UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

July 9, 2015 (July 7, 2015)

Date of Report (Date of earliest event reported)

 

HARTE HANKS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

1-7120

 

74-1677284

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

9601 McAllister Freeway, Suite 610

San Antonio, Texas  78216

(210) 829-9000

(Address of principal executive offices and Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 5.02           Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On July 9, 2015, Harte Hanks, Inc. (the “Company”) announced that Douglas C. Shepard would succeed Robert A. Philpott as the Company’s interim President and Chief Executive Officer, effective immediately.  Mr. Philpott resigned as President and Chief Executive Officer and from the Company’s board of directors (the “Board”), effective July 7, 2015.  In connection with the resignation, the Company agreed to provide Mr. Philpott severance benefits as though he had been terminated “without Cause” under the terms of his Employment Agreement with the Company of July 1, 2013.  The Board has formed a search committee to identify a successor President and Chief Executive Officer.  Mr. Shepard, 47, will continue in his role as Chief Financial Officer while assuming the interim responsibilities of the President and Chief Executive Officer’s office.

 

Compensation of Interim CEO

 

On July 7, 2015, the Board approved the following compensation with respect to Mr. Shepard:  (i) an increase in his annual base salary from $375,000 to $450,000; (ii) an increase in the target payout under the Company’s 2015 Annual Incentive Plan from 50% to 70% of his annual base salary; and (iii) an award of 78,671 shares of restricted stock under the terms of the Company’s 2013 Omnibus Incentive Plan, which shares vest in three equal annual installments.

 

Officer Retention Bonuses

 

On July 7, 2015, the Board approved the grant to certain of its named executive officers a retention bonus equal to 25% of their respective then-current base salary (the “Retention Bonus”), payable on the earlier of (i) June 30, 2016 or (ii) the occurrence of a “change in control” (as defined in the form Amended & Restated Severance Agreement previously filed as Exhibit 10.1 to the Company’s Form 8-K, dated March 19, 2015) (the “Retention Date”).  However, if an executive’s employment were to terminate prior to the Retention Date, the right to receive a Retention Bonus would be forfeited.

 

The foregoing summary of the Retention Bonus does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Officer Retention Bonus Letter, a form of which will is filed as an exhibit hereto.

 

Item 7.01           Regulation FD Disclosure.

 

A copy of the press release announcing certain of the matters described under Item 5.02 is furnished herewith as Exhibit 99.1 and is incorporated in this Item 7.01 by reference.

 

Item 9.01           Financial Statements and Exhibits.

 

(d)  Exhibits.     The following exhibits are being filed or furnished herewith:

 

Exhibit No.

 

Description

 

 

 

10.1

 

Form of Officer Retention Bonus Letter dated July 9, 2015

 

 

 

99.1

 

Press Release of Harte Hanks, Inc. dated July 9, 2015

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Harte Hanks, Inc.

 

 

 

 

 

Dated: July 9, 2015

 

 

 

 

 

 

By:

/s/ Robert L. R. Munden

 

 

 

Senior Vice President,
General Counsel & Secretary

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

10.1

 

Form of Officer Retention Bonus Letter dated July 9, 2015

 

 

 

99.1

 

Press Release of Harte Hanks, Inc. dated July 9, 2015

 

3

Exhibit 10.1

 

 

July 9, 2015

 

[Name]

Street Address Line 1

City, State ZIP

 

Dear [Name],

 

As you know, Harte Hanks, Inc. (“Harte Hanks”) is undergoing a period of leadership transition.  We consider your continued service and dedication to Harte Hanks essential to our future success.  To induce your continued employment, Harte Hanks is providing you the opportunity to earn a retention bonus, as described in this letter agreement.

 

In recognition of your continued service with Harte Hanks through the earlier of (i) June 30, 2016 or (ii) the occurrence of a “change in control” (as defined in your current amended and restated severance agreement with Harte Hanks) (the “Retention Date”), Harte Hanks is offering you a bonus equal to 25% of your then-current base salary, less all applicable withholdings and deductions required by law (the “Retention Bonus”).

 

If you are eligible to receive the Retention Bonus, it will be paid to you in one lump sum cash payment in the first administratively feasible payroll cycle after the Retention Date. If your employment is terminated (or notice of termination is given) prior to the Retention Date for any reason whatsoever you will forfeit the Retention Bonus and will not be entitled to any payment thereof.

 

Your employment remains at-will, meaning that either you or Harte Hanks may terminate your employment relationship at any time and for any reason, with or without cause.  You acknowledge and agree that neither Harte Hanks nor any of its affiliates, officers, or agents makes or has made any representation about the tax consequences of any payments or benefits offered to you under this letter.  The amounts and benefits provided pursuant to this letter are intended to comply with the short term deferral exception to Section 409A of the  Internal Revenue Code (the “Code”), set forth in Treas. Reg. § 1.409A-1(b)(4), and shall be interpreted accordingly.

