) through (iv) hereof being referred to as the Accrued Rights).
4.3 By Death. If Executives employment hereunder shall be terminated by Executives death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with Executives Termination Date, except (i) for the Accrued Rights, and (ii) that a beneficiary designated by Executive in accordance with Companys policies and procedures regarding such designation shall receive an amount in cash equal to $900,000, payable in ten equal annual installments.
4.4 By Disability. If Executives employment hereunder shall be terminated by Company due to Executives becoming disabled within the meaning of Companys long-term disability plan (Disability), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with Executives Termination Date, except for the Accrued Rights, including but not limited to any benefits due in accordance with any long-term disability plan of Company in which Executive participates as of the Termination Date.
4.5 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of Executives employment under this Agreement, Company and Executive hereby agree that the severance payments, if any, to be received by Executive pursuant to this Article IV (including under the Severance Policy or Change of Control Severance Agreement) shall be received by Executive as liquidated damages.
ARTICLE V
PROTECTION OF INFORMATION
5.1 Access to Information. For purposes of this Article V, the term Company shall include Company and each of its affiliates. Executive acknowledges and agrees that she will be provided information that (a) relates to Companys business; (b) provides Company economic value or business advantage; (c) is not generally known to the public; and (d) is learned or developed by Executive as a direct or indirect result of or during the course of Executives employment with Company, including but not limited to Companys trade secrets (i.e., Companys formulas, patterns, devices or compilations of information that generally facilitate the provision of services or sale of products, increase revenues, or provide an advantage over the competition, are not generally known and are identified as such) and Inventions (i.e., any and all inventions, discoveries, concepts, and ideas, whether or not patentable, including without limitation, devices, processes, methods, formulas, techniques, improvements, modifications or know-how related thereto, that relate to any part of Companys business or any business contemplated by Company, that is conceived or developed by Executive during employment (or thereafter if such invention is based, derived from or related to work performed by Executive during her employment or Companys Confidential Information) including all drawings, manuals, correspondence, notebooks, reports, and other like materials and information relating thereto) and other information related to, without limitation, any customer, business, merchandise, or marketing procedures, processes and services; hardware; software; research; marketing; developments; products; product lines; design; purchasing; finances and financial affairs; accounting; merchandising; selling; engineering; employees; training; business practices; business plans; business strategies; acquisitions; potential acquisitions; customer lists; customer contact lists; information provided by Companys customers; proprietary information; employee lists; employee compensation information; vendor lists; supplier lists; pricing; pricing agreements; merchandise resources; supply resources; service resources; system designs; procedures manuals; policies; non-public
personal information and protected health information about consumers; social security numbers; drivers license numbers (or state or federal identification card numbers); financial account numbers; credit or debit card numbers; the prices Company obtains or has obtained or at which it sells or has sold its services or products; or the names of Company personnel and those to whom the personnel report (collectively, Confidential Information). In consideration of such Confidential Information and other valuable consideration provided hereunder, and in order to protect Companys legitimate business interests, Executive agrees to comply with this Article V.
5.2 Company Covenants. Upon the execution of this Agreement by both parties, Company will place Executive in a position of special trust, and will provide Executive with (a) Confidential Information and access to such information; (b) specialized training, including self study materials and course work, classroom training, on-line training, on-the-job training, and instruction as to Companys products, services and methods of operations; and (c) goodwill support such as expense reimbursements in accordance with Company policies, Confidential Information related to Companys current and prospective clients, customers, business associates, vendors and suppliers and/or contact and relationships with current and potential clients, customers and business associates, in order to help Executive develop goodwill for Company. The foregoing is not contingent on Executives continued employment for any length of time, but is contingent upon Executive not working for or assisting a Competitive Business (as defined in Article VI below) and Executives full compliance with the restrictions in Article V and VI hereof. Executive specifically acknowledges that the items described in clauses (a), (b), and (c) above will be items that Executive has not previously been given and that Executive would not be given but for the execution of this Agreement.
5.3 Executive Covenants. Executive agrees not to, directly or indirectly, participate in the unauthorized use, disclosure or conversion of any Confidential Information. Specifically, but without limitation, Executive agrees not to use Confidential Information for her sole benefit, or for the benefit of any person or entity in any other way that harms Company or diminishes the value of the Confidential Information to Company. Executive also agrees to use the specialized training, goodwill and contacts developed with Companys customers and contractors for the exclusive benefit of Company and agrees not to use these items at any time in a way that would harm the business interests of Company.
5.4 Goodwill with Customers. Executive acknowledges that Company has near permanent relationships with its customers and owns the goodwill in Executives relationships with customers that Executive will or has developed or maintained in the course and scope of Executives employment with Company. If Executive owns goodwill in a relationship with a customer as of the Effective Date, Executive assigns any and all such goodwill to Company, and Company shall become the owner of such goodwill.
5.5 Companys Property. All documents and things provided to Executive by Company for use in connection with Executives employment, or created by Executive in the course and scope of Executives employment with Company, are the sole property
of Company and shall be held by Executive as a fiduciary on behalf of Company. Immediately upon termination of Executives employment, without the requirement of a prior demand by Company, Executive shall surrender to Company all such documents and things, including, but not limited to, all Confidential Information and all documents and things related to Restricted Customers (as defined in Article VI hereof) or Employee-Related Service (as defined in Article VI hereof), together with all copies, recording abstracts, notes, reproductions or electronic versions of any kind made from or about the documents and things and the information they contain.
5.6 Inventions. During and after Executives employment, Executive shall promptly and completely disclose, in writing, to Company or its designee all conceived or developed Inventions. Any and all Inventions shall be the absolute property of Company or its designees. Companys ownership in and to such Inventions shall vest without regard to Executives conception or development of the Inventions during or outside regular business hours, on or off Company premises, or with or without the use of Company resources or materials. During employment and as necessary thereafter, Executive shall assist Company to obtain, perfect and maintain all intellectual property rights covering such intellectual property that Company seeks to protect, and shall execute all documents and do all things necessary to obtain for Company all such intellectual property rights. Upon Companys request and at Companys expense, Executive agrees to make application in due form for United States letters patents or foreign letters patents or the like (Patents) that claim, register or disclose Inventions, in whole or in part. Executive further agrees to assign to Company all right, title and interest in and to any Patent application and any Patent that may result. To this end, Executive agrees to execute any and all instruments and do any and all acts necessary or desirable in connection with filing a Patent application and perfecting Companys entire right, title and interest in and to such Patent application and any resulting Patent. To maintain or further Companys rights, title and interest in a Patent, Executive further agrees, both during and after her employment with Company, to execute any and all instruments and do any and all acts necessary or desirable (including giving testimony in support of Executives inventorship) in connection with any continuations, reissues, reexaminations or the like, in the conduct of any related proceedings or litigation. Executive acknowledges that Company shall be the copyright proprietor of all copyrighted works created or developed by Executive, whether solely or jointly with others, during Executives employment, and such works created pursuant to the performance of Executives duties shall be works for hire. Where a copyrighted work prepared by Executive does not satisfy the statutory requirements of a work for hire, Executive agrees to assign to Company all right, title and interest in the copyrighted work.
ARTICLE VI
PROTECTIVE COVENANTS
6.1 Definitions. Executive agrees that the following covenants are reasonable and necessary agreements for the protection of the business interests covered in the fully enforceable, ancillary agreements set forth in this Agreement, including those in Article V above. For purposes of this Article VI, (a) the term Company shall include Company and each of its affiliates and (b) the following terms shall have the following meanings:
Competitive Business means any legal person (including Executive), and any parent, subsidiary, partner, agent, or affiliate of any legal person, that engages in, or plans to become engaged in, the development, design, production, manufacture, promotion, marketing, sale, support or service of a Competitive Service, Competitive Service Support, or any other product, good, process, or service that has been or is being developed, designed, produced, manufactured, marketed, promoted, sold, licensed or serviced by any legal person other than Company that would compete with or displace any services or products sold or being developed for sale by Company during Executives employment with Company or that engages in any other activities so similar in nature or purpose to those of Company that they would displace business opportunities or customers of Company, which include (without limitation) each company named in the peer group of Companys then-current annual report on Form 10-K filed with the Securities and Exchange Commission.
Competing Service means any service, process, solution or product that has been or is being developed, designed, produced, manufactured, marketed, promoted, sold, offered, licensed or serviced by any legal person other than Company that is the same or similar to, performs any of the same or similar functions, may be substituted for, or is intended to be or is used for any of the same purposes of any Employee-Related Service.
Competitive Service Support means any research, development, analysis, planning or support services of any kind or nature, including, without limitation, theoretical, applied, business, technical, regulatory, or systems research, analysis, planning, or support for or by any legal person other than Company that is intended for, or may be useful in, assisting, improving, or enhancing any aspect of the development, design, production, manufacture, marketing, promotion, sale, support, or service of a Competitive Service.
Employee-Related Service means goods, processes or services that have been or are being developed, designed, produced, manufactured, marketed, promoted, sold, licensed or serviced by Company that either (i) relate to the services Executive performed as an employee for Company at any time in the 12 months immediately preceding Executives Termination Date, or (ii) that Executive had access to Confidential Information at any time in the 12 months immediately preceding Executives Termination Date.
Restricted Customer means those persons to which Company has sold, negotiated for sales, marketed, attempted to or actually promoted or provided products or services to at any time during the 12 months immediately preceding Executives Termination Date, and with respect to which Executive has participated in any efforts related to the sales, marketing, negotiation or provision of goods or services, had contact with or supervised employees who had contact with, or received Confidential Information about within the 12 months immediately preceding Executives Termination Date.
