SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
November 19, 2019 (November 18, 2019)
Date of Report (Date of Earliest Event Reported)
Harte Hanks, Inc.
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction
(Commission File Number)
(I.R.S. Employer Identification Number)
2800 Wells Branch Parkway
Austin, Texas 78728
(Address of principal executive offices and Registrant’s 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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
[ ] Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
New York Stock Exchange (“NYSE”)
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 18, 2019, Harte Hanks, Inc. (the “Company”) announced changes to the Company’s executive leadership team that the Company’s board of directors (the “Board”) believes will position the Company for future growth and success, as well as changes to the Board’s leadership structure.
Appointment of Andrew Benett
On November 18, 2019, the Company announced the appointment of Andrew Benett, age 48, as the Executive Chairman and Chief Executive Officer of the Company, effective as of such date. In connection with such appointment, Andrew Harrison stepped down as President of the Company. Mr. Harrison will remain with the Company in an advisory role.
Mr. Benett has over 20 years of experience in effecting business transformation within marketing services, consulting and corporate organizations. Prior to his appointment, Mr. Benett served as Global Chief Commercial Officer of Bloomberg Media from June of 2015 to September 2019, where his responsibilities included advertising sales, marketing services, events, consulting, integrated franchises, and innovation. Previously, Mr. Benett spent 13 years working for Havas Creative Group, a leading marketing communications network. While working for Havas Creative group, Mr. Benett served as Global Chief Strategy Officer of Euro RSCG Worldwide from 2004 to 2010, until he was promoted to Global Chief Executive Officer of Arnold Worldwide in 2010, and to global CEO of Havas Creative Group in 2013. Prior to joining Euro RSCG Worldwide, Mr. Benett was EVP, Executive Director, Strategy and Innovation, at FutureBrand. He began his advertising career at McCann-Erickson in strategic planning. Mr. Benett sits on the Board of Directors of Viad Corp (NYSE: VVI) and is a Henry Crown Fellow at the Aspen Institute. Mr. Benett received his B.F.A. in art history with a minor in psychology from Georgetown University.
In connection with Mr. Benett’s appointment, on November 11, 2019, the Company entered into a Letter Agreement with Mr. Benett setting forth the terms and conditions of his employment (the “Letter Agreement”). Pursuant to the Letter Agreement, Mr. Benett will receive a base salary of $380,000 per year, and he will have an opportunity to earn an annual bonus with a target amount equal to 100% of his annual base salary. As contemplated by the Letter Agreement, the Board granted to Mr. Benett 150,000 restricted stock units that vest ratably on each of the first three anniversaries of the award’s date of grant, subject to Mr. Benett’s continuous service to the Company. The Letter Agreement also provides for Mr. Benett to receive another award of 150,000 restricted stock units that vest over three years within the first 15 days of January 2020, subject to his continuous service on the date of grant.
Mr. Benett is entitled to severance payments and benefits upon certain qualifying terminations of his employment with the Company. Upon a termination of his employment by the Company without Cause or resignation by Mr. Benett for Good Reason (each as defined in the Letter Agreement), he is entitled to receive 18 months of continued base salary and 12 months of continued health benefit coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).
As a condition to receiving any of the severance payments and benefits provided in the Letter Agreement, Mr. Benett (or his legal representative, as applicable) must execute and not revoke a customary severance and release agreement, including a waiver of all claims. As required by the Letter Agreement, Mr. Benett also entered into a customary confidentiality/non-disclosure agreement and a non-solicitation & non-competition agreement.
The foregoing description of the Letter Agreement is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed as Exhibit 10.1 to this report and incorporated herein by reference.
Appointment of Brian Linscott
On November 15, 2019, the Board announced that it approved the appointment of Brian Linscott, age 46, as Chief Operating Officer of the Company effective January 6, 2020.
Mr. Linscott has nearly two decades of experience advising clients and C-level executives on strategy, operational improvements to drive topline growth, acquisitions, corporate development and capital structure across a variety of industries including media, manufacturing, and transportation. From 2015 to 2019, he served as Partner at BR Advisors where he led the operational improvement of radio and printing companies, developed new partnerships, and facilitated asset transactions. He also served as Operating Partner at Traverse Pointe Partners since 2014, where he advised a private equity fund on financial and operational assessment of equity investments and developed a post-acquisition, operational strategies to create shareholder value. From 2013 to 2015, Brian served as Managing Director at Huron Business Advisory where he managed client relationships, oversaw consulting teams, and developed new business opportunities. From 2009 to 2012, Brian served as Chief Financial Officer / Senior Vice President at Sun Times Media, LLC where he created and executed a restructuring plan that led to a $60 million EBITDA improvement in two years and managed working capital to enhance cash flow. Mr. Linscott received his B.S. in Finance from the University of Illinois, Urbana.
In connection with his appointment, the Company entered into an Employment Agreement with Mr. Linscott setting forth the terms and conditions of his employment on November 15, 2019 (the “Linscott Agreement”). Pursuant to the Linscott Agreement, Mr. Linscott will receive a base salary of $330,000 per year, and he will have an opportunity to earn an annual bonus with a target amount equal to 75% of his annual base salary. Mr. Linscott will also receive a one-time sign on bonus of $37,500, less applicable withhold. As contemplated by the Linscott Agreement, the Board made the following equity grants to Mr. Linscott: (i) a grant of 50,000 performance-based restricted stock units that vest on the later of the first anniversary of the date that the Board approves the grant and the first business day following the date that the Performance Condition (as defined in the Linscott Agreement) is met, in each case subject to Mr. Linscott’s continued service through the applicable vesting date, (ii) an option to purchase 50,000 shares of the Company’s common stock that vests ratably on the first three anniversaries of the grant date, subject to Mr. Linscott’s continued employment, and has an exercise price equal to the per share price on the date of grant, and (iii) a grant of 14,150 restricted stock units that vest on the grant date. Mr. Linscott will be eligible to receive additional equity awards in future years, consistent with the Company’s regular equity award and review practices.
Mr. Linscott is eligible to receive certain “Change of Control” (as defined in the Linscott Agreement) severance payments and benefits under the Linscott Agreement. If, during the 6 months preceding or the 12 months immediately following a Change of Control, Mr. Linscott’s employment is terminated by the Company without “Cause” or he resigns for “Good Reason” (each as defined in the Linscott Agreement), he would be entitled to receive 18 months of continued base salary and 12 months of Health Benefits Continuation (as defined in the Linscott Agreement). Upon a termination of his employment by the Company without Cause or resignation by Mr. Linscott for Good Reason (and except with respect to a Change of Control, as described above), he is entitled to receive 12 months of continued base salary and 12 months of Health Benefits Continuation. As a condition to receiving any of the severance payments and benefits provided in the Linscott Agreement, Mr. Linscott (or his legal representative, as applicable) must execute and not revoke a customary severance and release agreement, including a waiver of all claims. As required by the Linscott Agreement, Mr. Linscott also entered into a customary confidentiality/non-disclosure agreement, and a non-solicitation & non-competition agreement.
The foregoing description of the Linscott Agreement is qualified in its entirety by reference to the full text of the Linscott Agreement, which is filed as Exhibit 10.2 to this report and incorporated herein by reference.
Since September of 2018, BR Advisors LLC ("BR Advisors"), an entity for which Mr. Linscott has served as a Partner and Managing Member since 2015, has provided consulting services to the Company, receiving
an aggregate total of $354,627 in fees to date. The consulting arrangements with BR Advisors will cease as of December 31, 2019.
Departure of Mark Del Priore
Mark Del Priore stepped down from his positions with the Company on November 15, 2019 to pursue other opportunities. The Company and Mr. Del Priore have entered into a separation agreement memorializing the terms of his separation of employment (the “Separation Agreement”). Mr. Del Priore will receive severance of seventy-one thousand two hundred and fifty dollars ($71,250), representing three months of his annual base salary, less applicable withholdings and deductions. Additionally, the Separation Agreement contains a release, as well as a non-disparagement provision, and ratifies the confidentiality and non-solicitation covenants in Mr. Del Priore’s employment restrictions agreement with the Company, dated January 4, 2019.
