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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2016
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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74-1677284
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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9601 McAllister Freeway, Suite 610, San Antonio, Texas 78216
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(Address of principal executive offices) (Zip Code)
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Registrant’s telephone number, including area code
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210-829-9000
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Title of each class
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Name of each exchange on which registered
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Common Stock
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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•
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Agency & Digital Services.
Our agency services are full-service, customer engagement agencies specializing in direct and digital communications for both consumer and business-to-business markets. With strategy, creative, and implementation services, we help marketers within targeted industries understand, identify, and engage prospects and customers in their channel of choice. Our digital solutions integrate online services within the marketing mix and include: search engine management, display, digital analytics, website development and design, digital strategy, social media, email, e-commerce, and interactive relationship management and a host of other services that support our core businesses.
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Database Marketing Solutions and Business-to-Business Lead Generation.
We have successfully delivered marketing database solutions across various industries. Our solutions are built around centralized marketing databases with three core offerings: insight and analytics; customer data integration; and marketing communications tools. Our solutions enable organizations to build and manage customer communication strategies that drive new customer acquisition and retention and maximize the value of existing customer relationships. Through insight, we help clients identify models of their most profitable customer relationships and then apply these models to increase the value of existing customers while also winning profitable new customers. Through customer data integration, data from multiple sources comes together to provide a single customer view of client prospects and customers. Then we help clients apply their data and insights to the entire customer life cycle, to help clients sustain and grow their business, gain deeper customer insights, and continuously refine their customer resource management strategies and tactics.
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Direct Mail.
As a full-service direct marketing provider and one of the largest mailing partners of the U.S. Postal Service ("USPS"), our operational mandate is to ensure creativity and quality, provide an understanding of the options available in technologies and segmentation strategies and capitalize on economies of scale with our variety of execution options. Our services include: digital printing, print on demand, advanced mail optimization, logistics and transportation optimization, tracking (including our proprietary prEtrak solution), commingling, shrink wrapping, and specialized mailings. We also maintain fulfillment centers where we provide custom kitting services, print on demand, product recalls, and freight optimization allowing our customers to distribute literature and other marketing materials.
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Contact Centers.
We operate teleservice workstations around the globe providing advanced contact center solutions such as: speech, voice and video chat, integrated voice response, analytics, social cloud monitoring, and web self-service. We provide both inbound and outbound contact center services and support many languages with our strategically placed global locations for both consumer and business-to-business markets.
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Domestic Offices
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Austin, Texas
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Maitland, Florida
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Baltimore, Maryland
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New York, New York
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Burlington, Massachusetts
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Oakland, California
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Burlington, Vermont
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San Antonio, Texas
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Chicago, Illinois
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San Diego, California
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Deerfield Beach, Florida
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San Francisco, California
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Denver, Colorado
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San Mateo, California
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East Bridgewater, Massachusetts
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Shawnee, Kansas
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Fullerton, California
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Trevose, Pennsylvania
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Grand Prairie, Texas
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Texarkana, Texas
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Jacksonville, Florida
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Wilkes-Barre, Pennsylvania
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Langhorne, Pennsylvania
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International Offices
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Bristol, United Kingdom
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Manila, Philippines
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Hasselt, Belgium
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Uxbridge, United Kingdom
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•
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Federal and state laws governing the use of the internet and regulating telemarketing, including the U.S. Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM"), which regulates commercial email and requires that commercial emails give recipients an opt-out method. Canada’s Anti-Spam Legislation ("CASL") applies in a comparable manner for our activities in Canada. Telemarketing activities are regulated by, among other requirements, the Federal Trade Commission’s Telemarketing Sales Rule ("TSR"), the Federal Communications Commission’s Telephone Consumer Protection Act ("TCPA"), and various state do-not-call laws.
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Federal and state laws governing the collection and use of personal data online and via mobile devices, including but not limited to the Federal Trade Commission Act and the Children's Online Privacy Protection Act, which seek to address consumer privacy and protection.
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The U.S. Department of Commerce’s proposed Privacy Shield Framework, the Federal Trade Commission’s Protecting Consumer Privacy in an Era of Rapid Change policy, and the European Commission’s European General Data Protection Regulation ("GDPR"), each of which seeks to address consumer privacy, data protection, and technological advancements in relation to the collection or use of personal information.
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A significant number of states in the U.S. have passed versions of data security or breach notification laws, which include required standards for data security and generally require timely notifications to affected persons in the event of data security breaches or other unauthorized access to certain types of protected personal data. With the increased attention security breaches have received, federal legislation may also be adopted and impose additional obligations.
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The Fair Credit Reporting Act ("FCRA"), which governs, among other things, the sharing of consumer report information, access to credit scores, and requirements for users of consumer report information.
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The Financial Services Modernization Act of 1999, or Gramm-Leach-Bliley Act ("GLB"), which, among other things, regulates the use for marketing purposes of non-public personal financial information of consumers that is held by financial institutions. Although Harte Hanks is not considered a financial institution, many of our clients are subject to the GLB. The GLB also includes rules relating to the physical, administrative, and technological protection of non-public personal financial information.
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The Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which regulates the use of protected health information for marketing purposes and requires reasonable safeguards designed to prevent intentional or unintentional use or disclosure of protected health information.
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The Fair and Accurate Credit Transactions Act of 2003 ("FACT Act"), which amended the FCRA and requires, among other things, consumer credit report notice requirements for creditors that use consumer credit report information in connection with risk-based credit pricing actions and also prohibits a business that receives consumer information from
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The European Union ("EU") data protection laws, including the comprehensive EU Directive on Data Protection (1995) ("EU Directive"), and the GDPR (which will replace the EU Directive once implemented), which imposes a number of obligations with respect to use of personal data, and includes a prohibition on the transfer of personal information from the EU to other countries that do not provide consumers with an “adequate” level of privacy or security. The EU standard for adequacy is generally stricter and more comprehensive than that of the U.S. and most other countries.
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limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, including limiting our ability to invest in our strategic initiatives, and consequently, place us at a competitive disadvantage;
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reduce the availability of our cash flows that would otherwise be available to fund working capital, capital expenditures, acquisitions, and other general corporate purposes; and
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result in higher interest expense in the event of increases in interest rates, as discussed below under the Risk Factor “Interest rate increases could affect our results of operations, cash flows, and financial position.”
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social, economic, and political instability;
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changes in local, national, and international legal requirements or policies resulting in burdensome government controls, tariffs, restrictions, embargoes, or export license requirements;
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higher rates of inflation;
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the potential for nationalization of enterprises;
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less favorable labor laws that may increase employment costs and decrease workforce flexibility;
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potentially adverse tax treatment;
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less favorable foreign intellectual property laws that would make it more difficult to protect our intellectual property from misappropriation;
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more onerous or differing data privacy and security requirements or other marketing regulations;
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longer payment cycles; and
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the differing costs and difficulties of managing international operations.
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the overall strength of the economies of the markets we serve and general market volatility;
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variations in our operating results from period to period and variations between our actual operating results and the expectations of securities analysts, investors, and the financial community;
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unanticipated developments with client engagements or client demand, such as variations in the size, budget, or progress toward the completion of engagements, variability in the market demand for our services, client consolidations, and the unanticipated termination of several major client engagements;
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announcements of developments affecting our businesses;
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competition and the operating results of our competitors; and
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other factors discussed elsewhere in this Item 1A, “Risk Factors.”
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2016
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2015
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High
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Low
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High
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Low
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First Quarter
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$
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3.72
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$
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2.53
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$
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8.10
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$
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7.27
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Second Quarter
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2.74
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0.85
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7.79
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5.96
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Third Quarter
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1.93
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1.42
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6.00
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3.40
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Fourth Quarter
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1.83
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1.28
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4.31
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3.23
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Period
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Total Number
of Shares
Purchased (1)
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Average Price
Paid per Share
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Total Number of Shares Purchased as
Part of a Publicly Announced Plan (2)
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Maximum
Dollar Amount
that May Yet Be Spent Under the
Plan
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October 1 - 31, 2016
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2,504
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$
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1.45
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—
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$
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11,437,538
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November 1 - 30, 2016
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—
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$
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—
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—
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$
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11,437,538
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December 1 - 31, 2016
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758
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$
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1.52
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—
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$
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11,437,538
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Total
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3,262
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$
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1.47
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—
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ANNUAL RETURN PERCENTAGE
Years Ending
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Company Name / Index
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Dec 2012
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Dec 2013
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Dec 2014
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Dec 2015
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Dec 2016
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Harte Hanks, Inc.
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(30.94
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36.62
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3.88
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(55.17
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)
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(52.11
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S&P 500 Index
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16.00
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32.39
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13.69
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1.38
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11.96
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Peer Group
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9.55
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51.30
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1.36
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5.12
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11.58
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In thousands, except per share amounts
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2016
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2015
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2014
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2013
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2012
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Statement of Comprehensive Income Data
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Revenues
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$
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404,412
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$
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444,166
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$
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499,444
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$
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503,760
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$
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528,042
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Operating income (loss) from continuing operations
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(55,780
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(203,269
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25,285
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24,772
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47,035
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Income (loss) from continuing operations
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$
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(89,778
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$
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(181,066
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$
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13,754
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$
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11,637
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$
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25,904
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Earnings (loss) from continuing operations per common share—diluted
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$
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(1.46
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$
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(2.94
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$
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0.22
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$
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0.19
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$
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0.41
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Weighted-average common and common equivalent shares outstanding—diluted
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61,487
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61,643
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62,658
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62,812
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63,148
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Cash dividends per share
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$
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0.09
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$
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0.34
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$
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0.34
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$
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0.26
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$
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0.43
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Balance sheet data (at end of period)
(1)
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Total assets
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213,437
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414,413
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643,613
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684,613
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706,212
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Total debt
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—
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77,105
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82,123
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97,079
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109,572
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Total stockholders’ equity
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2,656
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140,316
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326,676
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349,054
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328,164
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(1
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Includes reclassification of debt issuance costs as a reduction of the debt balance related to ASU 2015-03,
Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.
Prior to the adoption of this ASU, unamortized debt issuance costs were included in other assets. Please refer to Note A
, Significant Accounting Policies,
and Note C
, Long-Term Debt,
of the Notes to Consolidated Financial Statements.
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agency and digital services;
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database marketing solutions and business-to-business lead generation;
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direct mail; and
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contact centers.
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Year Ended December 31,
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In thousands, except per share amounts
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2016
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% Change
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2015
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% Change
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2014
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Revenues
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$
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404,412
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-9.0
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%
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$
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444,166
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-11.1
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%
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$
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499,444
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Operating expenses
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460,192
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-28.9
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%
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647,435
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36.5
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%
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474,159
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Operating income (loss)
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$
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(55,780
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72.6
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%
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$
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(203,269
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)
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-903.9
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%
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$
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25,285
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Operating Margin
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(13.8
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)%
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N/M
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5.1
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%
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Income (loss) from continuing operations
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$
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(89,778
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50.4
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%
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$
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(181,066
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)
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N/M
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$
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13,754
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Diluted EPS from continuing operations
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$
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(1.46
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)
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50.3
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%
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$
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(2.94
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)
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N/M
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$
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0.22
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In thousands
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Total
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2017
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2018
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2019
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2020
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2021
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Thereafter
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Debt
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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Interest on debt
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—
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—
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—
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—
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—
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—
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—
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Operating lease obligation
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30,076
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10,812
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7,482
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4,991
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2,842
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1,597
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2,352
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Capital lease obligations
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1,577
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559
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522
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459
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35
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2
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—
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Unfunded pension plan benefit payments
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17,405
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1,686
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1,676
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1,664
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1,692
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1,720
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8,967
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Total contractual cash obligations
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$
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49,058
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$
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13,057
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$
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9,680
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$
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7,114
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$
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4,569
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$
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3,319
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$
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11,319
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•
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an estimated discount rate such as the cost of equity or the weighted average cost of capital ("WACC"),
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•
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management's assumptions of future performance and historical operating results,
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market and industry specific risk premiums,
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•
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concentration of control owners,
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•
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valuation multiples, and
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•
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the economic outlook as of the valuation date.
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We did not properly staff (in amount and with appropriate levels of experience and training) for the company’s accounting and reporting requirements.
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We did not sufficiently establish directives, guidance, and controls to enable management and other personnel to understand and carry out their internal control responsibilities.
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We did not design and maintain internal controls that were effective in identifying, assessing and addressing risks that significantly impact our financial statements or the effectiveness of the internal controls over financial reporting. Specifically, we did not modify our controls to sufficiently address changes in risks of material misstatement as a result of changes in our operations, organizational structure and operating environment.
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We did not design and maintain effective controls to obtain, generate and communicate relevant and accurate information to support the function of internal control over financial reporting. Specifically, we did not identify all relevant information systems in support of our accounting and financial reporting processes.
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We did not use an adequate level of precision in our review of information used in controls.
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We did not design and maintain effective monitoring of compliance with established accounting policies, procedures and controls. This weakness included our failure to design and operate effective procedures and controls whose purpose is to evaluate and monitor the effectiveness of our individual control activities.
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Ineffective control environment, risk assessment, information and communication, and monitoring components of internal control
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Ineffective design of controls over the completeness and accuracy of information used to recognize revenue
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Insufficient level of precision with regards to management’s review controls over revenue
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Ineffective controls to ensure the identification of relevant information systems, including the relevant information technology general controls, used to process revenue transactions
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Ineffective controls over the accounting for contingent consideration
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Ineffective controls over the evaluation of goodwill for impairment
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Ineffective controls over the valuation of deferred tax assets
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•
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Ineffective controls over the financial closing and reporting process
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Name
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Age
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Position
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Stephen E. Carley
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64
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Director (Class II)
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David L. Copeland
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61
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Director (Class I)
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William F. Farley
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73
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Director (Class II)
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Christopher M. Harte
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69
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Director (Class I); Chairman of the Board
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Scott C. Key
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58
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Director (Class I)
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Judy C. Odom
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64
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Director (Class III)
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Karen A. Puckett
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56
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Director (Class III); President & CEO
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Carlos M. Alvarado
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43
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Vice President, Finance & Controller
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Frank M. Grillo
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51
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Executive Vice President, Sales & Chief Marketing Officer
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Andrew P Harrison
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45
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Executive Vice President, Contact Centers & CHRO
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Shirish R. Lal
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50
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Executive Vice President, COO & CTO
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Robert L. R. Munden
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48
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Executive Vice President, CFO, General Counsel & Secretary
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Committee
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Audit
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Compensation
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Governance
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||||||
Director
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2016
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2017
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2016
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2017
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2016
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2017
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Stephen E. Carley
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Member
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Member
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Member
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Member
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David L. Copeland
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Member*
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Chair
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William F. Farley
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Chair*
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Chair*
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Member
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Member
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Christopher M. Harte
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Member
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Member
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Member
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Scott C. Key
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Member
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Member
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Chair
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Judy C. Odom
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Member
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Member
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Chair
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Chair
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Number of 2016 meetings
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11
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5
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3
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||||||
Number of 2016 written consents
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1
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2
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0
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•
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Audit Committee
- The primary function of the Audit Committee is to assist the Board in fulfilling its oversight of (1) the integrity of our financial statements, including the financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance, (2) the qualifications and independence of our independent auditors, (3) the performance of our internal audit function and independent auditors, and (4) our compliance with legal and regulatory requirements.
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•
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Compensation Committee
- The primary functions of the Compensation Committee are to (1) review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and together with the other independent directors (as directed by the Board), determine and approve the CEO’s compensation level based on this evaluation, (2) review and recommend to the Board (as directed by the Board) non-CEO officer compensation, incentive-compensation plans and equity-based plans, and (3) review and discuss with management the company’s “Compensation Discussion and Analysis” and produce a committee report
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•
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Governance Committee
- The primary functions of the Governance Committee are to (1) develop, recommend to the Board, implement and maintain our company’s corporate governance principles and policies, (2) identify, screen and recruit, consistent with criteria approved by the Board, qualified individuals to become Board members, (3) recommend that the Board select the director nominees for the next annual meeting of stockholders, (4) assist the Board in determining the appropriate size, function, operation and composition of the Board and its committees, and (5) oversee the evaluation of the Board and management.
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•
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the Board shall conduct an annual evaluation of whether to combine (or continue combining, as the case may be) the roles of Chairman of the Board and CEO, with a view to ensuring significant independent oversight of management;
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•
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when the Chairman of the Board is also the CEO, the independent members of the Board shall elect one of the independent Directors to serve as Lead Director, such director to serve in such role for a one-year term;
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•
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at each regular meeting of the Board, the independent directors shall meet in executive session; and
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•
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the Lead Director shall have the following powers and duties (1) presiding over all meetings of the Board at which the Chairman of Board is not present, (2) presiding over executive sessions of independent and/or non-management directors, (3) calling meetings of the independent directors, and (4) serving as a liaison between the Chairman of the Board and the independent directors if so requested.
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•
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Karen Puckett - President and Chief Executive Officer;
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•
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Shirish R. Lal - Executive Vice President, COO & CTO;
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•
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Doug Shepard - Executive Vice President and CFO (resigned December 31, 2016);
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•
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Robert Munden - Executive Vice President, General Counsel & Secretary, and CFO from January 1, 2017; and
|
•
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Andrew Harrison - Executive Vice President, Contact Centers & Chief Human Resources Officer.
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•
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New Operations and Technology Leadership:
Shirish R. Lal joined the company as its Chief Operating and Chief Technology officer, replacing incumbents in those positions to drive growth and reorganization to align our operations with client needs and market expectations, and improve quality of execution.
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•
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Trillium Software Sale
: We sold our Trillium Software business in December, having terminated (without replacement) its CEO in April.
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•
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CFO Transition
: Mr. Shepard resigned from the company effective December 31, 2016, and Mr. Munden assumed the duties of CFO.
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•
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Smaller Leadership Team
: Through reorganized and consolidated roles, and in response to divestitures and other changes in our business, by the end of 2016 we reduced our senior leadership team by approximately half.
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•
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Equity Program
: In light of poor share performance and limitations to the shares available for issuance under the company’s equity incentive plan, the company reduced the value of grants to mitigate dilution and used new cash-settled awards of phantom stock.
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•
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Established target compensation for new officers which was largely consistent with market benchmarks.