6.2 Non-Competition. Executive agrees that while employed by Company and for a period of two years following Executives Termination Date (or, if longer, the implied period of salary continuation provided under, as applicable, the Severance Policy or the Change in Control Severance Agreement (as may be amended from time to time with the consent of Executive) (the Restricted Period), regardless of the reason for termination of employment, Executive shall not, directly or indirectly, be employed by, supervise, assist, perform services, work or otherwise engage in activities for a Competitive Business in any capacity that relates to any Competitive Service or Competitive Service Support anywhere in the United States or in any foreign country in which Company is then marketing or selling services, which the parties stipulate is a reasonable geographic area because of the scope of Companys operations and Executives employment with Company. Executive may not avoid the purpose and intent of this paragraph by engaging in conduct within the geographically limited area from a remote location through means such as telecommunications, written correspondence, computer generated or assisted communications or other similar methods
6.3 Non-Solicitation of Employees/Contractors. Executive agrees that while employed by Company and during the Restricted Period following Executives Termination Date, regardless of the reason for termination of employment, Executive shall not directly or indirectly solicit, cause to be solicited, assist or otherwise be involved with the solicitation of, any employee, contractor or other person to terminate that persons employment, contract or relationship with Company or to breach that persons employment agreement or contract with Company. Further, Executive agrees that while employed by Company and during the Restricted Period following Executives Termination Date, regardless of the reason for termination of employment, Executive will not, directly or indirectly, hire, recruit, solicit, or participate or assist any person or entity in hiring, recruiting or soliciting, any individual who was an employee or contractor during the 6 month period immediately following such employee or contractors termination of employment, contract or relationship with Company.
6.4 Non-Solicitation of Customers. Executive agrees that while employed by Company and during the Restricted Period following Executives Termination Date, regardless of the reason for termination of employment, Executive shall not, on behalf of a Competitive Business, directly or indirectly solicit, cause to be solicited, sell to, contact, supervise, assist or otherwise be involved with the solicitation of, or do or otherwise attempt to do business with a Restricted Customer in connection with or relating to a Competitive Service or Competitive Service Support. This paragraph is geographically limited to wherever any Restricted Customer can be found and is available for solicitation, or anywhere in the United States or in any foreign country in which Company is then marketing or selling services, which the parties stipulate is a reasonable geographic area because of the scope of Companys operations and Executives employment with Company. Executive may not avoid the purpose and intent of this paragraph by engaging in conduct within the geographically limited area from a remote location through means such as telecommunications, written correspondence, computer generated or assisted communications, or other similar methods.
6.5 Non-Disparagement. At all times during employment with Company and for the longest period thereafter permitted under law, (i) Executive shall not, directly or indirectly, make (or cause to be made) to any legal person any disparaging, derogatory or other negative or false statement about Company (including any of its products, services, policies, practices, operations, employees, sales representatives, agents, officers, directors, and equity holders), and (ii) Company (through its executive officers and board members) shall not directly or indirectly, make (or cause to be made) to any legal person any disparaging, derogatory or other negative or false statement about Executive. Notwithstanding anything else to the contrary, the provision of truthful testimony to governmental, regulatory or self-regulatory authorities or in any legal proceeding shall not constitute a violation of this Agreement. Further, it is understood and agreed that, after the Restricted Period following Executives Termination Date, this provision shall not be deemed to limit competitive speech or commercial comparisons by Executive on behalf of any future employer with respect to its services or products and such competitive speech or commercial comparisons by Executive shall not be deemed to violate this Agreement.
6.6 Early Resolution Conference/Employee Notification Obligations. This Agreement is understood to be clear and enforceable as written and is executed by both parties on that basis. However, should Executive later challenge any provision of Article V or VI as unclear, unenforceable, or inapplicable to any competitive activity that Executive intends to engage in, Executive will first notify Company in writing and meet with a Company representative and a neutral mediator (if Company elects to retain one at its expense) to discuss resolution of any disputes between the parties (an Early Resolution Conference). Executive will provide this notification at least 14 days before Executive engages in any activity on behalf of a Competitive Business or engages in any other activity that could foreseeably fall within a questioned restriction. All rights of both parties will be preserved if the Early Resolution Conference requirement is complied with even if no agreement is reached in the conference. Executive further agrees that during the term of the restrictions in Sections 6.2, 6.3 and 6.4, Executive shall promptly inform Company in writing of the identity of any new employer, the job title of Executives new position and a description of any services to be rendered to that employer; and, if the new employer is a Competitive Business, will communicate Executives obligations under Articles V and VI to each new employer, which shall include providing each new employer with a copy of this Agreement.
6.7 Survival/Enforcement of Covenants. Any monetary payments under this Agreement of any kind, including but not limited to, compensation, wages, separation pay or bonuses by Company to Executive are expressly conditioned upon Executives compliance with the restrictive covenants in Articles V and VI. In the event of breach or threatened breach by Executive of any provision of Article V or VI hereof, Company shall be entitled to (i) injunctive relief by temporary restraining order, temporary injunction, and/or permanent injunction and (ii) any other legal and equitable
relief to which Company may be entitled, including without limitation any and all monetary damages that Company may incur as a result of said breach or threatened breach. An agreed amount for the bond to be posted if an injunction is sought by Company is $500. Company may pursue any remedy available, without limitation, including declaratory relief, concurrently or consecutively in any order as to any breach, violation, or threatened breach or violation, and the pursuit of one such remedy at any time will not be deemed an election of remedies or waiver of the right to pursue any other remedy. Each restriction set forth in Articles V and VI hereof shall survive the termination of Executives employment with Company. The existence of any claim or cause of action of Executive against Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of any covenant contained in Article V or VI. In the event an enforcement remedy is sought under Sections 6.2, 6.3, or 6.4, the time periods provided for in those sections shall be extended by one day for each day Executive failed to comply with the restriction at issue. If any of the restrictions in Articles V or VI are deemed unenforceable under an applicable forums law, the parties expressly agree that such will not affect the enforceability of any of the remaining provisions of Articles V and VI. Further, if any of the restrictions in Articles V or VI are deemed unenforceable as written, the parties expressly authorize the court or arbitrator to revise, delete, or add to those restrictions to the extent necessary to enforce the intent of the parties and to provide effective protection for Companys goodwill, specialized training, Confidential Information and other business interests.
ARTICLE VII
DISPUTE RESOLUTION
7.1 Choice of Law. This Agreement shall be construed and interpreted and the rights of the parties governed by the laws of the State of Texas, without regard to its conflict of law principles.
7.2 Submission to Jurisdiction. The parties hereto submit to the exclusive jurisdiction of the state and federal courts, as applicable, located in San Antonio, Texas, and appropriate appellate courts therefrom, over any dispute, controversy or claim between Executive and Company arising out of or relating to this Agreement or Executives employment with Company. Each party submits to the jurisdiction of such courts and agrees not to raise any objections to such jurisdiction.
ARTICLE VIII
MISCELLANEOUS
8.1 Successors; Assigns. This Agreement is personal to Executive, and neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise transferred by Executive. Company may assign this Agreement, including to any affiliate or successor (whether by merger, purchase or otherwise) to all or substantially all of the equity, assets or businesses of Company, at any time without the consent of Executive. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and any assign of Company shall be deemed to be Company for purposes of this Agreement.
8.2 Notices. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given only if (i) delivered personally or by overnight courier, (ii) delivered by facsimile transmission with answer back confirmation, (iii) mailed (postage prepaid by certified or registered mail, return receipt requested) (effective upon actual receipt), or (iv) delivered by electronic communication to the address below. An electronic communication (Electronic Notice) shall be deemed written notice for purposes of this letter if sent with return receipt requested to the electronic mail address specified by the receiving party. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. The party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a non-electronic form (Non-electronic Notice) which shall be sent to the requesting party within five days after receipt of the written request for Non-electronic Notice. Either party from time to time may change its address, facsimile number, electronic mail address, or other information for the purpose of notices to that party by giving written notice specifying such change to the other party hereto.
If to the Executive: at the most recent address reflected in the payroll records of the Company
If to the Company: |
Harte-Hanks, Inc. |
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9601 McAllister Freeway, Suite 610 San Antonio, Texas 78216 Attention: General Counsel Email: general.counsel@hartehanks.com |
or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.
8.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
8.4 Severability. If an arbitrator or court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.
8.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement.
8.6 Withholding of Taxes and Other Executive Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Companys employees generally; provided, however, that no withholding pursuant to Section 4999 of the Code shall be made unless, in the opinion of tax counsel selected by Company and acceptable to Executive, such withholding relates to payments that result in the imposition of an excise tax pursuant to Section 4999 of the Code.
8.7 Headings; References; Interpretation. The Article and Section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. The words hereof, herein and hereunder and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including all Exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to Sections and Exhibits shall, unless the context requires a different construction, be deemed to be references to the Sections of this Agreement and the Exhibits attached hereto, and all such Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. The use herein of the word including following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as without limitation, but not limited to, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. The word or as used herein is not exclusive and is deemed to have the meaning and/or. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto.
8.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.
8.9 Affiliate. As used in this Agreement, the term affiliate as used with respect to a particular person or entity shall mean any other person or entity that owns or controls, is owned or controlled by such particular person or entity.
8.10 Effect of Termination. The provisions of Articles IV, V, VI, VII and VIII, and those provisions necessary to interpret and enforce them, shall survive any termination of this Agreement and any termination of the employment relationship between Executive and Company.
8.11 Entire Agreement. This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof are hereby null and void and of no further force or effect, and this Agreement shall supersede all other agreements, written or oral, that purport to govern the terms of Executives employment (including Executives compensation) with Company or any of its affiliates. Notwithstanding the forgoing, Executives Indemnification Agreement will continue in full force and effect.
8.12 Modification; Waiver. Any modification to or waiver of this Agreement shall be effective only if it is in writing and signed by Company and Executive.
8.13 Advice of Counsel. Executive acknowledges that Executive has been instructed to, and has had adequate opportunity to obtain, the advice of Executives own tax and legal counsel in connection with this Agreement.