Appointment of Lauri Kearnes
On November 15, 2019, the Board appointed Lauri Kearnes, age 48, as Chief Financial Officer of the Company in connection with Mr. Del Priore’s departure. Ms. Kearnes has served as the Company’s Principal Accounting Officer and Vice President, Finance and Controller since August 2018. Ms. Kearnes has over 20 years of experience in accounting and finance roles, including the last 16 years with Harte Hanks in various positions including Group Controller, VP Finance, and Group VP Finance, Accounting Shared Services. Ms. Kearnes started her career in public accounting and has held accounting positions with Nutraceutical Corp. and Brooks Automation prior to joining the Company. She holds a Bachelor of Science in Accounting and a Master of Accounting from Utah State University. Ms. Kearnes will receive a base salary of $275,000 per year
Director Role Changes
In connection with the appointment of Mr. Benett as Executive Chairman of the Board, Board member Alfred Tobia, Jr. stepped down as Chairman of the Board. On November 15, 2019, the Board named Board member Evan Behrens to serve as Lead Independent Director.
Item 8.01. Other Events.
On November 18, 2019, the Company issued a press release announcing, among other things, the approval of the appointment of Mr. Benett as President and Chief Executive Officer, Mr. Linscott as Chief Operating Officer, and Ms. Kearnes as Chief Financial Officer; and the departure of Mr. Del Priore, a copy of which is filed as Exhibit 99.1 to this report and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
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.
HARTE HANKS, INC.
Date: November 19, 2019 By: Lauri Kearnes
Name: Lauri Kearnes
Chief Finance Officer
HARTE HANKS November I l, 2019 Via Email Mr. Andrew Benett email@example.com 348 Canoe Hill Road New Canaan, CT 06840 Dear Mr. Benett: We are very pleased to offer you, Andrew Benett ("you" or "your"), the position of Executive Chairman and Chief Executive Officer of Harte Hanks, Inc. (the "Company"), with an effective date on November 18, 2019. Compensation Salary, Hiring Bonus, and Annual Incentive Bonus Salary—Your position is full time, exempt. You will be paid a base salary of $380,000, if annualized, in accordance with the Company's standard payroll practice of twenty-six bi-weekly payments of $14,615.39. You will be considered for pay increases consistent with your individual performance and the consideration given other executive officers. Additionally, you will be paid $10,000 per month as an Executive Chairman fee. All payments under this offer letter are subject to all applicable federal and state withholdings. Annual Incentive Bonus-- You will be eligible to participate in the Harte Hanks 2019 Annual Incentive Plan (the "Plan"), the annual incentive plan approved by the Board of Directors of the Company (the "Board") and/or CompensationCommittee thereof for executive officers with corporate objectives as determined by the Board, as well as future annual incentive plans. Typically, this bonus is paid in cash; however, the Compensation Committee and the Board retain the right to settle payment in shares of Company stock, constituting up to a maximum of 50% of the bonus amount. Your target incentive opportunity under the Plan will be 100% of your base salary and will be paid shortly following the filing of the 2019 earnings release, to the extent earned and in accordance with the terms of the Plan. Notwithstandingthe foregoing, if paying any portion of the annual bonus payable in shares would cause the total number of shares awarded to you in any year to exceed the applicable amount permitted under the Plan, such excess portion will be payable in cash. Your maximum bonus potential will be 250% of your base salary. hartehanks.com
F,guitx You will receive a grant of 150,000restricted stock units (the "RSUs") in 2019. The RSUs shall vest ratably (1/3) on each of the first three annual anniversaries of the award's date of grant. so that the entire award is fully vested on the third anniversary. The foregoing award will be subject to the standard terms and conditions of such awards under the Harte Hanks 2013 Omnibus Incentive Plan and the corresponding Restricted Stock Unit Award Agreement. You will receive an additional grant of 150,000restricted stock units within the first 15 days of January 2020, subject to your continued employment or other service with the Company through the grant date. Such restricted stock units shall vest ratably (1/3) on each of the first three annual anniversaries of the award's date of grant, so that the entire award is fully vested on the third anniversary. The foregoing award will be subject to the standard terms and conditions of such awards under the Harte Hanks 2013 Omnibus Incentive Plan and the corresponding Restricted Stock Unit Award Agreement. Executive (Yicer Benefits / Perquisites You will be eligible for the following perquisites as an officer and CEO, as approved by the Board of Directors and/or Compensation Committee from time to time: Severance: In the event you are terminated without Cause (as defined below) or resign for Good Reason (as defined below), the Company will pay you 18 months' severance pay ("Severance Pay") at your final base salary rate at the times set forth below and (ii) provide you with continued health insurance benefits under COBRA (if timely elected) for 12 months; post-termination payments are subject to you signing (and not revoking) a release of claims in substantially the form attached hereto as Exhibit A within the time period set forth therein. Subject to satisfaction of the release requirement hereunder, the Severance Pay will be paid in substantially equal installments in accordance with the Company's regular payroll cycle; provided that the first payment will be made on the first payroll period after the 75th day after your employment termination date (the "First Payment Date"), and such first payment shall be equal to the amount of Severance Pay that would have been due and payable from the termination date through the First Payment Date, and thereafter, any remaining Severance Pay will be payable to you in substantially equal installments. This letter agreement is intended comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and the interpretive guidance thereunder, and any similar state laws, and shall be administered, construed and interpreted accordingly. If you are a "specified employee" (as defined and applied in Section 409A of the Code) as of the termination date, to the extent any payment under this letter agreement constitutes deferred compensation (after taking into account any applicable exemptions under Section 409A of the Code) and to the extent required by Section 409A of the Code, you will not be entitled to any Severance Pay under this letter agreement until the earlier of (a) the first day following the six-month anniversary of the termination date, or (b) your date of death. hartehanks.com
Definition of Cause: (i) your material violation of any written policy of the Company that has been made available to you or, in the event of a non-material violation of a written policy that has been made available to you, any violation about which you have received written notice and a reasonable opportunity to cure if such violations are capable of remedy; (ii) your material failure to (x) obey the lawful written directions of the Board, (y) timely respond to written Board inquiries, or (z) provide the Board with timely updates regarding material Company business; (iii) your gross negligence in the performance of, or willful disregard of, your obligations to the Company; (iv) the material breach of any of your obligations under this offer letter, any employment restrictions agreement entered into by you and the Company, or any other material agreement entered into by you and the Company; (v) your fraud or misappropriation, embezzlement, or material misuse of funds or property belonging to the Company; (vi) your indictment or other criminal charge for, or conviction of or entering a plea of guilty or nolo contendere to, a crime constituting a felony; or (vii) the commission of an act of (x) material dishonesty or (y) moral turpitude by you which is, or is reasonably likely to be, materially detrimental to the Company. Definition of Good Reason: without your consent, (i) a material diminution in your duties, authority, or position; (ii) your base salary, as described in this offer letter, is reduced, other than in connection with Company-wide pay cut/furlough program; (iii) relocation of your principal office to a location more than 50 miles from the office location at the time of its establishment and your place of employment on the date of this offer letter; or (iv) the material breach of any of the Company's obligations under this letter agreement; provided, however, that no termination by you for Good Reason for any of the foregoing reasons shall be efTective unless and until (A) you have given the Company written notice of the reason for the termination for Good Reason no more than 30 calendar days following the initial existence of the condition(s) that constitute(s) Good Reason, and has given the Company at least 30 calendar days in which to remedy such condition(s), if such condition(s) are capable of remedy, (B) the Company has failed to remedy the same, and (C) You actually terminate your employment within 30 calendar days after the expiration of the remedy period without remedy of the Good Reason by the Company (or the date of the written notice, if the condition is not capable of remedy). • Indemnification: you will be offered the standard indemnification agreement for corporate officers of the Company. Please note that the Company does not reimburse executive officers for mileage for use of personal vehicles. General Benefits The Company offers a comprehensive benefits package. You will be eligible to participate in the following plans on the 1st of the month following 60 days of employment. Medical and dental plans which are paid for jointly by the Company and you; hartehanks.com