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•
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Established goals for our short term annual incentive plan (the “2016 AIP”) with a view to motivating our executives toward objectives fundamental to improving stockholder value.
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•
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Due to company performance, made no payments under the 2016 AIP.
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•
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Granted long-term equity awards with a lower value (compared to prior years), comprised of restricted stock awards, performance units and phantom stock to align participants with the company’s achievement of long-term stockholder value creation.
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•
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Due to the decline in the company’s share price and the limited number of shares available for issuance under our 2013 Omnibus Incentive Plan (the “2013 Plan”), we added cash-settling awards, which also had the effect of decreasing the dilution of awards granted.
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•
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Eliminated executive car allowances (offset by corresponding salary increases).
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•
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Held base salaries constant (other than the car allowance adjustment) in light of poor performance.
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•
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Adopted an optional benefit allowing senior executive officers to be reimbursed for an annual comprehensive health examination.
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•
|
Attract and Retain Top Talent
- Attract and retain high-performing individuals who will significantly contribute to our long-term success and the creation of long-term stockholder value by providing competitive compensation compared to peer companies, competitors or companies in the same market for executive talent.
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•
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Pay for Performance
- Motivate our executives to work in the best interests of our stockholders by closely tying compensation to company and individual performance on both a short-term and long-term basis.
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•
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Place Significant Portion of Pay At Risk
- Align executive compensation with stockholder interests by placing a significant portion of total direct compensation at risk, such that the executive will not realize value unless company performance goals are achieved (for example, annual bonuses and performance units with vesting dependent upon company performance) or our stock price appreciates (for example, stock options or phantom stock).
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•
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Require Significant Ongoing Executive Stock Ownership
- Align executive and stockholder interests by including a significant equity component in our total compensation awards and by requiring executives to accumulate and maintain a sizable equity position through our stock ownership guidelines.
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Element
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Objectives and Basis
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Form
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Base Salary
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Provide base compensation that is competitive for each role to reward and motivate individual performance
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Cash
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Annual Incentive Plan
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Annual incentive or “bonus” to drive company performance consistent with immediate or short-term objectives
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Cash
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Bonus Restricted Stock Elections
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Encourage greater stock ownership by executive officers by allowing each to elect to receive up to 30% of their bonus in the form of restricted stock vesting on the first anniversary of the grant, with executive officers receiving 125% of the value of the forgone cash bonus in shares of restricted stock
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Restricted stock
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Long-Term Incentive Awards
|
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Long-term incentive to drive company performance and align executives’ interests with stockholders’ interests, and to retain executives through long-term vesting and potential wealth accumulation
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Restricted stock, performance awards, and cash-settled phantom stock
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Perquisites
|
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Enhance the competitiveness of our executive compensation program through limited additional benefits
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Health examination and death benefits
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Severance Agreements
|
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Attract and retain key talent by providing certain compensation in the event of a change in control
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Cash severance, equity vesting and COBRA reimbursement
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Qualified Deferred Compensation
|
|
Provide tax-deferred means to save for retirement
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Same benefit made generally available to our employees to participate in our 401(k) plan with a company match
|
Non-Qualified Deferred Compensation
|
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Provide tax-deferred means to save for retirement
|
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Participation in our non-qualified deferred compensation program
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Other
|
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Offer other competitive benefits, such as medical, dental, and other health and welfare benefits
|
|
Same benefit made generally available to our employees
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•
|
reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those goals and objectives, and together with the other independent directors (as directed by the Board), determining and approving the CEO’s compensation level based on this evaluation;
|
•
|
making recommendations to the Board with respect to non-CEO officer compensation, and incentive-compensation and equity-based plans that are subject to board approval;
|
•
|
assisting the Board by (i) evaluating potential candidates for officer positions, (ii) recommending terms for the hiring, promotion and severance of officers, and (iii) overseeing the development of officer succession plans;
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•
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participating with management in reviewing the annual goals and objectives with respect to compensation for the company’s officers and, to the extent the Committee deems necessary or appropriate, other key employees of the company or its subsidiaries (collectively, “Principal Executives”);
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•
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periodically (but no less frequently than annually) evaluating the performance of the Principal Executives in light of established goals and objectives and, based upon this evaluation and any compensation recommendations for the Principal Executives made by the CEO, approving or (in the case of officers, and as directed by the Board) making recommendations to the Board with respect to the compensation for the Principal Executives; and
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•
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periodically (but no less frequently than annually) evaluating the competitiveness of the company’s executive compensation program in reference to its peers and broader trends, including consideration of base salaries, annual incentives, long-term incentives and equity-based compensation, considering (among other things) the company’s performance and relative stockholder return, the value of similar incentive awards to similarly situated executives at comparable companies, and the awards given to such person in prior years.
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•
|
anticipated reorganization and consolidation of leadership roles, potentially resulting in fewer leaders each with greater and/or broader responsibility;
|
•
|
possible divestitures and other changes in our business;
|
•
|
competitive market data to assess how our executive pay compared to other companies, considering the individual elements of our compensation program, the relative mix of those compensation elements and total direct compensation amounts, with then-current market data provided by Meridian;
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•
|
input from non-Committee members of the Board (including our CEO) with regard to base salary proposals, long-term incentive awards, individual executive officer performance and related matters;
|
•
|
recent company performance compared to (i) our financial and operational expectations for our company as a whole, (ii) for our (former) Trillium and Customer Interactions segments individually and (iii) our peers and other market indicators;
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•
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the need to attract and retain a pool of highly-qualified leadership candidates for positions necessitated by our evolving strategy and corresponding organizational changes;
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•
|
ongoing and anticipated efforts to transform our business operations in line with our strategy, that were expected to result in continued significant additional work commitments by our executive officers;
|
•
|
a general assessment of individual executive officer performance and contributions in support of our strategies, individual officer responsibilities, tenure and experience in his or her position and the overall financial performance of the businesses or functional areas for which an officer is responsible;
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•
|
providing competitive compensation to reflect new or expanded roles for some of our executives;
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•
|
retention considerations in light of a recent history of relatively low bonus payouts to executive officers based on recent company performance and diminished equity compensation values because of declining stock price and earnings per share performance;
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•
|
individual officer compensation history, including the cumulative effect of equity awards granted in prior years and value realized from prior equity awards;
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•
|
internal pay equity (
i.e
., considering pay for similar jobs and jobs at different levels within the company and considering the relative importance of a particular position to us); and
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•
|
tax and regulatory considerations, including our policy to take reasonable and practical steps to maximize the tax deductibility of compensation payments to executives under §162(m) of the Code, the impact of expensing equity grants under ASC 718, and the impact of §409A relating to non-qualified deferred compensation.
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•
|
perceived advantages, disadvantages, strengths and weaknesses of other candidates considered;
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•
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the scope and importance of the role to the company’s success;
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•
|
the compensation received by his immediate predecessors in the company;
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•
|
timing considerations (such as when he would be available to start); and
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•
|
the compensation he received in his recent employment.
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•
|
cash compensation (base pay, bonus and (until discontinued) automobile allowance) for the current year under consideration and each of the past two years;
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•
|
values of long-term equity compensation awards granted (options, restricted stock, phantom stock and performance awards) for the current year under consideration and each of the past two years;
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•
|
salary continuation benefits (similar in effect to life insurance benefits);
|
•
|
estimated pension benefits upon retirement;
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•
|
the value, and changes in value, of previous equity compensation awards;
|
•
|
stock ownership guideline compliance; and
|
•
|
estimated amounts the executive could realize upon a change in control or termination of employment.
|
•
|
whether any of our businesses, operations or functions has much more inherent risk, a significantly different compensation structure, or different profitability basis or results;
|
•
|
whether the compensation mix is appropriately balanced between annual and long-term incentive awards;
|
•
|
the relationship between annual and long-term performance measures and payouts, and whether measures are aligned (or complementary) to ensure that they encourage consistent behaviors and sustainable results without conflict;
|
•
|
whether long-term performance measures and equity vehicles encourage excessively risky behavior;
|
•
|
whether targets require performance at such a high level that executives would take improper risks to achieve them;
|
•
|
the overlap of performance criteria and vesting periods to reduce incentives to maximize performance in any one period;
|
•
|
whether the mix of equity incentives serve the best interests of stockholders by rewarding the right measures;
|
•
|
the effect of dilution on stockholders and the company’s equity burn rate; and
|
•
|
the report of Meridian regarding the risks of our compensation program.
|
Acxiom Corporation
|
The Dun & Bradstreet Corporation
|
MDC Partners, Inc.
|
Cenveo, Inc.
|
Forrester Research, Inc.
|
Meredith Corporation
|
Convergys Corporation
|
Gartner, Inc.
|
Sykes Enterprises, Incorporated
|
|
|
Teletech Holdings, Inc.
|
Acxiom Corporation
|
Hubspot, Inc.
|
NCI, Inc.
|
Advisory Board Co.
|
Information Services Group
|
Neustar, Inc.
|
CIBER, Inc.
|
Marin Software, Inc.
|
Rocket Fuel, Inc.
|
Forrester Research, Inc.
|
MDC Partners, Inc.
|
Sykes Enterprises, Incorporated
|
Hackett Group, Inc.
|
National Cinemedia, Inc.
|
Teletech Holdings, Inc.
|
•
|
the level of responsibility and complexity of the executive’s job;
|
•
|
the relative importance of the executive’s role and responsibilities in Harte Hanks;
|
•
|
whether, in the Committee’s business judgment and taking into account input from our CEO and other Board members, prior individual performance was particularly strong or weak;
|
•
|
how the executive’s salary compares to the salaries of other company executives;
|
•
|
how the executive’s salary compares to market salary information for the same or similar positions (making due consideration for how closely the benchmarked position matched the specific role of our executive);
|
•
|
the combined potential total direct compensation value of an executive’s salary, annual bonus opportunity and long-term incentive awards;
|
•
|
the economic environment; and
|
•
|
recent company performance compared to (i) our financial and operational expectations for our company as a whole, (ii) performance of the functions or operations for which the executive is responsible and (iii) our peers and other market indicators.
|
Named Executive Officer
|
|
Threshold
|
|
Target
|
|
Maximum
|
Karen Puckett
|
|
25.00%
|
|
100%
|
|
200%
|
Shirish Lal
|
|
18.75%
|
|
75%
|
|
150%
|
Doug Shepard
|
|
17.50%
|
|
70%
|
|
140%
|
Robert Munden
|
|
12.50%
|
|
50%
|
|
100%
|
Andrew Harrison
|
|
12.50%
|
|
50%
|
|
100%
|
Revenue (80% weight)
|
|
Operating Income (20% weight)
|
|
|
||||
Performance (% of Target)
|
|
Payout Level (% of Target)
|
|
Performance (% of Target)
|
|
Payout Level (% of Target)
|
|
|
110
|
|
200
|
|
110
|
|
200
|
|
Maximum
|
100
|
|
100
|
|
100
|
|
100
|
|
Target
|
97
|
|
25
|
|
90
|
|
85
|
|
Threshold
|
•
|
stock options
(time vesting), which in general align our executives’ interests with the interests of stockholders by having value only if our stock price increases over time;
|
•
|
restricted stock
(time vesting), which serves our retention goals by ensuring that the awards will have value if they vest because the ultimate value of restricted stock, unlike stock options, does not depend solely on our stock price increasing over time; and
|
•
|
performance awards
(performance vesting share-denominated awards), which require performance over a multi-year measurement period and thereby help align our executive compensation program with longer term company performance.
|
Named Executive Officer
|
|
Restricted Stock (shares) (1)
|
|
Phantom Stock (units) (2)
|
|
Performance Awards (TSR) (units-maximum) (3)
|
|
Performance Awards
(Revenue) (units-maximum) (4)
|
||||
Karen Puckett
|
|
185,000
|
|
|
112,397
|
|
|
185,000
|
|
|
261,096
|
|
Shirish Lal
|
|
—
|
|
|
—
|
|
|
48,000
|
|
|
41,219
|
|
Doug Shepard
|
|
75,000
|
|
|
42,100
|
|
|
75,000
|
|
|
68,122
|
|
Robert Munden
|
|
44,000
|
|
|
22,914
|
|
|
44,000
|
|
|
37,784
|
|
Andrew Harrison
|
|
44,000
|
|
|
22,914
|
|
|
44,000
|
|
|
37,784
|
|
(1)
|
Restricted shares vesting in three equal annual installments.
|
(2)
|
Restricted stock units vesting in four equal annual installments and settling in cash.
|
(3)
|
Performance stock units vesting February 15, 2019 based on relative TSR measured against the S&P 600 Small Cap Index for the period ending December 31, 2018, and settling in stock.
|
(4)
|
Performance stock units vesting February 15, 2019 based on the company’s reported 2018 revenue, and settling in cash.
|
•
|
Salary Continuation Benefits
- We provide salary continuation benefits (which are similar in effect to life insurance benefits) to our executive officers. This benefit provides the estates of our executive officers ten annual payments (of $90,000 for our CEO and $70,000 for Executive Vice Presidents) in the event of their death while employed by the company.
|
•
|
Annual Health Examination
- reimbursement for an annual comprehensive health examination at the Cooper Clinic (or similar clinic) for our CEO, Executive Vice Presidents and Senior Vice Presidents (with a cost estimated to be $5,000).
|
•
|
up to 12 months of temporary housing expenses (not to exceed $3,000 per month) at a location proximate to one of the company’s significant business operations;
|
•
|
at her 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 she incurs on the sale of her current primary personal residence, not to exceed $250,000, but only if she establishes a primary personal residence within 30 miles of one of the company’s primary business locations (or any other location mutually agreeable to the Committee and Ms. Puckett) during the first 24 months of her employment with the company; and
|
•
|
up to $10,000 in legal fees incurred by her for review and negotiation of her employment agreement.
|
•
|
our executive severance policy (the “Executive Severance Policy”);
|
•
|
“change in control” severance agreement (the “CIC Agreements”);
|
•
|
severance agreements with Messrs. Harrison, Munden and Shepard (the “Severance Agreements”); and
|
•
|
an employment agreement with our CEO (the “CEO Agreement”).
|
•
|
the company shall pay such officer a lump sum cash payment equal to 1.5 times such officer’s then-current annual base salary;
|
•
|
for a period of up to 18 months, the company will reimburse such officer for healthcare coverage as then elected to the extent such costs exceed his or her employee contribution prior to the termination date; and
|
•
|
all outstanding, unvested shares of time vesting restricted common stock held by such officer shall automatically become fully vested.
|
•
|
they are also entitled to severance compensation if employment is terminated by them for good reason (as defined in the employment agreement);
|
•
|
the initial (inducement) restricted stock and option grants (but no subsequent grants) would vest one additional tranche upon a termination without cause or for good reason; and
|
•
|
they would receive severance compensation equal to two times then-current base salary for most terminations not connected to a change in control.
|
|
Compensation Committee
|
|
Scott C. Key, Chair
|
|
Stephen E. Carley
|
|
Christopher M. Harte
|
|
Judy C. Odom
|
|
|
|
|
Salary
|
|
Bonus
(1) |
|
Stock
Awards (2) |
|
Option
Awards (2) |
|
Change in
Pension Value and Nonqualified Deferred Compensation Earnings (4) |
|
All Other
Compensation |
|
Total
|
|||||||
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|||||||
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(h)
|
|
(i)
|
|
(j)
|
|||||||
Karen Puckett (4)
|
|
2016
|
|
741,986
|
|
|
—
|
|
|
1,502,509
|
|
|
—
|
|
|
—
|
|
|
23,860
|
|
|
2,268,355
|
|
President and
|
|
2015
|
|
234,615
|
|
|
—
|
|
|
1,610,086
|
|
|
577,115
|
|
|
—
|
|
|
88,657
|
|
|
2,510,473
|
|
Chief Executive Officer
|
|
2014
|
|
—
|
|
|
—
|
|
|
59,999
|
|
|
—
|
|
|
—
|
|
|
68,450
|
|
|
128,449
|
|
Shirish Lal
|
|
2016
|
|
323,980
|
|
|
200,000
|
|
|
338,759
|
|
|
149,999
|
|
|
—
|
|
|
1,620
|
|
|
1,014,358
|
|
Executive Vice President, Chief Operating
|
|
2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Officer & Chief Technology Officer
|
|
2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Doug Shepard (5)
|
|
2016
|
|
458,820
|
|
|
—
|
|
|
523,685
|
|
|
—
|
|
|
25,749
|
|
|
26,086
|
|
|
1,034,340
|
|
Executive Vice President
|
|
2015
|
|
426,635
|
|
|
—
|
|
|
964,678
|
|
|
171,561
|
|
|
—
|
|
|
58,565
|
|
|
1,621,439
|
|
and Chief Financial Officer
|
|
2014
|
|
375,000
|
|
|
112,500
|
|
|
473,504
|
|
|
212,826
|
|
|
88,732
|
|
|
39,837
|
|
|
1,302,399
|
|
Robert Munden
|
|
2016
|
|
313,820
|
|
|
79,175
|
|
|
298,028
|
|
|
—
|
|
|
11,768
|
|
|
17,088
|
|
|
719,879
|
|
Executive Vice President
|
|
2015
|
|
316,731
|
|
|
—
|
|
|
296,803
|
|
|
98,936
|
|
|
—
|
|
|
36,549
|
|
|
749,019
|
|
and General Counsel & Secretary
|
|
2014
|
|
305,000
|
|
|
91,500
|
|
|
273,058
|
|
|
122,733
|
|
|
43,275
|
|
|
34,629
|
|
|
870,195
|
|
Andrew Harrison
|
|
2016
|
|
298,595
|
|
|
75,425
|
|
|
298,028
|
|
|
—
|
|
|
29,200
|
|
|
17,527
|
|
|
718,775
|
|
Executive Vice President, Human
|
|
2015
|
|
301,154
|
|
|
2,000
|
|
|
296,803
|
|
|
98,936
|
|
|
—
|
|
|
38,001
|
|
|
736,894
|
|
Human Resources and Contact Centers
|
|
2014
|
|
275,769
|
|
|
121,516
|
|
|
296,183
|
|
|
134,124
|
|
|
93,261
|
|
|
32,589
|
|
|
953,442
|
|
(1)
|
For Messrs. Shepard, Harrison and Munden in 2014, represents retention bonuses paid pursuant to their respective Severance Agreements, and additionally for Mr. Harrison, a discretionary retention incentive of $34,516 in the form of restricted stock and options granted in 2015 in part in respect of 2014 performance (the value of which are included in columns (e) and (f)). For Mr. Harrison in 2015, represents divisional anniversary bonus. For 2016, represents a signing bonus for Mr. Lal, and retention bonuses for Messrs. Harrison and Munden.
