Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
HARTE
HANKS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which the transaction applies:
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Aggregate number of securities to which the transaction applies:
(3)
Per
unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of the transaction:
(5)
Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
TO BE HELD MAY 23, 2024 at 2:00 P.M. (Eastern Daylight Time)
As a stockholder of Harte Hanks, Inc., a Delaware corporation (the “Company” or “Harte Hanks”), you are hereby given notice of, and invited to virtually attend the Company’s 2024 annual meeting of stockholders (the "Annual Meeting"), which will be held virtually, exclusively via a live audio webcast on Thursday, May 23, 2024, at 2:00 p.m. Eastern Daylight Time, for the following purposes:
Proposal
Board
Recommendation
I. Election of five (5) Board nominees, each to serve until our 2025 annual meeting of stockholders or until their successors are duly elected and qualified;
FOR
II. To approve (on a non-binding advisory basis) the compensation of our named executive officers;
FOR
III. To consider and vote upon the ratification of the selection of Baker Tilly US, LLP as Harte Hanks’ independent registered public accounting firm for the fiscal year ending December 31, 2024; and
FOR
IV.
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
The board of directors of Harte Hanks has fixed the close of business on March 26, 2024, as the record date for determining stockholders entitled to notice of and to vote at the Annual Meeting and, subject to applicable law and the provisions of our Bylaws, any adjournment or postponement thereof. Only holders of record as of such date will be entitled to virtually attend and vote at the Annual Meeting. For more information, please refer to the enclosed proxy statement.
The
enclosed proxy statement and our Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended December 31, 2023 (which we are distributing in lieu of a separate annual report to stockholders) are available on our website at www.hartehanks.com, under the heading “SEC Filings” in the “Investors Relations” section of our website.
Your vote is important, and we urge you to review the accompanying materials carefully and to submit your proxy as soon
as possible so that your shares will be represented at the Annual Meeting. Submitting a vote before the Annual Meeting will not preclude you from voting your shares at the virtual Annual Meeting should you decide to join the webcast.
Thank you for your continued interest and support.
We are privileged and honored to be leading Harte Hanks in its 101st year of continuous service. We are profoundly inspired by the pride and unwavering commitment our team demonstrates towards our clients. Our enduring relationships, spanning decades, attest to our ability to adapt and grow alongside our valued partners.
Central to our continued success is our strategic collaboration with clients, by ensuring the delivery of customized innovative solutions. This commitment forms the foundation of our transformative journey, encapsulated within the core
essence of Project Elevate (“Elevate”). We believe that this program will not only enhance stockholder value but will also delight our customers and invigorate our team members. A few of our key accomplishments with respect to Elevate in 2023 are important to highlight. First and foremost, our talent.
We have assembled a dynamic leadership team, dedicated to executing a comprehensive transformation of our business. Our collective vision for the future, in which our Board is actively engaged, fills us with tremendous excitement and determination.
Elevate is the creation of our entire executive leadership team, reflecting our collective dedication to charting a new course for Harte Hanks. Since last June, we have welcomed several key executives who have already made significant contributions to our organization:
•David
Garrison, a seasoned CFO with extensive SEC reporting and international business experience, officially joined us in January, bringing invaluable expertise to our financial operations.
•Kelly Waller, an accomplished sales and marketing professional with international sales acumen, assumed the role of SVP, Sales and Marketing in October. Under her leadership, we’ve witnessed a major transformation and expansion of our sales and marketing endeavors, setting the stage for future growth.
•Ron Lee, a versatile executive with over two decades of experience in revenue operations and finance, joined us as SVP of our Sales Services business unit in November.
•David Fisher, a highly accomplished finance executive with over 25 years of experience, came on board as Chief Transformation
Officer in January, spearheading strategic initiatives to drive operational excellence.
Together, we are laser-focused on repositioning Harte Hanks to streamline our value proposition, foster continuous growth, and capitalize on emerging opportunities. As part of our commitment to enhancing customer relationships, we are also in the process of appointing a Chief Customer Officer in the first half of 2024.
With our talented team in place, our next step in 2024 and onward, encompasses execution on the Elevate Plan.
Our Elevate Plan encompasses two pivotal components:
•Part
One: We have reimagined and expanded our sales and marketing organization, laying the groundwork for sustainable growth. With a fully staffed team and a comprehensive execution strategy, we are already seeing promising early indicators of progress, with sustainable growth expected to materialize by late 2024.
•Part Two: Over the past four months, we have conducted a thorough analysis of our legacy structure, identifying an opportunity to remove $16 million in costs throughout 2024-2025. This initiative, spearheaded by our newly established business transformation office, underscores our commitment to operational efficiency and fiscal responsibility.
The culmination of our efforts and unwavering commitment is poised to unlock significant growth potential with the goal of delivering double-digit margins by 2026.
Elevate
signifies a new chapter for Harte Hanks, a century-old enterprise revitalized for today's economy and committed to creating enduring value for our stockholders, customers, and team members.
Elevate also encompasses an internal restructuring of how we operate, and how we go to market.
Presently, we operate as a leading customer and brand experience company across six service categories, addressing the evolving challenges of B2B and B2C businesses in the era of intelligence and Artificial Intelligence (AI). Our focus on data-driven analytics, customer experience strategies, and seamless program execution underscores our dedication to the success of our clients at every stage of the customer lifecycle.
As we transition into 2024, we have restructured our services into four distinct business units, aligning with the end-to-end customer
and product lifecycles:
•Marketing Services, which comprises data, marketing, demand generation, and managed marketing services
•Sales Services
•Fulfillment & Logistics
•Customer Care
The above structure will allow us to operate more efficiently, in a more transparent manner, and will allow each business unit to focus on our main goal, which is driving client value and success.
We want to extend our gratitude to our entire leadership team and Board of Directors for their support throughout our journey with Project Elevate. Their invaluable insights and guidance have been instrumental in shaping our strategy
and driving our investments.
Lastly, please be assured our management team and Board are fully aligned on our strategy and are committed to delivering sustained stockholder value in 2024 and onward.
This proxy statement is being furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”)
of Harte Hanks, Inc. for use at our virtual annual meeting of stockholders (the “Annual Meeting”). In this proxy statement, references to “Harte Hanks,” the “Company,”“we,”“us,”“our” and similar expressions refer to Harte Hanks, Inc., unless the context of a particular reference provides otherwise. We refer to various websites in this proxy statement. None of the websites referenced in this proxy statement, including the Harte Hanks website, nor the information contained therein, shall be deemed to be incorporated into this proxy statement.
GENERAL
INFORMATION
2024 Annual Meeting Date and Location
This year’s Annual Meeting will be held on Thursday, May 23, 2024 at 2:00 p.m. Eastern Daylight Time, or at such other time to which the Annual Meeting may be adjourned or postponed. The Annual Meeting will be a completely virtual meeting of stockholders. You may virtually attend, vote and submit questions during the Annual Meeting via live audio webcast on the Internet at http://www.virtualshareholdermeeting.com/HHS2024. We
expect that in future years we will continue to host only virtual meetings, which we believe meaningfully enhances opportunities for stockholder attendance and participation and is also consistent with our cost reduction efforts to further position the Company for future growth.