8.14 Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code and the Treasury regulations and other interpretive guidance issued thereunder (collectively, Section 409A) or an exemption therefrom and shall be construed and administered in accordance with such intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Notwithstanding any provision in this Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A if Executives receipt of such payment or benefit is not delayed until the earlier of (a) the date of Executives death or (b) the date that is six months after Executives Termination Date (such date, the Section 409A Payment Date), then such payment or benefit shall not be provided to Executive (or Executives estate, if applicable) until the Section 409A Payment Date. To the extent necessary to comply with Section 409A, in no event shall Executive, directly or indirectly, designate the taxable year of any payment under this Agreement. In particular, in the event any payment hereunder conditioned upon the Executive delivering a release is not otherwise exempt from Section 409A of the Code, then if the designated payment period for such payment begins in one taxable year and ends in the next taxable year, the payment will be made in the later taxable year. Notwithstanding the foregoing, Company makes no representations that the payments and benefits provided under this Agreement are exempt from, or compliant with, Section 409A and in no event shall Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.
8.15 Compensation Recoupment. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), the compensation payable pursuant to this Agreement (including without limitation Sections 3.2 and 3.5 hereof) shall not be deemed fully earned or vested, even if paid or distributed to Executive, if such compensation or any portion thereof is deemed incentive compensation and subject to recovery, or clawback, by Company pursuant to the provisions of the Act and any rules or regulations promulgated thereunder or by any stock exchange on which the Common Stock is listed (the Rules). In addition, Executive hereby acknowledges that this Agreement may be amended as necessary and/or shall be subject to any recoupment policies adopted by Company to comply with the requirements and/or limitations under the Act and the Rules or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) Company to revoke, recover, and/or clawback any compensation payable pursuant to this Agreement (including without limitation Sections 3.2 and 3.5 hereof) that is deemed incentive compensation .
[Signature Page Follows]
IN WITNESS WHEREOF, Executive and Company each have caused this Agreement to be executed in its name and on its behalf, effective for all purposes as provided above.
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HARTE HANKS, INC. | ||
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By: |
/s/ Robert L. R. Munden | |
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Robert L. R. Munden | |
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Senior Vice President, | |
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General Counsel & Secretary | |
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Date: |
September 13, 2015 |
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EXECUTIVE | ||
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/s/ Karen A. Puckett | ||
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Karen A. Puckett | ||
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Date: |
September 13, 2015 |
Exhibit 10.2
HARTE HANKS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
To: Karen A. Puckett |
Date of Grant: September 17, 2015 |
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Number of Shares: |
Exercise Price Per Share: $ |
HARTE HANKS, INC. (the Company), is pleased to grant you, as an inducement material to your entry into employment with the Company, a stock option (the Option) to purchase all or any part of a number of shares of Stock (as defined below), subject to the terms and conditions set forth in this Non-Qualified Stock Option Agreement (this Agreement). The grant of the Option is specifically conditioned upon (i) the approval of this grant to you by the Board (as defined below), and (ii) the execution by you of this Agreement, agreeing to all of the terms and conditions set forth herein. The Date of Grant, the number of shares issuable upon exercise of the Option (the Option Shares) and the Exercise Price are stated above. The Option is not governed by the Harte-Hanks, Inc. 2013 Omnibus Incentive Plan, 2005 Omnibus Incentive Plan or by any other equity compensation plan of the Company (or of any of its affiliates). Instead, the Option is made outside of any equity compensation plan of the Company (or any of its affiliates), as an inducement contemplated by Section 303A.08 of the New York Stock Exchange Listed Company Manual. This Option is not intended to be an incentive stock option within the meaning of section 422 of the Code (as defined below).
This Agreement sets forth the terms of the agreement between you and the Company with respect to the Option. By accepting this Agreement, you agree to be bound by all of the terms hereof.
1. Definitions. Unless otherwise defined herein, as used in this Agreement, the following terms have the meanings set forth below:
(a) Board means the board of directors of the Company.
(b) Cause has the same meaning as in the Change in Control Severance Agreement (as defined in Section 1(d), unless otherwise specified.
(c) Change in Control means the first day that any one or more of the following conditions shall have been satisfied:
(i) the acquisition of any outstanding voting securities by any person, after which such person (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding voting securities of the Company; provided, however, that for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company, or (D) any acquisition by any corporation pursuant to a transaction that complies with Sections (iii)(A) and (iii)(B) of this definition;
(ii) individuals who, as of the Date of Grant, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Date of Grant, whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;
(iii) consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a Business Combination), in each case unless (A) the stockholders of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries), and (B) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
(d) Change in Control Severance Agreement means that certain Change in Control Severance Agreement by and between the Company and you, effective September 14, 2015, as may be amended from time to time with your consent.
(e) Code means the Internal Revenue Code of 1986, as amended.
(f) Committee means the Compensation Committee of the Board.
(g) Date of Grant means the date designated as such on the first page of this Agreement.
(h) Employment Agreement means that certain Employment Agreement by and between the Company and you, effective September 14, 2015, as may be amended from time to time with your consent.
(i) Exchange Act means the Securities Exchange Act of 1934, as amended.
(j) Exercise Price means the exercise price per share designated as such on the first page of this Agreement.
(k) Fair Market Value means with respect to Stock, as of any date, the closing price of a share of Stock on the New York Stock Exchange for the last trading day prior to that date. If no such prices are reported, then Fair Market Value shall mean the average of the high and low sale prices for the Stock (or if no sale prices are reported, the average of the high and low bid prices) as reported by the principal regional stock exchange, or if not so reported, as reported by Nasdaq or a quotation system of general circulation to brokers and dealers; provided, however, that with respect to same day sales, Fair Market Value shall mean the per share price actually paid for shares of Stock in connection with such sale.
(l) Final Exercise Date means the tenth anniversary of the Date of Grant.
(m) Material Breach means the material breach of any contractual, statutory, fiduciary or other legal obligation you have to the Company, determined in the sole judgment of the Company.
(n) Severance Policy means the Companys Severance Policy as defined in the Employment Agreement.
(o) Stock means the Companys $1.00 par value per share voting common stock, or any other securities that are substituted therefor.
(p) Termination Date means the date on which your performance of services for the Company (or any affiliate) in the capacity of an employee, a non-employee member of the Board or a consultant cease.
2. Vesting. You cannot exercise the Option and acquire Stock until your right to exercise has vested. This Option vests in four equal installments (i.e., 25% each) on each of the first four anniversaries of the Date of Grant. Notwithstanding the foregoing, (a) in no event can this Option be exercised in whole or in part on or after the date on which the Option lapses pursuant to Section 5, (b) this Option shall automatically vest in full if you terminate employment with the Company due to Disability (as defined in the Employment Agreement) or death, (c) in the event you are terminated from employment with the Company without Cause (as defined in the Severance Policy) or terminate employment from the Company for Good Reason (as defined in the Employment Agreement) and you satisfy the participant requirements set forth in the Severance Policy, this Option shall vest as if you terminated immediately following the next anniversary of the Date of Grant after the date of your termination, and (d) this Option shall automatically vest in full pursuant to the terms of the Change in Control Severance Agreement (i) in the event this Option is not assumed or replaced by a Publically-Traded Successor with an Assumed/Replaced Award (as such terms are
defined in the Change in Control Severance Agreement) after a Change in Control, or (ii) you are terminated from employment with the Company without Cause or terminate employment from the Company for Good Reason during the period beginning on the CiC Date and ending on the second anniversary of the CiC Date (as such terms are defined in the Change in Control Severance Agreement). This Option is exercisable to the extent vested (i.e., the right of exercise shall be cumulative so that to the extent the Option is not exercised in any period to the maximum extent permissible, it shall continue to be exercisable, in whole or in part, with respect to all shares for which it is vested until the earlier of the Final Exercise Date (as defined below) or the termination of this Option under Section 5).
3. Exercise. You may exercise this Option, in whole or in part, at any time (subject to Section 2) by delivering written notice to the Companys Secretary along with full payment of the Exercise Price for the shares being purchased. The notice must specify that this Option (or a portion thereof) is being exercised and the number of shares with respect to which this Option is being exercised. This Option may only be exercised as provided in this Agreement and in accordance with such rules and regulations as may, from time to time, be adopted by the Committee. The exercise of this Option shall be deemed effective upon receipt by the Company of the notice and payment described herein. If you exercise this Option in full, it shall be surrendered to the Company for cancellation. If you only partially exercise this Option, it shall, upon request, be delivered to the Company for the purpose of making appropriate notation thereon, or otherwise reflecting, in such manner as the Company shall determine, the result of such partial exercise hereof. As soon as practicable after the effective exercise of this Option, and upon satisfaction of all applicable withholding requirements, you or your nominee shall be recorded on the Companys stock transfer books as the owner of the shares purchased. The Company may, but is not required to, deliver to you on or more duly issued and executed stock certificates evidencing such ownership.
4. Payments. When this Option is exercised, payment of the total Exercise Price for the shares being purchased shall be made to the Company (a) in cash (including check, bank draft or money order); (b) by transfer from you to the Company of shares of Stock (other than shares of Stock that the Committee determines by rule may not be used to exercise this Option) that you have held for more than six months with a then current aggregate Fair Market Value equal to the total Exercise Price for the portion of this Option being exercised; (c) by the Company retaining a number of shares of the Stock deliverable upon exercise of this Option whose aggregate Fair Market Value is equal to the Exercise Price to be paid in connection with such exercise; or (d) to the extent permissible under applicable law, delivery to the Company of (i) a properly executed exercise notice, (ii) irrevocable instructions to a broker to sell a sufficient number of the shares being exercised to cover the Exercise Price and promptly deliver to the Company (on the same day that the shares of Stock issuable upon exercise are delivered) the amount of sale proceeds required to pay the Exercise Price and any required tax withholding related to the exercise, and (iii) such other documentation as the Committee and the broker shall require to effect a same day exercise and sale. In the event the Committee subsequently determines that the aggregate Fair Market Value of Stock or any other consideration delivered as payment of the Exercise Price is insufficient to pay the entire Exercise Price, then you shall pay to the Company, immediately upon the Companys request, the amount of the deficiency in the form of payment requested by the Committee.