|
(2)
|
The amounts in columns (e) and (f) reflect the full grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see note H of our audited financial statements for the fiscal year ended December 31, 2016 included in our Form 10-K. For performance based stock units the fair value assumed such awards vested based on probable outcome of the performance conditions as of the grant date. For Ms. Puckett, 2014 amount reflects stock award made in respect of her service as an independent director, and in 2015 includes $59,993 for similar stock grants.
|
(3)
|
The amounts in column (h) reflect an estimate of the actuarial increase in the present value of the named executive officer’s benefits under the Restoration Pension Plan, determined using interest rate and mortality rate assumptions consistent with those used in our audited financial statements and described in note F of our audited financial statements for the fiscal year ended December 31, 2016 included in our Form 10-K. There can be no assurance that the amounts shown will ever be realized by the named executive officers
|
(4)
|
Ms. Puckett served as a director before her appointment as President and CEO effective September 14, 2015.
|
(5)
|
Mr. Shepard resigned from the company effective December 31, 2016.
|
Name
|
|
Year
|
|
Insurance Premium (1)
|
|
Auto Allowance
|
|
Company Contributions to 401(k) Plan
|
|
Dividends on Restricted Stock (2)
|
|
Other
(3) |
|
Total
|
||||||||||||
Karen Puckett
|
|
2016
|
|
$
|
1,150
|
|
|
$
|
3,975
|
|
|
$
|
—
|
|
|
$
|
18,735
|
|
|
$
|
—
|
|
|
$
|
23,860
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
5,300
|
|
|
$
|
—
|
|
|
$
|
23,357
|
|
|
$
|
60,000
|
|
|
$
|
88,657
|
|
|
|
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,950
|
|
|
$
|
63,500
|
|
|
$
|
68,450
|
|
Shirish Lal
|
|
2016
|
|
$
|
1,054
|
|
|
$
|
566
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Doug Shepard
|
|
2016
|
|
$
|
519
|
|
|
$
|
2,925
|
|
|
$
|
10,600
|
|
|
$
|
12,042
|
|
|
$
|
—
|
|
|
$
|
26,086
|
|
|
|
2015
|
|
$
|
519
|
|
|
$
|
11,700
|
|
|
$
|
10,600
|
|
|
$
|
35,746
|
|
|
$
|
—
|
|
|
$
|
58,565
|
|
|
|
2014
|
|
$
|
519
|
|
|
$
|
11,700
|
|
|
$
|
10,400
|
|
|
$
|
17,218
|
|
|
$
|
—
|
|
|
$
|
39,837
|
|
Robert Munden
|
|
2016
|
|
$
|
475
|
|
|
$
|
2,925
|
|
|
$
|
10,600
|
|
|
$
|
3,088
|
|
|
$
|
—
|
|
|
$
|
17,088
|
|
|
|
2015
|
|
$
|
475
|
|
|
$
|
11,700
|
|
|
$
|
10,600
|
|
|
$
|
13,774
|
|
|
$
|
—
|
|
|
$
|
36,549
|
|
|
|
2014
|
|
$
|
475
|
|
|
$
|
11,700
|
|
|
$
|
10,400
|
|
|
$
|
12,054
|
|
|
$
|
—
|
|
|
$
|
34,629
|
|
Andrew Harrison
|
|
2016
|
|
$
|
914
|
|
|
$
|
2,925
|
|
|
$
|
10,600
|
|
|
$
|
3,088
|
|
|
$
|
—
|
|
|
$
|
17,527
|
|
|
|
2015
|
|
$
|
914
|
|
|
$
|
11,700
|
|
|
$
|
10,600
|
|
|
$
|
14,787
|
|
|
$
|
—
|
|
|
$
|
38,001
|
|
|
|
2014
|
|
$
|
580
|
|
|
$
|
10,575
|
|
|
$
|
10,400
|
|
|
$
|
11,034
|
|
|
$
|
—
|
|
|
$
|
32,589
|
|
(1)
|
Reflects annual premium paid by Harte Hanks for life insurance policies obtained in connection with providing salary continuation benefits to each of the named executive officers; see “Perquisites” included above in the CD&A.
|
(2)
|
Reflects dividends paid by Harte Hanks during the year on shares of restricted stock held by each of the named executive officers; such dividends are paid at the same rate as paid on other shares of common stock.
|
(3)
|
Amounts for Ms. Puckett reflect (i) in 2015, board service fees of $50,000 earned during her tenure as an independent director, and reimbursement of $10,000 in legal fees incurred in connection with the negotiation of her employment agreement, and (ii) in 2014 board service fees earned as an independent director.
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
|
|
All Other Option Awards: Number of Securities Underlying Options (2)
|
|
Exercise or Base Price of Option Awards (3)
|
|
Grant Date Fair Value of Stock and Option Awards (4)
|
||||||||||||||||||||||||
|
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
|
|
||||||||||||||||||||
Name
|
|
Award Type (1)
|
|
Grant Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
|
($/Sh)
|
|
($)
|
|||||||||||||||
(a)
|
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
|
(k)
|
|
(l)
|
||||||||||||||||
Karen Puckett
|
|
AIP
|
|
3/29/2016
|
|
$
|
186,475
|
|
|
$
|
745,900
|
|
|
$
|
1,491,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
PSU(S)
|
|
4/15/2016
|
|
|
|
|
|
|
|
46,250
|
|
|
92,500
|
|
|
185,000
|
|
|
|
|
|
|
|
$
|
1.90
|
|
|
$
|
175,750
|
|
||||||||
|
|
RSA
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,000
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
497,650
|
|
||||||||||
|
|
PSU(C)
|
|
4/15/2016
|
|
|
|
|
|
|
|
130,548
|
|
|
195,822
|
|
|
261,096
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
526,761
|
|
||||||||
|
|
RSU
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,397
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
302,348
|
|
||||||||||
Shirish Lal
|
|
AIP
|
|
3/29/2016
|
|
$
|
77,194
|
|
|
$
|
308,775
|
|
|
$
|
617,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Option
|
|
3/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,371
|
|
(4)
|
|
$
|
2.85
|
|
|
$
|
149,999
|
|
||||||||||
|
|
RSA
|
|
3/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,684
|
|
|
|
|
|
$
|
2.85
|
|
|
$
|
209,999
|
|
||||||||||
|
|
PSU(S)
|
|
4/15/2016
|
|
|
|
|
|
|
|
12,000
|
|
|
24,000
|
|
|
48,000
|
|
|
|
|
|
|
|
$
|
1.90
|
|
|
$
|
45,600
|
|
||||||||
|
|
PSU(C)
|
|
4/15/2016
|
|
|
|
|
|
|
|
20,610
|
|
|
30,914
|
|
|
41,219
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
83,159
|
|
||||||||
Doug Shepard
|
|
AIP
|
|
3/29/2016
|
|
$
|
80,798
|
|
|
$
|
323,190
|
|
|
$
|
646,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
PSU(S)
|
|
4/15/2016
|
|
|
|
|
|
|
|
18,750
|
|
|
37,500
|
|
|
75,000
|
|
|
|
|
|
|
|
$
|
1.90
|
|
|
$
|
71,250
|
|
||||||||
|
|
RSA
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
201,750
|
|
||||||||||
|
|
PSU(C)
|
|
4/15/2016
|
|
|
|
|
|
|
|
34,061
|
|
|
51,092
|
|
|
68,122
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
137,437
|
|
||||||||
|
|
RSU
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,100
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
113,249
|
|
||||||||||
Robert Munden
|
|
AIP
|
|
3/29/2016
|
|
$
|
39,588
|
|
|
$
|
158,350
|
|
|
$
|
316,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
PSU(S)
|
|
4/15/2016
|
|
|
|
|
|
|
|
11,000
|
|
|
22,000
|
|
|
44,000
|
|
|
|
|
|
|
|
$
|
1.90
|
|
|
$
|
41,800
|
|
||||||||
|
|
RSA
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,000
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
118,360
|
|
||||||||||
|
|
PSU(C)
|
|
4/15/2016
|
|
|
|
|
|
|
|
18,892
|
|
|
28,338
|
|
|
37,784
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
76,229
|
|
||||||||
|
|
RSU
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,914
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
61,639
|
|
||||||||||
Andrew Harrison
|
|
AIP
|
|
3/29/2016
|
|
$
|
37,713
|
|
|
$
|
150,850
|
|
|
$
|
301,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
PSU(S)
|
|
4/15/2016
|
|
|
|
|
|
|
|
11,000
|
|
|
22,000
|
|
|
44,000
|
|
|
|
|
|
|
|
$
|
1.90
|
|
|
$
|
41,800
|
|
||||||||
|
|
RSA
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,000
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
118,360
|
|
||||||||||
|
|
PSU(C)
|
|
4/15/2016
|
|
|
|
|
|
|
|
18,892
|
|
|
28,338
|
|
|
37,784
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
76,229
|
|
||||||||
|
|
RSU
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,914
|
|
|
|
|
|
$
|
2.69
|
|
|
$
|
61,639
|
|
(1)
|
Type of Award: AIP = Annual Incentive Plan (cash); PSU(S) = Performance Award (unit settling in stock) with a TSR performance measure; RSA = Restricted Stock Award; PSU(C) = Performance Award (unit settling in cash) with a revenue performance measure; Option = Stock Option; see Additional Analysis of Executive Compensation Elements-Long Term Incentive Awards above for more details.
|
(2)
|
The amount shown in column (k) is based upon the closing market price of our common stock on the grant date, as reported on the NYSE.
|
(3)
|
The amounts shown in column (l) represent the full grant date fair value of the options and awards calculated in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note H,
Stock-Base Compensation,
in this Form 10-K.
|
(4)
|
Options were granted at exercise prices equal to the market value of our common stock on the grant date. Options expire on the tenth anniversary of the grant date and vest in four equal annual installments, one on each of the first four anniversaries of the grant date.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||||||||||||||
Name
|
|
Number of
Securities Underlying Unexercised Options (#) Exercisable |
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable |
|
Option Exercise
Price ($) |
|
Option
Expiration Date |
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
|
|
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) (2)
|
|||||||||||||||||
(a)
|
|
(b)
|
|
(c)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|||||||||||||||||
Karen Puckett
|
|
216,841
|
|
|
650,523
|
|
|
(3
|
)
|
|
$
|
3.79
|
|
|
9/17/2025
|
|
112,397
|
|
|
(7)
|
|
$
|
169,719
|
|
|
185,000
|
|
(16
|
)
|
|
$
|
279,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,000
|
|
|
(8)
|
|
$
|
279,350
|
|
|
261,096
|
|
(17
|
)
|
|
$
|
394,255
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,601
|
|
|
(9)
|
|
$
|
213,818
|
|
|
349,809
|
|
(16
|
)
|
|
$
|
528,212
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
5,154
|
|
|
(10)
|
|
$
|
7,783
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,853
|
|
|
(11)
|
|
$
|
4,308
|
|
|
|
|
|
|
|
|
||||
Shirish Lal
|
|
—
|
|
|
120,371
|
|
|
(4
|
)
|
|
$
|
2.85
|
|
|
3/16/2016
|
|
73,684
|
|
|
(12)
|
|
$
|
111,263
|
|
|
41,219
|
|
(17
|
)
|
|
$
|
62,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,000
|
|
(16
|
)
|
|
$
|
72,480
|
|
||||||||
Doug Shepard
|
|
20,774
|
|
|
62,324
|
|
|
(5
|
)
|
|
$
|
7.68
|
|
|
4/15/2025
|
|
42,100
|
|
|
(7)
|
|
$
|
63,571
|
|
|
75,000
|
|
(16
|
)
|
|
$
|
113,250
|
|
|
|
39,946
|
|
|
39,947
|
|
|
(6
|
)
|
|
$
|
8.23
|
|
|
4/15/2024
|
|
75,000
|
|
|
(8)
|
|
$
|
113,250
|
|
|
68,122
|
|
(17
|
)
|
|
$
|
102,864
|
|
|
|
60,000
|
|
|
—
|
|
|
|
|
$
|
7.25
|
|
|
9/18/2022
|
|
52,448
|
|
|
(13)
|
|
$
|
79,196
|
|
|
30,833
|
|
(18
|
)
|
|
$
|
46,558
|
|
|
|
|
40,000
|
|
|
—
|
|
|
|
|
$
|
9.91
|
|
|
2/5/2022
|
|
26,806
|
|
|
(14)
|
|
$
|
40,477
|
|
|
26,589
|
|
(19
|
)
|
|
$
|
40,149
|
|
|
|
|
10,000
|
|
|
—
|
|
|
|
|
$
|
12.31
|
|
|
2/5/2021
|
|
11,396
|
|
|
(15)
|
|
$
|
17,208
|
|
|
|
|
|
|
|||||
|
|
75,000
|
|
|
—
|
|
|
|
|
$
|
11.90
|
|
|
2/5/2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
90,000
|
|
|
—
|
|
|
|
|
$
|
6.04
|
|
|
2/5/2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
15,000
|
|
|
—
|
|
|
|
|
$
|
15.90
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
50,000
|
|
|
—
|
|
|
|
|
$
|
17.30
|
|
|
12/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Robert Munden
|
|
11,980
|
|
|
35,941
|
|
|
(5
|
)
|
|
$
|
7.68
|
|
|
4/15/2025
|
|
22,914
|
|
|
(7)
|
|
$
|
34,600
|
|
|
37,784
|
|
(16
|
)
|
|
$
|
57,054
|
|
|
|
23,036
|
|
|
23,037
|
|
|
(6
|
)
|
|
$
|
8.23
|
|
|
4/15/2024
|
|
44,000
|
|
|
(8)
|
|
$
|
66,440
|
|
|
44,000
|
|
(17
|
)
|
|
$
|
66,440
|
|
|
|
60,000
|
|
|
—
|
|
|
|
|
$
|
7.25
|
|
|
9/18/2022
|
|
15,459
|
|
|
(14)
|
|
$
|
23,343
|
|
|
17,780
|
|
(18
|
)
|
|
$
|
26,848
|
|
|
|
|
28,000
|
|
|
—
|
|
|
|
|
$
|
9.91
|
|
|
2/5/2022
|
|
6,572
|
|
|
(15)
|
|
$
|
9,924
|
|
|
15,333
|
|
(19
|
)
|
|
$
|
23,153
|
|
|
|
|
12,000
|
|
|
—
|
|
|
|
|
$
|
12.31
|
|
|
2/5/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
40,000
|
|
|
—
|
|
|
|
|
$
|
13.19
|
|
|
4/9/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Andrew Harrison
|
|
11,980
|
|
|
35,941
|
|
|
(5
|
)
|
|
$
|
7.68
|
|
|
4/15/2025
|
|
22,914
|
|
|
(7)
|
|
$
|
34,600
|
|
|
37,784
|
|
(16
|
)
|
|
$
|
57,054
|
|
|
|
5,700
|
|
|
—
|
|
|
|
|
$
|
7.76
|
|
|
2/5/2025
|
|
44,000
|
|
|
(8)
|
|
$
|
66,440
|
|
|
44,000
|
|
(17
|
)
|
|
$
|
66,440
|
|
|
|
|
23,036
|
|
|
23,037
|
|
|
(6
|
)
|
|
$
|
8.23
|
|
|
4/15/2024
|
|
15,459
|
|
|
(14)
|
|
$
|
23,343
|
|
|
17,780
|
|
(18
|
)
|
|
$
|
26,848
|
|
|
|
40,000
|
|
|
—
|
|
|
|
|
$
|
7.25
|
|
|
9/18/2022
|
|
6,572
|
|
|
(15)
|
|
$
|
9,924
|
|
|
15,333
|
|
(19
|
)
|
|
$
|
23,153
|
|
|
|
|
8,000
|
|
|
—
|
|
|
|
|
$
|
9.91
|
|
|
2/5/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
4,000
|
|
|
—
|
|
|
|
|
$
|
12.31
|
|
|
2/5/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
12,000
|
|
|
—
|
|
|
|
|
$
|
11.90
|
|
|
2/5/2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
11,250
|
|
|
—
|
|
|
|
|
$
|
6.04
|
|
|
2/5/2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
4,000
|
|
|
—
|
|
|
|
|
$
|
15.90
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
750
|
|
|
—
|
|
|
|
|
$
|
26.07
|
|
|
2/5/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based upon the closing market price of our common stock as of December 31, 2016 ($1.51), as reported on the NYSE.
|
(2)
|
In 2014, 2015 and 2016, our Compensation Committee awarded our executives performance-based stock units which are payable, if earned, in shares of common stock or cash. The payout levels range from 0% to a maximum of 100% of the performance units granted. At the time of each grant, it was expected that the probable outcome of the performance criterion would lead to a payout level of 75%.
|
(3)
|
These options vest in three equal annual installments on September 17 of 2017 - 2019.
|
(4)
|
These options vest in four equal annual installments on March 16 of 2017 - 2020.
|
(5)
|
These options vest in three equal annual installments on April 15 of 2017 - 2019.
|
(6)
|
These options vest in two equal annual installments on April 15 of 2017 - 2018.
|
(7)
|
Restricted stock vests in three equal annual installments on April 15 of 2017 - 2019.
|
(8)
|
Restricted stock units (phantom stock) vests in four equal annual installments on April 15 of 2017 - 2020.
|
(9)
|
Restricted stock vests in two equal annual installments on September 17 of 2017 - 2018.
|
(10)
|
Restricted stock vest(ed) in two equal annual installments on February 5 of 2017 - 2018.
|
(11)
|
Restricted stock vested on February 5, 2017.
|
(12)
|
Restricted stock vest(ed) in three equal annual installments on March 16 of 2017 - 2019.
|
(13)
|
Restricted stock vests in two equal annual installments on July 7 of 2017 - 2018.
|
(14)
|
Restricted stock vests in two equal annual installments on April 15 of 2017 - 2018.
|
(15)
|
Restricted stock vests on April 15, 2017.