• Company paid life insurance and AD&D insurance plans; and Flexible spending account plans (healthcare and dermdent care) and vision plan. You will also be eligible to participate in additional valuable benefit plans after applicable waiting periods including 401(k). salary continuation. long-term disability. educational assistance, 15 days of annual paid time off, paid holidays and several other benefit plans. These benefits will be explained to you in more detail after you join the Company. Benefits are subject to change at any time. Should this occur, you will be notified. You may contact HR Support at 877-691-2147 for additional important enrollment and eligibility information. Executive Officer Responsibilities As Chief Executive Officer, you will be an "executive officer" and a "named executive omcer•• as defined by U.S. securities laws, and as such will be required to promptly and publicly report to the U.S. Securities and Exchange Commission all transactions in the Company stock. The Company will be required to promptly and publicly disclose all compensatory arrangements it makes with you. You will be subject to the Company's Business Conduct Policy (including restrictions on transacting in the Company's stock) and Officer Stock Ownership Guidelines. You will be required to sign the Company's standard employment restrictions agreement for corporate officers, which contains both non-competition and non-solicitation provisions, among other limitations. Other Additionally, you will need to provide the required documents authorizing you to work for the Company in the United States. This offer and your response are not meant to constitute a contract of employment for a stated term. Your employment will be strictly "at will". This means that if you accept this offer, you will retain the right to discontinue your employment at any time and that the Company will retain the same right. This offer is valid for ten business days from receipt of this letter. As a condition of your acceptanceof this offer of employment,you are assuringus that your employment with the Company would not violate any non-competition, confidentiality or other obligations you may have with any current or former employer. You are also certifying that you have provided us with copies of any non-competition, confidentiality or other agreements that you signed with any current or former employer. The Company also reserves the right to terminate your employment if on or prior to December 20, 2019 any of your former employers files a lawsuit against you or the Company alleging that your employment with the Company violates any continuing obligations to that former employer or any former employer seeks a temporary restraining order or other preliminary injunction to enjoin you. This offer is valid for 10 business days from receipt of this letter. hanehanks.com
Andrew, on behalf of the Board of Directors of Harte Hanks, Inc., I would like to express my pleasure in presenting you with this offer. Yours sincerely, DLO L(-/ Maureen O'Connell (1 24 Accepted By: Il Andrew Benett Date hartehanks.com
ЕХШШТ А Attached hartehanks.com
Exhibit A FORM OF RELEASE AGREEMENT This RELEASE AGREEMENT (this "Agreement") dated 20_, is made and entered into by and between [el (the "Company"), and [e] (the "Former Executive"). WHEREAS,the Company and the Former Executive previously entered into an Letter Agreement dated [el, 20[•] (the "Letter Agreement"); WHEREAS, the Former Executive's employment with the Company has terminated effective and the Former Executive is eligible for payments and benefits pursuant to the "Severance" section of the Letter Agreement (collectively, the "Severance Payments"); and WHEREAS, pursuant to the Letter Agreement, it is a condition precedent to the Company's obligations to make the Severance Payments that Former Executive executes and delivers this Agreement. NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein and in the Letter Agreement, the sufficiency and receipt of which is hereby acknowledged, the Former Executive agrees as follows: 1. General Release and Waiver of Claims. (a) Pursuant to the Letter Agreement and in consideration of the Severance Payments to be provided to Former Executive by the Company, Former Executive hereby releases and forever discharges and holds the Company, subsidiaries of the Company, affiliates of the Company and each officer, director, employee, partner (general and limited), equity holder, member, manager, agent, subsidiary, affiliate, successor and assign and insurer of any of the foregoing (collectively, the "Releasees") harmless from all claims or suits, of any nature whatsoever (whether known or unknown), being directly or indirectly related to Former Executive's employment with the Company or the termination thereof, including, but not limited to, any claims for notice, pay in lieu of notice, wrongful dismissal, discrimination, harassment, severance pay, bonus, incentive compensation, interest, any claims relating to Former Executive's employment with the Company, through the date hereof. (b) This release includes, but is not limited to, contract and tort claims, claims arising out of any legal restriction on the Company's right to terminate its employees and claims or rights under federal, state, and local laws prohibiting employment discrimination, including, but not limited to, claims or rights under Title V Il of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights Act of 1991; the Equal Pay Act; the Age Discrimination in Employment Act of 1967 ("ADEA"), including the Older Workers Benefit Protection Act of 1990; the Americans with Disabilities Act; the Employee Retirement Income Security Act; the Worker Adjustment and Retraining Notification Act, I and any other federal, state, or local law (statutory or decisional), regulation or ordinance (if and to the extent applicable and as the same may be amended from time to time), or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Releasees; or any claim for wrongful discharge, breach of contract, negligence, infliction of emotional distress, defamation; or any claim I NTD: Insert applicable state law referencesat time of the termination. A-I
for costs, fees, or other expenses (including attorney's fees incurred in these matters), which arose through the date Former Executive executes this Agreement. (c) Former Executive acknowledges that the consideration given for this Agreement is in addition to anything of value to which Former Executive was already entitled. (d) Former Executive acknowledges that because this Agreement contains a general release of all claims including under the ADEA, and is an important legal document, he has been advised to consult with legal counsel of his own choosing. Former Executive may take up to [twenty-one (21 days to decide whether to execute this Agreement, and he may revoke his signature by delivering or mailing a signed notice of revocation to the Company at its corporate offices within seven (7) days after executing it. (e) Notwithstanding the foregoing, this Agreement does not release (i) claims which cannot be lawfully released, (ii) claims with respect to the breach of any covenant to be performed by the Company pursuant to this Agreement or any other claims arising from actions or omissions occurring after the date of this Agreement, (iii) rights of the Former Executive, if any, under any equity compensation program of the Company solely to the extent that such rights of the Former Executive, by their terms, survive the termination of the Former Executive's employment with the Company in the circumstances under which such employment was actually terminated, and (iv) any rights the former Executive has to indemnification under any Company plan, policy or by-law, or pursuant to applicable law. Further, the release contained herein does not, and shall not be construed to, release or limit the scope of any existing obligation of the Company (A) to Former Executive and his eligible, participating dependents or beneficiaries with respect to any vested benefits under any existing group welfare (excluding severance), equity, or retirement plan of the Company in which Former Executive is a participant, or (B) with respect to Severance Payments pursuant to the Letter Agreement. (f) Former Executive acknowledges that there is a risk that after signing this Agreement he may discover losses or claims that are released under this Agreement, but that are presently unknown to him. Former Executive assumes this risk and understands that this Agreement shall apply to any such losses and claims. Former Executive understands that this Agreement includes a full and final release covering all known and unknown, suspected or unsuspected injuries, debts, claims or damages which have arisen or may have arisen from any matters, acts, omissions or dealings released herein. Former Executive acknowledges that by accepting the Severance Payments, he assumes and waives the risks that the facts and the law may be other than as he believes. 2. Nothing in this Agreement shall be construed to affect the independent right and responsibility of the Equal Employment Opportunity Commission ("EEOC") or any other government agency to enforce the law; provided, however Former Executive is barred from receiving any monetary damages in connection with any EEOC or other government agency proceeding concerning matters covered by this Agreement to the fullest extent permitted by law. 2 NTD: Update to the extent executive is laid offin reduction in force that requires longer consideration period.