5. Expiration.
(a) This Option shall expire (and shall cease to be outstanding) on the Final Exercise Date unless terminated prior to the Final Exercise Date pursuant to the terms of this Section 5 or as otherwise provided in this Agreement. In addition, this Option shall expire: One year after the date of your death or Disability; provided, however, that in such event this Option may only be exercised to the extent it is vested at the time of your death or disability.
(b) On the Final Exercise Date, if your employment with the Company ends due to your retirement in accordance with the Companys then-current retirement policy; provided, however, that in such event this Option may only be exercised to the extent it is vested at the time of your retirement.
(c) 120 days after the Termination Date if you are then still living and if such termination is for a reason other than for death, disability or retirement, for Cause or as a result of a Material Breach;
(i) provided, however, that in such event this Option may only be exercised to the extent it is vested at the time of the Termination Date, unless this Option would vest in full or in part pursuant to the terms of the Change in Control Severance Agreement due to your termination and your delivery of an Irrevocable Release (as defined in the Change in Control Severance Agreement), in which case such portion of the Option will remain exercisable pursuant to the terms of the Change in Control Severance Agreement;
(ii) provided, further, however, that in the event that you die during the 120 day period immediately after the Termination Date (and you have not been terminated for Cause or as a result of a Material Breach), then this Option shall terminate one year after the date of your death; or
(d) On the Termination Date, if such termination was for Cause or as a result of a Material Breach.
6. Transfer and Assignment. The Option and the rights and privileges conferred therewith shall not be sold, transferred, encumbered, hypothecated or otherwise conveyed by you otherwise than by will or by the laws of descent and distribution. This Option is not and will not be liable for or subject to, in whole or in part, any debts, contracts, liability or torts by you nor shall it be subject to garnishment, attachment, execution, levy or other legal or equitable process. This Option shall be exercisable during your lifetime only by you. To the extent exercisable after your death, this Option shall be exercised only by the person or persons entitled to receive this Option under your will, duly probated, or if you shall fail to make a testamentary disposition of this Option, by the executor or administrator of your estate.
7. Conditions. If at any time the Board shall determine, based on opinion of counsel to the Company, that listing, registration or qualification of the shares covered by this Option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of the exercise of this Option, this Option may not be exercised in whole or in part unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to counsel for the Company. The Company may require you, as a condition of exercising or receiving the Option, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that you are acquiring the Stock subject to the Option for your own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate to comply with federal and applicable state securities laws.
8. Rights as a Stockholder. You shall not have any rights as a stockholder with respect to any shares of Stock covered by the Option until you or your nominee become the holder of record of such Stock, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date preceding the date you or your nominee become the holder of record of such Stock.
9. Change in Capital Structure. In the event that the Board determines that any dividend or other distribution (whether in the form of cash, Stock, other securities or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, or other similar corporate transaction or event including a Change in Control, in the Boards sole discretion, affects the Stock such that an adjustment is determined by the Board to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Board shall direct the Committee to, in such manner as it determines is equitable, adjust any or all of:
(a) The number and kind of shares of Stock (or other securities or property) subject to the Option; and
(b) The Exercise Price (except if such adjustment would result in a repricing of the Option or would cause the Option to become subject to Section 409A of the Code).
This Agreement shall not in any way affect or restrict the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Stock or the rights thereof or which are convertible into or exchangeable for Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
10. Extraordinary Events. In the event of any transaction or event described in Section 9 or any unusual or nonrecurring transaction or event affecting the Company, any affiliate of the Company or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations or accounting principles occurs, including any Change in Control, the Board, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to direct the Committee to take any one or more of the following actions whenever the Board determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:
(a) To provide for the cancellation of the Option in exchange for an amount of cash equal to the amount that could have been attained upon the exercise of this Option or realization of your rights had the Option been exercised in full for all shares of Stock covered thereby (including an amount equal to zero if no cash could have been so attained or realized);
(b) To provide that the Option cannot be exercised or become payable after such event; provided, however, that no action shall be taken pursuant to this clause (b) without your consent, which consent shall not be unreasonably withheld;
(c) To provide that the Option shall be vested, exercisable and nonforfeitable as to all shares covered thereby and that all restrictions with respect thereto shall lapse, notwithstanding anything herein to the contrary;
(d) To provide that the Option be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; and
(e) To make such other adjustments in the number and type of shares of Stock (or other securities or property) subject to the Option (including the Exercise Price); provided that no such adjustment shall be affected if it would result in a repricing of the Option or would cause the Option to become subject to Section 409A of the Code.
11. Authority of the Committee. This Agreement and the Option granted hereunder shall be administered by the Committee except to the extent the Board elects to administer this Agreement and the Option granted hereunder, in which case references herein to the Committee shall be deemed to include references to the Board. The Committee shall have the authority, in its sole and absolute discretion, to
(i) adopt, amend, and rescind administrative and interpretive rules and regulations relating to this Agreement; (ii) accelerate the time of exercisability of the Option; (iii) construe this Agreement and the Option; (iv) make determinations of the Fair Market Value of the Stock subject to this Agreement; (v) delegate its duties under this Agreement to such agents as it may appoint from time to time; (vi) terminate, modify, or amend this Agreement, provided that, no amendment or termination may decrease your rights inherent in the Option prior to such amendment without your express written permission except to the extent such amendment is necessary to comply with applicable laws and regulations and to conform the provisions of this Agreement to any change thereto; and (vii) make all other determinations, perform all other acts, and exercise all other powers and authority necessary or advisable for administering this Agreement, including the delegation of those ministerial acts and responsibilities as the Committee deems appropriate. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in this Agreement in the manner and to the extent it deems necessary or desirable to carry the Agreement into effect, and the Committee shall be the sole and final judge of that necessity or desirability. The determinations of the Committee on the matters referred to in this Section 11 shall be final and conclusive.
12. Section 16. Notwithstanding any other provisions of this Agreement, the grant of this Option shall comply with the applicable provisions of Rule 16b-3 promulgated under the Exchange Act and shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Option shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
13. Taxes. Any provision of this Agreement to the contrary notwithstanding, the Company may take such steps as it may deem necessary or desirable for the withholding of any taxes which it is required by law or regulation of any governmental authority, federal, state or local, domestic or foreign, to withhold in connection with any shares subject hereto. Subject to limitations established by the Committee and/or the Board from time to time, any withholding taxes may be paid by delivery to the Company of previously owned shares of Stock or by reducing the number of shares issuable upon exercise of this Option.
14. Notices. Any notice to be given under the terms of this Agreement or any delivery of this Option to the Company shall be deemed to have been duly given or made only if (i) delivered personally or by overnight courier, (ii) delivered by facsimile transmission with answer back confirmation, (iii) mailed (postage prepaid by certified or registered mail, return receipt requested) (effective upon actual receipt), or (iv) delivered by electronic communication to the address below. An electronic communication (Electronic Notice) shall be deemed written notice for purposes of this letter if sent with return receipt requested to the electronic mail address specified by the receiving party. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. The party
receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a non-electronic form (Non-electronic Notice) which shall be sent to the requesting party within five days after receipt of the written request for Non-electronic Notice. Either party from time to time may change its address, facsimile number, electronic mail address, or other information for the purpose of notices to that party by giving written notice specifying such change to the other party hereto.
If to the Executive: at the most recent address reflected in the payroll records of the Company
If to the Company: |
Harte Hanks, Inc. |
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9601 McAllister Freeway, Suite 610 San Antonio, Texas 78216 Attention: General Counsel Email: general.counsel@hartehanks.com |
or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.
15. Further Understandings. The granting of this Option shall impose no obligation upon you to exercise any part of it. You acknowledge and agree that the vesting of shares pursuant to the vesting schedule hereof is earned only by your continued service for the Company (or any affiliate) in the capacity of an employee, a non-employee member of the Board or a consultant (and not through the act of being hired, being granted this Option or acquiring shares hereunder). You further acknowledge and agree that this Option, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as an employee, a non-employee member of the Board or a consultant for the vesting period, for any period, or at all, and shall not interfere in any way with your right or the right of the Company or any affiliate to terminate your relationship as an employee, a non-employee member of the Board, or a consultant at any time with or without Cause. You acknowledge that this Option (a) is not granted by the Company as a matter of right, but is granted (and the amount of the award is granted) at the sole discretion of the Board or Committee, (b) is not part of your contractual compensation, and (c) does not create an enforceable right to further options in future years or in similar amounts. This discretion of the Board and Committee relates to the award of options and the amount of any award. You waive any and all acquired rights or claims in connection with past or future employment or service as a consultant or director with the Company or any affiliate.
16. Protection of Goodwill. You acknowledge that the Company is providing you with this Option in connection with and in consideration for your promises and covenants contained herein. Specifically, in consideration for the Option, which you acknowledge provides a material incentive for you to grow, develop and protect the goodwill and confidential and proprietary information of the Company, you agree that the Option (itself and in combination with any other awards made to you) constitutes
independent and sufficient consideration for all non-competition, non-solicitation and confidentiality covenants between you and the Company, and agree and acknowledge that you will fully abide by each of such covenants. You further acknowledge that your promise to fully abide by each of the protective covenants referenced above is a material inducement for the Company to provide you with the Option.
17. Successors & Assigns. Subject to the limitations on the transferability of this Option, this Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties hereto.
18. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.
19. Clawback. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), this Option shall not be deemed fully earned or vested, even if exercised, if this Option or any portion thereof is deemed incentive compensation and subject to recovery, or clawback, by the Company pursuant to the provisions of the Act and any rules or regulations promulgated thereunder or by any stock exchange on which the Companys securities are listed (the Rules). In addition, you hereby acknowledge that this Agreement may be amended as necessary and/or shall be subject to any recoupment policies adopted by the Company to comply with the requirements and/or limitations under the Act and the Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) the Company to revoke, recover and/or clawback this Option or the shares of Stock issued pursuant hereto.