Delivery of Proxy Materials
Mailing Date
The approximate date on which this Notice is first being sent or given to stockholders is April
12, 2024.
Important Notice Regarding Availability of Proxy Materials For 2024 Annual Meeting
We are using the “notice and access” system adopted by the United States Securities and Exchange Commission (the “SEC”) relating to the delivery of our proxy materials over the Internet. As a result, we mailed to our stockholders of record a notice (the “Notice”) about the Internet availability of the proxy materials instead of mailing a paper copy of this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report”). The Notice provides instructions on how you can obtain a copy of this proxy statement and a copy of the Annual Report, by either
viewing online, by requesting an electronic copy of these documents, or by requesting a written copy of these documents. Therefore, unless we receive a specific request from a stockholder requesting to receive proxy materials in printed form by mail or electronically by email, we will not be providing a copy of the proxy materials to stockholders. The proxy statement and our Annual Report are also available on our website at www.hartehanks.com, under the “SEC Filings” in the “Investor Relations” section of our website. We believe the notice and access rules
allow us to use internet technology that many stockholders prefer, continue to provide stockholders with the information that they need, and, at the same time, ensure more prompt delivery of the proxy materials.
Stockholders Sharing an Address
Registered Stockholders - You are a registered stockholder if you own shares in your own name on the books of our transfer agent, Computershare Trust Company, N.A. The SEC permits a single Notice to be sent to any household at which two or more registered stockholders reside if they appear to be members of the same family. Each stockholder will continue to receive a separate proxy card. This procedure, referred to as "householding", reduces the volume of duplicate
information stockholders receive, and reduces our mailing and printing expenses. A number of brokerage firms have instituted householding. If your household would like to receive duplicate rather than single mailings in the future, please write to the Company at 1 Executive Drive, Suite 303, Chelmsford, Massachusetts01824 (Attention: Secretary), or call (512) 434-1100.
Street-name Stockholders
- Most banks and brokers are delivering only one copy of the Notice to consenting street-name stockholders (you are a street-name stockholder if you own shares beneficially in the name of a bank, broker or other holder of record on the books of our transfer agent) who share the same address. This procedure reduces printing and distribution costs. Those who wish to receive separate Notices may do so by contacting their bank, broker or other nominee, or (if offered) by checking the appropriate box on the voting instruction card sent to them. Similarly, most street-name stockholders who are receiving multiple Notices at a single address may request that only a single Notice be sent to them in the future by checking the appropriate box on the voting instruction card sent to them or by contacting their bank, broker or other nominee.
Voting
Stockholders
Entitled to Vote
The record date for determining the common stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof is the close of business on March 26, 2024 (the “Record Date”). As of March 26, 2024, we had 7,240,905 shares of common stock issued and outstanding, which were held by approximately 740 holders of record. Please refer to “Security Ownership of Management and Principal Stockholders” for information about common stock beneficially owned by our directors, executive officers and principal stockholders. Stockholders
are entitled to one vote for each share of common stock owned as of the Record Date. A list of stockholders entitled to vote at the virtual Annual Meeting will be open to the examination of any stockholder for any purpose germane to the Annual Meeting, during ordinary business hours at our corporate headquarters located at 1 Executive Drive, Suite 303, Chelmsford, MA01824 for a period of at least ten days prior to the virtual Annual Meeting and on the virtual Annual Meeting website during the entirety of the meeting.
Voting
of Proxies by Management Proxy Holders
The Board has appointed Mr. Kirk Davis (Chief Executive Officer), Mr. David Garrison (Chief Financial Officer) and Mr. Robert Wyman (General Counsel), each with full powers of substitution and resubstitution, as the management proxy holders for the Annual Meeting. Your shares will be voted in accordance with the instructions on the proxy card you submit electronically or by mail, or the instructions provided for any proxy submitted by telephone or online, as applicable. For stockholders who have their shares voted by duly submitting a proxy online, by mail or telephone, the management proxy holders will vote all shares represented by such valid proxies as specified by such holder, and if not specified, in accordance with the Board’s recommendations:
PROPOSAL
ROADMAP
PAGE
RECOMMENDATION
Proposal No. 1: Election of Directors
FOR the election of each of the persons named under “Proposal I Election of Directors” as nominees for election as directors
Proposal No. 3: Ratification of the selection of Independent Registered Public Accounting Firm - FOR the proposal to ratify the selection of Baker Tilly US, LLP, as our independent registered public accounting firm (independent auditors) for the fiscal year ended December 31, 2024
As
of the date of printing of this proxy statement, the Board is not aware of any other business or nominee to be presented or voted upon at the Annual Meeting. Should any other matter requiring a vote of stockholders properly arise, the proxies in the enclosed form confer upon the person or persons entitled to vote the shares represented by such proxies' discretionary authority to vote the same in accordance with their discretion.
The virtual presence at the Annual Meeting,
including by proxy, of holders of a majority of all of the shares of the stock entitled to vote at the Annual Meeting constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions and broker “non-votes” (which are described in voting procedures) are counted as present at the Annual Meeting for purposes of determining whether a quorum is present. If a quorum is not present, the Annual Meeting may be adjourned or postponed from time to time until a quorum is obtained.
PROPOSAL
VOTE
REQUIRED
BROKER DISCRETIONARY VOTING ALLOWED
I
Election of directors
Majority of votes cast
No
II
Say on Pay
Majority of votes cast
No
III
Ratification of the Selection of Independent Registered Public Accounting Firm
Majority
of votes cast
Yes
•Proposal No. 1 (Election of Directors) - To be elected in an uncontested election, each nominee for election as a director must receive a majority of the votes cast in favor of his or her election at the Annual Meeting virtually or by proxy. In a contested election, directors are elected by a plurality of votes cast virtually or by proxy. The election of directors at the Annual Meeting will be uncontested and therefore majority voting applies. Votes may be cast in favor of or withheld from the election of each nominee. Abstentions and broker non-votes, if any, will not count as votes cast and will have no effect on the outcome of the vote on the election of directors. Pursuant to Amendment No. 2 (the "Amendment") to our Fifth Amended and Restated
Bylaws (the “Bylaws”), each nominee who is a current director has submitted an irrevocable resignation as a director. Such resignation will become effective upon (1) that person not receiving a majority of the votes cast in favor of his or her election in an uncontested election and (2) acceptance by the Board of that resignation in accordance with the policies and procedures adopted by the Board for such purpose.
•Proposal No. 2 (Say on Pay) – Approval of the compensation of our named executive officers, on a non-binding, advisory basis requires the approval of a majority of the votes cast at the Annual Meeting virtually or by proxy. Abstentions and broker non-votes, if any, will not count as
votes cast and will have no effect on the outcome of the proposal.