3. This Agreement shall not be construed as an admission by any of the Releasees or the Former Executive of any violation of any federal, state or local law. 4. Except for Former Executive's covenants and obligations pursuant to of the Letter Agreement and the covenants and obligations of the Company under of the Letter Agreement (the "Surviving Sections")3 , the Letter Agreement is terminated effective as of the date of the termination of Former Executive's employment, and except for the Surviving Sections, shall be of no further force and effect with no further liability or obligation of any party thereto thereunder. The Surviving Sections of the Letter Agreement survive termination of the Letter Agreement and remain in full force and effect according to their terms. Former Executive expressly and specifically acknowledges, ratifies, and reaffirms his obligations under the Surviving Sections of the Letter Agreement. 5. FORMER EXECUTIVE ACKNOWLEDGESTHAT HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY;THAT TO THE EXTENT HE HAS DESIRED, HE HAS AVAILED HIMSELF OF THAT RIGHT; THAT HE HAS CAREFULLY READ AND UNDERSTANDSALL OF THE PROVISIONSOF THIS AGREEMENT; AND THAT HE IS KNOWINGLY AND VOLUNTARILY ENTERING INTO THIS AGREEMENT. 6. Miscellaneous (n) Governing Law. This Agreement and any and all claims arising out of, under, pursuant to, or in any way related to this Agreement, including but not limited to any and all claims (whether sounding in contract or tort) as to this Agreement's scope, validity, enforcement, interpretation, construction, and effect shall be governed by the laws of the State of New York (without regard to any conflict of law rules which might result in the application of the laws of any other jurisdiction). (o) Construction. There shall be no presumption that any ambiguity in this Agreement should be resolved in favor of one party hereto and against another party hereto. Any controversy concerning the construction of this Agreement shall be decided neutrally without regard to authorship. (p) Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed will be deemed to be an original, and such counterparts will, when executed by the parties hereto, together constitute but one agreement. Facsimile and electronic signatures shall be deemed to be the equivalent of manually signed originals. (q) Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective successors and permitted assigns. Neither this Agreement nor any rights or obligations hereunder may be assigned by Former Executive, other than by will or the laws of descent or distribution. Severability. All provisions of this Agreement are intended to be severable. In the event any provision or restriction contained herein is held to be invalid or unenforceable in any respect, in whole or in part, such finding shall in no way affect the 3 NTD: Surviving Sections to be updated as necessary based on applicable agreement, incorporate applicable restrictive covenant agreement references
validity or enforceabilityof any other provision of this Agreement. The parties hereto further agree that any such invalid or unenforceable provision shall be deemed modified so that it shall be enforced to the greatest extent permissible under law, and to the extent that any arbitrator or court of competent jurisdiction determines any restriction herein to be unreasonable in any respect, such court or arbitrator may limit this Agreement to render it reasonable in the light of the circumstances in which it was entered into and specifically enforce this Agreement as limited. (s) Modification: Waiver. This Agreement may not be modified or amended except in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived except in writing by the party charged with waiver. A waiver shall operate only as to the specific term or condition waived and will not constitute a waiver for the future or act on anything other than that which is specifically waived. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof; and this Agreement supersedes all other agreements and drafts hereof, oral or written, between the parties hereto with respect to the subject matter hereof. No promises, statements, understandings, representations or warranties of any kind, whether oral or in writing, express or implied, have been made to Former Executive to induce Former Executive to enter into this Agreement other than the express terms set forth herein, and Former Executive is not relying upon any promises, statements, understandings, representations, or warranties other than those expressly set forth in this Agreement. [Signature page tofollow]
Exhibit A IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. By: Name: Title: Accepted and Agreed to: 1 ACKNOWLEDGETHAT 1 HAVE CAREFULLY READ THE FOREGOING RELEASE AGREEMENT,THAT I UNDERSTANDALL OF ITS TERMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY. I FURTHERACKNOWLEDGE THAT I AM AWARE OF MY RIGHTS TO REVIEW AND CONSIDERTHIS RELEASE FOR [211/1451DAYS AND TO CONSULT WITH AN ATTORNEYABOUT IT, AND STATE THAT BEFORE SIGNING THIS AGREEMENT,1 HAVE EXERCISEDTHESE RIGHTS TO THE FULL EXTENT THAT I DESIRED. 1 ALSO UNDERSTAND THAT 1MAY REVOKE MY SIGNATURE WITHIN SEVEN (7) DAYS AFTER SIGNING. [EXECUTIVE'S NAME] Date: Signature Page to Release of Claims
EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into effective as of November 15, 2019, by and between Brian Linscott (“Employee”) and Harte Hanks, Inc. (the “Company”). RECITALS WHEREAS, the Company desires to employ Employee, and Employee desires to be employed by the Company, on the terms set forth in this Agreement. AGREEMENTS NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Employment Term. Subject to the terms and conditions set forth herein, the Company hereby agrees to employ Employee, and Employee hereby agrees to accept employment with the Company, to be effective on January 6, 2020 (the “Effective Date”). Employee’s employment with the Company shall continue until terminated in accordance with the provisions set forth below. The period of Employee’s employment with the Company as set forth in this Section 1 is referred to herein as the “Employment Term.” 2. Employment Duties. (a) During the Employment Term, Employee shall be the Chief Operating Officer of the Company and shall perform such duties and responsibilities for the Company as are customarily associated with such position or as may be assigned to Employee, from time to time, by the Chief Executive Officer of the Company (the “CEO”) and/or the Board of Directors of the Company (the “Board”). Employee shall report to the CEO. In addition to serving as the Chief Operating Officer of the Company, Employee agrees to serve without additional compensation, if elected or appointed thereto, in one or more offices or as a member of the board of directors or board of managers of any of the Company’s Subsidiaries and/or affiliates. (b) Employee will devote substantially all of Employee’s business time, and Employee will devote his best efforts, to the performance of Employee’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board. Notwithstanding the foregoing, during the Employment Term, it shall not be a violation of this Agreement for Employee to (i) serve on corporate, civic or charitable boards or committees, provided that service on any corporate board or committee shall be subject to the prior approval of the Board, (ii) deliver lectures or fulfill speaking engagements, (iii) manage personal investments, and (iv) serve on the board of directors of and provide services to the entities set forth on Annex 1 hereof, in each case so long as such activities do not materially interfere with the performance of Employee’s responsibilities hereunder. 1 43938.00000
(c) Employee shall perform services at the Company’s various offices, from his home office in Chicago, IL, and at such other place or places as the Employee’s duties and responsibilities may require. The Employee understands and agrees that he may be required to travel in connection with the performance of his duties. 3. Base Salary. During Employee’s employment hereunder, the Company shall pay Employee a base salary (“Base Salary”) at the annual rate of $330,000, payable in regular installments in accordance with the Company’s payment practices as in effect from time to time, but in no event less frequently than twice a month. The Company will consider increases in Base Salary from time to time in a manner consistent with the consideration given to other similarly-situated executives. 4. Bonuses. (a) With respect to each full calendar year of employment hereunder beginning in calendar year 2020, Employee will be eligible to earn an annual bonus award (an “Annual Bonus”) with a target Annual Bonus opportunity of 75% of Employee’s Base Salary and a maximum bonus opportunity of 150% of Employee’s Base Salary, subject to the terms, conditions and performance goals established by the Board; provided, however, that the Board may award Employee with additional bonus amounts for outstanding achievement. Any amount of the Annual Bonus that becomes payable will be paid two-thirds in cash and one-third in fully-vested Shares (as defined below) granted under the Harte Hanks 2013 Omnibus Incentive Plan (as amended, the “Equity Plan”) as soon as reasonably practicable following the Board or its designee’s certification of performance, but in no event later than the 15th day of the third month following the end of the year in which the amount is earned. The number of Shares to be granted under this Section 4(a) for a given year will be determined by (1) multiplying the cash value of the applicable portion of the Annual Bonus by 1.10 (the “Equity Value”) and (2) dividing the Equity Value by the average closing price of a Share on the applicable stock exchange during the 30 days immediately preceding and including the grant date; provided, however, that if such grant would cause the total number of Shares granted to Employee in any fiscal year to exceed applicable Equity Plan limits, such excess amount will be payable in cash. (b) Employee will receive a one-time sign on bonus of $37,500, less applicable withholding, in consideration for his entry into this Agreement, payable in his first- regularly scheduled paycheck. 5. Equity. (a) As soon as reasonably practicable following the Effective Date, the Company will grant Employee equity-based awards under the Equity Plan (the “Initial Grants”), subject to the terms and conditions of the applicable award agreements and Board approval of the Initial Grants. The Initial Grants will consist of (i) a grant of 50,000 performance-based restricted stock units that vests on the later of the first anniversary of the date that the Board approves the Initial Grants and the first business day following the date that the Performance Condition set forth on Exhibit A hereto is met, in each case subject to Employee’s continued service as an employee through the applicable vesting date and (ii) an option to purchase 50,000 shares of the Company’s common stock (each, a “Share”) that vests ratably on the 2