20. Other Benefits. The amount of any compensation deemed to be received by you as a result of the receipt, vesting or exercise of this Option will not constitute earnings with respect to any other benefits provided to you by the Company or an affiliate, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan.
21. Furnish Information. You shall furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation. From time to time, the Board and appropriate officers of the Company shall and are authorized to take whatever action is necessary to file required documents with governmental authorities and other appropriate persons to make shares of Stock available for issuance pursuant to the exercise of the Option.
22. No Liability for Good Faith Determinations. The Company and the members of the Committee and the Board shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Option granted hereunder.
23. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Stock or other property to you, or to your legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Company may require you or your legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine.
24. No Guarantee of Interests. Neither the Committee, the Board nor the Company guarantees the Stock of the Company from loss or depreciation.
25. Company Records. Records of the Company or its affiliates regarding your period of employment, termination of employment and the reason therefor, leaves of absence, re-employment, and other matters shall be conclusive for all purposes hereunder, unless determined by the Company to be incorrect.
26. Company Action. Any action required of the Company shall be by resolution of its Board or by a person authorized to act by resolution of the Board.
27. Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.
28. Headings; Word Usage. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof. Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.
29. Fractional Shares. In no event may the Option be exercised or adjusted for any fractional shares. The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
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Exhibit 10.3
HARTE HANKS, INC.
RESTRICTED STOCK AWARD AGREEMENT
To: Karen A. Puckett |
Date of Grant: September 17, 2015 |
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Number of Shares: |
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HARTE HANKS, INC. (the Company), is pleased to grant you, as an inducement material to your entry into employment with the Company, a restricted stock award (the Restricted Stock Award) with respect to a number of shares of Stock (as defined below), subject to the terms and conditions set forth in this Restricted Stock Award Agreement (this Agreement). The grant of the Restricted Stock Award is specifically conditioned upon (i) the approval of this grant to you by the Board (as defined below), and (ii) the execution by you of this Agreement, agreeing to all of the terms and conditions set forth herein. The Date of Grant and the number of shares of Stock subject to this Restricted Stock Award are stated above. The Restricted Stock Award is not governed by the Harte-Hanks, Inc. 2013 Omnibus Incentive Plan, 2005 Omnibus Incentive Plan or by any other equity compensation plan of the Company (or of any of its affiliates). Instead, this Restricted Stock Award is made outside of any equity compensation plan of the Company (or any of its affiliates), as an inducement contemplated by Section 303A.08 of the New York Stock Exchange Listed Company Manual. No payment is required for the Stock that you receive pursuant to this Restricted Stock Award.
This Agreement sets forth the terms of the agreement between you and the Company with respect to the Restricted Stock Award. By accepting this Agreement, you agree to be bound by all of the terms hereof.
1. Definitions. Unless otherwise defined herein, as used in this Agreement, the following terms have the meanings set forth below:
(a) Board means the board of directors of the Company.
(b) Change in Control means the first day that any one or more of the following conditions shall have been satisfied:
(i) the acquisition of any outstanding voting securities by any person, after which such person (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding voting securities of the Company; provided, however, that for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company, or (D) any acquisition by any corporation pursuant to a transaction that complies with Sections (iii)(A) and (iii)(B) of this definition;
(ii) individuals who, as of the Date of Grant, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Date of Grant, whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;
(iii) consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a Business Combination), in each case unless (A) the stockholders of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries), and (B) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
(c) Change in Control Severance Agreement means that certain Change in Control Severance Agreement by and between the Company and you, effective September 14, 2015, as may be amended from time to time with your consent.
(d) Code means the Internal Revenue Code of 1986, as amended.
(e) Committee means the Compensation Committee of the Board.
(f) Date of Grant means the date designated as such on the first page of this Agreement.
(g) Employment Agreement means that certain Employment Agreement by and between the Company and you, effective September 14, 2015, as may be amended from time to time with your consent.
(h) Exchange Act means the Securities Exchange Act of 1934, as amended.
(i) Fair Market Value means with respect to Stock, as of any date, the closing price of a share of Stock on the New York Stock Exchange for the last trading day prior to that date. If no such prices are reported, then Fair Market Value shall mean the average of the high and low sale prices for the Stock (or if no sale prices are reported, the average of the high and low bid prices) as reported by the principal regional stock exchange, or if not so reported, as reported by Nasdaq or a quotation system of general circulation to brokers and dealers; provided, however, that with respect to same day sales, Fair Market Value shall mean the per share price actually paid for shares of Stock in connection with such sale.
(j) Severance Policy means the Companys Severance Policy as defined in the Employment Agreement.
(k) Stock means the Companys $1.00 par value per share voting common stock, or any other securities that are substituted therefor.
2. Vesting. The shares of Stock subject to this Restricted Stock Award vest and become non-forfeitable (a) in three installments of equal amount (subject to whole-share rounding), with one such installment vesting on each of the first three anniversaries of the Date of Grant; provided that you are still employed by the Company on each applicable vesting date, (b) upon your death, Disability (as such term is defined in the Employment Agreement) prior to your termination of employment, or (c) pursuant to the terms of the Change in Control Severance Agreement. Notwithstanding the forgoing, if your employment terminates without Cause (as defined in the Severance Policy) or for Good Reason (as defined in the Employment Agreement) and you satisfy the participant requirements set forth in the Severance Policy, the shares of Stock subject to this Restricted Stock Award vest and become non-forfeitable as if you terminated employment immediately following the next anniversary of the Date of Grant after the date of your termination and any shares of Stock that would have remained unvested immediately after the next anniversary of the Date of Grant shall be forfeited. Except as provided above and pursuant to the terms of the Change in Control Severance Agreement, if your employment terminates prior to the date the Stock vests all unvested Stock shall be forfeited at the time of such termination. In addition, if you fail to satisfy the applicable requirements of the Severance Policy or Change in Control Severance Agreement (including the delivery of an irrevocable release), shares which would otherwise vest upon your termination without Cause (as defined in the Severance Policy) or for Good Reason (as defined in the Employment Agreement) or pursuant to the Change in Control Severance Agreement shall be forfeited.
3. Restricted Shares. The shares of Stock you receive under this Agreement will be considered Restricted Shares until they vest. You may not sell, transfer, pledge or otherwise dispose of, make any short sale of, grant any option for the purchase of or enter into any hedging or similar transaction with the same economic effect as a sale, any Restricted Shares. The Restricted Shares are also restricted in the sense that they may be forfeited to the Company. Stock that vests in accordance with the vesting schedule set forth in Section 2 above will no longer be considered Restricted Shares.
4. Stock Certificates. Your Restricted Shares will be held for you by the Company in book entry form at its transfer agent until it vests, after which you may request transfer or issuance of a certificate. If you receive a stock certificate evidencing the grant of the Restricted Shares, the Committee may in its sole discretion require one or more of the following methods of enforcing the restrictions referred to in Section 3: (a) placing a legend on the stock certificates referring to the restrictions, (b) requiring you to keep the stock certificates, duly endorsed, in the custody of the Company while the restrictions remain in effect, or (c) requiring that the stock certificates, duly endorsed, be held in the custody of a third party while the restrictions remain in effect.
5. Privileges of a Stockholder. From and after the time the Restricted Shares are issued in your name, you will be entitled to all the rights of absolute ownership of the Restricted Shares, including the right to vote those shares and to receive dividends thereon if, as, and when declared by the Board, subject, however, to the terms, conditions and restrictions set forth in this Agreement; provided, however, that each dividend payment will be made no later than the 60th day following the date such dividend payment is made to stockholders generally.
6. Conditions. Notwithstanding any provision of this Agreement to the contrary, the issuance of Stock (including Restricted Shares) will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed. No Stock will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. The Company may require you, as a condition of receiving the Stock, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that you are acquiring the Stock subject to the Restricted Stock Award for your own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate to comply with federal and applicable state securities laws.
7. Change in Capital Structure. In the event that the Board determines that any dividend or other distribution (whether in the form of cash, Stock, other securities or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, or other similar corporate transaction or event including a Change in Control, in the Boards sole discretion, affects the Stock such that an adjustment is determined by the Board to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Board shall direct the Committee to, in such manner as it determines is equitable, adjust any or all of the number and kind of shares of Stock (or other securities or property) subject to the Restricted Stock Award; provided that no such adjustment shall be affected if it would cause the Restricted Stock Award to become subject to Section 409A of the Code. This Agreement shall not in any way affect or restrict the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Stock or the rights thereof or which are convertible into or exchangeable for Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
8. Extraordinary Events. In the event of any transaction or event described in Section 7 or any unusual or nonrecurring transaction or event affecting the Company, any affiliate of the Company or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations or accounting principles occurs, including any Change in Control, the Board, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to direct the Committee to take any one or more of the following actions whenever the Board determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:
(a) To provide for the cancellation of the Restricted Stock Award in exchange for an amount of cash equal to the amount that could have been attained upon the realization of your rights had the Restricted Stock Award been fully vested (including an amount equal to zero if no cash could have been so attained or realized);
(b) To provide that the Restricted Stock Award cannot vest after such event; provided, however, that no action shall be taken pursuant to this clause (b) without your consent, which consent shall not be unreasonably withheld;
(c) To provide that such Restricted Stock Award shall be vested and nonforfeitable as to all shares covered thereby and that all restrictions with respect thereto shall lapse, notwithstanding anything to the contrary herein;
(d) To provide that the Restricted Stock Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares; and
(e) To make such other adjustments in the number and type of shares of Stock (or other securities or property) subject to the Restricted Stock Award; provided that no such adjustment shall be affected if it would cause the Restricted Stock Award to become subject to Section 409A of the Code.