|
(16)
|
Performance stock unit vests (payable in stock) February 15, 2019, subject to relative TSR performance conditions.
|
(17)
|
Performance stock unit vests (payable in cash) February 15, 2019, subject to revenue performance conditions.
|
(18)
|
Performance stock unit vests (payable in stock) February 15, 2018, subject to operating income performance conditions.
|
(19)
|
Performance stock unit would vest (payable in stock) February 15, 2017, subject to operating income performance conditions; conditions were not met, so no units vested.
|
|
|
Stock Awards
|
||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
|
||
(a)
|
|
(d)
|
|
(e) (1)
|
||
Karen Puckett
|
|
78,389
|
|
$
|
134,505
|
|
Shirish Lal
|
|
—
|
|
$
|
—
|
|
Doug Shepard
|
|
61,022
|
|
$
|
136,723
|
|
Robert Munden
|
|
22,635
|
|
$
|
64,602
|
|
Andrew Harrison
|
|
25,615
|
|
$
|
74,049
|
|
A =
|
1.0 percent of the Average Monthly Compensation multiplied by the projected number of years of credited service at the Normal Retirement Date.
|
B =
|
0.65 percent of the Average Monthly Compensation in excess of 1/12 of Covered Compensation multiplied by the number of years of projected credited service at the Normal Retirement Date up to 35 years.
|
C =
|
Ratio of credited service at April 1, 2014 to projected credited service at the Normal Retirement Date.
|
D =
|
50 percent of Average Monthly Compensation.
|
|
|
|
|
Number of Years of
Credited Service
|
|
Present Value of
Accumulated Benefit (1)
|
|
Payments During
Last Fiscal Year
|
|||||
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|||||
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|||||
Karen Puckett
|
|
Restoration Benefit Plan
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Shirish Lal
|
|
Restoration Benefit Plan
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Doug Shepard
|
|
Restoration Benefit Plan
|
|
6.250
|
|
|
$
|
274,921
|
|
|
$
|
—
|
|
Robert Munden
|
|
Restoration Benefit Plan
|
|
4.000
|
|
|
$
|
122,859
|
|
|
$
|
—
|
|
Andrew Harrison
|
|
Restoration Benefit Plan
|
|
18.583
|
|
|
$
|
290,653
|
|
|
$
|
—
|
|
(1)
|
The accumulated benefit is based on service and earnings, as described above, considered by the plans for the period through December 31, 2015. The present value has been calculated using a discount rate of 4.21% and assuming the named executive officers will live and retire at the normal retirement age of 65 years. For purposes of calculating the actuarial present value, no pre-retirement decrements are factored into the calculations. The mortality assumption is based on the RP2006 generational mortality tables projected using Scale MP2016.
|
•
|
the Executive Severance Policy;
|
•
|
the CIC Agreements;
|
•
|
Severance Agreements with Messrs. Harrison, Munden and Shepard; and
|
•
|
CEO Agreement with Ms. Puckett.
|
•
|
Establishing a clear offset right for the company so that executives cannot claim duplicate compensation under multiple arrangements;
|
•
|
Basing the bonus component of severance compensation on the target bonus payable to the executive, rather than an average of previously paid bonuses; and
|
•
|
Reforming the term and tail-period provisions to provide more clarity and certainty.
|
•
|
the company shall pay such officer a lump sum cash payment equal to 1.5 times such officer’s then-current annual base salary;
|
•
|
for a period of up to 18 months, the company will reimburse such officer for healthcare coverage as then elected to the extent such costs exceed his or her employee contribution prior to the termination date; and
|
•
|
all outstanding, unvested shares of time vesting restricted common stock held by such officer shall automatically become fully vested.
|
•
|
she is also entitled to severance compensation if she terminates her employment for good reason (as defined in the employment agreement);
|
•
|
her initial (inducement) restricted stock and option grants (but no subsequent grants) would vest one additional tranche upon a termination without cause or for good reason; and
|
•
|
she would receive severance compensation equal to two times her then-current base salary for most terminations not connected to a change in control.
|
|
|
No Change in Control
|
|
Change in Control
|
||||||||||||||||
|
|
Disability
|
|
Death
|
|
Termination
Without
Cause
|
|
No
Termination (1)
|
|
Termination
Without Cause or For Good
Reason
|
||||||||||
Karen Puckett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Retirement Benefits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Disability Benefits
|
|
1,422,875
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Salary Continuation (2)
|
|
—
|
|
|
900,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Severence (3)
|
|
—
|
|
|
—
|
|
|
1,491,800
|
|
|
—
|
|
|
4,475,400
|
|
|||||
Health Benefits (3) (4)
|
|
—
|
|
|
—
|
|
|
20,071
|
|
|
—
|
|
|
40,044
|
|
|||||
Equity Vesting Acceleration (3) (5)
|
|
674,978
|
|
|
674,978
|
|
|
674,978
|
|
|
—
|
|
|
1,876,794
|
|
|||||
Estimated Total
|
|
$
|
2,097,853
|
|
|
$
|
1,574,978
|
|
|
$
|
2,186,849
|
|
|
$
|
—
|
|
|
$
|
6,392,238
|
|
Shirish Lal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Retirement Benefits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Disability Benefits
|
|
2,629,281
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Salary Continuation (2)
|
|
—
|
|
|
700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Severence
|
|
—
|
|
|
—
|
|
|
411,700
|
|
|
—
|
|
|
1,440,950
|
|
|||||
Health Benefits (4)
|
|
—
|
|
|
—
|
|
|
20,071
|
|
|
—
|
|
|
40,044
|
|
|||||
Equity Vesting Acceleration (5)
|
|
111,263
|
|
|
111,263
|
|
|
111,263
|
|
|
—
|
|
|
245,984
|
|
|||||
Estimated Total
|
|
$
|
2,740,544
|
|
|
$
|
811,263
|
|
|
$
|
543,034
|
|
|
$
|
—
|
|
|
$
|
1,726,978
|
|
Doug Shepard
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Retirement Benefits (6)
|
|
$
|
274,921
|
|
|
$
|
274,921
|
|
|
$
|
274,921
|
|
|
$
|
274,921
|
|
|
$
|
274,921
|
|
Disability Benefits
|
|
2,744,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Salary Continuation (2)
|
|
—
|
|
|
700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Severence
|
|
—
|
|
|
—
|
|
|
692,550
|
|
|
—
|
|
|
1,962,225
|
|
|||||
Health Benefits (4)
|
|
—
|
|
|
—
|
|
|
15,295
|
|
|
—
|
|
|
30,354
|
|
|||||
Equity Vesting Acceleration (5)
|
|
313,703
|
|
|
313,703
|
|
|
313,703
|
|
|
—
|
|
|
616,524
|
|
|||||
Estimated Total
|
|
$
|
3,333,224
|
|
|
$
|
1,288,624
|
|
|
$
|
1,296,469
|
|
|
$
|
274,921
|
|
|
$
|
2,884,024
|
|
Robert Munden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Retirement Benefits (6)
|
|
$
|
122,859
|
|
|
$
|
122,859
|
|
|
$
|
122,859
|
|
|
$
|
122,859
|
|
|
$
|
122,859
|
|
Disability Benefits
|
|
2,306,070
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Salary Continuation (2)
|
|
—
|
|
|
700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Severence
|
|
—
|
|
|
—
|
|
|
475,050
|
|
|
—
|
|
|
1,187,625
|
|
|||||
Health Benefits (4)
|
|
—
|
|
|
—
|
|
|
19,815
|
|
|
—
|
|
|
38,550
|
|
|||||
Equity Vesting Acceleration (5)
|
|
134,307
|
|
|
134,307
|
|
|
134,307
|
|
|
—
|
|
|
307,801
|
|
|||||
Estimated Total
|
|
$
|
2,563,236
|
|
|
$
|
957,166
|
|
|
$
|
752,031
|
|
|
$
|
122,859
|
|
|
$
|
1,656,835
|
|
Andrew Harrison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Retirement Benefits (6)
|
|
$
|
290,653
|
|
|
$
|
290,653
|
|
|
$
|
290,653
|
|
|
$
|
290,653
|
|
|
$
|
290,653
|
|
Disability Benefits
|
|
2,571,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Salary Continuation (2)
|
|
—
|
|
|
700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Severence
|
|
—
|
|
|
—
|
|
|
452,551
|
|
|
—
|
|
|
1,131,377
|
|
|||||
Health Benefits (4)
|
|
—
|
|
|
—
|
|
|
20,070
|
|
|
—
|
|
|
39,941
|
|
|||||
Equity Vesting Acceleration (5)
|
|
134,307
|
|
|
134,307
|
|
|
134,307
|
|
|
—
|
|
|
307,801
|
|
|||||
Estimated Total
|
|
$
|
2,996,360
|
|
|
$
|
1,124,960
|
|
|
$
|
897,581
|
|
|
$
|
290,653
|
|
|
$
|
1,769,772
|
|
(1)
|
Assumes equity awards are assumed or replaced with equivalents, as described under the terms of the CIC Agreements or CEO Agreement.
|
(2)
|
Reflects the aggregate amount of 10 annual payments payable to the executive’s estate in the event of such executive’s death while employed.
|
(3)
|
The non-change in control amounts are also payable if Ms. Puckett terminates for “good reason” as defined in her employment agreement.
|
(4)
|
Reflects the estimated payments to (i) partially offset the cost of 18 months (no change in control) or (ii) entirely offset the cost of 24
months of future premiums (change in control) under our health and welfare benefit plans.
|
(5)
|
Values are calculated based on the closing price of our common stock of $1.51 on December 31, 2016.
|
(6)
|
Reflects the estimated single sum present value of Restoration Pension Plan accumulated benefit as of December 31, 2016, which the officer would be entitled to receive upon reaching age 65. Actual payments are made over time, not in a lump sum. None of our named executive officers with this benefit have reached normal retirement age. These amounts would also be payable in the event of termination with or without cause or voluntary resignation, provided that some or all of this amount is subject to clawback if, in the event of a “for cause” termination related to dishonest conduct, the Compensation Committee elects to deny vested retirement benefits under the Restoration Pension Plan.
|
Plan Category
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights (1)
(a)
|
|
Weighted-average exercise
price of outstanding options,
warrants and rights (2)
(b)
|
|
Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities
reflected in column (a)) (3)
(c)
|
Equity compensation plans approved by security holders
|
|
3,111,358
|
|
$9.39
|
|
2,477,276
|
Equity compensation plans not approved by security holders (4)
|
|
1,438,850
|
|
$3.73
|
|
—
|
Total
|
|
4,550,208
|
|
$7.72
|
|
2,477,276
|
(1)
|
Consisting of outstanding options and stock-denominated performance units.
|
(2)
|
The weighted-average exercise price does not take into account any shares issuable upon vesting of outstanding restricted stock or performance restricted stock units, which have no exercise price.
|
(3)
|
Represents shares available under our 2013 Plan; shares available for issuance under our 2013 Plan may be issued pursuant to stock options, restricted stock, performance restricted stock units, common stock and other awards that may be established pursuant to the 2013 Plan. No new options or securities may be granted under the 2005 Plan.
|
(4)
|
Consists of inducement awards made to Ms. Puckett and Messrs. Grillo and Lal in connection with their employment; the terms of these grants are consistent with the 2013 Plan.
|
Name and Address of Beneficial Owner (1)
|
|
Number of Shares of Common Stock
|
|
Percent of Class
|
||
Named Executive Officers
|
|
|
|
|
||
Karen A. Puckett (2)
|
|
659,857
|
|
|
1.1
|
%
|
Andrew P. Harrison (3)
|
|
232,902
|
|
|
*
|
|
Shirish R. Lal (4)
|
|
109,768
|
|
|
*
|
|
Robert L. R. Munden (5)
|
|
304,282
|
|
|
*
|
|
Douglas C. Shepard
|
|
—
|
|
|
*
|
|
|
|
|
|
|
||
Directors
|
|
|
|
|
||
Stephen E. Carley
|
|
98,878
|
|
|
*
|
|
David L. Copeland (6)
|
|
4,731,347
|
|
|
7.6
|
%
|
William F. Farley (7)
|
|
162,669
|
|
|
*
|
|
Christopher M. Harte (8)
|
|
1,158,765
|
|
|
1.9
|
%
|
Scott C. Key
|
|
115,086
|
|
|
*
|
|
Judy C. Odom
|
|
129,606
|
|
|
*
|
|
Karen A. Puckett (2)
|
|
659,857
|
|
|
1.1
|
%
|
|
|
|
|
|
||
Other Known 5% Holders
|
|
|
|
|
||
Houston H. Harte (9)
|
|
6,608,179
|
|
|
10.6
|
%
|
Dimensional Fund Advisors, Inc. (10)
|
|
3,961,916
|
|
|
6.3
|
%
|
Eidelman Virant Capital, Inc. (11)
|
|
3,576,600
|
|
|
5.7
|
%
|
|
|
|
|
|
||
All Current Executive Officers and Directors as a Group (16 persons) (12)
|
|
7,793,629
|
|
|
12.4
|
%
|
*
|
|
Less than 1%.
|
(1)
|
|
The address of (a) Houston H. Harte is P.O. Box 17424, San Antonio, TX 78217, (b) Dimensional Fund Advisors, Inc. is 6300 Bee Cave Road, Building One, Austin, TX 78746, (c) Eidelman Virant Capital, Inc. is 8000 Maryland Ave, Suite 380, St. Louis, MO 63105, and (d) each other beneficial owner is c/o Harte Hanks, Inc., 9601 McAllister Freeway, Suite 610, San Antonio, TX 78216
|
(2)
|
|
Includes 216,841 shares that may be acquired upon the exercise of options exercisable within the next 60 days.
|
(3)
|
|
Includes 137,764 shares that may be acquired upon the exercise of options exercisable within the next 60 days.
|
(4)
|
|
Includes 30,092 shares that may be acquired upon the exercise of options exercisable within the next 60 days.
|
(5)
|
|
Includes 198,514 shares that may be acquired upon the exercise of options exercisable within the next 60 days.
|
(6)
|
|
Includes the following shares to which Mr. Copeland disclaims beneficial ownership: (a) 68,000 shares held as custodian for unrelated minors, (b) 1,241,721 shares that are owned by various trusts for which he serves as trustee or co-trustee, (c) 200,500 shares held by a limited partnership of which he is sole manager of the general partner, and (d) 3,062,465 shares owned by the Shelton Family Foundation, of which he is one of nine directors and an employee.
|
(7)
|
|
Includes (i) 124 shares owned indirectly by Mr. Farley via a trust in which his spouse is a beneficiary, as to which beneficial ownership is disclaimed, and (ii) 81,448 shares held in a trust for which Mr. Farley is a beneficiary.
|
(8)
|
|
Includes 768,939 shares held by Spicewood Family Partners, Ltd., of which he is the sole member and manager of the limited liability company that is the sole general partner, with exclusive voting and dispositive power over all the partnership’s shares, and the following shares to which he disclaims beneficial ownership: (a) 300 shares held as custodian for Mr. Harte’s step-children and child, (b) 58,850 shares held by trusts for which Mr. Harte serves as trustee, and (c) 120,001 shares held by other trusts for which Mr. Harte serves as a co-trustee.
|
(9)
|
|
All such shares are held in a trust for which Mr. Harte and his wife are co-trustees and beneficiaries.
|
(10)
|
|
Represents shares held by investment advisory clients of Dimensional Fund Advisors LP (“Dimensional”) for whom Dimensional serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In its role as investment advisor, sub-adviser and/or manager, Dimensional or its subsidiaries possess sole voting power over 3,843,816 such shares and sole investment power over all such shares that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Issuer held by the Funds. However, all securities reflected are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. The Funds have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the securities held in their respective accounts.To the knowledge of Dimensional, the interest of no one such Fund exceeds 5% of the company’s common stock. Information relating to this stockholder is based on the stockholder’s Schedule 13G, filed with the SEC on February 9, 2017.
|
(11)
|
|
Represents shares held by investment advisory clients of Eidelman Virant Capital none of which, to its knowledge, owns 5% or more of the company’s common stock. Information relating to this stockholder is based on the stockholder’s Schedule 13G, filed with the SEC on February 13, 2017
|
(12)
|
|
Includes 621,143 shares that may be acquired upon the exercise of options exercisable within the next 60 days.
|
•
|
As previously disclosed in our 2016 proxy statement, Mr. Copeland’s son is a member of the transaction services group of KPMG LLP, the independent registered public accounting firm we used in 2015 and prior fiscal years. This issue was previously reviewed and discussed by the Board in connection with assessing the continued independence of Mr. Copeland. This review process included discussing with KPMG the nature of its transaction services group and whether there was any relation to KPMG’s audit or tax compliance groups. As a result of this diligence and discussions with KPMG, it was determined that KPMG’s transaction services group is a separate and distinct group from KPMG’s audit and tax compliance practice groups. Accordingly, based on the nature of the services provided by the transaction services group and the fact that Harte Hanks has not purchased such transaction services from KPMG, this matter was not deemed to constitute a material relationship with Harte Hanks. We selected Deloitte & Touche LLP as our independent registered public accounting firm for 2016 and 2017.
|
•
|
As disclosed in our 2016 proxy statement and further in this Form 10-K, in accordance with SEC rules, Mr. Copeland has reported, but disclaimed, “beneficial ownership” of approximately 7.6% of our outstanding shares of our common
|
|
|
2015
|
|
2016
|
||||
|
|
(KPMG)
|
|
(Deloitte)
|
||||
Audit Fees (1)
|
|
$
|
970,000
|
|
|
$
|
2,000,000
|
|
Audit Related Fees (2)
|
|
141,948
|
|
|
17,500
|
|
||
Tax Fees (relating to state, federal and international tax matters)
|
|
62,586
|
|
|
171,226
|
|
||
All Other Fees
|
|
—
|
|
|
2,132
|
|
||
Total
|
|
$
|
1,174,534
|
|
|
$
|
2,190,858
|
|
(1)
|
Fees for the annual financial statement audit, quarterly financial statement reviews and audit of internal control over financial reporting.
|
(2)
|
Includes fees for assurance and related services other than those included in Audit Fees. Includes charges for statutory audits of certain of the company’s foreign subsidiaries required by countries in which they are domiciled in 2015 and 2016.
|
ITEM 15.