first three anniversaries of the grant date and has an exercise price equal to the per Share price on the date of grant. Employee will be eligible to receive additional equity awards in future years, consistent with the Company’s regular equity award and review practices. (b) In addition to the Initial Grants, subject to the terms and conditions of the applicable award agreement and Board approval, Employee will receive a grant of 14,150 restricted stock units that vest on the grant date; provided, however, that the number of units will be subject to reduction in the event that such a grant would cause the total number of Shares granted to Employee in the 2019 fiscal year to exceed applicable Equity Plan limits, in which case, such excess units will be granted to Employee in the next fiscal year in which such grant would not cause the total Shares granted to Employee (subject to Employee’s continued employment) in such fiscal year to exceed applicable Equity Plan limits. 6. Benefits. Employee shall be eligible during the Employment Term to participate in such employee benefit plans and programs that are maintained from time to time for senior executives of the Company, to the extent that Employee (and Employee’s spouse and dependents, as the case may be) meet(s) the applicable eligibility requirements; provided that Employee will be entitled to healthcare coverage beginning on February 1, 2020. The Company does not promise the adoption or continuance of any particular plan or program during the Employment Term, and Employee’s (and Employee’s spouse’s and dependents’) participation in any such plan or program shall be subject to the provisions, rules, regulations and laws applicable thereto. Employee will be entitled to four (4) weeks of vacation in accordance with the Company’s vacation policy as in effect from time to time. 7. Expense Reimbursement. Employee shall be entitled to reimbursement for ordinary and reasonable out of pocket documented business expenses which Employee incurs in connection with performing Employee’s duties under this Agreement, including travel, lodging and meal expenses in accordance with the Company’s travel and expense reimbursement policies applicable to other senior Employees of the Company as in effect from time to time and approved by the Board, provided, however, (x) Employee must comply fully with such travel and expense reimbursement policies and (y) the Company will not reimburse executive officers for mileage for use of personal vehicles. 8. Termination of Employment. Employee’s employment with the Company pursuant to this Agreement: (a) shall terminate upon Employee’s death or Employee becoming Permanently Disabled (as determined pursuant to Section 9(e) hereof), and may be terminated at any time by Employee for any reason (or no reason), including, without limitation, for Good Reason, or by the Company, for any reason (or no reason), including, without limitation, without Cause. Any termination of Employee’s employment pursuant to the preceding sentence is referred to herein as an “Employee Termination”; (b) shall terminate on the following date: (i) if terminated as a result of Employee’s resignation, with or without Good Reason, on the date specified in a written notice delivered by Employee to the Company, the effective date of such resignation to be no less than thirty (30) days from the date such notice is delivered to the Company, which notice period may be waived by the Company in its sole discretion; (ii) if terminated as a 3
result of death, on the date of death; (iii) if terminated as a result of Employee becoming Permanently Disabled, on the date as of which Employee is determined to be Permanently Disabled as defined in Section 9(e); and (iv) if terminated by the Company, on the date specified in a written notice delivered by the Company to Employee. 9. Definitions. As used in this Agreement: (a) “Cause” shall mean: (i) Employee’s violation of any material written policy of the Company; (ii) Employee’s failure to (x) obey the lawful orders of the Board, (y) timely respond to Board inquiries, or (z) provide the Board with timely updates regarding material Company business; (iii) Employee’s gross negligence in the performance of, or willful disregard of, Employee’s obligations to the Company; (iv) the breach of any of Employee’s obligations under this Agreement, restrictive covenants agreement (if any), or any other material agreement entered into with the Company; (v) the commission of an act by Employee constituting financial dishonesty against the Company; (vi) Employee’s indictment or other criminal charge for, or conviction of or entering a plea of guilty or nolo contendere to, a crime constituting a felony; or (vii) the commission of any act of dishonesty or moral turpitude by Employee which is, or is reasonably likely to be, detrimental to the Company. For the purposes of this definition, “Company” shall include any affiliate or Subsidiary of the Company and any entity with whom Employee holds a position at the request of the Company. The Company may terminate Employee’s employment for Cause under this Agreement following issuance to Employee of written notice of the circumstances the Company believes constitute Cause; provided, that if the basis for termination is curable, including, without limitation, Section 9(a)(i), Section 9(a)(ii), Section 9(a)(iii), and Section (9)(a)(iv), then Employee shall have thirty (30) days after receipt of such written notice to cure such basis, and if not cured, the Company may terminate Employee’s employment for Cause. If, within thirty (30) days subsequent to Employee’s termination of employment for any reason other than by the Company for Cause, the Company determines that Employee’s employment could have been terminated for Cause under circumstances that could not be cured, Employee’s employment will be deemed to have been terminated for Cause for all purposes, and Employee will be required to disgorge to the Company all amounts received pursuant to this 4
Agreement or otherwise on account of such termination that would not have been payable to Employee had such termination been by the Company for Cause. (b) “Change of Control” shall have the meaning set forth in the Equity Plan as in effect on the date hereof. (c) “Change of Control Period” shall mean the period commencing 6 months prior to a Change of Control and ending on the first anniversary of the Change of Control. (d) “Good Reason” shall mean, without Employee’s consent, (i) a material diminution in Employee’s duties or position; (ii) Employee’s Base Salary is materially reduced, other than in connection with a region-wide or Company-wide pay cut/furlough program; (iii) the Company’s material breach of its obligations under this Agreement; or (iv) the Company requires that Employee relocate to a location outside of the Chicago Metropolitan area. provided, however, that no termination by Employee for Good Reason for any of the foregoing reasons shall be effective unless and until (A) Employee has given the Company written notice of the reasons for the termination for Good Reason no more than thirty (30) calendar days following the initial existence of the condition(s) that constitute(s) Good Reason, and has given the Company at least thirty (30) calendar days in which to remedy such condition(s), (B) the Company has failed to remedy the same, and (C) Employee actually terminates his employment within thirty (30) calendar days after the expiration of the remedy period without remedy of the Good Reason by the Company. (e) “Permanently Disabled” shall mean (i) Employee becomes eligible to receive benefits under any long-term disability plan paid for the Company on behalf of Employee or (ii) if by reason of injury or illness (including mental illness) Employee shall be unable to perform the essential functions of his position for ninety (90) consecutive days or one hundred twenty (120) days, whether or not consecutive, in a twelve (12) month period. (f) “Person” shall mean an individual, an entity, a partnership, a corporation, a limited liability company or limited partnership, an association, a trust, a joint stock company, a trust, a joint venture, an unincorporated organization, or the United States of America or any other nation, any state or other political subdivision thereof, any entity exercising Employee, legislative, judicial, regulatory or administrative functions of government. (g) “Subsidiary” shall mean with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a 5
corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For the purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company, association or other business entity gains or losses or shall be or control or have the right to appoint, as the case may be, the managing director, manager, board of advisors, of a company or other governing body of such partnership, limited liability company, association or other business entity by means of ownership interest, agreement or otherwise. 10. Payments by Virtue of Termination of Employment. Upon the occurrence of an Employee Termination: (a) if an Employee Termination shall result from Employee’s employment being terminated by the Company without Cause or from Employee’s resignation for Good Reason, in each case other than during a Change of Control Period, Employee shall be entitled to: (i) Employee’s unpaid and accrued Base Salary accrued to the effective date of such termination, payable in accordance with the Company’s regular payroll practices as in effect from time to time; plus (ii) payment for accrued and unused vacation days accrued to the effective date of such termination (in accordance with applicable Company policy or to the extent required by law); plus (iii) any unpaid expense reimbursement Employee is entitled to pursuant to Section 7 of this Agreement; plus (iv) any vested payment or benefit arising from Employee’s participation in, or benefits under, any qualified employee benefit plans, programs, or arrangements under Section 6 (other than severance plans, programs, or arrangements), which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements (the amounts provided for under Subsections 10(a)(i), (ii), (iii) and (iv), together the “Accrued Amounts”); plus, subject to Section 11(a): (v) as severance pay (“Severance Pay”), Employee will continue to receive his then Base Salary for a period of twelve (12) months, payable in equal installments in accordance with the Company’s regular payroll practices as in effect from time to time; provided, that the first installment of the Severance Pay shall be made on the next regularly scheduled payroll date of the Company following the 6