9. Authority of the Committee. This Agreement and the Restricted Stock Award granted hereunder shall be administered by the Committee except to the extent the Board elects to administer this Agreement and the Restricted Shares granted hereunder, in which case references herein to the Committee shall be deemed to include references to the Board. The Committee shall have the authority, in its sole and absolute discretion, to (i) adopt, amend, and rescind administrative and interpretive rules and regulations relating to this Agreement; (ii) accelerate the time of vesting of the Restricted Shares; (iii) construe this Agreement and the Restricted Stock Award; (iv) make determinations of the Fair Market Value of the Stock subject to this Agreement; (v) delegate its duties under this Agreement to such agents as it may appoint from time to time; (vi) terminate, modify, or amend this Agreement, provided that, no amendment or termination may decrease your rights inherent in the Restricted Stock Award prior to such amendment without your express written permission except to the extent such amendment is necessary to comply with applicable laws and regulations and to conform the provisions of this Agreement to any change thereto; and (vii) make all other determinations, perform all other acts, and exercise all other powers and authority necessary or advisable for administering this Agreement, including the delegation of those ministerial acts and responsibilities as the Committee deems appropriate. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in this Agreement in the manner and to the extent it deems necessary or desirable to carry the Agreement into effect, and the Committee shall be the sole and final judge of that necessity or desirability. The determinations of the Committee on the matters referred to in this Section 9 shall be final and conclusive.
10. Section 16. Notwithstanding any other provisions of this Agreement, the grant of this Restricted Stock Award shall comply with the applicable provisions of Rule 16b-3 promulgated under the Exchange Act and shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Restricted Stock Award shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
11. Withholding Taxes. No Stock will be released to you unless you have made acceptable arrangements to pay any withholding taxes that may be due as a result of receipt of this Restricted Stock Award or the vesting of the Stock you receive under this Restricted Stock Award. These arrangements may include withholding of Stock that otherwise would be released to you when the Restricted Shares vest. The Fair Market Value of the Stock withheld (determined as of the date when the taxes otherwise would have been withheld in cash) will be applied as a credit against the taxes. Any provision of this Agreement to the contrary notwithstanding, the Company may take such steps as it may deem necessary or desirable for the withholding of any taxes which it is required by law or regulation of any governmental authority, federal, state or local, domestic or foreign, to withhold in connection with any shares subject hereto.
12. Notices. Any notice to be given under the terms of this Agreement shall be deemed to have been duly given or made only if (i) delivered personally or by overnight courier, (ii) delivered by facsimile transmission with answer back confirmation, (iii) mailed (postage prepaid by certified or registered mail, return receipt requested) (effective upon actual receipt), or (iv) delivered by electronic communication to the address below. An electronic communication (Electronic Notice) shall be deemed written notice for purposes of this letter if sent with return receipt requested to the electronic mail address specified by the receiving party. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. The party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a non-electronic form (Non-electronic Notice) which shall be sent to the requesting party within five days after receipt of the written request for Non-electronic Notice. Either party from time to time may change its address, facsimile number, electronic mail address, or other information for the purpose of notices to that party by giving written notice specifying such change to the other party hereto.
If to the Executive: at the most recent address reflected in the payroll records of the Company
If to the Company: |
Harte Hanks, Inc. |
|
9601 McAllister Freeway, Suite 610 |
or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.
13. No Guarantee of Continued Service. You acknowledge and agree that the vesting of Stock pursuant to the vesting schedule set forth in this Agreement is earned only by continuing as an employee at the will of the Company (and not through the act of being hired or being granted this Restricted Stock Award). You further acknowledge and agree that this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued employment for the vesting period, for any period, or at all, and shall not interfere in any way with your right or the right of the Company or any affiliate to dismiss you from employment, free from any liability, or any claim under this Agreement, at any time with or without cause.
14. Protection of Goodwill. You acknowledge that the Company is providing you with this Restricted Stock Award in connection with and in consideration for your promises and covenants contained herein. Specifically, in consideration for the Restricted Stock Award, which you acknowledge provides a material incentive for you to grow, develop and protect the goodwill and confidential and proprietary information of the Company, you agree that the Restricted Stock Award (itself and in combination with any other awards made to you) constitutes independent and sufficient consideration for all non-competition, non-solicitation and confidentiality covenants between you and the Company, and agree and acknowledge that you will fully abide by each of such covenants. You further acknowledge that your promise to fully abide by each of the protective covenants referenced above is a material inducement for the Company to provide you with the Restricted Stock Award.
15. Successors & Assigns. Subject to the limitations on the transferability of this Restricted Stock Award and the Restricted Shares, this Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties hereto.
16. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.
17. Clawback. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), the Stock subject to this Agreement shall not be deemed fully earned or vested, even if distributed to you, if this Restricted Stock Award or any portion thereof is deemed incentive compensation and subject to recovery, or clawback, by the Company pursuant to the provisions of the Act and any rules or regulations promulgated thereunder or by any stock exchange on which the Companys securities are listed (the Rules). In addition, you hereby acknowledge that this Agreement may be amended as necessary and/or shall be subject to any recoupment policies adopted by the Company to comply with the requirements and/or limitations under the Act and the Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) the Company to revoke, recover and/or clawback the shares of Stock issued pursuant hereto.
18. Other Benefits. The amount of any compensation deemed to be received by you as a result of the receipt or vesting of this Restricted Stock Award will not constitute earnings with respect to any other benefits provided to you by the Company or an affiliate, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan.
19. Furnish Information. You shall furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or
regulation. From time to time, the Board and appropriate officers of the Company shall and are authorized to take whatever action is necessary to file required documents with governmental authorities and other appropriate persons to make shares of Stock available for issuance pursuant to this Agreement.
20. No Liability for Good Faith Determinations. The Company and the members of the Committee and the Board shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Restricted Shares granted hereunder.
21. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Stock or other property to you, or to your legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Company may require you or your legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine.
22. No Guarantee of Interests. Neither the Committee, the Board nor the Company guarantees the Stock of the Company from loss or depreciation.
23. Company Records. Records of the Company or its affiliates regarding your period of employment, termination of employment and the reason therefor, leaves of absence, re-employment, and other matters shall be conclusive for all purposes hereunder, unless determined by the Company to be incorrect.
24. Company Action. Any action required of the Company shall be by resolution of its Board or by a person authorized to act by resolution of the Board.
25. Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.
26. Headings; Word Usage. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof. Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.
27. Fractional Shares. In no event may the Restricted Shares be adjusted for any fractional shares. The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
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Exhibit 10.4
HARTE HANKS, INC.
PERFORMANCE UNIT AWARD AGREEMENT
To: Karen A. Puckett |
Date of Grant: September , 2015 |
Number of Shares:
HARTE HANKS, INC. (the Company), is pleased to grant you, as an inducement material to your entry into employment with the Company, performance units (the Performance Units) with respect to a number of shares of Stock (as defined below), subject to the terms and conditions set forth in this Performance Unit Award Agreement (this Agreement). The grant of the Performance Units is specifically conditioned upon (i) the approval of this grant to you by the Board (as defined below), and (ii) the execution by you of this Agreement, agreeing to all of the terms and conditions set forth herein. The Date of Grant and the maximum number of shares of Stock that may be earned with respect to the Performance Units are stated above. The Performance Units are not governed by the Harte-Hanks, Inc. 2013 Omnibus Incentive Plan, 2005 Omnibus Incentive Plan or by any other equity compensation plan of the Company (or of any of its affiliates). Instead, the Performance Units are granted outside of any equity compensation plan of the Company (or any of its affiliates), as an inducement contemplated by Section 303A.08 of the New York Stock Exchange Listed Company Manual. No payment is required for the Performance Units that you receive pursuant to this Agreement.
This Agreement sets forth the terms of the agreement between you and the Company with respect to the Performance Units. By accepting this Agreement, you agree to be bound by all of the terms hereof.
1. Definitions. Unless otherwise defined herein, as used in this Agreement, the following terms have the meanings set forth below:
(a) Board means the board of directors of the Company.
(b) Change in Control means the first day that any one or more of the following conditions shall have been satisfied:
(i) the acquisition of any outstanding voting securities by any person, after which such person (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding voting securities of the Company; provided, however, that for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company, or (D) any acquisition by any corporation pursuant to a transaction that complies with Sections (iii)(A) and (iii)(B) of this definition;
(ii) individuals who, as of the Date of Grant, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Date of Grant, whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;
(iii) consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a Business Combination), in each case unless (A) the stockholders of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries), and (B) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
(c) Change in Control Severance Agreement means that certain Change in Control Severance Agreement by and between the Company and you, effective September , 2015, as may be amended from time to time with your consent.
(d) Code means the Internal Revenue Code of 1986, as amended.
(e) Committee means the Compensation Committee of the Board.
(f) Date of Grant means the date designated as such on the first page of this Agreement.
(a) Employment Agreement means that certain Employment Agreement by and between the Company and you, effective September 14, 2015, as may be amended from time to time with your consent.
(g) Exchange Act means the Securities Exchange Act of 1934, as amended.
(h) Fair Market Value means with respect to Stock, as of any date, the closing price of a share of Stock on the New York Stock Exchange for the last trading day prior to that date. If no such prices are reported, then Fair Market Value shall mean the average of the high and low sale prices for the Stock (or if no sale prices are reported, the average of the high and low bid prices) as reported by the principal regional stock exchange, or if not so reported, as reported by Nasdaq or a quotation system of general circulation to brokers and dealers; provided, however, that with respect to same day sales, Fair Market Value shall mean the per share price actually paid for shares of Stock in connection with such sale.
(i) Stock means the Companys $1.00 par value per share voting common stock, or any other securities that are substituted therefor.