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
15(a)(1)
|
|
Financial Statements
|
|
|
|
|
|
The financial statements filed as part of this report and referenced in Item 8 are presented in the Consolidated Financial Statements and the notes thereto beginning at page 74 of this Form 10-K (Financial Statements).
|
|
|
|
15(a)(2)
|
|
Financial Statement Schedules
|
|
|
|
|
|
All schedules for which provision is made in the applicable rules and regulations of the SEC have been omitted as the schedules are not required under the related instructions, are not applicable, or the information required thereby is set forth in the Consolidated Financial Statements or notes thereto.
|
|
|
|
15(a)(3)
|
|
Exhibits
|
|
|
|
|
|
The Exhibit Index following the Notes to Consolidated Financial Statements in this Form 10-K lists the exhibits that are filed or furnished, as applicable, as part of this Form 10-K.
|
HARTE HANKS, INC.
|
|
||
|
|
||
By:
|
|
/s/ Karen A. Puckett
|
|
|
|
Karen A. Puckett
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
June 16, 2017
|
|
/s/ Karen A. Puckett
|
|
/s/ Robert L. R. Munden
|
Karen A. Puckett
|
|
Robert L. R. Munden
|
Director, President and Chief Executive Officer
|
|
Executive Vice President, Chief Financial Officer,
|
Date: June 16, 2017
|
|
General Counsel and Secretary
|
|
|
Date: June 16, 2017
|
|
|
|
/s/ Carlos M. Alvarado
|
|
/s/ Christopher M. Harte
|
Carlos M. Alvarado
|
|
Christopher M. Harte, Chairman
|
Vice President, Finance and Corporate Controller
|
|
Date: June 16, 2017
|
Date: June 16, 2017
|
|
|
|
|
|
/s/ Stephen E. Carley
|
|
/s/ Scott C. Key
|
Stephen E. Carley, Director
|
|
Scott C. Key, Director
|
Date: June 16, 2017
|
|
Date: June 16, 2017
|
|
|
|
/s/ David L. Copeland
|
|
/s/ Judy C. Odom
|
David L. Copeland, Director
|
|
Judy C. Odom, Director
|
Date: June 16, 2017
|
|
Date: June 16, 2017
|
|
|
|
/s/ William F. Farley
|
|
|
William F. Farley, Director
|
|
|
Date: June 16, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
In thousands, except per share and share amounts
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
46,005
|
|
|
$
|
16,564
|
|
Accounts receivable
(less allowance for doubtful accounts of $1,028 at December 31, 2016 and $974 at December 31, 2015)
|
|
88,813
|
|
|
103,758
|
|
||
Inventory
|
|
838
|
|
|
963
|
|
||
Prepaid expenses
|
|
5,944
|
|
|
7,908
|
|
||
Prepaid income tax
|
|
2,895
|
|
|
1,760
|
|
||
Other current assets
|
|
4,934
|
|
|
6,664
|
|
||
Current assets of discontinued operations
|
|
—
|
|
|
169,401
|
|
||
Total current assets
|
|
149,429
|
|
|
307,018
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
||
Buildings and improvements
|
|
18,673
|
|
|
16,631
|
|
||
Software
|
|
53,672
|
|
|
55,901
|
|
||
Equipment and furniture
|
|
92,367
|
|
|
99,726
|
|
||
Software development and equipment installations in progress
|
|
600
|
|
|
1,015
|
|
||
Gross property, plant and equipment
|
|
165,312
|
|
|
173,273
|
|
||
Less accumulated depreciation and amortization
|
|
(141,388
|
)
|
|
(145,137
|
)
|
||
Net property, plant and equipment
|
|
23,924
|
|
|
28,136
|
|
||
Goodwill
|
|
34,510
|
|
|
69,699
|
|
||
Other intangible assets
(less accumulated amortization of $1,471 at December 31, 2016 and $650 at December 31, 2015)
|
|
3,302
|
|
|
4,123
|
|
||
Deferred tax assets, net
|
|
—
|
|
|
3,000
|
|
||
Other assets
|
|
2,272
|
|
|
2,437
|
|
||
Total assets
|
|
$
|
213,437
|
|
|
$
|
414,413
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
|
||
Current maturities of long-term debt
|
|
$
|
—
|
|
|
$
|
3,000
|
|
Accounts payable
|
|
45,563
|
|
|
36,617
|
|
||
Accrued payroll and related expenses
|
|
9,990
|
|
|
7,416
|
|
||
Deferred revenue and customer advances
|
|
6,505
|
|
|
6,240
|
|
||
Income taxes payable
|
|
30,436
|
|
|
1,246
|
|
||
Customer postage and program deposits
|
|
7,985
|
|
|
12,513
|
|
||
Other current liabilities
|
|
4,188
|
|
|
6,342
|
|
||
Current liabilities of discontinued operations
|
|
—
|
|
|
24,758
|
|
||
Total current liabilities
|
|
104,667
|
|
|
98,132
|
|
||
Long-term debt
|
|
—
|
|
|
74,105
|
|
||
Pensions
|
|
60,836
|
|
|
55,491
|
|
||
Contingent consideration
|
|
29,725
|
|
|
20,277
|
|
||
Deferred tax liability, net
|
|
11,044
|
|
|
20,672
|
|
||
Other long-term liabilities
|
|
4,509
|
|
|
5,420
|
|
||
Total liabilities
|
|
210,781
|
|
|
274,097
|
|
||
|
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
|
|
||
Common stock, $1 par value, 250,000,000 shares authorized 120,436,735 shares issued at December 31, 2016 and 120,146,720 shares issued at December 31, 2015
|
|
120,437
|
|
|
120,147
|
|
||
Additional paid-in capital
|
|
350,245
|
|
|
353,050
|
|
||
Retained earnings
|
|
837,316
|
|
|
973,538
|
|
||
Less treasury stock, 58,791,630 shares at cost at December 31, 2016 and 58,879,742 shares at cost at December 31, 2015
|
|
(1,259,164
|
)
|
|
(1,262,859
|
)
|
||
Accumulated other comprehensive loss
|
|
(46,178
|
)
|
|
(43,560
|
)
|
||
Total stockholders’ equity
|
|
2,656
|
|
|
140,316
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
213,437
|
|
|
$
|
414,413
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands, except per share amounts
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating revenues
|
|
$
|
404,412
|
|
|
$
|
444,166
|
|
|
$
|
499,444
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|||
Labor
|
|
247,241
|
|
|
238,620
|
|
|
253,205
|
|
|||
Production and distribution
|
|
117,126
|
|
|
141,920
|
|
|
165,307
|
|
|||
Advertising, selling, general and administrative
|
|
44,804
|
|
|
44,579
|
|
|
42,758
|
|
|||
Impairment of goodwill
|
|
38,669
|
|
|
209,938
|
|
|
—
|
|
|||
Depreciation, software and intangible asset amortization
|
|
12,352
|
|
|
12,378
|
|
|
12,889
|
|
|||
Total operating expenses
|
|
460,192
|
|
|
647,435
|
|
|
474,159
|
|
|||
Operating income (loss)
|
|
(55,780
|
)
|
|
(203,269
|
)
|
|
25,285
|
|
|||
Other expenses
|
|
|
|
|
|
|
|
|
|
|||
Interest expense, net
|
|
3,454
|
|
|
5,016
|
|
|
2,805
|
|
|||
Loss on sale
|
|
—
|
|
|
9,501
|
|
|
—
|
|
|||
Other, net
|
|
9,914
|
|
|
640
|
|
|
1,100
|
|
|||
Total other expenses
|
|
13,368
|
|
|
15,157
|
|
|
3,905
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
(69,148
|
)
|
|
(218,426
|
)
|
|
21,380
|
|
|||
Income tax expense (benefit)
|
|
20,630
|
|
|
(37,360
|
)
|
|
7,626
|
|
|||
Income (loss) from continuing operations
|
|
$
|
(89,778
|
)
|
|
$
|
(181,066
|
)
|
|
$
|
13,754
|
|
|
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations, net of income taxes
(including loss on disposal of $44,529 at December 31, 2016)
|
|
$
|
(41,159
|
)
|
|
$
|
10,138
|
|
|
$
|
10,237
|
|
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(130,937
|
)
|
|
$
|
(170,928
|
)
|
|
$
|
23,991
|
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
0.22
|
|
Discontinued operations
|
|
(0.67
|
)
|
|
0.17
|
|
|
0.16
|
|
|||
Basic earnings (loss) per common share
|
|
(2.13
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
|
61,487
|
|
|
61,643
|
|
|
62,444
|
|
|||
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
0.22
|
|
Discontinued operations
|
|
(0.67
|
)
|
|
0.17
|
|
|
0.16
|
|
|||
Diluted earnings (loss) per common share
|
|
$
|
(2.13
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common and common equivalent shares outstanding
|
|
61,487
|
|
|
61,643
|
|
|
62,658
|
|
|||
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(130,937
|
)
|
|
$
|
(170,928
|
)
|
|
$
|
23,991
|
|
|
|
|
|
|
|
|
||||||
Declared dividends per share
|
|
$
|
0.09
|
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|||
Adjustment to pension liability
|
|
$
|
(3,062
|
)
|
|
$
|
5,645
|
|
|
$
|
(17,281
|
)
|
Foreign currency translation adjustments
|
|
444
|
|
|
(1,976
|
)
|
|
(1,830
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
|
(2,618
|
)
|
|
3,669
|
|
|
(19,111
|
)
|
|||
Comprehensive income (loss)
|
|
$
|
(133,555
|
)
|
|
$
|
(167,259
|
)
|
|
$
|
4,880
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
(130,937
|
)
|
|
$
|
(170,928
|
)
|
|
$
|
23,991
|
|
|
|
|
|
|
|
|
||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|||
(Income) loss from discontinued operations, net of tax
|
|
41,159
|
|
|
(10,138
|
)
|
|
(10,237
|
)
|
|||
Loss on sale
|
|
—
|
|
|
9,501
|
|
|
—
|
|
|||
Impairment of goodwill
|
|
38,669
|
|
|
209,938
|
|
|
—
|
|
|||
Depreciation and software amortization
|
|
11,531
|
|
|
11,719
|
|
|
12,863
|
|
|||
Intangible asset amortization
|
|
821
|
|
|
659
|
|
|
26
|
|
|||
Stock-based compensation
|
|
2,673
|
|
|
5,442
|
|
|
3,978
|
|
|||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|||
Net pension cost (payments)
|
|
385
|
|
|
(257
|
)
|
|
(2,860
|
)
|
|||
Interest accretion on contingent consideration
|
|
2,430
|
|
|
2,337
|
|
|
—
|
|
|||
Adjustments to fair value of contingent consideration
|
|
7,018
|
|
|
—
|
|
|
—
|
|
|||
Discount amortization
|
|
208
|
|
|
356
|
|
|
357
|
|
|||
Deferred income taxes
|
|
26,290
|
|
|
(41,569
|
)
|
|
5,794
|
|
|||
Other, net
|
|
(246
|
)
|
|
333
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable
|
|
14,945
|
|
|
7,238
|
|
|
(8,539
|
)
|
|||
Decrease in inventory
|
|
125
|
|
|
272
|
|
|
51
|
|
|||
Decrease in prepaid expenses and other current assets
|
|
2,723
|
|
|
954
|
|
|
4,861
|
|
|||
Increase (decrease) in accounts payable
|
|
9,126
|
|
|
1,888
|
|
|
(739
|
)
|
|||
(Decrease) increase in other accrued expenses and liabilities
|
|
23,045
|
|
|
(10,390
|
)
|
|
(16,299
|
)
|
|||
Other, net
|
|
—
|
|
|
—
|
|
|
98
|
|
|||
Net cash provided by continuing operations
|
|
49,965
|
|
|
17,341
|
|
|
13,345
|
|
|||
Net cash provided by (used in) discontinued operations
|
|
(35,375
|
)
|
|
15,945
|
|
|
12,672
|
|
|||
Net cash provided by operating activities
|
|
14,590
|
|
|
33,286
|
|
|
26,017
|
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
||||||
Acquisitions, net of cash acquired
|
|
(3,500
|
)
|
|
(29,862
|
)
|
|
—
|
|
|||
Dispositions, net of cash transferred
|
|
—
|
|
|
4,974
|
|
|
—
|
|
|||
Purchases of property, plant and equipment
|
|
(6,691
|
)
|
|
(7,907
|
)
|
|
(9,118
|
)
|
|||
Proceeds from the sale of property, plant and equipment
|
|
755
|
|
|
(76
|
)
|
|
45
|
|
|||
Net cash used in investing activities within continuing operations
|
|
(9,436
|
)
|
|
(32,871
|
)
|
|
(9,073
|
)
|
|||
Net cash provided by (used in) investing activities within discontinued operations
|
|
109,139
|
|
|
(3,269
|
)
|
|
(2,084
|
)
|
|||
Net cash provided by (used in) investing activities
|
|
99,703
|
|
|
(36,140
|
)
|
|
(11,157
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
||||||
Borrowings
|
|
276,302
|
|
|
13,000
|
|
|
—
|
|
|||
Repayment of borrowings
|
|
(353,614
|
)
|
|
(18,375
|
)
|
|
(15,313
|
)
|
|||
Debt financing costs
|
|
(2,484
|
)
|
|
—
|
|
|
—
|
|
|||
Issuance of common stock
|
|
(233
|
)
|
|
(909
|
)
|
|
(481
|
)
|
|||
Payment of capital leases
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
14
|
|
|
—
|
|
|||
Purchase of treasury stock
|
|
—
|
|
|
(4,619
|
)
|
|
(7,354
|
)
|
|||
Issuance of treasury stock
|
|
186
|
|
|
193
|
|
|
—
|
|
|||
Dividends paid
|
|
(5,285
|
)
|
|
(21,241
|
)
|
|
(21,485
|
)
|
|||
Net cash used in financing activities
|
|
(85,296
|
)
|
|
(31,937
|
)
|
|
(44,633
|
)
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
444
|
|
|
(1,976
|
)
|
|
(1,830
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
29,441
|
|
|
(36,767
|
)
|
|
(31,603
|
)
|
|||
Cash and cash equivalents at beginning of year
|
|
16,564
|
|
|
53,331
|
|
|
84,934
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
46,005
|
|
|
$
|
16,564
|
|
|
$
|
53,331
|
|
In thousands, except per share amounts
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income(loss)
|
|
Total
Stockholders’
Equity
|
||||||||||||
Balance at December 31, 2013
|
|
$
|
119,187
|
|
|
$
|
345,095
|
|
|
$
|
1,163,201
|
|
|
$
|
(1,250,311
|
)
|
|
$
|
(28,118
|
)
|
|
$
|
349,054
|
|
Exercise of stock options and release of unvested shares
|
|
420
|
|
|
(151
|
)
|
|
—
|
|
|
(750
|
)
|
|
—
|
|
|
(481
|
)
|
||||||
Net tax effect of stock options exercised and release of unvested shares
|
|
—
|
|
|
(1,993
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,993
|
)
|
||||||
Stock-based compensation
|
|
—
|
|
|
4,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,055
|
|
||||||
Dividends paid ($0.34 per share)
|
|
—
|
|
|
—
|
|
|
(21,485
|
)
|
|
—
|
|
|
—
|
|
|
(21,485
|
)
|
||||||
Treasury stock issued
|
|
—
|
|
|
(767
|
)
|
|
—
|
|
|
1,307
|
|
|
—
|
|
|
540
|
|
||||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,894
|
)
|
|
—
|
|
|
(7,894
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
23,991
|
|
|
—
|
|
|
—
|
|
|
23,991
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,111
|
)
|
|
(19,111
|
)
|
||||||
Balance at December 31, 2014
|
|
$
|
119,607
|
|
|
$
|
346,239
|
|
|
$
|
1,165,707
|
|
|
$
|
(1,257,648
|
)
|
|
$
|
(47,229
|
)
|
|
$
|
326,676
|
|
Exercise of stock options and release of unvested shares
|
|
540
|
|
|
(329
|
)
|
|
—
|
|
|
(1,120
|
)
|
|
—
|
|
|
(909
|
)
|
||||||
Net tax effect of stock options exercised and release of unvested shares
|
|
—
|
|
|
1,742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,742
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
5,733
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,733
|
|
||||||
Dividends paid ($0.34 per share)
|
|
—
|
|
|
—
|
|
|
(21,241
|
)
|
|
—
|
|
|
—
|
|
|
(21,241
|
)
|
||||||
Treasury stock issued
|
|
—
|
|
|
(335
|
)
|
|
—
|
|
|
528
|
|
|
—
|
|
|
193
|
|
||||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,619
|
)
|
|
—
|
|
|
(4,619
|
)
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
(170,928
|
)
|
|
—
|
|
|
—
|
|
|
(170,928
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,669
|
|
|
3,669
|
|
||||||
Balance at December 31, 2015
|
|
$
|
120,147
|
|
|
$
|
353,050
|
|
|
$
|
973,538
|
|
|
$
|
(1,262,859
|
)
|
|
$
|
(43,560
|
)
|
|
$
|
140,316
|
|
Exercise of stock options and release of unvested shares
|
|
290
|
|
|
(290
|
)
|
|
—
|
|
|
(233
|
)
|
|
—
|
|
|
(233
|
)
|
||||||
Net tax effect of stock options exercised and release of unvested shares
|
|
—
|
|
|
(1,259
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,259
|
)
|
||||||
Stock-based compensation
|
|
—
|
|
|
2,486
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,486
|
|
||||||
Dividends paid ($0.09 per share)
|
|
—
|
|
|
—
|
|
|
(5,285
|
)
|
|
—
|
|
|
—
|
|
|
(5,285
|
)
|
||||||
Treasury stock issued
|
|
—
|
|
|
(3,742
|
)
|
|
—
|
|
|
3,928
|
|
|
—
|
|
|
186
|
|
||||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
(130,937
|
)
|
|
—
|
|
|
—
|
|
|
(130,937
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,618
|
)
|
|
(2,618
|
)
|
||||||
Balance at December 31, 2016
|
|
$
|
120,437
|
|
|
$
|
350,245
|
|
|
$
|
837,316
|
|
|
$
|
(1,259,164
|
)
|
|
$
|
(46,178
|
)
|
|
$
|
2,656
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
|
$
|
974
|
|
|
$
|
878
|
|
|
$
|
1,410
|
|
Net charges to expense
|
|
711
|
|
|
685
|
|
|
(109
|
)
|
|||
Amounts recovered against the allowance
|
|
(657
|
)
|
|
(589
|
)
|
|
(423
|
)
|
|||
Balance at end of year
|
|
$
|
1,028
|
|
|
$
|
974
|
|
|
$
|
878
|
|
Buildings and improvements
|
10
|
to
|
40 years
|
Software
|
3
|
to
|
10 years
|
Equipment and furniture
|
3
|
to
|
20 years
|
|
|
December 31,
|
||||||
In thousands
|
|
2016
|
|
2015
|
||||
Equipment and furniture
|
|
$
|
2,357
|
|
|
$
|
1,088
|
|
Less accumulated depreciation
|
|
(903
|
)
|
|
(767
|
)
|
||
Net book value
|
|
$
|
1,454
|
|
|
$
|
321
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
(1)
|
|
|
|
|
|
|
|
|
|
|||
United States
|
|
$
|
324,625
|
|
|
$
|
377,717
|
|
|
$
|
427,535
|
|
Other countries
|
|
79,787
|
|
|
66,449
|
|
|
71,909
|
|
|||
Total revenue
|
|
$
|
404,412
|
|
|
$
|
444,166
|
|
|
$
|
499,444
|
|
|
|
December 31,
|
||||||
In thousands
|
|
2016
|
|
2015
|
||||
Property, plant and equipment
(2)
|
|
|
|
|
|
|
||
United States
|
|
$
|
19,810
|
|
|
$
|
24,695
|
|
Other countries
|
|
4,114
|
|
|
3,441
|
|
||
Total property, plant and equipment
|
|
$
|
23,924
|
|
|
$
|
28,136
|
|
(1)
|
Geographic revenues are based on the location of the service being performed.