sixtieth (60th) day after the effective date of Employee’s termination and shall include payment of any amounts that would otherwise be due prior thereto; plus (vi) the Company will provide continued coverage under its health insurance plans (“Health Benefits Continuation”) to Employee for a period of twelve (12) months, subject to Employee continuing to make premium payments at the current applicable employee rate for such coverage; provided, however, that if the Health Benefits Continuation is not permitted to be provided under the terms of the Company’s health insurance plans (as in effect from time to time following the date of Employee Termination), and applicable law, the Company may provide the Health Benefits Continuation pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 by paying an amount equal to the employer’s portion of premium contributions for active employees, with Employee paying the premium payments at the current applicable employee rate for such coverage; provided, further, that in any event the coverage provided pursuant to this Section 10(a)(vi) shall be counted towards the Company’s satisfaction of its COBRA obligations to Employee (clauses (v) and (vi) hereof, collectively, the “Severance Package”); (b) if an Employee Termination shall result from Employee’s resignation (other than for Good Reason), Employee’s death or Permanent Disability or Employee’s discharge for Cause, Employee shall be entitled only to the Accrued Amounts. (c) if an Employee Termination shall result from Employee’s employment being terminated by the Company without Cause or from Employee’s resignation for Good Reason, in each case during a Change of Control Period, then, subject to Section 11(a), Employee shall be entitled to the Severance Package, provided that the Severance Pay will be for a period of eighteen (18) months. 11. Release of Claims. (a) All payments and benefits due to Employee under Sections 10(a) and 10(c) above, except for the Accrued Amounts, shall be expressly conditioned on, and shall be payable or continued only if, Employee (or, to the extent applicable, Employee’s personal representative) delivers to the Company and does not revoke within the Revocation Period (as defined therein) a customary separation agreement that contains a general release of all claims. Such agreement and general release shall be executed and delivered to the Company in accordance with Section 17(a) within the time period specified therein. Failure to timely execute and return such release or the revocation thereof shall be a waiver of Employee’s right, if any, to the Severance Package. In addition, the Company’s obligation in respect of the Severance Package, shall be expressly conditioned upon Employee’s continuing compliance with the obligations under Sections 12, 13, and 15 of this Agreement and the Restrictive Agreements (as defined below). (b) Employee hereby acknowledges and agrees that, other than the payments described in Section 10, upon the effective date of any Employee Termination, Employee shall not be entitled to any other severance or payments of any kind under any Company 7
benefit plan, severance policy generally available to the Company’s employees or otherwise and further, that the treatment of any equity awards granted by the Company to Employee shall be governed by the terms thereof. 12. Resignation as an Officer and Director. Upon the effective date of any Employee Termination, Employee shall be deemed to have resigned, to the extent applicable, as an officer of the Company, as a member of the board of directors or similar body of any Subsidiary of the Company and as a fiduciary of any Company benefit plan. On or immediately following the effective date of any such Employee Termination, Employee shall confirm the foregoing by submitting to the Company written confirmation of Employee’s resignation(s). 13. Return of Company Property. Within (a) ten (10) days following the effective date of an Employee Termination for any reason other than death or Permanent Disability, or (b) a reasonable period of time following an Employee Termination due to death or Permanent Disability, Employee or Employee’s personal representative shall return all property of the Company in Employee’s possession, custody or control, including but not limited to all Company-owned computer equipment (hardware and software), telephones, facsimile machines, cell phones, tablet computer and other communication devices, credit cards, office keys, security access cards, badges, identification cards and all copies (including drafts) of any documentation or information (however stored) relating to the business of the Company and its Subsidiaries and affiliates, the Company’s customers and clients or any prospective customers and clients. Anything to the contrary notwithstanding, Employee shall be entitled to retain (i) personal papers and other materials of a personal nature; provided, that such papers or materials do not include Non-Public Information (as defined in any Restrictive Agreement), (ii) information showing Employee’s compensation or relating to reimbursement of expenses, and (iii) copies of plans, programs and agreements relating to Employee’s employment, or termination thereof, with the Company which Employee received in his capacity as a participant. 14. Confidentiality, Non-Solicit and Non-Competition. Employee will enter into and be subject to a Confidentiality/Non-Disclosure Agreement and a Non-Solicitation and Non- Compete Agreement, each in substantially the form attached hereto as Exhibits B and C (the “Restrictive Agreements”), which, for the avoidance of doubt, may be revised as required by law to ensure enforceability. 15. Cooperation. From and after an Employee Termination, Employee shall provide Employee’s reasonable cooperation in connection with any legal action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Employee’s employment hereunder, provided, that the Company shall reimburse Employee for Employee’s reasonable costs and expenses incurred in connection therewith, and such cooperation shall not unreasonably burden Employee or unreasonably interfere with any subsequent employment that Employee may undertake. 16. Whistleblower. Nothing in this Agreement or the Restrictive Agreements will preclude, prohibit or restrict Employee from (a) communicating with, any federal, state or local administrative or regulatory agency or authority, including but not limited to the Securities and Exchange Commission (the “SEC”); (b) participating or cooperating in any 8
investigation conducted by any governmental agency or authority; or (c) filing a charge of discrimination with the United States Equal Employment Opportunity Commission or any other federal state or local administrative agency or regulatory authority. Nothing in this Agreement, or any other agreement between the parties, prohibits or is intended in any manner to prohibit, Employee from (A) reporting a possible violation of federal or other applicable law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the SEC, the U.S. Congress, and any governmental agency Inspector General, or (B) making other disclosures that are protected under whistleblower provisions of federal law or regulation. This Agreement does not limit Employee’s right to receive an award (including, without limitation, a monetary reward) for information provided to the SEC. Employee does not need the prior authorization of anyone at the Company to make any such reports or disclosures, and Employee is not required to notify the Company that Employee has made such reports or disclosures. Nothing in this Agreement or any other agreement or policy of the Company is intended to interfere with or restrain the immunity provided under 18 U.S.C. §1833(b). Employee cannot be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) (A) in confidence to federal, state or local government officials, directly or indirectly, or to an attorney, and (B) for the purpose of reporting or investigating a suspected violation of law; (ii) in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal; or (iii) in connection with a lawsuit alleging retaliation for reporting a suspected violation of law, if filed under seal and does not disclose the trade secret, except pursuant to a court order. The foregoing provisions regarding protected disclosures are intended to comply with all applicable laws. If any laws are adopted, amended or repealed after the execution of this Agreement, this Section 16 shall be deemed to be amended to reflect the same. 17. Miscellaneous. (a) Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) upon receipt when mailed by first class certified or registered mail, postage prepaid, (iii) one (1) business day after being sent by overnight courier, or (iv) upon confirmation of receipt by facsimile, addressed to the parties at their respective addresses specified below: if to Company, to: Robert T. Wyman Corporate Counsel 2 Executive Drive Chelmsford, Massachusetts 01824 with a copy (which shall not constitute notice) to: 9