2. Vesting. The Performance Units subject to this Agreement will vest and become payable (a) on March 15, 2019, if you are still employed by the Company on such date, but only to the extent the Performance Criterion set forth in Section 3 below is achieved, or (b) to the extent sooner, pursuant to the terms of the Change in Control Severance Agreement. If your employment terminates prior to the vesting of the Performance Units (including without limitation a termination by the Company with or without cause, or termination by reason of death or disability (as such term is defined in the Employment Agreement or otherwise defined), your retirement, or a voluntary termination by you) all Performance Units shall be forfeited at the time of such termination, except to the extent, if applicable, that Performance Units subject to this Agreement vest pursuant to the terms of the Change in Control Severance Agreement if you deliver the required Irrevocable Release (as defined in the Change in Control Severance Agreement). To the extent you fail to timely deliver an Irrevocable Release required under the Change in Control Severance Agreement, such Performance Units that otherwise would vest pursuant to such agreement following your termination shall be forfeited.
3. Performance Criterion. The Performance Criterion shall be the Companys Total Shareholder Return (TSR) versus the TSR for the S&P Small Cap 600 Index for the performance period which begins on the Date of Grant and ends on December 31, 2018 (Benchmark). Performance at the 50% percentile is the Target level at which half of the number of Performance Units shall vest and become payable. The number of the Performance Units that will vest and become payable pursuant to this Section 3 shall be determined by applying the Percentage of Units Vesting amount in the column below, with linear interpolation used to determine payout percentages between levels; provided that (i) no Performance Units shall vest if performance is below 25th percentile, (ii) no more than 100% of the Performance Units can vest and (iii) in the event Company TSR is negative, the percentage of Performance Units vesting shall in no event exceed 50%.
Performance |
|
Percentage of Target |
|
Percentage of |
|
Below 25th percentile of Benchmark |
|
0 |
% |
0 |
% |
At 25th percentile of Benchmark |
|
50 |
% |
25 |
% |
At 50th percentile of Benchmark |
|
100 |
% |
50 |
% |
At 75th percentile of Benchmark or above |
|
200 |
% |
100 |
% |
Company TSR shall be determined by dividing (x) Company Average Stock Price at the end of the performance period (December 31, 2018) plus dividends paid minus Average Stock Price at the beginning of the performance period (the Date of Grant) by (y) Average Stock Price at the beginning of the performance period (the Date of Grant), with dividends treated as reinvested. For this purpose, Average Stock Price shall be the average of the reported closing prices of Company common stock for the 30 trading day period (i) subsequent to the beginning of the performance period (the Date of Grant), or (ii) immediately prior to (and including) December 31, 2018, as applicable. Benchmark TSR shall be determined using the published methodology for the Benchmark TSRs calculation as of the end of performance period.
4. Settlement. Upon vesting, in settlement of the vested Performance Units (if any) you will receive (a) one share of Stock for each vested Performance Unit, or (b) if the Committee so elects (in its sole discretion), cash in an amount equal to the Fair Market Value of the Stock multiplied by the number of Performance Units vested. Settlement shall occur no later than two and one-half months following the vesting date and will be subject to withholding for taxes and other applicable payroll adjustments. The Committees determination of the amount payable shall be binding upon you and your beneficiary or estate. The value received shall not bear any interest owing to the passage of time.
5. Rights as a Stockholder. The Performance Units granted pursuant to this Agreement do not and shall not entitle you to any rights of a holder of Stock, including the right to vote or receive dividends or any dividend equivalents, prior to the date, if any, that shares of Stock are issued to you in settlement of the Performance Units pursuant to Section 4.
6. Nontransferability of Agreement. This Agreement and all rights under this Agreement shall not be transferable by you during your life other than by will or pursuant to applicable laws of descent and distribution. Any of your rights and privileges in connection herewith shall not be transferred, assigned, pledged or hypothecated by
you or by any other person or persons, in any way, whether by operation of law, or otherwise, and shall not be subject to execution, attachment, garnishment or similar process. In the event of any such occurrence, this Agreement shall automatically be terminated and shall thereafter be null and void.
7. Conditions. Notwithstanding any provision of this Agreement to the contrary, the issuance of Stock will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed. No Stock will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. The Company may require you, as a condition of receiving the Stock, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that you are acquiring the Stock subject to this Agreement for your own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate to comply with federal and applicable state securities laws.
8. Change in Capital Structure. In the event that the Board determines that any dividend or other distribution (whether in the form of cash, Stock, other securities or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, or other similar corporate transaction or event including a Change in Control, in the Boards sole discretion, affects the Stock such that an adjustment is determined by the Board to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Board shall direct the Committee to, in such manner as it determines is equitable, adjust any or all of the number and kind of shares of Stock (or other securities or property) subject to the Performance Units; provided that no such adjustment shall be affected if it would cause the Performance Units to become subject to, or otherwise fail to comply with, Section 409A of the Code. This Agreement shall not in any way affect or restrict the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Stock or the rights thereof or which are convertible into or exchangeable for Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
9. Extraordinary Events. In the event of any transaction or event described in Section 8 or any unusual or nonrecurring transaction or event affecting the Company, any affiliate of the Company or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations or accounting principles occurs, including any Change in Control, the Board, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to direct the Committee to take any one or more of the following actions whenever the Board determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:
(a) To provide for the cancellation of the Performance Units in exchange for an amount of cash equal to the amount that could have been attained upon the realization of your rights had the Performance Units been currently payable or fully vested (including an amount equal to zero if no cash could have been so attained or realized);
(b) To provide that the Performance Units cannot vest or become payable after such event; provided, however, that no action shall be taken pursuant to this clause (b) without your consent, which consent shall not be unreasonably withheld;
(c) To provide that such Performance Units shall be vested and nonforfeitable as to all shares covered thereby and that all restrictions with respect thereto shall lapse, notwithstanding anything to the contrary herein;
(d) To provide that the Performance Units be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares; and
(e) To make such other adjustments in the number and type of shares of Stock (or other securities or property) subject to the Performance Units and the criteria included herein; provided that no such adjustment shall be affected if it would cause the Performance Units to become subject to, or to otherwise fail to comply with, Section 409A of the Code.
10. Authority of the Committee. This Agreement and the Performance Units granted hereunder shall be administered by the Committee except to the extent the Board elects to administer this Agreement and the Performance Units granted hereunder, in which case references herein to the Committee shall be deemed to include references to the Board. The Committee shall have the authority, in its sole and absolute discretion, to (i) adopt, amend, and rescind administrative and interpretive rules and regulations relating to this Agreement; (ii) accelerate the time of vesting of the Performance Units; (iii) construe this Agreement and the Performance Units; (iv) make determinations of the Fair Market Value of the Stock subject to this Agreement; (v) delegate its duties under this Agreement to such agents as it may appoint from time to time; (vi) terminate, modify, or amend this Agreement, provided that, no amendment or
termination may decrease your rights inherent in the Performance Units prior to such amendment without your express written permission except to the extent such amendment is necessary to comply with applicable laws and regulations and to conform the provisions of this Agreement to any change thereto; and (vii) make all other determinations, perform all other acts, and exercise all other powers and authority necessary or advisable for administering this Agreement, including the delegation of those ministerial acts and responsibilities as the Committee deems appropriate. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in this Agreement in the manner and to the extent it deems necessary or desirable to carry the Agreement into effect, and the Committee shall be the sole and final judge of that necessity or desirability. The determinations of the Committee on the matters referred to in this Section 10 shall be final and conclusive.
11. Section 16. Notwithstanding any other provisions of this Agreement, the grant of the Performance Units shall comply with the applicable provisions of Rule 16b-3 promulgated under the Exchange Act and shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Performance Units shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
12. Withholding Taxes. No Stock or cash will be released to you unless you have made acceptable arrangements to pay any withholding taxes that may be due as a result of receipt, vesting or settlement of the Performance Units pursuant to this Agreement. These arrangements may include withholding of Stock that otherwise would be released to you when the Performance Units vest and are paid to you or surrendering Stock that you already own. The Fair Market Value of the Stock withheld or that you surrender (determined as of the date when the taxes otherwise would have been withheld in cash) will be applied as a credit against the taxes. Any provision of this Agreement to the contrary notwithstanding, the Company may take such steps as it may deem necessary or desirable for the withholding of any taxes which it is required by law or regulation of any governmental authority, federal, state or local, domestic or foreign, to withhold in connection with any shares subject hereto.
13. Notices. Any notice to be given under the terms of this Agreement shall be deemed to have been duly given or made only if (i) delivered personally or by overnight courier, (ii) delivered by facsimile transmission with answer back confirmation, (iii) mailed (postage prepaid by certified or registered mail, return receipt requested) (effective upon actual receipt), or (iv) delivered by electronic communication to the address below. An electronic communication (Electronic Notice) shall be deemed written notice for purposes of this letter if sent with return receipt requested to the electronic mail address specified by the receiving party. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. The party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a non-electronic form (Non-electronic Notice) which shall be sent to the requesting party within five days after
receipt of the written request for Non-electronic Notice. Either party from time to time may change its address, facsimile number, electronic mail address, or other information for the purpose of notices to that party by giving written notice specifying such change to the other party hereto.
If to the Executive: at the most recent address reflected in the payroll records of the Company
If to the Company: |
Harte Hanks, Inc. |
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9601 McAllister Freeway, Suite 610 |
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San Antonio, Texas 78216 |
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Attention: General Counsel |
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Email: general.counsel@hartehanks.com |
or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.
14. No Guarantee of Continued Service. You acknowledge and agree that the vesting of Performance Units pursuant to the vesting schedule set forth in this Agreement is earned only by continuing as an employee at the will of the Company (and not through the act of being hired or being granted the Performance Units). You further acknowledge and agree that this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued employment for the vesting period, for any period, or at all, and shall not interfere in any way with your right or the right of the Company or any affiliate to dismiss you from employment, free from any liability, or any claim under this Agreement, at any time with or without cause.