 

Harte Hanks has the authority to interpret all of the terms of this letter agreement and the Retention Bonus.  Determinations and interpretations by Harte Hanks in this respect will be final and conclusive.  This letter agreement contains all of the understandings and representations between Harte Hanks and you relating to the Retention Bonus and supersedes all prior and contemporaneous understandings, discussions, agreements, representations and warranties, both written and oral, with respect to any Retention Bonus.  This letter agreement may not be amended or modified unless in writing signed by both Harte Hanks and you.  This letter agreement, for all purposes, shall be construed in accordance with the laws of Texas without regard to conflicts-of-law principles and applicable federal law.

 

Kind regards,

 

GivenName Lastname

AGREED AND ACCEPTED:

 

Title

[Name]

 

 

Date:

 

 

Harte Hanks

www.hartehanks.com

9601 McAllister Freeway, Suite 610, San Antonio, Texas 78216

 

Office 210-829-9135      Fax 210-829-9139

 

 

Exhibit 99.1

 

NEWS RELEASE

 

Media Contact:

ICR for Harte Hanks

 

Phil Denning

646-277-1258

Phil.Denning@icrinc.com

 

Investor Contact:

ICR for Harte Hanks

 

Staci Strauss Mortenson

203-682-8273

Staci.Mortenson@icrinc.com

 

HARTE HANKS ANNOUNCES EXECUTIVE LEADERSHIP CHANGE

 

SAN ANTONIO — July 9, 2015 — Harte Hanks (NYSE: HHS), a leader in developing customer relationships, experiences and defining interaction-led marketing, today announced the appointment of Douglas C. Shepard as interim President and Chief Executive Officer, effective immediately. Mr. Shepard, the company’s Chief Financial Officer, succeeds Robert A. Philpott, who has stepped down as President and CEO, as well as from the Company’s Board of Directors, to pursue other interests. The Board has formed a search committee to identify a successor CEO.

 

“On behalf of the entire company, I would like to express my gratitude and appreciation to Robert for his service and dedication to Harte Hanks during his tenure,” said Christopher Harte, Chairman of the Board. “Under Robert’s leadership, the business has successfully refocused its core activities and developed a corporate strategy to become a leader in smarter customer interactions.”

 

Mr. Harte continued, “Doug is a talented executive who has proven his leadership over the course of more than seven years with the Company, and we have the utmost confidence in his ability to execute on our strategic vision. Combined with the support of a strong senior leadership team, I know that this will be a smooth and seamless transition. Given the strength of our service offerings and our current client portfolio, I feel confident about our long term potential to drive growth and shareholder value.”

 

Mr. Shepard, 47, will continue in his role as CFO while assuming the interim responsibilities of the CEO’s office. Since joining Harte Hanks as CFO in December 2007, he has played a key role in defining the Company’s strategic vision, building its M&A strategy and streamlining the organization to improve its operational efficiencies. Prior to joining the Company, Mr. Shepard served as Chief Financial Officer and Treasurer of Highmark’s vision holding company, HVHC Inc., and as Executive Vice President, Chief Financial Officer, Treasurer and Secretary of Visionworks, Inc. (formerly Eye Care Centers of America, Inc.).

 

Related to this transition, the Company expects to incur a pre-tax severance charge of approximately $2.0 million to $2.5 million.

 


 

About Harte Hanks

 

Harte Hanks partners with clients to deliver relevant, connected and quality customer interactions. Our approach starts with discovery and learning, which leads to customer journey mapping, creative and content development, analytics and data management, and ends with execution and support in a variety of digital and traditional channels. We do something powerful: we produce engaging and memorable customer interactions to drive business results for our clients, which is why Harte Hanks is famous for developing better customer relationships, experiences and defining interaction-led marketing. For more information, visit the Harte Hanks website at www.hartehanks.com, call (800) 456-9748, email pr@hartehanks.com or follow us on Twitter @hartehanks or Facebook at https://www.facebook.com/HarteHanks.

 

Forward-Looking Statements

 

This press release contains forward-looking statements, including statements about the company’s leadership transition, services and clients. A number of risks and uncertainties could cause actual results to differ materially from currently anticipated results. Additional important factors and information regarding Harte Hanks that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in our Annual Report on Form 10-K, as filed with the SEC and available in the “Investors” section of our website under the heading “Financials & Filings.”  We specifically disclaim any obligation to update these forward-looking statements in the future even if circumstances change and, therefore, you should not rely on these forward-looking statements as representing our views after today.

 

As used herein, “Harte Hanks” refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require.