Manan (Mike) Shah Milbank LLP 55 Hudson Yards New York, NY 10001-2163 if to Employee, to Employee’s most recent address on file with the Company with a copy (which shall not constitute notice) to: James L. Komie Howard & Howard Attorneys PLLC 200 S. Michigan Ave., Ste. 1100 Chicago, IL 60604 Any party to this Agreement may change his or its address for notices by notice given pursuant to this Section 17(a). (b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, executors, administrators, distributees, devisees, legatees, successors and, solely with respect to the Company, its assigns, including without limitation any successor in interest to the Company who acquires all or substantially all of the Company’s assets. (c) In the event of any Employee Termination, Employee shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Company under this Agreement and no such substitute employment or mitigation shall affect Employee’s right to receive severance and other benefits hereunder. (d) The Company’s obligation to pay Employee the amounts, and to make the arrangements, provided hereunder shall be subject to set off or recoupment of any amounts loaned or advanced to Employee by the Company or any Subsidiary of the Company that are supported by reasonable documentation; provided, that any such set off or recoupment shall, in each case, be applied to the next dollars due to Employee from the Company during the applicable period. (e) Except as expressly set forth herein, this Agreement, together with any other agreement entered into between the Company and Employee on the date hereof, contains the entire agreement between the parties with respect to the subject matter hereof, and this Agreement supersedes all other agreements and drafts hereof, oral or written, between the parties hereto with respect to the subject matter hereof. No promises, statements, understandings, representations or warranties of any kind, whether oral or in writing, express or implied, have been made to Employee by any Person to induce Employee to enter into this Agreement other than the express terms set forth herein, and Employee is not relying upon any promises, statements, understandings, representations, or warranties other than those expressly set forth in this Agreement. 10
(f) No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver of any provisions of this Agreement shall be valid unless in writing and signed by the party charged with such waiver. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver, unless so provided in the waiver. (g) If any provision of this Agreement (or portion thereof) shall, for any reason, be held invalid or unenforceable, such provision (or portion thereof) shall be ineffective only to the extent of such invalidity or unenforceability, and the remaining provisions of this Agreement (or portions thereof) shall nevertheless be valid, enforceable and of full force and effect. If any court of competent jurisdiction or arbitrator finds that any provision contained in this Agreement is invalid or unenforceable, then the parties hereto agree that such invalid or unenforceable provision shall be deemed modified so that it shall be valid and enforceable to the greatest extent permissible under law, and if such provision cannot be modified so as to make it enforceable or valid, such finding shall not affect the enforceability or validity of any of the other provisions contained herein. (h) This Agreement may be executed in identical counterparts, both of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof. (i) The section or paragraph headings or titles herein are for convenience of reference only and shall not be deemed a part of this Agreement. The parties have jointly participated in the drafting of this Agreement, and the rule of construction that a contract shall be construed against the drafter shall not be applied. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found. (j) Notwithstanding anything to the contrary in this Agreement: (i) The parties agree that this Agreement shall be interpreted to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended or replaced, and the regulations and authoritative guidance promulgated thereunder to the extent applicable (collectively “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A. In no event whatsoever will the Company be liable for any additional tax, interest or penalties that may be imposed on Employee under Code Section 409A or any damages for failing to comply with Code Section 409A. 11
(ii) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits considered “nonqualified deferred compensation” under Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Employee, and (B) the date of Employee’s death (either such period, the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 17(j)(ii) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed on the first business day following the expiration of the Delay Period to Employee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. (iii) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (A) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (B) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be provided in any other taxable year, provided, that this clause (B) shall not be violated with regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (C) such payments shall be made on or before the last day of Employee’s taxable year following the taxable year in which the expense occurred. (iv) For purposes of Code Section 409A, Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company. (k) This Agreement and any and all claims arising out of, under, pursuant to, or in any way related to this Agreement, including but not limited to any and all claims (whether sounding in contract or tort) as to this Agreement’s scope, validity, enforcement, 12
interpretation, construction, and effect shall be governed by the laws of the State of New York (without regard to any conflict of laws rule which might result in the application of the laws of any other jurisdiction). (l) The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. (m) Notwithstanding anything that may be expressed or implied in this Agreement, Employee covenants, agrees and acknowledges that this Agreement may only be enforced against the Company. All claims or causes of action (whether in contract, tort or otherwise) arising out of or relating to this Agreement (including without limitation the negotiation, execution or performance of this Agreement and any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) may be made only against the Company, and no one other than the Company (including without limitation any person negotiating or executing this Agreement on behalf of the Company) shall have any liability or obligation with respect to same. (n) Notwithstanding anything in this Agreement to the contrary, if any payment or distribution Employee would receive pursuant to this Agreement or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the change in control shall perform the foregoing calculation. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Employee. Any reduction in payments and/or benefits pursuant to this paragraph will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits payable to Employee. (o) Employee represents, warrants and covenants that (i) that Employee has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on his own judgment, (ii) Employee has the full right, authority and capacity to enter into this Agreement and perform Employee’s obligations hereunder, (iii) Employee is not bound by any agreement that conflicts with or prevents or restricts the full performance of Employee’s duties and obligations to the Company hereunder during or after the Employment Term, and (iv) the execution and delivery of this Agreement shall not result in any breach or violation of, or a default under, any existing obligation, commitment or agreement to which Employee is subject. Employee represents that he has informed his employer as of the date hereof (the “Former Employer”) that he will be working for the Company, described the scope of his duties hereunder and confirms that his employment 13
with the Company will not violate any agreements or obligations with the Former Employer. The Company reserves the right to contact the Former Employer if it has any concerns regarding any non-competition, confidentiality or other obligations Employee may have and to terminate Employee’s employment for Cause if the Company determines that the representations and warranties in this section are false. (p) The covenants and obligations of the Company under Sections 7, 10 (to the extent the Severance Package is payable), and 17 hereof and the covenants and obligations of Employee under Sections 12, 13, 15, and 17, hereof and in the Restrictive Agreements (as set forth therein), shall continue and survive any Employee Termination or Employee’s ceasing to be an officer or employee of the Company or any termination of this Agreement. [signature page follows] 14
Exhibit A The Performance Condition means maintaining a closing price of $6 or greater per Share for 30 consecutive days following the grant date of the Initial Grants, subject to the terms and conditions provided in the Company’s Restricted Stock Unit Award Agreement, and to Employee’s continued service as an employee through the vesting date. #4827-6397-6050v1
Exhibit B Attached - 17 -
Exhibit C Attached - 18 -
Harte Hanks Announces New Leadership Appointments to Energize Growth and Accelerate Strategic Transformation
Andrew Benett, Former Global CEO of Havas Creative Group,
Appointed as Executive Chairman and CEO
Brian Linscott named COO and Lauri Kearnes promoted to CFO
New York, New York – November 18, 2019 -- Harte Hanks (NYSE: HHS), a leading data-driven multi-channel marketing solutions firm, today announced a transformation of its senior leadership team, signaling the final stage of its restructuring efforts and a renewed focus on driving growth and deepening customer engagements. Effective immediately:
Andrew Benett was appointed as Executive Chairman and Chief Executive Officer. Andrew is a seasoned executive with over 20 years of expertise in brand development, digital, direct, and marketing technology, and he was the former global CEO of Havas Creative Group, a leading marketing communications network with 12,000 employees.
Brian Linscott was appointed Chief Operating Officer. Brian has an accomplished track record for improving financial and operational results, and his prior positions include CFO of Sun Times Media, LLC, a media company that included the Chicago Sun-Times, Managing Director of Huron Consulting Group, and a Partner at BR Advisors, where he led operation improvement, developed new partnerships and drove topline growth for media clients and other companies.