•Proposal No. 3 (Ratification of the Selection of Independent Registered Public Accounting Firm) - Ratification of the selection of Baker Tilly US, LLP as our independent registered public accounting firm (independent auditors) for the fiscal year ended December 31, 2024 requires the affirmative vote of the majority of the votes cast at the Annual Meeting virtually or by proxy. As Proposal No. 3 is considered a routine matter, banks, brokers or other nominees have the discretion to vote without instructions from the stockholder. Abstentions, if any, will not count as votes cast and will have no effect on the outcome of the proposal.
Submission of Proposal No. 3 (Ratification of the Selection of Independent Registered
Public Accounting Firm) is not legally required. However, the Board and its Audit Committee believe that such submission is an opportunity for stockholders to provide feedback to the Board and its Audit Committee on an important issue of corporate governance. If the stockholders do not ratify the selection of Baker Tilly US, LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2024, the Audit Committee will reconsider the selection of such firm as independent auditors, although the results of the vote are not binding on the Audit Committee. The Audit Committee has the sole authority and responsibility to retain, evaluate, and, where appropriate, replace the Company’s independent auditors. Ratification by the stockholders of the selection of Baker Tilly US, LLP does not limit the authority of
the Audit Committee to direct the appointment of new independent auditors at any time during fiscal year 2024 or thereafter.
Voting Procedures
Registered Stockholders - Registered stockholders may vote their shares or submit a proxy to have their shares voted by one of the following methods:
•By Mail. You may submit a proxy by signing, dating and returning the enclosed proxy card in the enclosed pre-addressed envelope.
•By Telephone. You may submit a proxy by telephone using the toll-free number listed on the enclosed proxy card. Please have your proxy card in
hand when you call. Telephone voting facilities will close and no longer be available on the date and time specified on the proxy card.
•Online. You may submit a proxy online using the website listed on the enclosed proxy card. Please have your proxy card in hand when you log onto the website. Online
voting facilities will close and no longer be available on the date and time specified on the proxy card.
•Electronically. You may vote electronically at the Annual Meeting by following instructions at the virtual Annual Meeting and completing an electronic ballot online; however, virtually attending the Annual Meeting without completing a ballot will not count as a vote.
Street-name Stockholders - Street-name stockholders may generally vote their shares or submit a proxy to have their shares voted by one of the following methods in accordance with the applicable brokers’, nominees’, or agent’s procedures:
•By Mail. You may submit a proxy by signing, dating and returning the enclosed proxy card in the enclosed pre-addressed
envelope.
•By Methods Listed on the Proxy Card. Please refer to the enclosed proxy card or other information forwarded by your bank, broker or other holder of record to determine whether you may submit a proxy by telephone or online, following the instructions on the proxy card or other information provided by your bank, broker or other nominee.
•Virtually with a “Legal” Proxy from the Record Holder. A street-name stockholder who wishes to vote his or her shares electronically at the Annual Meeting will need to obtain a “legal” proxy from their bank, broker or other nominee. Please consult the voting form or other information sent to you by your bank, broker or other nominee to determine how to obtain a “legal” proxy in order to vote electronically at the Annual
Meeting.
A “broker non-vote” occurs when a nominee, such as a broker or dealer, holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. On routine matters, brokers have the discretion to vote shares held in “street name” – a term that means the shares are held in the name of the broker on behalf of its customer, the beneficial owner. If your shares are held in “street name” by a broker and you wish to vote on the proposal to elect the directors (Proposal 1), the advisory vote to approve named executive officer compensation (Proposal 2), or to act upon any other non-routine business that may properly come before the Annual Meeting, you should provide instructions to your broker. If you do not provide your broker with instructions, your
broker generally will only have the authority to vote on the ratification of the appointment of Baker Tilly US, LLP, as the Company’s independent registered public accounting firm (Proposal 3). All other matters at the Annual Meeting are expected to be non-routine and therefore brokers will not be entitled to vote on a beneficial owner’s behalf without voting instructions or discretionary authority on such matters.
If you need assistance in voting your shares, please call 1-512-434-1100 no later than the day before the Annual Meeting.
As a matter of policy, proxy cards, ballots and voting tabulations that identify individual stockholders are kept confidential by the
Company. Such documents are made available only to the inspector of elections and personnel associated with processing proxies and tabulating votes at the Annual Meeting. The votes of individual stockholders will not be disclosed except as may be required by applicable law.
Revoking Your Proxy
If you are a registered stockholder, you may revoke your proxy at any time before the shares are voted at the Annual Meeting by:
•timely delivery of a valid, later-dated executed proxy card;
•timely submitting a proxy with new voting instructions using the telephone or online voting system;
•virtually
attending the webcast of the Annual Meeting and completing an electronic ballot; however, virtually attending the Annual Meeting without completing an electronic ballot will not revoke any previously submitted proxy; or
•filing an instrument of revocation received by the Secretary of Harte Hanks, Inc. at the Company’s office at 1 Executive Drive, Suite 303, Chelmsford, MA01824, by 2:00 p.m., Eastern Daylight Time, on Wednesday, May 22, 2024.
Your latest
dated proxy card or telephone or internet proxy will be the one that is counted.
If you are a street-name stockholder and you vote by proxy, you may change your vote by submitting new voting instructions to your bank, broker or nominee in accordance with that entity’s procedures.
None of Delaware law (the state of incorporation of Harte Hanks, Inc.), our Certificate of Incorporation, or our Bylaws,
provides for appraisal or other similar rights for dissenting stockholders in connection with any of the proposals to be voted upon at the Annual Meeting. Accordingly, our stockholders will have no right to dissent and obtain payment for their share.
Attending the Annual Meeting Virtually
The Annual Meeting will be a completely virtual meeting of stockholders conducted exclusively by a live audio webcast. Only record or beneficial owners of Harte Hanks common stock as of the Record Date may attend the virtual Annual Meeting, vote their shares and submit online questions.
Stockholders may access the meeting by visiting http://www.virtualshareholdermeeting.com/HHS2024, and using the 16-digit control
number included on the Notice of Annual Meeting, on the proxy card or on the instructions accompanying the proxy materials. The Annual Meeting will begin promptly at 2:00 p.m., Eastern Daylight Time, and you should allow ample time for check-in procedures.
If you wish to submit a question at the Annual Meeting, you may do so in advance at http://www.virtualshareholdermeeting.com/HHS2024, or you may type it into the dialog box provided at any point during the virtual meeting (until the floor is closed to questions). We will endeavor to answer as many stockholder-submitted questions as time permits that comply with the Annual Meeting rules of conduct. We reserve the right to exclude questions
regarding topics that are not pertinent to meeting matters or Company business or to defer to responding to questions until after the meeting. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition.
Solicitation Expenses
We will bear all costs incurred in the preparation, assembly, mailing and solicitation of proxies by our Board. In addition to solicitation by mail, our directors, officers and employees may solicit proxies personally or by telephone, e-mail, facsimile or other means, without additional compensation. We may also make arrangements with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation materials to the beneficial owners of shares of common stock held by such persons, and we may reimburse these brokerage houses and other custodians, nominees and fiduciaries for reasonable expenses incurred in connection therewith.