|
(2)
|
Property, plant and equipment are based on physical location.
|
Level 1
|
|
Quoted prices in active markets for identical assets or liabilities.
|
|
|
|
Level 2
|
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
|
|
Level 3
|
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
|
December 31,
|
||||||
In thousands
|
|
2016
|
|
2015
|
||||
2016 Revolving Credit Facility, various interest rates based on the Base rate, due March 10, 2021 (effective rate of 6.00% at December 23, 2016 termination)
|
|
$
|
—
|
|
|
N/A
|
|
|
2016 Term Loan Facility, various interest rates based on the Base rate plus the applicable margin, due March 10, 2021 (effective rate of 10.72% at December 23, 2016 termination)
|
|
—
|
|
|
N/A
|
|
||
2013 Revolving Credit Facility ($60.6 million capacity), various interest rates based on the highest of (a) the Agent's prime rate, (b) the Federal Funds Rate plus 0.50% per annum, or (c) Eurodollar rate plus 1.00% per annum, plus a spread which is determined based on our total debt-to-EBITDA ratio then in effect, due August 16, 2016 (effective rate of 4.75% at December 31, 2015)
|
|
N/A
|
|
|
13,000
|
|
||
2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.42% at December 31, 2015), due August 16, 2016
|
|
N/A
|
|
|
64,313
|
|
||
Less: unamortized discount and debt issuance costs
|
|
—
|
|
|
(208
|
)
|
||
Total debt
|
|
—
|
|
|
77,105
|
|
||
Less current maturities
|
|
—
|
|
|
3,000
|
|
||
Total long-term debt
|
|
$
|
—
|
|
|
$
|
74,105
|
|
|
|
December 31,
|
||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
In thousands
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Total debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77,105
|
|
|
$
|
77,105
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
(6,360
|
)
|
|
$
|
2,920
|
|
|
$
|
1,519
|
|
State and local
|
|
(107
|
)
|
|
744
|
|
|
113
|
|
|||
Foreign
|
|
807
|
|
|
545
|
|
|
200
|
|
|||
Total current
|
|
$
|
(5,660
|
)
|
|
$
|
4,209
|
|
|
$
|
1,832
|
|
|
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
18,619
|
|
|
$
|
(38,048
|
)
|
|
$
|
3,427
|
|
State and local
|
|
7,655
|
|
|
(3,523
|
)
|
|
1,637
|
|
|||
Foreign
|
|
16
|
|
|
2
|
|
|
730
|
|
|||
Total deferred
|
|
$
|
26,290
|
|
|
$
|
(41,569
|
)
|
|
$
|
5,794
|
|
|
|
|
|
|
|
|
||||||
Total income tax expense (benefit)
|
|
$
|
20,630
|
|
|
$
|
(37,360
|
)
|
|
$
|
7,626
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
|
$
|
(66,828
|
)
|
|
$
|
(217,920
|
)
|
|
$
|
17,277
|
|
Foreign
|
|
(2,320
|
)
|
|
(506
|
)
|
|
4,103
|
|
|||
Total income (loss) from continuing operations before income taxes
|
|
$
|
(69,148
|
)
|
|
$
|
(218,426
|
)
|
|
$
|
21,380
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
In thousands
|
|
2016
|
|
Rate
|
|
2015
|
|
Rate
|
|
2014
|
|
Rate
|
|||||||||
Computed expected income tax expense (benefit)
|
|
$
|
(24,202
|
)
|
|
35.0
|
%
|
|
$
|
(76,449
|
)
|
|
35.0
|
%
|
|
$
|
7,484
|
|
|
35.0
|
%
|
Goodwill impairment basis difference
|
|
6,275
|
|
|
-9.1
|
%
|
|
36,664
|
|
|
-16.8
|
%
|
|
—
|
|
|
—
|
%
|
|||
Sold operations basis difference
|
|
—
|
|
|
—
|
%
|
|
686
|
|
|
-0.3
|
%
|
|
—
|
|
|
—
|
%
|
|||
Net effect of state income taxes
|
|
(954
|
)
|
|
1.4
|
%
|
|
178
|
|
|
-0.1
|
%
|
|
1,138
|
|
|
5.4
|
%
|
|||
Foreign subsidiary dividend inclusions
|
|
843
|
|
|
-1.2
|
%
|
|
557
|
|
|
-0.3
|
%
|
|
135
|
|
|
0.6
|
%
|
|||
Foreign tax rate differential
|
|
722
|
|
|
-1.0
|
%
|
|
291
|
|
|
-0.1
|
%
|
|
(668
|
)
|
|
-3.1
|
%
|
|||
Change in valuation allowance
|
|
34,478
|
|
|
-49.9
|
%
|
|
(153
|
)
|
|
0.1
|
%
|
|
(386
|
)
|
|
-1.8
|
%
|
|||
Non-deductible interest
|
|
3,219
|
|
|
-4.7
|
%
|
|
715
|
|
|
-0.3
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other, net
|
|
249
|
|
|
-0.4
|
%
|
|
151
|
|
|
-0.1
|
%
|
|
(77
|
)
|
|
-0.4
|
%
|
|||
Income tax expense (benefit) for the period
|
|
$
|
20,630
|
|
|
-29.9
|
%
|
|
$
|
(37,360
|
)
|
|
17.1
|
%
|
|
$
|
7,626
|
|
|
35.7
|
%
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Continuing operations
|
|
$
|
20,630
|
|
|
$
|
(37,360
|
)
|
|
$
|
7,626
|
|
Discontinued operations
|
|
8,994
|
|
|
5,446
|
|
|
5,689
|
|
|||
Loss on sale of discontinued operations
|
|
(4,600
|
)
|
|
—
|
|
|
—
|
|
|||
Stockholders’ equity
|
|
(782
|
)
|
|
2,021
|
|
|
(9,527
|
)
|
|||
Total
|
|
$
|
24,242
|
|
|
$
|
(29,893
|
)
|
|
$
|
3,788
|
|
|
|
Year Ended December 31,
|
||||||
In thousands
|
|
2016
|
|
2015
|
||||
Deferred tax assets
|
|
|
|
|
||||
Deferred compensation and retirement plan
|
|
$
|
24,715
|
|
|
$
|
22,884
|
|
Accrued expenses not deductible until paid
|
|
3,508
|
|
|
3,612
|
|
||
Employee stock-based compensation
|
|
3,321
|
|
|
3,709
|
|
||
Accrued payroll not deductible until paid
|
|
1,400
|
|
|
707
|
|
||
Accounts receivable, net
|
|
406
|
|
|
1,208
|
|
||
Other, net
|
|
393
|
|
|
417
|
|
||
Foreign net operating loss carryforwards
|
|
2,271
|
|
|
2,657
|
|
||
State net operating loss carryforwards
|
|
3,349
|
|
|
1,956
|
|
||
Foreign tax credit carryforwards
|
|
785
|
|
|
785
|
|
||
Capital loss carryforwards
|
|
—
|
|
|
6,278
|
|
||
Total gross deferred tax assets
|
|
40,148
|
|
|
44,213
|
|
||
Less valuation allowances
|
|
(40,148
|
)
|
|
(9,958
|
)
|
||
Net deferred tax assets
|
|
$
|
—
|
|
|
$
|
34,255
|
|
|
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
$
|
(3,060
|
)
|
|
$
|
(6,154
|
)
|
Goodwill and other intangibles
|
|
(6,800
|
)
|
|
(45,212
|
)
|
||
Other, net
|
|
(1,184
|
)
|
|
(561
|
)
|
||
Total gross deferred tax liabilities
|
|
(11,044
|
)
|
|
(51,927
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(11,044
|
)
|
|
$
|
(17,672
|
)
|
In thousands
|
|
|
||
Balance at December 31, 2014
|
|
$
|
10,933
|
|
Additions:
|
|
|
||
Charged to cost and expenses
|
|
366
|
|
|
Charged to other accounts
|
|
—
|
|
|
Deductions
|
|
(1,341
|
)
|
|
Balance at December 31, 2015
|
|
$
|
9,958
|
|
Additions:
|
|
|
||
Charged to cost and expenses
|
|
37,798
|
|
|
Charged to other accounts
|
|
—
|
|
|
Deductions
|
|
(7,608
|
)
|
|
Balance at December 31, 2016
|
|
$
|
40,148
|
|
In thousands
|
|
|
||
Balance at December 31, 2013
|
|
$
|
27
|
|
Additions for current year tax positions
|
|
—
|
|
|
Additions for prior year tax positions
|
|
—
|
|
|
Reductions for prior year tax positions
|
|
—
|
|
|
Lapse of statute
|
|
(27
|
)
|
|
Settlements
|
|
—
|
|
|
Balance at December 31, 2014
|
|
$
|
—
|
|
Additions for current year tax positions
|
|
—
|
|
|
Additions for prior year tax positions
|
|
761
|
|
|
Reductions for prior year tax positions
|
|
—
|
|
|
Lapse of statute
|
|
—
|
|
|
Settlements
|
|
—
|
|
|
Balance at December 31, 2015
|
|
$
|
761
|
|
Additions for current year tax positions
|
|
—
|
|
|
Additions for prior year tax positions
|
|
206
|
|
|
Reductions for prior year tax positions
|
|
—
|
|
|
Lapse of statute
|
|
—
|
|
|
Settlements
|
|
—
|
|
|
Balance at December 31, 2016
|
|
$
|
967
|
|
In thousands
|
|
|
||
Balance at December 31, 2014
|
|
$
|
248,891
|
|
Purchase consideration
|
|
41,845
|
|
|
Disposition
|
|
(11,099
|
)
|
|
Impairment
|
|
(209,938
|
)
|
|
Balance at December 31, 2015
|
|
$
|
69,699
|
|
Additions
|
|
3,480
|
|
|
Impairment
|
|
(38,669
|
)
|
|
Balance at December 31, 2016
|
|
$
|
34,510
|
|
In thousands
|
|
|
||
Balance at December 31, 2014
|
|
$
|
2,250
|
|
Acquisition
|
|
—
|
|
|
Impairment
|
|
(2,250
|
)
|
|
Balance at December 31, 2015
|
|
$
|
—
|
|
Acquisition
|
|
—
|
|
|
Disposition
|
|
—
|
|
|
Balance at December 31, 2016
|
|
$
|
—
|
|
In thousands
|
|
|
||
Balance at December 31, 2014
|
|
$
|
27
|
|
Disposition
|
|
(18
|
)
|
|
Acquisition
|
|
4,773
|
|
|
Amortization
|
|
(659
|
)
|
|
Balance at December 31, 2015
|
|
$
|
4,123
|
|
Amortization
|
|
(821
|
)
|
|
Balance at December 31, 2016
|
|
$
|
3,302
|
|
In thousands
|
|
|
||
2017
|
|
$
|
707
|
|
2018
|
|
627
|
|
|
2019
|
|
613
|
|
|
2020
|
|
613
|
|
|
2021
|
|
613
|
|
|
Thereafter
|
|
129
|
|
|
Total
|
|
3,302
|
|
|
|
Year Ended December 31,
|
||||||
In thousands
|
|
2016
|
|
2015
|
||||
Change in benefit obligation
|
|
|
|
|
|
|
||
Benefit obligation at beginning of year
|
|
$
|
178,715
|
|
|
$
|
191,065
|
|
Interest cost
|
|
7,802
|
|
|
7,724
|
|
||
Actuarial (gain) loss
|
|
2,127
|
|
|
(10,861
|
)
|
||
Benefits paid
|
|
(9,397
|
)
|
|
(9,213
|
)
|
||
Benefit obligation at end of year
|
|
$
|
179,247
|
|
|
$
|
178,715
|
|
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
|
|
|
||
Fair value of plan assets at beginning of year
|
|
121,682
|
|
|
124,372
|
|
||
Actual return on plan assets
|
|
2,883
|
|
|
982
|
|
||
Contributions
|
|
1,557
|
|
|
5,541
|
|
||
Benefits paid
|
|
(9,397
|
)
|
|
(9,213
|
)
|
||
Fair value of plan assets at end of year
|
|
$
|
116,725
|
|
|
$
|
121,682
|
|
|
|
|
|
|
||||
Funded status at end of year
|
|
$
|
(62,522
|
)
|
|
$
|
(57,033
|
)
|
In thousands
|
|
2016
|
|
2015
|
||||
Other current liabilities
|
|
$
|
1,686
|
|
|
$
|
1,542
|
|
Pensions
|
|
60,836
|
|
|
55,491
|
|
||
Total
|
|
$
|
62,522
|
|
|
$
|
57,033
|
|
In thousands
|
|
2016
|
|
2015
|
||||
Net loss
|
|
$
|
46,977
|
|
|
$
|
43,915
|
|
In thousands
|
|
2016
|
|
2015
|
||||
Projected benefit obligation
|
|
$
|
179,247
|
|
|
$
|
178,715
|
|
Accumulated benefit obligation
|
|
$
|
179,247
|
|
|
$
|
178,715
|
|
Fair value of plan assets
|
|
$
|
116,725
|
|
|
$
|
121,682
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net Periodic Benefit Cost (Pre-Tax)
|
|
|
|
|
|
|
|
|
|
|||
Service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100
|
|
Interest cost
|
|
7,802
|
|
|
7,724
|
|
|
7,698
|
|
|||
Expected return on plan assets
|
|
(8,245
|
)
|
|
(8,637
|
)
|
|
(8,418
|
)
|
|||
Recognized actuarial loss
|
|
2,386
|
|
|
6,228
|
|
|
3,654
|
|
|||
Net periodic benefit cost
|
|
$
|
1,943
|
|
|
$
|
5,315
|
|
|
$
|
3,034
|
|
|
|
|
|
|
|
|
||||||
Amounts Recognized in Other Comprehensive Income (Loss) (Pre-Tax)
|
|
|
|
|
|
|
|
|
|
|||
Net (gain) loss
|
|
$
|
5,103
|
|
|
$
|
(9,408
|
)
|
|
$
|
28,802
|
|
|
|
|
|
|
|
|
||||||
Net (benefit) cost recognized in net periodic benefit cost and other comprehensive (income) loss
|
|
$
|
7,046
|
|
|
$
|
(4,093
|
)
|
|
$
|
31,836
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Weighted-average assumptions used to determine net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
4.49
|
%
|
|
4.13
|
%
|
|
4.94
|
%
|
Expected return on plan assets
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||
Weighted-average assumptions used to determine benefit obligations
|
|
|
|
|
|
|
Discount rate
|
|
4.21
|
%
|
|
4.49
|
%
|
In thousands
|
|
2016
|
|
%
|
|
2015
|
|
%
|
||||||
Equity securities
|
|
$
|
61,254
|
|
|
52
|
%
|
|
$
|
83,185
|
|
|
68
|
%
|
Debt securities
|
|
21,940
|
|
|
19
|
%
|
|
32,726
|
|
|
27
|
%
|
||
Other
|
|
33,531
|
|
|
29
|
%
|
|
5,771
|
|
|
5
|
%
|
||
Total plan assets
|
|
$
|
116,725
|
|
|
100
|
%
|
|
$
|
121,682
|
|
|
100
|
%
|
In thousands
|
|
December 31,
2016 |
|
Quoted Prices
in Active Markets for
Identical Assets (Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Equity securities
|
|
$
|
61,254
|
|
|
$
|
61,254
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities
|
|
21,940
|
|
|
21,940
|
|
|
—
|
|
|
—
|
|
||||
Total investments, excluding investments valued at NAV
|
|
83,194
|
|
|
83,194
|
|
|
—
|
|
|
—
|
|
||||
Investments valued at NAV
(1)
|
|
33,531
|
|
|
—
|
|
|
|
|
—
|
|
|||||
Total plan assets
|
|
$
|
116,725
|
|
|
$
|
83,194
|
|
|
$
|
—
|
|
|
$
|
—
|
|
In thousands
|
|
December 31,
2015 |
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Equity securities
|
|
$
|
83,185
|
|
|
$
|
83,185
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities
|
|
32,726
|
|
|
32,726
|
|
|
—
|
|
|
—
|
|
||||
Total investments, excluding investments valued at NAV
|
|
115,911
|
|
|
115,911
|
|
|
—
|
|
|
—
|
|
||||
Investments valued at NAV
(1)
|
|
5,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total plan assets
|
|
$
|
121,682
|
|
|
$
|
115,911
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Target
|
|
Acceptable Range
|
|
Benchmark Index
|
||||
Domestic Equities
|
|
50.0
|
%
|
|
35
|
%
|
-
|
75%
|
|
S&P 500
|
Large Cap Growth
|
|
22.5
|
%
|
|
15
|
%
|
-
|
30%
|
|
Russell 1000 Growth
|
Large Cap Value
|
|
22.5
|
%
|
|
15
|
%
|
-
|
30%
|
|
Russell 1000 Value
|
Mid Cap Value
|
|
5.0
|
%
|
|
5
|
%
|
-
|
15%
|
|
Russell Mid Cap Value
|
Mid Cap Growth
|
|
0.0
|
%
|
|
0
|
%
|
-
|
10%
|
|
Russell Mid Cap Growth
|
|
|
|
|
|
|
|
|
|
||
Domestic Fixed Income
|
|
35.0
|
%
|
|
15
|
%
|
-
|
50%
|
|
LB Aggregate
|
International Equities
|
|
15.0
|
%
|
|
10
|
%
|
-
|
25%
|
|
MSC1 EAFE
|
In thousands
|
|
|
||
2017
|
|
$
|
9,736
|
|
2018
|
|
9,873
|
|
|
2019
|
|
9,967
|
|
|
2020
|
|
10,241
|
|
|
2021
|
|
10,513
|
|
|
2022-2026
|
|
56,362
|
|
|
Total
|
|
$
|
106,692
|
|
In thousands
|
|
Number of
Shares
|
|
Weighted-
Average Option Price
|
|
Weighted- Average
Remaining Contractual
Term (Years)
|
|
Aggregate
Intrinsic Value (Thousands)
|
|||||
Options outstanding at December 31, 2013
|
|
4,245,712
|
|
|
$
|
13.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Granted in 2014
|
|
1,002,955
|
|
|
8.01
|
|
|
|
|
|
|
||
Exercised in 2014
|
|
(78,125
|
)
|
|
6.19
|
|
|
|
|
$
|
61
|
|
|
Unvested options forfeited in 2014