Lauri Kearnes was promoted to Chief Financial Officer, replacing Mark Del Priore, who will be leaving the Company. Lauri has held a variety of finance positions at the Company of increasing responsibility over the past sixteen years, and both she and Mark played a critical role in the restructuring.
Evan Behrens was named Lead Independent Director.
Andrew Harrison stepped down as President, but will remain with the Company, and report to Andrew Benett in an executive advisory role.
Al Tobia, the former Chairman of the Board, stated, “We are excited to have someone of Andrew’s caliber and accomplishments. He is ideally suited to lead Harte Hanks, given his exceptional 20-plus year track record delivering top- and bottom-line growth. Andrew’s skills in brand strategy, modern marketing, and new media will complement Brian’s operational and financial expertise. Combined with Lauri’s deep institutional knowledge and solid finance background, the new leadership team shifts the Company’s focus from cost-cutting and strategic realignment to growth and improved profitability.”
Andrew Benett, Harte Hanks’ new Executive Chairman and CEO, stated, “Harte Hanks has a deep-seated and well-established position in the data, digital and direct marketing industry. I have admired the Company for years. At its core, Harte Hanks’ businesses play a vital and proven role in building our clients’ brands. I am excited to join the team and help lead Harte Hanks into its next chapter.”
Mr. Tobia further stated, “The Board expresses sincere appreciation to Andrew Harrison for his leadership during our restructuring and for continuing to serve the Company in an executive advisory role. The Board also thanks Mark Del Priore for his work on the restructuring and wishes him well in his future endeavors.”
Mr. Tobia, continued, “As part of this realignment of the Board and management transition, Evan Behrens has been appointed as Lead Independent Director. Evan and I worked closely during the recruitment process. I am confident that under Andrew’s and Evan’s oversight and guidance, the new management team will be well positioned to lead Harte Hanks to the next phase of its development.”
Mr. Tobia concluded, “We have taken shareholder feedback into the boardroom. We reconstituted the full board with effective, independent directors, and established a robust governance framework and restructured the entire senior leadership team. The Board believes the Company is well-positioned to refocus on growth going forward. It is the right time for me to step down as Chairman.”
Andrew Benett is a seasoned marketing executive and business leader. Most recently, Andrew served as the Global Chief Commercial Officer at Bloomberg Media Group where he was responsible for advertising sales, marketing services, events, consulting, integrated franchises, and innovation. Andrew sits on the Board of Directors of Viad Corp (NYSE: VVI) and is a Henry Crown Fellow at the Aspen Institute.
Before joining Bloomberg, Andrew was the global CEO of Havas Creative Group, a leading marketing communications network with 12,000 employees across 316 offices and 75 countries. In that role, he oversaw all aspects of the business, including full P&L Responsibility, Corporate Strategy, Operations, Finance, People, Culture and Product. While there, he led the turnaround and business transformation of Havas Creative Group, driving significant year-over-year bottom and top-line growth.
Throughout his career, Andrew has been inducted into the AAF’s Advertising Hall of Achievement, honoring innovators under the age of 40 (2010), Boston Business Journal’s “40 Under 40” (2010) and Crain’s New York Business’s “40 Under 40” (2009).
Andrew is a frequent contributor to the Financial Times, CNBC and CNN, and regularly speaks on the topics of corporate branding, CSR and marketing innovation.
He is also co-author of three business books, Consumed: Rethinking Business in the Era of Mindful Spending; Good for Business: The Rise of the Conscious Corporation; and The Talent Mandate: Why Smart Companies Put People First.
Brian Linscott’s career includes nearly two decades of advising clients and C-level executives on strategy, operational improvements to drive topline growth, acquisitions, corporate development and capital structure across a variety of industries including media, manufacturing, and transportation. Most recently, he served as Partner at BR Advisors where he was the COO of a privately held company and he led the operational improvement of radio and printing companies, developed new partnerships, and facilitated asset transactions. He also served as Operating Partner at Traverse Pointe Partners, where he advised a private equity fund on financial and operational assessment of equity investments and developed a post-acquisition, operational strategies to create shareholder value. From 2013 to 2015, Brian served as Managing Director at Huron Business Advisory where he managed client relationships, oversaw consulting teams, and developed new business opportunities. From 2009 to 2012, Brian served as Chief Financial Officer / Senior Vice President at Sun Times Media, LLC where he created and executed a restructuring plan that led to a $60 million EBITDA improvement in two years and managed working capital to enhance cash flow.
Lauri Kearnes previously was the Vice President of Finance and Corporate Controller at Harte Hanks. Lauri has served in a number of finance roles with increasing levels of responsibility at Harte Hanks over the past 16 years.
In her new role, Lauri Kearnes succeeds Mark Del Priore as Chief Financial Officer, who has decided to leave the Company to pursue other interests.
About Harte Hanks:
Harte Hanks is a global marketing services firm specializing in multi-channel marketing solutions that connect our clients with their customers in powerful ways. Experts in defining, executing and optimizing the customer journey, Harte Hanks offers end-to-end marketing services including consulting, strategic assessment, data, analytics, digital, social, mobile, print, direct mail and contact center. From visionary thinking to tactical execution, Harte Hanks delivers smarter customer interactions for some of the world's leading brands. Harte Hanks has approximately 3,200 employees located in North America, Asia-Pacific and Europe. For more information, visit Harte Hanks at www.hartehanks.com, call 800-456-9748, or email us at firstname.lastname@example.org.
Cautionary Note Regarding Forward-Looking Statements:
Our press release and related earnings conference call contain “forward-looking statements” within the meaning of U.S. federal securities laws. All such statements are qualified by this cautionary note, provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements other than historical facts are forward-looking and may be identified by words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “seeks,” “could,” “intends,” or words of similar meaning. These forward-looking statements are based on current information, expectations and estimates and involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from what is expressed in or indicated by the forward-looking statements. In that event, our business, financial condition, results of operations or liquidity could be materially adversely affected and investors in our securities could lose part or all of their investments. These risks, uncertainties, assumptions and other factors include: (a) local, national and international economic and business conditions, including (i) market conditions that may adversely impact marketing expenditures and (ii) the impact of economic environments and competitive pressures on the financial condition, marketing expenditures and activities of our clients and prospects; (b) the demand for our products and services by clients and prospective clients, including (i) the willingness of existing clients to maintain or increase their spending on products and services that are or remain profitable for us, and (ii) our ability to predict changes in client needs and preferences; (c) economic and other business factors that impact the industry verticals we serve, including competition and consolidation of current and prospective clients, vendors and partners in these verticals; (d) our ability to manage and timely adjust our facilities, capacity, workforce and cost structure to effectively serve our clients; (e) our ability to improve our processes and to provide new products and services in a timely and cost-effective manner though development, license, partnership or acquisition; (f) our ability to protect our facilities against security breaches and other interruptions and to protect sensitive personal information of our clients and their customers; (g) our ability to respond to increasing concern, regulation and legal action over consumer privacy issues, including changing requirements for collection, processing and use of information; (h) the impact of privacy and other regulations, including restrictions on unsolicited marketing communications and other consumer protection laws; (i) fluctuations in fuel prices, paper prices, postal rates and postal delivery schedules; (j) the number of shares, if any, that we may repurchase in connection with our repurchase program; (k) unanticipated developments regarding litigation or other contingent liabilities; (l) our ability to complete anticipated divestitures and reorganizations, including cost-saving initiatives; (m) our ability to realize the expected tax refunds; and (n) other factors discussed from time to time in our filings with the Securities and Exchange Commission, including under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017. The forward-looking statements in this press release and our related earnings conference call are made only as of the date hereof and we undertake no obligation to update publicly any forward-looking statement, even if new information becomes available or other events occur in the future.
As used herein, “Harte Hanks” or “the Company” refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks’ logo and name are trademarks of Harte Hanks.
Source: Harte Hanks, Inc.