Additionally, the Board has retained Saratoga Proxy Consulting, LLC, a proxy solicitation firm, who may solicit proxies on the Board’s behalf. We will pay Saratoga Proxy Consulting, LLC an estimated fee not to exceed $7,500 plus costs and expenses. Saratoga Proxy Consulting, LLC and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement.
Delinquent
Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and related rules of the SEC require our directors, officers, and persons who own more than 10% of a registered class of our equity securities (collectively the "Reporting Persons"), to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to our equity securities with the SEC. All Reporting Persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports that they file. As with many public companies, we provide assistance to our directors and executive officers in making their Section 16(a) filings pursuant to powers of attorney granted by our insiders.
To
our knowledge, based solely on our review of the copies of Section 16(a) reports provided to us by such Reporting Persons, including those reports that we have filed on behalf of our directors and executive officers pursuant to powers of attorney, or written representations from certain Reporting Persons we believe that there has been compliance with all Section 16(a) filing requirements applicable to such Reporting Persons with respect to the fiscal year ended December 31, 2023, with the exception of one Form 3 for Mr. Davis and Mr. Garrison (which were each filed late), and one Form 4 for Mr. Radoff (filed late). The failure to timely file the Form 3s and Form 4 was inadvertent on the part of the Company's officers and directors.
Implications of Being a “Smaller Reporting Company”
We qualify as a “smaller reporting company” as such term is defined in Rule 405 of the Securities Act of 1933, as amended (the “Securities Act”), and Item 10 of Regulation S-K. Accordingly, and in accordance with relevant SEC rules and guidance, as a smaller reporting company, we are allowed to take advantage of specified exemptions and reduced disclosure obligations, including with respect to executive compensation disclosure, in our periodic reports and proxy statements.
DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth certain information about our current directors as of March 26, 2024:
Name
Age
Kirk Davis
62
Genni Combes
57
Elizabeth
Ross
52
John H. Griffin, Jr.*
3
63
Bradley Radoff
50
David L. Copeland(i)
68
* Chairman
(i) Mr. Copeland was not nominated for reelection at the Annual Meeting. After the Annual
Meeting our Board size will be reduced to five members.
Members of the Board are generally elected at each annual meeting of the Company’s stockholders to serve until the next annual meeting of the Company’s stockholders.
Kirk Davis has served as the Company’s Chief Executive Officer since June 2023. Mr. Davis has spent the past 26 years serving as president or CEO of public and private media companies. From June 2021 – June 2023, Mr. Davis served as the Chief Executive Officer of Metro Corp Publishing, a regional media company and publisher of Philadelphia and Boston magazines. During
Mr. Davis’s tenure at MetroCorp, Boston Magazine (in 2023) received the highest editorial honor, the general excellence award for editorial excellence from the National City in Regional Magazine Association. From 2006-2019, Mr. Davis served in various roles at GateHouse Media, LLC (“GateHouse”) and its affiliates and predecessor entities, one of the largest newspaper chains in the United States, including serving as Chief Executive Officer of GateHouse and as President, Chief Operating Officer of its publicly traded parent, New Media Investment Group from 2014-2019. Earlier in his career, Mr. Davis served as Chief Executive Officer of Enterprise NewsMedia LLC and Community Newspaper Company. Since 2015, Mr. Davis has served as a member of the board of directors of The Associated Press and currently serves as Chair of its Audit Committee. Mr. Davis attended Wright State
University (Ohio) and Ohio University. As the company’s Chief Executive Officer, Mr. Davis provides the Board with valuable experience and insights to enable the company to achieve growth, improve profitability, and to provide Harte-Hanks employees with an engaging and challenging work environment. Mr. Davis’s long-tenured industry experience also makes him an ideal Board member.
Genevieve “Genni” Combes has served as a director of Harte Hanks since May 2021. Ms. Combes currently serves as the CFO at CrowdStreet, Inc. (since July 2021) where she leads the finance and financial operations teams. She has broad experience as a finance and operations
executive at both public and private companies. Ms. Combes previously served as CFO at ApplePie Capital, Inc. (from June 2018 to July 2021). Prior to that, she served as Vice President, Finance Partner Relations and Operations at Sungevity (from February 2015 to February 2017), and the Senior Vice President at ZipRealty (from August 2004 to April 2013). Earlier in her career, Ms. Combes served as a Managing Director and Sr. Equity Analyst at J.P. Morgan Chase (NYSE: JPM) from October 1999 to January 2001, and at Hambrecht & Quist from December 1992 to October 1999, where she led the e-commerce and consumer research groups. Ms. Combes’ experience in leading the finance, financial planning and financial operations teams at a number of different entities, as well as her experience as a senior equity analyst at a number of different investment banks, provides valuable expertise to the Board.
Elizabeth Ross has served as a director of Harte Hanks since January 2024. Currently and since January 2022, Ms. Ross serves as the CEO of Shift Paradigm, a private equity-backed marketing consultancy that is based in Austin, Texas. Prior to Shift Paradigm, Ms. Ross had a nearly 30-year-long career in the digital marketing and advertising industries, including serving as the Chief Marketing Officer for Bright Health, Inc. (November 2020 to January 2022), and serving in C-suite roles at Minneapolis, Minnesota-based Periscope, where she lead the company as President and CEO (from October 2015 through January 2020); IPG MediaBrands (January 2011 to May 2015), where her title (at the time she departed the Company) was
Global Chief Marketing Officer; and Publicis Groupe, a subsidiary of Digitas, where she served as Chief Growth Officer (from August 2009 to January 2011). Ms. Ross was elected to our Board in light of her extensive marketing service industry experience, and ability to provide valuable guidance to the Company’s marketing services group. She also has extensive financial and compensation experience and will prove to be a valuable voice on the company committees on which she sits. Ms. Ross currently serves on both the Nominating and Governance, Compensation and Audit Committees for the Company.
John H. “Jack”
Griffin, Jr. has served as a director of Harte Hanks since July 2018. In April 2021, he was appointed as the Company’s Chairman of the Board. From April to December of 2019, he served as Vice Chairman and Chairman of the Operations Committee of Harte Hanks. Prior to that, he was a member of the Harte Hanks Office of the Chief Executive Officer (the “Office of the CEO”) from August 2018 to January 2019. Mr. Griffin is currently the Operating Chairman of Magazines at Dotdash Meredith, a subsidiary of IAC (NASDAQ: IAC). From 2018 to 2021 he was the Chairman of the Board of Dennis Publishing, a London-based firm owned by Exponent, a UK Private Equity Fund. Dennis Publishing was sold to Future PLC in October 2021. From 2016 to 2018 Mr. Griffin served as Managing Director at Oaklins DeSilva+Phillips, an advisory firm in New York City focused on mid-market
M&A transactions, valuations and restructurings for firms in media, marketing services, information, education and health care communications. Previously, as CEO and director of Tribune Publishing Company (from 2014-2016), Mr. Griffin led the spin-off of the Tribune Publishing Company’s Newspaper Division into a separate publicly traded company. Before Tribune, Mr. Griffin founded and served as CEO of Empirical Media LLC, a consulting firm that assisted legacy media companies with digital transition, restructuring and strategic planning, from 2011-2014. Mr. Griffin was previously CEO of Time Inc. and spent a dozen years at Meredith Corporation in senior executive capacities. We believe that Mr. Griffin’s qualifications for our Board include his proven success as both an operator and advisor to companies undergoing restructuring and reengineering solutions, along with his demonstrated record of achieving and exceeding financial targets in demanding private and
public company environments. In addition, the experience Mr. Griffin gained as a member of the Office of the CEO and Chairman of the Operations committee enables him to provide the Board with additional insight into the Company’s operations, strategic initiatives and personnel.