|
|
(437,984
|
)
|
|
8.72
|
|
|
|
|
|
|
||
Vested options expired in 2014
|
|
(268,537
|
)
|
|
17.83
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2014
|
|
4,464,021
|
|
|
$
|
11.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Granted in 2015
|
|
1,973,606
|
|
|
5.73
|
|
|
|
|
|
|
||
Exercised in 2015
|
|
(35,000
|
)
|
|
6.04
|
|
|
|
|
$
|
67
|
|
|
Unvested options forfeited in 2015
|
|
(660,733
|
)
|
|
7.96
|
|
|
|
|
|
|
||
Vested options expired in 2015
|
|
(1,139,148
|
)
|
|
14.89
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2015
|
|
4,602,746
|
|
|
$
|
8.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Granted in 2016
|
|
150,371
|
|
|
2.61
|
|
|
|
|
|
|
||
Exercised in 2016
|
|
—
|
|
|
—
|
|
|
|
|
$
|
—
|
|
|
Unvested options forfeited in 2016
|
|
(570,197
|
)
|
|
7.57
|
|
|
|
|
|
|
||
Vested options expired in 2016
|
|
(477,027
|
)
|
|
16.06
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2016
|
|
3,705,893
|
|
|
$
|
7.72
|
|
|
4.74
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest at December 31, 2016
|
|
3,554,630
|
|
|
$
|
7.86
|
|
|
4.58
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2016
|
|
1,950,302
|
|
|
$
|
9.83
|
|
|
2.74
|
|
$
|
—
|
|
Range of
Exercise Prices
|
|
Number
Outstanding
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining Life (Years)
|
|
Number
Exercisable
|
|
Weighted-Average
Exercise Price
|
||||||||||
$
|
0.00
|
|
-
|
6.99
|
|
1,638,475
|
|
|
$
|
4.42
|
|
|
6.22
|
|
446,601
|
|
|
$
|
4.86
|
|
$
|
7.00
|
|
-
|
10.99
|
|
1,352,768
|
|
|
8.07
|
|
|
4.64
|
|
789,051
|
|
|
8.26
|
|
||
$
|
11.00
|
|
-
|
11.99
|
|
332,500
|
|
|
11.90
|
|
|
1.90
|
|
332,500
|
|
|
11.90
|
|
||
$
|
12.00
|
|
-
|
15.99
|
|
259,100
|
|
|
14.48
|
|
|
1.75
|
|
259,100
|
|
|
14.48
|
|
||
$
|
16.00
|
|
-
|
24.49
|
|
50,000
|
|
|
17.30
|
|
|
0.25
|
|
50,000
|
|
|
17.30
|
|
||
$
|
24.50
|
|
-
|
28.85
|
|
73,050
|
|
|
26.07
|
|
|
0.10
|
|
73,050
|
|
|
26.07
|
|
||
|
|
|
|
3,705,893
|
|
|
$
|
7.72
|
|
|
4.74
|
|
1,950,302
|
|
|
$
|
9.83
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Expected term (in years)
|
|
6.25
|
|
|
6.24
|
|
|
6.25
|
|
Expected stock price volatility
|
|
44.80
|
%
|
|
40.60
|
%
|
|
47.10
|
%
|
Risk-free interest rate
|
|
1.48
|
%
|
|
1.58
|
%
|
|
1.88
|
%
|
Expected dividend yield
|
|
—
|
%
|
|
5.69
|
%
|
|
3.82
|
%
|
|
|
Number of
Shares
|
|
Weighted-
Average Grant
Date Fair Value
|
|||
Unvested shares outstanding at December 31, 2013
|
|
686,045
|
|
|
$
|
8.72
|
|
|
|
|
|
|
|||
Granted in 2014
|
|
529,426
|
|
|
7.90
|
|
|
Vested in 2014
|
|
(342,613
|
)
|
|
8.98
|
|
|
Forfeited in 2014
|
|
(82,720
|
)
|
|
8.37
|
|
|
Unvested shares outstanding at December 31, 2014
|
|
790,138
|
|
|
$
|
8.10
|
|
|
|
|
|
|
|||
Granted in 2015
|
|
836,775
|
|
|
6.38
|
|
|
Vested in 2015
|
|
(504,686
|
)
|
|
8.23
|
|
|
Forfeited in 2015
|
|
(159,781
|
)
|
|
7.90
|
|
|
Unvested shares outstanding at December 31, 2015
|
|
962,446
|
|
|
$
|
6.57
|
|
|
|
|
|
|
|||
Granted in 2016
|
|
741,954
|
|
|
2.63
|
|
|
Vested in 2016
|
|
(365,196
|
)
|
|
6.70
|
|
|
Forfeited in 2016
|
|
(393,952
|
)
|
|
5.78
|
|
|
Unvested shares outstanding at December 31, 2016
|
|
945,252
|
|
|
$
|
3.76
|
|
|
|
Number of
Shares |
|
Weighted-
Average Grant Date Fair Value |
|||
Phantom stock units outstanding at December 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|||
Granted in 2016
|
|
781,645
|
|
|
2.69
|
|
|
Vested in 2016
|
|
—
|
|
|
—
|
|
|
Forfeited in 2016
|
|
(249,825
|
)
|
|
2.69
|
|
|
Phantom stock units outstanding at December 31, 2016
|
|
531,820
|
|
|
$
|
2.69
|
|
|
|
Number of
Shares
|
|
Weighted-
Average Grant-Date Fair Value
|
|||
Performance stock units outstanding at December 31, 2013
|
|
470,700
|
|
|
$
|
8.58
|
|
|
|
|
|
|
|||
Granted in 2014
|
|
308,507
|
|
|
7.09
|
|
|
Settled in 2014
|
|
—
|
|
|
—
|
|
|
Forfeited in 2014
|
|
(175,533
|
)
|
|
9.30
|
|
|
Performance stock units outstanding at December 31, 2014
|
|
603,674
|
|
|
$
|
7.61
|
|
|
|
|
|
|
|||
Granted in 2015
|
|
669,839
|
|
|
4.30
|
|
|
Settled in 2015
|
|
—
|
|
|
—
|
|
|
Forfeited in 2015
|
|
(572,129
|
)
|
|
7.54
|
|
|
Performance stock units outstanding at December 31, 2015
|
|
701,384
|
|
|
$
|
4.51
|
|
|
|
|
|
|
|||
Granted in 2016
|
|
473,000
|
|
|
1.90
|
|
|
Settled in 2016
|
|
—
|
|
|
—
|
|
|
Forfeited in 2016
|
|
(330,069
|
)
|
|
5.76
|
|
|
Performance stock units outstanding at December 31, 2016
|
|
844,315
|
|
|
$
|
2.56
|
|
|
|
Number of
Shares |
|
Weighted-
Average Grant-Date Fair Value |
|||
Cash performance stock units outstanding at December 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|||
Granted in 2016
|
|
512,127
|
|
|
2.69
|
|
|
Settled in 2016
|
|
—
|
|
|
—
|
|
|
Forfeited in 2016
|
|
(68,122
|
)
|
|
2.69
|
|
|
Cash performance stock units outstanding at December 31, 2016
|
|
444,005
|
|
|
$
|
2.69
|
|
In thousands
|
|
|
||
2017
|
|
$
|
10,812
|
|
2018
|
|
7,482
|
|
|
2019
|
|
4,991
|
|
|
2020
|
|
2,842
|
|
|
2021
|
|
1,597
|
|
|
Thereafter
|
|
2,352
|
|
|
Total
|
|
$
|
30,076
|
|
In thousands
|
|
2016
|
|
2015
|
||||
Current portion of capital leases
|
|
$
|
559
|
|
|
$
|
132
|
|
Long-term portion of capital leases
|
|
1,018
|
|
|
204
|
|
||
Total capital lease obligation
|
|
$
|
1,577
|
|
|
$
|
336
|
|
In thousands
|
|
|
||
2017
|
|
$
|
559
|
|
2018
|
|
522
|
|
|
2019
|
|
459
|
|
|
2020
|
|
35
|
|
|
2021
|
|
2
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
1,577
|
|
In thousands, except per share amounts
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations
|
|
$
|
(89,778
|
)
|
|
$
|
(181,066
|
)
|
|
$
|
13,754
|
|
Income (loss) from discontinued operations
|
|
(41,159
|
)
|
|
10,138
|
|
|
10,237
|
|
|||
Net income (loss)
|
|
$
|
(130,937
|
)
|
|
$
|
(170,928
|
)
|
|
$
|
23,991
|
|
|
|
|
|
|
|
|
||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|||
Weighted-average common shares outstanding used in earnings per share computations
|
|
61,487
|
|
|
61,643
|
|
|
62,444
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
0.22
|
|
Discontinued operations
|
|
(0.67
|
)
|
|
0.17
|
|
|
0.16
|
|
|||
Basic earnings (loss) per share
|
|
$
|
(2.13
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
||||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|||
Shares used in diluted earnings per share computations
|
|
61,487
|
|
|
61,643
|
|
|
62,658
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
0.22
|
|
Discontinued operations
|
|
(0.67
|
)
|
|
0.17
|
|
|
0.16
|
|
|||
Basic earnings (loss) per share
|
|
$
|
(2.13
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
||||||
Computation of Shares Used in Earnings Per Share Computations
|
|
|
|
|
|
|
|
|
|
|||
Weighted-average common shares outstanding
|
|
61,487
|
|
|
61,643
|
|
|
62,444
|
|
|||
Weighted-average common equivalent shares-dilutive effect of stock options and awards
|
|
—
|
|
|
—
|
|
|
214
|
|
|||
Shares used in diluted earnings per share computations
|
|
61,487
|
|
|
61,643
|
|
|
62,658
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
|
$
|
(130,937
|
)
|
|
$
|
(170,928
|
)
|
|
$
|
23,991
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||
Adjustment to pension liability
|
|
(5,103
|
)
|
|
9,408
|
|
|
(28,802
|
)
|
|||
Tax (expense) benefit
|
|
2,041
|
|
|
(3,763
|
)
|
|
11,521
|
|
|||
Adjustment to pension liability, net of tax
|
|
(3,062
|
)
|
|
5,645
|
|
|
(17,281
|
)
|
|||
Foreign currency translation adjustment
|
|
444
|
|
|
(1,976
|
)
|
|
(1,830
|
)
|
|||
Total other comprehensive income (loss)
|
|
$
|
(2,618
|
)
|
|
$
|
3,669
|
|
|
$
|
(19,111
|
)
|
|
|
|
|
|
|
|
||||||
Total comprehensive income (loss)
|
|
$
|
(133,555
|
)
|
|
$
|
(167,259
|
)
|
|
$
|
4,880
|
|
In thousands
|
|
Defined Benefit
Pension Items
|
|
Foreign
Currency Items
|
|
Total
|
||||||
Balance at December 31, 2014
|
|
$
|
(49,560
|
)
|
|
$
|
2,331
|
|
|
$
|
(47,229
|
)
|
Other comprehensive loss, net of tax, before reclassifications
|
|
—
|
|
|
(1,976
|
)
|
|
(1,976
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax
|
|
5,645
|
|
|
—
|
|
|
5,645
|
|
|||
Net current period other comprehensive income (loss), net of tax
|
|
5,645
|
|
|
(1,976
|
)
|
|
3,669
|
|
|||
Balance at December 31, 2015
|
|
$
|
(43,915
|
)
|
|
$
|
355
|
|
|
$
|
(43,560
|
)
|
Other comprehensive loss, net of tax, before reclassifications
|
|
—
|
|
|
444
|
|
|
444
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax
|
|
(3,062
|
)
|
|
—
|
|
|
(3,062
|
)
|
|||
Net current period other comprehensive income (loss), net of tax
|
|
(3,062
|
)
|
|
444
|
|
|
(2,618
|
)
|
|||
Balance at December 31, 2016
|
|
$
|
(46,977
|
)
|
|
$
|
799
|
|
|
$
|
(46,178
|
)
|
In thousands
|
|
|
||
Cash consideration per purchase agreement
|
|
$
|
30,245
|
|
Estimated fair value of contingent consideration
|
|
17,940
|
|
|
Fair value of total consideration
|
|
$
|
48,185
|
|
In thousands
|
|
|
||
Recognized amounts of tangible assets and liabilities:
|
|
|
||
Current assets
|
|
$
|
4,135
|
|
Property and equipment
|
|
164
|
|
|
Other assets
|
|
389
|
|
|
Current liabilities
|
|
(822
|
)
|
|
Other liabilities
|
|
—
|
|
|
Total tangible assets and liabilities
|
|
$
|
3,866
|
|
Identifiable intangible assets
|
|
4,773
|
|
|
Goodwill (including deferred tax adjustment of $2,299)
|
|
41,845
|
|
|
Total
|
|
$
|
50,484
|
|
In thousands
|
|
|
||
Contingent consideration at acquisition date
|
|
$
|
17,940
|
|
Accretion of interest
|
|
2,337
|
|
|
Accrued contingent consideration liability as of December 31, 2015
|
|
20,277
|
|
|
Accretion of interest
|
|
2,430
|
|
|
Adjustments to fair value
|
|
7,018
|
|
|
Accrued contingent consideration liability as of December 31, 2016
|
|
$
|
29,725
|
|
|
|
Year Ended December 31,
|
||||||||||
In thousands
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
|
$
|
45,639
|
|
|
$
|
51,135
|
|
|
$
|
54,232
|
|
|
|
|
|
|
|
|
||||||
Labor
|
|
18,687
|
|
|
22,219
|
|
|
25,930
|
|
|||
Production and distribution
|
|
703
|
|
|
1,404
|
|
|
1,651
|
|
|||
Advertising, selling, general and administrative
|
|
10,255
|
|
|
9,951
|
|
|
9,142
|
|
|||
Depreciation, software and intangible asset amortization
|
|
2,304
|
|
|
1,867
|
|
|
2,032
|
|
|||
Interest expense, net
|
|
7,133
|
|
|
(256
|
)
|
|
(246
|
)
|
|||
Loss on sale
|
|
44,529
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(1,207
|
)
|
|
366
|
|
|
(203
|
)
|
|||
Income (loss) from discontinued operations before income taxes
|
|
(36,765
|
)
|
|
15,584
|
|
|
15,926
|
|
|||
Income tax expense
|
|
4,394
|
|
|
5,446
|
|
|
5,689
|
|
|||
Net income (loss) from discontinued operations
|
|
$
|
(41,159
|
)
|
|
$
|
10,138
|
|
|
$
|
10,237
|
|
|
|
Year Ended December 31,
|
||||||
In thousands
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
1,049
|
|
Accounts receivable, net
|
|
—
|
|
|
11,397
|
|
||
Prepaid expenses
|
|
—
|
|
|
1,640
|
|
||
Property, plant and equipment, net
|
|
—
|
|
|
5,777
|
|
||
Goodwill
|
|
—
|
|
|
149,273
|
|
||
Other current assets
|
|
—
|
|
|
265
|
|
||
Total current assets of discontinued operations
|
|
$
|
—
|
|
|
$
|
169,401
|
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
—
|
|
|
$
|
1,670
|
|
Accrued payroll and related expenses
|
|
—
|
|
|
924
|
|
||
Deferred revenue and customer advances
|
|
—
|
|
|
21,186
|
|
||
Other current liabilities
|
|
—
|
|
|
978
|
|
||
Total current liabilities of discontinued operations
|
|
$
|
—
|
|
|
$
|
24,758
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||||||||||
In thousands, except per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Revenues
|
|
$
|
99,563
|
|
|
$
|
109,315
|
|
|
$
|
97,317
|
|
|
$
|
109,175
|
|
|
$
|
97,425
|
|
|
$
|
108,784
|
|
|
$
|
110,107
|
|
|
$
|
116,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating income (loss) from continuing operations
|
|
(9,033
|
)
|
|
(258
|
)
|
|
(7,175
|
)
|
|
3,039
|
|
|
(4,572
|
)
|
|
(209,640
|
)
|
|
(35,000
|
)
|
|
3,590
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations before income taxes
|
|
(9,278
|
)
|
|
(457
|
)
|
|
(8,001
|
)
|
|
(8,613
|
)
|
|
(5,386
|
)
|
|
(208,742
|
)
|
|
(46,483
|
)
|
|
(613
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loss from continuing operations
|
|
(6,700
|
)
|
|
(404
|
)
|
|
(5,902
|
)
|
|
(6,690
|
)
|
|
(4,285
|
)
|
|
(172,856
|
)
|
|
(72,891
|
)
|
|
(1,115
|
)
|
||||||||
Discontinued operations, net of tax
|
|
1,097
|
|
|
2,019
|
|
|
1,639
|
|
|
2,518
|
|
|
1,244
|
|
|
1,942
|
|
|
(45,139
|
)
|
|
3,659
|
|
||||||||
Net income (loss)
|
|
$
|
(5,603
|
)
|
|
$
|
1,615
|
|
|
$
|
(4,263
|
)
|
|
(4,172
|
)
|
|
$
|
(3,041
|
)
|
|
$
|
(170,914
|
)
|
|
$
|
(118,030
|
)
|
|
$
|
2,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
|
$
|
(0.11
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(2.81
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
(0.02
|
)
|
Discontinued operations
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
(0.74
|
)
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
|
$
|
(0.11
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(2.81
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
(0.02
|
)
|
Discontinued operations
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
(0.74
|
)
|
|
$
|
0.06
|
|
Exhibit
|
|
|
No.