15. Protection of Goodwill. You acknowledge that the Company is providing you with the Performance Units in connection with and in consideration for your promises and covenants contained herein. Specifically, in consideration for the Performance Units, which you acknowledge provide a material incentive for you to grow, develop and protect the goodwill and confidential and proprietary information of the Company, you agree that the Performance Units (themselves and in combination with any other awards made to you) constitute independent and sufficient consideration for all non-competition, non-solicitation and confidentiality covenants between you and the Company, and agree and acknowledge that you will fully abide by each of such covenants. You further acknowledge that your promise to fully abide by each of the protective covenants referenced above is a material inducement for the Company to provide you with the Performance Units.
16. Successors & Assigns. Subject to the limitations on the transferability of this Agreement and the Performance Units, this Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties hereto.
17. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.
18. Clawback. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), the Performance Units subject to this Agreement shall not be deemed fully earned or vested, even if settled, if the Performance Units or any portion thereof are deemed incentive compensation and subject to recovery, or clawback, by the Company pursuant to the provisions of the Act and any rules or regulations promulgated thereunder or by any stock exchange on which the Companys securities are listed (the Rules). In addition, you hereby acknowledge that this Agreement may be amended as necessary and/or shall be subject to any recoupment policies adopted by the Company to comply with the requirements and/or limitations under the Act and the Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) the Company to revoke, recover and/or clawback the Performance Units or the shares of Stock or cash issued in settlement thereof.
19. Other Benefits. The amount of any compensation deemed to be received by you as a result of the receipt, vesting or settlement of the Performance Units will not constitute earnings with respect to any other benefits provided to you by the Company or an affiliate, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan.
20. Furnish Information. You shall furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation. From time to time, the Board and appropriate officers of the Company shall and are authorized to take whatever action is necessary to file required documents with governmental authorities and other appropriate persons to make shares of Stock available for issuance pursuant to this Agreement.
21. No Liability for Good Faith Determinations. The Company and the members of the Committee and the Board shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Performance Units granted hereunder.
22. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Stock or other property to you, or to your legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Company may require you or your legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine.
23. No Guarantee of Interests. Neither the Committee, the Board nor the Company guarantees the Stock of the Company from loss or depreciation.
24. Company Records. Records of the Company or its affiliates regarding your period of employment, termination of employment and the reason therefor, leaves of absence, re-employment, and other matters shall be conclusive for all purposes hereunder, unless determined by the Company to be incorrect.
25. Company Action. Any action required of the Company shall be by resolution of its Board or by a person authorized to act by resolution of the Board.
26. Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.
27. Headings; Word Usage. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof. Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.
28. Fractional Shares. In no event may the Performance Units be settled or adjusted for any fractional shares. The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
Exhibit 99.1
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NEWS RELEASE
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Media Contact:
ICR for Harte Hanks
Phil Denning
646-277-1258
Phil.Denning@icrinc.com
Investor Contact:
ICR for Harte Hanks
Staci Strauss Mortenson
203-682-8273
Staci.Mortenson@icrinc.com
HARTE HANKS ANNOUNCES NEW PRESIDENT AND CHIEF EXECUTIVE OFFICER
SAN ANTONIO September 14, 2015 Harte Hanks (NYSE: HHS), a leader in developing customer relationships, experiences and defining interaction-led marketing, today announced the appointment of Karen Puckett as its President and Chief Executive Officer, effective immediately.
Ms. Puckett, 55, a director of Harte Hanks since 2009, will remain a director but will no longer serve on the Compensation Committee. Ms. Puckett succeeds interim President and CEO Doug Shepard, who will continue in his role as Harte Hanks Chief Financial Officer.
Karen has a proven track record of successfully growing an enterprise both organically and through acquisitions, and in navigating a business through shifts in industry dynamics. We are delighted to appoint her as the leader of Harte Hanks, said Chris Harte, Chairman of the Board. The Board unanimously agrees Karens extensive business building experience and knowledge of the tech sector will help us build an integrated, interactive and digital approach over the long-term that will best position Harte Hanks for sustained profitable growth and further our efforts toward becoming a leader in smarter customer interactions.
On behalf of the board, I want to thank Doug for his steady hand in guiding Harte Hanks as interim CEO, Mr. Harte added. Doug has played an invaluable leadership role in Harte Hanks throughout his over seven year tenure with us, and we look forward to his continued positive impact on our business moving forward.
Ms. Puckett brings significant experience in the telecom, cloud and managed services industries in both consumer and business segments, stemming from her 15-year tenure at CenturyLink, Inc. (NYSE: CTL), where she served as the Chief Operating Officer from 2000 2014, and as President Global Markets from then until leaving the company in August to pursue new leadership opportunities.
During her time at CenturyLink, she was instrumental in leading its transformation from a local telephone company to an industry leader in advanced communications services and driving revenue growth from $1.5 billion to over $18 billion. Furthermore, she is an experienced business integrator, having overseen 15 acquisitions during her time at CenturyLink. In addition to serving on the board of Harte Hanks, Ms. Puckett also sits on the board of Entergy Corporation, a Fortune 500 electric utilities company.
I am excited for the opportunity to lead Harte Hanks and look forward to working with my colleagues to further advance our capabilities and the strategic plan we began implementing last year, said Ms. Puckett. While we have a solid foundation in place, it is clear that we still have a lot of work to do to achieve our goal of returning the business to profitable revenue growth and becoming a leader in smarter customer interactions. With the industry moving towards digital approaches supported by data and analytics, I believe this presents a tremendous growth opportunity for Harte Hanks. By building out and strengthening our data analytics and interactive capabilities, we can deliver more impactful market-leading products that better connect our clients with their customers, which will ultimately benefit our employees and stockholders as well over the long-term.
About Harte Hanks
Harte Hanks partners with clients to deliver relevant, connected and quality customer interactions. Our approach starts with discovery and learning, which leads to customer journey mapping, creative and content development, analytics and data management, and ends with execution and support in a variety of digital and traditional channels. We do something powerful: we produce engaging and memorable customer interactions to drive business results for our clients, which is why Harte Hanks is famous for developing better customer relationships, experiences and defining interaction-led marketing. For more information, visit the Harte Hanks website at www.hartehanks.com, call (800) 456-9748, email pr@hartehanks.com or follow us on Twitter @hartehanks or Facebook at https://www.facebook.com/HarteHanks.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about the companys leadership transition, services and clients. A number of risks and uncertainties could cause actual results to differ materially from currently anticipated results. Additional important factors and information regarding Harte Hanks that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in our Annual Report on Form 10-K, as filed with the SEC and available in the Investors section of our website under the heading Financials & Filings. We specifically disclaim any obligation to update these forward-looking statements in the future even if circumstances change and, therefore, you should not rely on these forward-looking statements as representing our views after today.
As used herein, Harte Hanks refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks logo and name are trademarks owned by Harte Hanks. All other brand names, product names, or trademarks belong to their respective owners.
Exhibit 99.2
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|
NEWS RELEASE |
Media Contact:
Doug Shepard
Harte Hanks
Executive Vice President & CFO
(210) 829-9120
doug.shepard@hartehanks.com
HARTE HANKS, INC. DISCLOSURE PURSUANT TO NYSE RULE 303A.08
SAN ANTONIO, TX September 14, 2015 Harte Hanks (NYSE: HHS) today announced that, pursuant to New York Stock Exchange Listing Rule 303A.08, it approved a grant of employment inducement awards to Ms. Karen A. Puckett in connection with her previously announced appointment as its new President and Chief Executive Officer. Harte Hanks independent directors approved the employment inducement awards as a material inducement to Ms. Puckett to accept her offer of employment, in reliance on the employment inducement award exemption to New York Stock Exchange Listing Rule 303A.08 that requires shareholder approval of equity-based compensation plans.
On September 17, 2015 (the Grant Date), Ms. Puckett will be granted inducement awards (the Inducement Awards) consisting of (i) a non-qualified stock option award for the number of shares determined by dividing $575,000 by the per share Black-Scholes value of a non-qualified stock option as of the Grant Date, and with an exercise price equal to the closing market price per share of Harte Hanks common stock on the Grant Date, which option shall vest in four equal installments on the first four anniversaries of the Grant Date and expire on the tenth anniversary of the Grant Date; (ii) an award for the number of shares of restricted Harte Hanks common stock determined by dividing $805,000 by the closing market price per share of Harte Hanks common stock on the Grant Date, which shares of restricted stock shall vest in three
equal installments on the first three anniversaries of the Grant Date and (iii) a performance unit award for a maximum number of units determined by dividing $920,000 by the closing market price per share of Harte Hanks common stock on the Grant Date, discounted by the net present value of expected dividends during the term of the award, which award shall vest on March 15, 2019 to the extent that Harte Hanks meets certain performance criteria based on relative total shareholder return. The Inducement Awards are subject to vesting acceleration upon certain termination of employment events and certain transactions involving the Company.
About Harte Hanks
Harte Hanks partners with clients to deliver relevant, connected and quality customer interactions. Our approach starts with discovery and learning, which leads to customer journey mapping, creative and content development, analytics and data management, and ends with execution and support in a variety of digital and traditional channels. We do something powerful: we produce engaging and memorable customer interactions to drive business results for our clients, which is why Harte Hanks is famous for developing better customer relationships, experiences and defining interaction-led marketing. For more information, visit the Harte Hanks website at www.hartehanks.com, call (800) 456-9748, email pr@hartehanks.com or follow us on Twitter @hartehanks or Facebook at https://www.facebook.com/HarteHanks.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about the Companys leadership transition. A number of risks and uncertainties could cause actual results to differ materially from currently anticipated results. Additional important factors and information regarding Harte Hanks that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in our Annual Report on Form 10-K, as filed with the SEC and available in the Investors section of our website under the heading Financials & Filings. We specifically disclaim any obligation to update these forward-looking statements in the future even if circumstances change and, therefore, you should not rely on these forward-looking statements as representing our views after today.
As used herein, Harte Hanks refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks logo and name are trademarks owned by Harte Hanks.
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