Bradley L. Radoff has served as a director of Harte Hanks since May 2021. Mr. Radoff currently serves as a private investor and as Principal of Fondren Management LP, a private investment management company, and has held such positions since 2005. Mr. Radoff previously served as a Portfolio Manager at Third Point LLC, a registered investment advisor firm, from 2006 to 2009. He also served as Managing Director of Lonestar Capital Management LLC, a registered investment advisory firm, from 2003 to 2004. Mr. Radoff served as a director of Citadel
Investment Group LLC, a global financial institution, from 2000 to 2003. Mr. Radoff has served as a director of Farmer Brothers Co. (NASDAQ: FARM), a coffee roaster and wholesale equipment servicer and distributor of coffee, tea and allied products, since October 2022; and as a director of Enzo Biochem, Inc. (NYSE: ENZ), an integrated diagnostics, clinical lab and life sciences company, since January 2022. Mr. Radoff served as a director of VAALCO Energy Inc (NYSE: EGY), a Texas-based independent energy company, from June 2020 to January 2022; Support.com (formerly NASDAQ: SPRT), a leading provider of cloud-based software and services, from June 2016 until its merger in September 2021, and Page Producing Company (formerly NYSE: PPP), an oil and gas exploration, development and production company, from March 2007 until the completion of its sale to Plains Exploration & Production Company in November 2007. Mr. Radoff graduated summa cum laude with a B.S. in Economics
from The Wharton School, University of Pennsylvania. We believe that Mr. Radoff’s qualifications for our Board include his experience serving on the boards of directors for several publicly traded companies and his extensive experience in finance and working with technology. Mr. Radoff’s experience as Principal of a private investment management company provides valuable expertise in management and finance. Mr. Radoff is also a significant shareholder which the Board believes will be valuable as it continues to develop its strategic view for the Company.
The following
persons are our current executive officers and hold the positions set forth below:
Name
Age
Principal Position
Kirk Davis
62
Chief Executive Officer
David Garrison
55
Chief Financial Officer
Robert Wyman
60
General
Counsel
For biographical information about Kirk Davis, the Company's Chief Executive Officer, see the table above in this “Directors and Executive Officers” section.
David Garrison has served as the Company’s Chief Financial Officer since January, 2024. Mr. Garrison previously served as the Company's interim CFO starting in October, 2023. Mr. Garrison brings notable expertise in cost containment, streamlining operations, and ERP implementations. He joins Harte Hanks from Digital Lumens Incorporated, an IoT lighting fixture and factory automation technology company that was spun out of
Osram Sylvania, where he served as CFO from May 2021 through June 2023. Prior to Digital Lumens, Mr. Garrison served as Chief Financial Officer of Sensera, Ltd., an Australian listed medical and IoT technology company (from December 2017 through January 2021), where he played an important role in turning around operations to facilitate a sale. Previously, he served as Managing Director of IW Ventures LLC, a financial consultant, and TTcogen LLC, a joint venture between Tecogen Inc. and Tedom a.s. From 2014 to 2017, Mr. Garrison served as CFO of Tecogen Inc., a NASDAQ-listed company that designs, manufactures and sells industrial and commercial cogeneration systems, where he supported growth with cost controls to drive margin expansion and profitability. He has an MBA from Boston University and has led several Greater Boston-based companies through successful growth-driven integrations, transactions, and implementations.
Robert
T. Wyman has served as General Counsel at Harte Hanks since 2021. Mr. Wyman is responsible for legal, regulatory, and corporate governance activities for all domestic and international businesses of the Company. Prior to serving as General Counsel, Mr. Wyman acted as Corporate Counsel for the Company beginning in 2011, and concurrent with this service, also served (in private practice) as the founding partner and as of counsel for the law firm of Wyman & Barton. During his tenure at Wyman & Barton, Mr. Wyman’s practice centered on commercial and residential real estate, and civil and criminal litigation. Mr. Wyman also previously served on the Board of Directors of Georgetown Bank (10 years), and on the Board of Directors
of several charitable/ non-profit organizations including the Lowell Massachusetts Boys and Girls Club (10 years), New Wave Swim Club (2 years), and as an advisor to the Merrimack Valley Housing Partnership, Project Genesis (2010 - current). An attorney practicing for more than 33 years (Massachusetts and New Hampshire), Mr. Wyman is a graduate of the University of Massachusetts | Lowell (1985, B.S. Business Management), and New England Law | Boston (1990, Juris Doctorate).
CORPORATE GOVERNANCE
We believe that strong corporate governance helps to ensure that
our company is managed for the long-term benefit of our stockholders. We continuously review our corporate governance policies and practices, the applicable federal securities laws regarding corporate governance, and the corporate governance standards of NASDAQ, the stock exchange on which our common stock is listed, to ensure compliance with all applicable laws and regulations and we will contemplate any changes to what is considered best practices for corporate governance even if such changes are not required by relevant laws and regulations or NASDAQ. This review is part of our continuing effort to enhance our corporate governance and to communicate our governance policies to stockholders and other interested parties.
You can access and print, free of charge, the charters of our Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee, as well as our Corporate Governance Principles, Business Conduct Policy, Code of Ethics and certain other policies and procedures on our website at www.hartehanks.com under the “Governance” tab of our “Investors Relations” section. The information on our website is not incorporated by reference and is not part of this proxy statement. Additionally, stockholders can request copies of any of these documents free of charge by writing to the following address:
From time to time, these governance documents may be revised in response to changing regulatory requirements, our evaluation of evolving best practices and industry norms and input from our stockholders and
other interested parties. We encourage you to check our website periodically for the most recent versions.
Board of Directors and Board Committees
Our business and affairs are managed under the direction of the Board. The Company’s Bylaws provide that the Board will consist of the number of directors designated by the Board from time-to-time, and, in the absence of such
designation, the Board will consist of seven directors. Currently, the Board has six directors, including the CEO. David L. Copeland, who has served on our Board since 1996, was not nominated for reelection, and will not be included on this year's proxy card. After 28 years of dedicated service on/ to our Board, the nominating committee recommended, and the Board agreed, to not renominate Mr. Copeland in an effort to allow Mr. Copeland to pursue other opportunities. Immediately after Mr. Copeland's term is deemed to expire (which will occur at the Annual Meeting), the Board will reduce its size to five directors.