|
|
Description of Exhibit
|
2.1
|
|
Asset Purchase Agreement, dated September 18, 2013, by and among Harte Hanks Shoppers, Inc., Southern Comprint Co. and Harte Hanks, Inc., on the one hand, and Pennysaver USA Publishing, LLC, Pennysaver USA Printing, LLC, Orbiter Properties, LLC and OpenGate Capital Management, LLC, on the other hand (filed as Exhibit 2.1 to the company’s Form 8-K dated September 19, 2013).
|
|
|
|
2.2
|
|
Agreement and Plan of Merger, dated March 16, 2015, among Harte Hanks, Inc., Harte Hanks Smart, Inc., 3Q Digital, Inc. and Maury Domengeaux, as representative to the stockholders of 3Q Digital, Inc. (filed as Exhibit 2.1 to the company's Form 10-Q dated May 7, 2015).
|
|
|
|
2.3
|
|
Membership Interest Purchase Agreement, dated April 14, 2015, between AMI Intermediate, LLC and Harte Hanks, Inc. relating to the sale of Aberdeen Group and Harte Hanks Market Intelligence (filed as Exhibit 2.2 to the company's Form 10-Q dated May 7, 2015).
|
|
|
|
2.4
|
|
Stock Purchase Agreement, dated November 29, 2016, by and among Syncsort Incorporated, Syncsort Limited, Syncsort GmbH, Harte Hanks, Inc., Harte-Hanks UK Limited, Harte-Hanks GmbH, Trillium Software, Inc., Harte-Hanks Trillium UK Limited, Harte-Hanks Trillium Software Germany GmbH and Harte Hanks, Inc. as sellers’ representative (filed as Exhibit 2.1 to the company's Form 8-K dated December 30, 2016).
|
|
|
|
2.5
|
|
3Q Agreement, dated May 1, 2017, by and between Harte Hanks, Inc. and 3Q Digital, Inc. and Maury Domengeaux, as representative to the former stockholders and option holders of 3Q Digital, Inc. (filed as Exhibit 2.1 to the company's Form 8-K dated May 5, 2017
|
3(a)
|
|
Amended and Restated Certificate of Incorporation as amended through May 5, 1998 (filed as Exhibit 3(e) to the company’s Form 10-Q for the six months ended June 30, 1998).
|
|
|
|
3(b)
|
|
Fifth Amended and Restated Bylaws (filed as Exhibit 3.1 to the company’s Form 8-K dated December 23, 2015).
|
|
|
|
3(c)
|
|
Certificate of Amendment of Incorporation dated January 30, 2015 (filed as Exhibit 3.1 to the company’s Form 8-K dated January 30, 2015).
|
|
|
|
10.1(a)
|
|
Term Loan Agreement by and between Harte Hanks, Inc. and Wells Fargo Bank, as administrative agent, dated March 10, 2016 (filed as Exhibit 10.1 to the company's Form 8-K dated March 11, 2016).
|
|
|
|
10.1(b)
|
|
Waiver and First Amendment to Credit Agreement as of May 16, 2016, with Wells Fargo Bank, N.A., as Administrative Agent (filed as Exhibit 10.1 in the company's Form 8-K dated May 20, 2016).
|
|
|
|
10.1(c)
|
|
Waiver and Second Amendment to Credit Agreement as of August 5, 2016, with Wells Fargo Bank, N.A., as Administrative Agent (filed as Exhibit 10.1 in the company's Form 8-K dated August 9, 2016).
|
|
|
|
10.1(d)
|
|
Waiver to Credit Agreement dated November 8, 2016, with Wells Fargo Banks, N.A., as Administrative Agent (filed as Exhibit 10.1 in the company's Form 10-Q dated November 9, 2016.
|
|
|
|
10.1(e)
|
|
Waiver and Third Amendment to Credit Agreement as of December 13, 2016, with Wells Fargo Bank, N.A. as administrative agent (filed as Exhibit 10.1 in the company's Form 8-K dated December 16, 2016).
|
|
|
|
10.1(f)
|
|
Credit Agreement by and between Harte Hanks, Inc. and Texas Capital Bank, as lender, dated April 17, 2017 (filed as 10.1 to the company's Form 8-K dated April 21, 2017.
|
10.2(a)
|
|
Harte Hanks, Inc. Restoration Pension Plan (As Amended and Restated Effective January 1, 2008) (filed as Exhibit 10.1 to the company’s Form 8-K dated June 27, 2008).
|
|
|
|
10.2(b)
|
|
Harte Hanks, Inc. 2005 Omnibus Incentive Plan (As Amended and Restated Effective February 13, 2009) (filed as Exhibit 10.1 to the company’s Form 8-K dated February 13, 2009).
|
|
|
|
10.2(c)
|
|
Amendment to Harte Hanks, Inc. 2005 Omnibus Incentive Plan, dated as of May 12, 2009 (incorporated by reference to Exhibit 4.4 to Harte Hanks Registration Statement on Form S-8, filed on May 12, 2009).
|
|
|
|
10.2(d)
|
|
Form of 2005 Omnibus Incentive Plan Non-Qualified Stock Option Agreement (filed as Exhibit 10.2(i) to the company’s Form 10-K dated March 7, 2012).
|
|
|
|
10.2(e)
|
|
Form of 2005 Omnibus Incentive Plan Bonus Stock Agreement (filed as Exhibit 10.2(j) to the company’s Form 10-K dated March 7, 2012).
|
|
|
|
10.2(f)
|
|
Form of 2005 Omnibus Incentive Plan Restricted Stock Award Agreement (filed as Exhibit 10.2(k) to the company’s Form 10-K dated March 7, 2012).
|
|
|
|
10.2(g)
|
|
Form of 2005 Omnibus Incentive Plan Performance Unit Award Agreement (filed as Exhibit 10.2(l) to the company’s Form 10-K dated March 7, 2012).
|
|
|
|
10.2(h)
|
|
Summary of Non-Employee Directors’ Compensation (included within the company’s Schedule of 14A proxy statement filed April 11, 2016).
|
|
|
|
10.2(i)
|
|
Harte Hanks, Inc. 2013 Omnibus Incentive Plan (filed as Annex A to the company’s Schedule 14A proxy statement filed April 15, 2013).
|
|
|
|
10.2(j)
|
|
Form of 2013 Omnibus Incentive Plan Non-Qualified Stock Option Agreement (filed as Exhibit 10.4 to the company’s Registration Statement on Form S-8 dated June 7, 2013).
|
|
|
|
10.2(k)
|
|
Form of 2013 Omnibus Incentive Plan Restricted Stock Award Agreement (General) (filed as Exhibit 10.1 to the company’s Registration Statement on Form S-8 dated June 7, 2013).
|
|
|
|
10.2(l)
|
|
Form of 2013 Omnibus Incentive Plan Restricted Stock Award Agreement (Director) (filed as Exhibit 10.2 to the company’s Registration Statement on Form S-8 dated June 7, 2013).
|
|
|
|
10.2(m)
|
|
Form of 2013 Omnibus Incentive Plan Performance Unit Award Agreement (filed as Exhibit 10.3 to the company’s Registration Statement on Form S-8 dated June 7, 2013).
|
|
|
|
10.2(n)
|
|
Form of Non-Qualified Stock Option Agreement between the company and Karen A. Puckett (filed as Exhibit 10.2 to the company's Form 8-K dated September 14, 2015).
|
|
|
|
10.2(o)
|
|
Form of Restricted Stock Award Agreement between the company and Karen A. Puckett (filed as Exhibit 10.3 to the company's Form 8-K dated September 14, 2015).
|
|
|
|
10.2(p)
|
|
Form of Performance Unit Award Agreement between the company and Karen A. Puckett (filed as Exhibit 10.4 to the company's Form 8-K dated September 14, 2015).
|
|
|
|
10.2(q)
|
|
Form of Non-Qualified Stock Option Agreement between Harte Hanks, Inc. and Shirish R. Lal (filed as Exhibit 10.2 to the company's Form 8-K dated February 17, 2016).
|
|
|
|
10.2(r)
|
|
Form of Restricted Stock Award Agreement between Harte Hanks, Inc. and Shirish R. Lal (filed as Exhibit 10.3 to the company's Form 8-K dated February 17, 2016).
|
|
|
|
10.2(s)
|
|
First Amendment to the Harte Hanks, Inc. Amended & Restated Restoration Pension Plan, dated October 11, 2016 (filed as Exhibit 10.1 to the company's Form 8-K dated October 14, 2016).
|
10.3(a)
|
|
Form of Change of Control Severance Agreement between the company and its Corporate Officers (filed as Exhibit 10.1 to the company’s Form 8-K, dated March 19, 2015).
|
|
|
|
10.3(b)
|
|
Form of Employment Restrictions Agreement signed by the Corporate Officers of the company (filed as Exhibit 10.3 to the company’s Form 8-K dated March 15, 2011).
|
|
|
|
10.3 (c)
|
|
Transition and Consulting Agreement, dated as of July 25, 2011, Between the company and Peter E. Gorman (filed as Exhibit 10.1 to the company’s Form 8-K dated July 26, 2011).
|
|
|
|
10.3 (d)
|
|
Transition Agreement dated July 30, 2012 between the company and Gary J. Skidmore (filed as Exhibit 10.2 to the company’s 8-K dated August 2, 2012)
|
|
|
|
10.3 (e)
|
|
Form of Indemnification Agreement for Directors and Officers (filed as Exhibit 10.1 to the company’s 8-K dated August 2, 2012)
|
|
|
|
10.3 (f)
|
|
Retirement & Consulting Agreement between the company and Larry D. Franklin dated June 7, 2013 (filed as Exhibit 10.5 to the company’s 8-K dated June 11, 2013).
|
|
|
|
10.3 (g)
|
|
Employment Agreement between the company and Robert A. Philpott dated June 8, 2013 (filed as Exhibit 10.1 to the company’s 8-K dated June 11, 2013).
|
|
|
|
10.3 (h)
|
|
Form of Severance Agreement between the company and certain of its officers (filed as Exhibit 10.6 to the company’s 8-K dated June 11, 2013).
|
|
|
|
10.3(i)
|
|
Executive Severance Policy applicable to the company’s executive officers and certain others (filed as Exhibit 10.1 to the company’s Form 8-K, dated January 30, 2015).
|
|
|
|
10.3(j)
|
|
Retention Bonus Agreement applicable to the company's executive officers (filed as Exhibit 10.1 to the company's Form 8-K, dated July 9, 2015).
|
|
|
|
10.3(k)
|
|
Employment Agreement between the company and Karen A. Puckett dated September 13, 2015 (filed as Exhibit 10.1 to the company's Form 8-K, dated September 14, 2015).
|
|
|
|
10.3(l)
|
|
Employment Agreement between the company and Shirish R. Lal dated February 3, 2016 (filed as Exhibit 10.1 to the company's Form 8-K, dated February 17, 2016).
|
|
|
|
10.3(m)
|
|
Retention Bonus Agreement between the company and Robert L. R. Munden dated December 31, 2016 (filed as Exhibit 10.1 to the company's Form 8-K, dated December 15, 2016).
|
|
|
|
10.3(n)
|
|
Transition and Consulting Agreement, dated as of December 31, 2016, between the company and Douglas C. Shepard (filed as Exhibit 10.2 to the company's Form 8-K, dated December 15, 2016).
|
|
|
To: Frank M. Grillo
|
|
Date of Grant:
October 28, 2015
|
|
|
|
Number of Shares:
101,306
|
|
Exercise Price Per Share:
$4.26
|
HARTE HANKS, INC.
|
|
|
|
|
|
By:
|
|
/s/ Robert L. R. Munden
|
|
|
Robert L. R. Munden
|
|
|
Senior Vice President,
|
|
|
General Counsel & Secretary
|
/s/ Frank M. Grillo
|
Frank M. Grillo
|
To: Frank M. Grillo
|
|
Date of Grant:
October 28, 2015
|
|
|
|
Number of Shares:
13,145
|
|
|
HARTE HANKS, INC.
|
|
|
|
|
|
By:
|
|
/s/ Robert L. R. Munden
|
|
|
Robert L. R. Munden
|
|
|
Senior Vice President,
|
|
|
General Counsel & Secretary
|
/s/ Frank M. Grillo
|
Frank M. Grillo
|
$20,000,000.00
|
|
APRIL 17, 2017
|
1.
|
DEFINITIONS
|
Applicable Margin for
Base Rate Portion
|
Applicable Margin
for LIBOR Portion
|
-0.75%
|
1.95%
|
2.
|
PAYMENT TERMS
|
3.
|
EVENT OF DEFAULT AND REMEDIES
|
4.
|
GENERAL PROVISIONS
|
BORROWER:
|
|
|
|
|
|
HARTE HANKS, INC.
|
|
|
|
|
|
By:
|
|
/s/ Robert L. R. Munden
|
|
|
Executive Vice President, Chief Financial Officer, and
|
|
|
General Counsel and Secretary
|
Name of Entity
|
|
Jurisdiction of Organization
|
|
% Owned
|
3Q Digital, Inc.
|
|
Delaware
|
|
100%
|
Harte-Hanks Belgium N.V.
|
|
Belgium
|
|
100%
(1)
|
Harte-Hanks Data Services LLC
|
|
Maryland
|
|
100%
|
Harte-Hanks Direct, Inc.
|
|
New York
|
|
100%
(2)
|
Harte-Hanks Direct Marketing/Baltimore, Inc.
|
|
Maryland
|
|
100%
|
Harte-Hanks Direct Marketing/Cincinnati, Inc.
|
|
Ohio
|
|
100%
|
Harte-Hanks Direct Marketing/Dallas, Inc.
|
|
Delaware
|
|
100%
|
Harte-Hanks Direct Marketing/Fullerton, Inc.
|
|
California
|
|
100%
|
Harte-Hanks Direct Marketing/Jacksonville, LLC
|
|
Delaware
|
|
100%
(4)
|
Harte-Hanks Direct Marketing/Kansas City, LLC
|
|
Delaware
|
|
100%
(3)
|
Harte-Hanks do Brazil Consultoria e Servicos Ltda.
|
|
Brazil
|
|
100%
|
Harte Hanks Europe B.V.
|
|
Netherlands
|
|
100%
|
Harte-Hanks Florida, Inc.
|
|
Delaware
|
|
100%
|
Harte-Hanks GmbH
|
|
Germany
|
|
100%
(6)
|
Harte Hanks Logistics, LLC
|
|
Florida
|
|
100%
(4)
|
Harte-Hanks Market Intelligence Espana LLC
|
|
Colorado
|
|
100%
|
Harte-Hanks Philippines, Inc.
|
|
Philippines
|
|
100%
|
Harte-Hanks Print, Inc.
|
|
New Jersey
|
|
100%
|
Harte-Hanks Response Management/Austin, Inc.
|
|
Delaware
|
|
100%
|
Harte-Hanks Response Management/Boston, Inc.
|
|
Massachusetts
|
|
100%
|
Harte-Hanks Shoppers, Inc.
|
|
California
|
|
100%
|
Harte-Hanks SRL
|
|
Romania
|
|
100%
(5)
|
Harte-Hanks Strategic Marketing, Inc.
|
|
Delaware
|
|
100%
|
Harte-Hanks STS, Inc.
|
|
Delaware
|
|
100%
|
Harte Hanks Tranquility Limited
|
|
England & Wales
|
|
100%
|
Harte Hanks UK Limited
|
|
United Kingdom
|
|
100%
|
HHMIX SAS
|
|
France
|
|
100%
(6)
|
NSO, Inc.
|
|
Ohio
|
|
100%
|
Sales Support Services, Inc.
|
|
New Jersey
|
|
100%
|
Southern Comprint Co.
|
|
California
|
|
100%
|
(1)
|
99.84% Owned by Harte Hanks, Inc.
|
|
0.16% Owned by Harte-Hanks Direct, Inc.
|
(2)
|
Owned by Harte-Hanks Print, Inc.
|
(3)
|
Owned by Sales Support Services, Inc.
|
(4)
|
Owned by Harte-Hanks Florida, Inc.
|
(5)
|
Owned by Harte Hanks UK Limited
|
(6)
|
Owned by Harte Hanks Europe B.V.
|
I, Karen A. Puckett, President and Chief Executive Officer of Harte Hanks, Inc. (the “Company”), certify that:
|
||
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of the Company;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
June 16, 2017
|
|
/s/ Karen A. Puckett
|
Date
|
|
Karen A. Puckett
|
|
|
President and Chief Executive Officer
|
I, Robert L. R. Munden, Executive Vice President, Chief Financial Officer, and General Counsel and Secretary of Harte Hanks, Inc. (the “Company”), certify that:
|
||
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of the Company;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
June 16, 2017
|
|
/s/ Robert L. R. Munden
|
Date
|
|
Executive Vice President, Chief Financial Officer,
|
|
|
and General Counsel and Secretary
|
June 16, 2017
|
|
/s/ Karen A. Puckett
|
Date
|
|
Karen A. Puckett
|
|
|
President and Chief Executive Officer
|
June 16, 2017
|
|
/s/ Robert L. R. Munden
|
Date
|
|
Executive Vice President, Chief Financial Officer,
|
|
|
and General Counsel and Secretary
|