The Board elects the principal executive officer and other corporate officers, acts as an advisor to and as a resource for management, and monitors management’s performance. The Board, with the assistance of the Compensation Committee, also assists in planning for the succession of the principal executive officer
and certain other key positions. In addition, the Board oversees the conduct of our business and strategic plans to evaluate whether the business is properly being managed, and reviews and approves our financial objectives and major corporate plans and actions. Through the Audit Committee, the Board reviews and approves significant changes in the appropriate auditing and accounting principles and practice and provides oversight of internal and external audit processes, financial reporting and internal controls.
Our Board of Directors has established an Audit Committee, a Compensation Committee and Nominating and Corporate Governance Committee, which have the composition and responsibilities described below. Each committee operates under a charter that has been approved by the Board of Directors.
On July 17, 2019, the Board adopted the Amendment to the Company's Bylaws. The Amendment amends Article I, Section 8 of the Bylaws to provide for the resignation of any director who fails to receive a majority of votes cast in favor of his or her election at an annual meeting of the stockholders, assuming that the election is uncontested (the “Majority Voting Provision”). Under the Majority Voting Provision,
each nominee is required to submit an irrevocable resignation, which resignation would become effective upon (1) that person not receiving a majority of the votes cast in favor of his or her election in an uncontested election and (2) acceptance by the Board of that resignation in accordance with the policies and procedures adopted by the Board for such purpose. The Board, acting on the recommendation of the Nominating and Corporate Governance Committee, is required to determine whether or not to accept the resignation not later than 90 days following certification of the stockholder vote, and the Board is required to accept the resignation absent a determination that a compelling reason exists for concluding that it is in the best interests of the Company for the person in question to remain as a director.
In
connection with the adoption of the Amendment, the Board also adopted revisions to the Company’s Corporate Governance Principles and Nominating and Corporate Governance Committee Charter to implement the Majority Voting Provision and set forth the procedures governing the resignation of directors who do not receive a majority of the votes cast in an uncontested election.
Audit Committee
We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is currently comprised of Ms. Combes, Ms. Ross (only since January 2024), and Messrs. Griffin and Radoff, each
of whom served (excepting Ms. Ross) throughout 2023. Ms. Combes is presently our Audit Committee Chair and she is considered an “audit committee financial expert,” as currently defined under the SEC and NASDAQ rules.
Our Board has determined that all the Audit Committee members are independent within the meaning of the applicable SEC rules and the listing standards of NASDAQ as such requirements apply to members of audit committees and meet the financial literacy requirements of the NASDAQ.
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.
The Audit Committee’s role is one of oversight. Management is responsible for preparing the Company’s financial statements and the independent registered public accounting firm is responsible for auditing those financial statements. Management, including the outside provider of internal audit, and the independent registered public accounting firm have more time, knowledge and detailed information about the
Company than do Audit Committee members. Consequently, in carrying out its oversight responsibilities, the Audit Committee will not provide any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent registered public accounting firm’s work.
Compensation Committee
The Compensation Committee is currently comprised of Messrs. Radoff and Griffin and Ms. Combes and Ms. Ross (since January 2024), each of whom also served (excepting Ms. Ross) throughout 2023. Mr. Radoff is presently our Compensation Committee Chair.
The primary functions of the Compensation Committee are to
(1) review and approve corporate goals and objectives relevant to principal executive officer compensation, evaluate the principal executive officer’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 principal executive officer’s compensation level based on this evaluation, (2) review and recommend to the Board (as directed by the Board) non-principal executive officer compensation, incentive-compensation plans and equity-based plans, and (3) to the extent such disclosure is required, review and discuss with management the Company’s “Compensation Discussion and Analysis” and produce a committee report on executive compensation as required by the SEC to be included in our annual proxy statement or Annual Report on Form 10-K filed with the SEC.
In
addition, the Compensation Committee may delegate power and authority to a subcommittee, provided that the subcommittee consists of at least two members and the Compensation Committee does not delegate any power or authority required to be exercised by the Compensation Committee as a whole.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is currently comprised of Messrs. Radoff, Griffin and Ms. Combes and Ms. Ross (since January 2024), each of whom also served (excepting Ms. Ross) throughout 2023. Mr. Griffin is presently our Nominating and Corporate Governance Committee Chair.
The primary functions of the Nominating and Corporate 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.
Director Candidates
The Nominating and Corporate Governance Committee is responsible for managing the process for the nomination of new directors and considers nominations from its
stockholders made pursuant to Section 1.3 of our Fifth Amended and Restated Bylaws. The Nominating and Corporate Governance Committee may identify potential candidates for first-time nomination as a director using a variety of sources, including recommendations from current Board members, our management, stockholders or contacts in communities served by Harte Hanks, or by conducting a formal search using an outside search firm selected and engaged by the Nominating and Corporate Governance Committee.
Following the identification of a potential director nominee, the Nominating and Corporate Governance Committee commences an inquiry to obtain sufficient information on the background of such potential new director nominee. Included in this inquiry is an initial review of the candidate with respect to whether the individual
would be considered independent under all applicable rules and whether the individual would meet any additional requirements imposed by law
or regulation on the members of the Audit and Compensation Committee. The Nominating and Corporate Governance Committee evaluates candidates for director nominees in the context of the current composition of the Board, taking into account all factors it considers appropriate, including independence, diversity, age, skills, background and experience, financial acumen, availability of service to Harte Hanks, tenure of incumbent directors on the Board and the Board’s anticipated needs. Candidates
should also have the skills and fortitude to assess and challenge the current status quo and recommend alternative solutions; in the case of independent directors, the independence necessary to make an unbiased evaluation of management performance and effectively carry out oversight responsibilities; an awareness of both the business and social environment in which the Company operates; and a sense of urgency and spirit of cooperation that will enable them to interact with other Board members in directing the future and profitable growth of the Company. The Nominating and Corporate Governance Committee has determined that it is desirable for the Board to have variety in perspectives, professional experiences, educational background, skills, race, gender and age, and considers issues of diversity
and background in determining the appropriate composition of the Board and identifying director nominees. However, the Company does not have a formal policy concerning diversity considerations, nor does the Company have any formal means of assessing the efficacy of its diversity considerations. We are committed to inclusiveness and as such, when searching for director nominees, the Nominating and Corporate Governance Committee endeavors to include highly qualified diverse candidates in the pool from which nominees are chosen.
The Nominating and Corporate Governance Committee will consider potential nominees recommended by our stockholders taking into account the same characteristics considered for all other potential nominees. Stockholders may recommend candidates
by writing to the Nominating and Corporate Governance Committee at the attention of our Secretary at Harte Hanks, Inc., 1 Executive Drive, Suite 303, Chelmsford, MA01824. Our Bylaws provide additional procedures and requirements for stockholders wishing to nominate a director for election as part of the official business to be conducted at an annual stockholders meeting, as described further under “Submission of Stockholder Proposals for 2024 Annual Meeting” and in our Bylaws. Stockholders wishing to submit nomination
recommendations to the Nominating and Corporate Governance Committee should review Section 1.3 of our Bylaws in their entirety as the director nomination process described herein is incomplete.
Assuming a satisfactory conclusion to the Nominating and Corporate Governance Committee’s review and evaluation process, the Nominating and Corporate Governance Committee presents the candidate’s name to the Board for nomination for election as a director and, if applicable, inclusion in our proxy statement.
Board Meetings and Attendance
The
Board held twelve meetings and acted by unanimous written consent ten times during the fiscal year ended December 31, 2023. In addition, the Audit Committee held four meetings, the Compensation Committee held two meeting and the Nominating and Corporate Governance Committee held one meeting during the fiscal year ended December 31, 2023. Although the Company does not have a formal policy regarding director attendance at the annual meeting of stockholders, all directors are encouraged to attend. All directors who served on the Board during the fiscal year ended December 31, 2023 attended at least 75% of the Board and applicable committee meetings held.
Board
Leadership Structure and Self-Evaluation
The Board believes that there is no single organizational model that would be most effective in all circumstances. Our Corporate Governance Principles currently provide the roles of Chairman of the Board and CEO may be filled by the same or different individuals, which gives the Board the flexibility to determine whether these roles should be combined or separated based on the Company’s circumstances and needs at any given time. The Nominating and Corporate Governance Committee regularly evaluates whether to combine or separate the roles of the principal executive officer and Chairman, especially in connection with changes in leadership.
In April 2021, the Board evaluated its leadership structure and determined that the most effective leadership structure
was to have separate individuals serve as CEO and Chairman of the Board. In connection with this decision, Mr. John H. Griffin, Jr. was elected Chairman of the Board in April 2021, and has served in such capacity since that time. The Board reevaluated this decision in April 2022, and again in April 2023, and determined not to change its leadership structure. Separating these positions allows the Chief Executive Officer to focus on the full-time job of running the Company’s business, while allowing the Chairman to lead the Board in its fundamental role of providing advice to, and independent oversight of management. The Board also believes that separating the Chairman and Chief Executive Officer positions provides enhanced independent leadership and oversight for the Company, management, and the Board.
As of the 2024 annual meeting date, Mr. Griffin continues to serve as the Chairman of the Board.
On an annual basis, the Board conducts an informal evaluation to determine whether it and its committees are functioning effectively. As part of this self-evaluation, the Board reviews whether the current leadership structure continues to provide the best representation for the Company, and for its stockholders. Our corporate governance principles provide the flexibility for our Board to modify or continue our current leadership
structure in the future, as it deems appropriate, in light of the results of evaluations or ongoing business needs.
Executive Sessions
Our Corporate Governance Principles provide that the non-management members of the Board will hold regular executive sessions in connection with regular Board meetings to consider issues that they may determine from time to time without the presence of any member of management. If the Chairman of the Board is not a member of management, the Chairman will chair each such session and report any material issues to the full Board. If the Chairman is a member of management, the Lead Independent Director serves as the chairman
of the executive sessions. In 2023, these sessions were presided over by Mr. Griffin as Chairman of our Board. If the non-management directors include directors who are not “independent” under applicable SEC rules, then the independent directors will hold an executive session at least once a year. The Chairman of the Board, if an independent director, chairs each such session and reports any material issues to the full Board. If the Chairman is not an independent director, the Lead Independent Director serves as the chairman of such sessions. We believe having a majority of independent, experienced directors on our Board benefits the Company and its stockholders by providing strong oversight and advice on the issues facing the Company.
Risk
Oversight
Our Board is responsible for overseeing the risk management process. The Board focuses on risk management strategy and the most significant risks we face and ensures that management implements appropriate risk mitigation strategies. The Board is also apprised of particular risk management matters in connection with its general oversight and review of corporate matters.
In performing the risk management process, the Board reviews with management (1) our policies with respect to risk assessment and management of risks that may be material to us, (2) our system of disclosure controls and procedures and system of internal controls over financial reporting, and (3) our compliance with legal and regulatory requirements. The Board also discusses major legislative and regulatory developments that could materially impact our contingent liabilities and risks. Our Board committees
also consider and address risk as they perform their respective committee responsibilities. For example, our Compensation Committee evaluates the risks associated with our compensation plans and policies, and our Audit Committee monitors risks relating to our financial controls and reporting. All committees report to the full Board as appropriate, including when a matter rises to the level of a material or enterprise level risk. The leadership structure of our Board described above under the section heading “Board Leadership Structure” ensures that management is properly overseen by independent directors.
Management is responsible for day-to-day risk management. Our finance, treasury, general counsel and internal audit functions serve as the primary monitoring and testing groups for company-wide policies and procedures and manage the day-to-day oversight of the risk management strategy for our ongoing business. The
Company also has a Risk Steering Committee, on which each of these individuals serves (along with the head of IT, head of Corporate Security, as well as other top management individuals). This oversight includes identifying, evaluating and addressing potential risks that may exist at the enterprise, strategic, financial and operational levels, as well as compliance and reporting.
Since 2021, in recognition of the unique and evolving risks posed by cybersecurity and data protection, the Board determined to delegate to the Audit Committee the responsibility of overseeing risks related to cybersecurity, data protection (including confidential, proprietary and personal information, reputation and goodwill in all forms) and other similar risks. The Audit Committee is also responsible for overseeing and assisting in the establishment of policies and procedures to mitigate such risks. For instance, the
Company maintains a global set of security policies and standards and regularly evaluates response readiness, disaster recovery or business continuity considerations (via the Risk Steering Committee). In addition, all employees receive annual cybersecurity and phishing training. The Audit Committee Charter was amended to update the committee’s scope of responsibility to include overseeing such risks.
We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing the Company and that our Board leadership structure supports this approach.
Stockholder Communications with the Board of Directors
Stockholders may send communications to our Board, including any individual director or the directors as a group, by mailing such communications to Harte Hanks, Inc., Attn: Corporate Secretary, 1 Executive Drive, Suite 303, Chelmsford, MA01824 or by reaching out to our investor relations team (rob@fnkir.com). If by correspondence,
such correspondence shall be addressed to the Board or any individual director by either name or title.
All communications received as set forth in the preceding paragraph will be opened by our Corporate Secretary or the secretary’s designee for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service, or patently offensive material will be forwarded promptly to the addressee. In the case of communications to our Board or any individual director, our Corporate Secretary will make sufficient copies of the contents to send to each director to which the envelope is addressed.
Director
Attendance at Annual Meetings
Although we do not have a formal policy regarding director attendance at the annual meeting of stockholders, all directors are encouraged to attend. All directors serving on the Board during the fiscal year ended 2023 virtually attended the 2023 annual meeting of stockholders, and all current directors plan to virtually attend the 2024 Annual Meeting.
Code of Business Conduct and Ethics
We have established a corporate compliance program as part of our commitment to responsible business practices in all of the communities in which
we operate. The Board has adopted a Business Conduct Policy that applies to all of our directors, officers and employees, which promotes the fair, ethical, honest and lawful conduct in our business relationships with employees, customers, suppliers, competitors, government representatives, and all other business associates. In addition, we have adopted a Code of Ethics applicable to our Chief Executive Officer and all of our senior financial officers. The Business Conduct Policy and Code of Ethics Policy form the foundation of a compliance program that includes policies and procedures covering a variety of specific areas of professional conduct, including compliance with laws, conflicts of interest, confidentiality, public corporate disclosures, insider trading, trade practices, protection and proper use of company assets, intellectual property, financial accounting, employment practices, health, safety and environment, and political contributions and payments. The
Business Conduct Policy forbids employees and directors from engaging in hedging activities with respect to our securities.
Both our Business Conduct Policy and our Code of Ethics Policy are available on our website at www.hartehanks.com, under the “Governance” subsection of our “Investor Relations” section. In accordance with NASDAQ and SEC rules, we intend to disclose on our website any future amendments to our Code of Ethics, or waivers from our Code of Ethics for our Chief Executive Officer or Chief Financial
Officer.
Hedging Policy
As part of our Business Conduct Policy, we have adopted an insider trading policy that, among other things, forbids employees and directors from engaging in hedging activities or similar arrangements with respect to our securities. As of the date of this proxy statement, management of the Company is not aware of any hedging activities by Company insiders involving the Company’s securities.
Certain
Relationships and Related Transactions, and Director Independence
Related Party Transactions
Our Board reviews related party transactions for potential conflict of interest issues and has adopted certain policies and procedures relating to their review, approval or ratification of any transaction in which the Company is a participant and that is required to be reported by the SEC’s rules and regulations regarding transactions with related persons. As set forth in the Nominating and Corporate Governance Committee’s charter, except for matters delegated by the Board to the Audit Committee, all proposed related transactions and conflicts of
interest should be presented to the Nominating and Corporate Governance Committee for its consideration. If required by law, SEC regulations or any other applicable rule or regulations, such transactions must obtain Nominating and Corporate Governance Committee approval. In reviewing any such transactions and potential transactions, the Nominating and Corporate Governance Committee may take into account a variety of factors that it deems appropriate, which may include, for example, whether the transaction is on terms
comparable to those that could be obtained in arm’s length dealings with an unrelated third party, the value and materiality of such
transaction, any affiliate transaction restrictions that may be included in our debt agreements, any impact on the Board’s evaluation of a non-employee director’s independence or on such director’s eligibility to serve on one of the Board’s committees and any required public disclosures by Harte Hanks.
Director Independence
Our common stock is listed on the NASDAQ Global Market. As required under the listing standards of NASDAQ, a majority of the members of the Board must qualify as “independent” as affirmatively determined by the Board. Our Board has affirmatively determined that the following four directors are independent within the meaning of the applicable NASDAQ listing standards and the
Company’s corporate governance principles: Ms. Combes. Ms. Ross and Messrs. Griffin and Radoff. Mr. Copeland, who was not nominated for reelection, was not determined to be independent under the NASDAQ listing standards and the Company's corporate governance principles.
As part of the Board’s review of the independence of Board members, questionnaires are used on an annual basis (or when a new director is added) to gather input to assist the Nominating and Corporate Governance Committee and the Board in their determinations of the independence of the non-employee directors. Based on the foregoing and on such other due consideration and diligence as it deemed appropriate, the Nominating and Corporate Governance Committee presented its 2023 findings to the Board on the independence of each
of its non-employee directors, in each case in accordance with the Company’s corporate governance guidelines, NASDAQ rules and applicable federal securities laws. The Board determined that, other than in their capacity as directors, none of Ms. Combes, Ms. Ross and Messrs. Griffin and Radoff had a material relationship with Harte Hanks, either directly or as a partner, stockholder or officer of an organization that has a relationship with Harte Hanks. The Board further determined that (i) each of Ms. Combes, Ms. Ross and Messrs. Griffin and Radoff are otherwise independent under rules that would be applicable to companies listed on NASDAQ, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee and (ii) each of Ms. Combes, Ms. Ross and Messrs. Griffin and Radoff satisfied the additional audit
committee independence standards under Rule 10A-3 of the SEC.
When assessing the materiality of a director’s relationship with us, if any, the Board considers all known relevant facts and circumstances, not merely from the director’s standpoint, but from that of the persons or organizations with which the director has an affiliation, the frequency or regularity of the services, whether the services are being carried out at arm’s length in the ordinary course of business and whether the services are being provided substantially on the same terms to us as those prevailing at the time from unrelated parties for comparable transactions. Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships.
Indemnification
of Officers and Directors
Our Certificate of Incorporation and Bylaws require us to indemnify our officers and directors to the fullest extent permitted by the Delaware General Corporation Law. These documents also contain provisions that provide for the indemnification of our directors for third party actions and actions by or in the right of Harte Hanks that mirror Section 145 of the Delaware General Corporation Law.
In December 2019, the Company entered into an indemnification agreement with each of our directors and executive officers (the “Indemnification Agreements”) which continues to remain in effect. The Board
determined that it is in the best interests of the Company and its stockholders to enter into Indemnification Agreements in order to attract and retain highly competent individuals to serve, or continue to serve, as directors and executive officers. The Indemnification Agreements, among other things, subject to certain exceptions, require the Company to indemnify, and advance expenses to, each director and executive officer to the fullest extent permitted by the laws of the State of Delaware, including indemnification of expenses such as attorneys' fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in
right of the Company, arising out of such person’s services as a director or executive officer.
Our Certificate of Incorporation also states that the Company has the power to purchase and maintain insurance, at its expense, to protect itself and any such director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against such expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law. We also have and intend to maintain director and officer liability insurance, if available on reasonable terms.
Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
SECURITY
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of our common stock beneficially owned by (1) our “named executive officers” included in the Summary Compensation Table below, (2) each current Harte Hanks director, (3) each person known by Harte Hanks to beneficially own more than 5% of the outstanding shares of our common stock, and (4) all current Harte Hanks directors and executive officers as a group. Except as otherwise noted below, (a) the persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them, and (b) ownership is as of March 31, 2024, when 7,245,842 shares of our common stock were outstanding.
Name
and Address of Beneficial Owner(1)(2)
Title of Class
Amount and Nature of Beneficial Ownership
Percent of Class
Named Executive Officers
Kirk Davis
Common Stock
15,281
*
David
Garrison
Common Stock
—
*
Robert Wyman
Common Stock
14,796
*
Brian Linscott
Common Stock
279,218
3.86
%
Laurilee
Kearnes
Common Stock
81,097
1.13
%
Directors
David L. Copeland(3)
Common
Stock
434,627
6.00
%
Genni Combes
Common Stock
26,283
*
John H. Griffin, Jr.
Common Stock
181,557
2.51
%
Bradley
Radoff(4)
Common Stock
216,283
2.99
%
Elizabeth Ross
Common Stock
—
*
All
current directors and executive officers as a group (8 persons)(8)
888,827
12.28
%
5% Holders
William Blair & Company LLC(5)
Common Stock
660,845
9.13
%
Houston
H. Harte (Estate of)(6)
Common Stock
660,816
9.13
%
Westerly Holdings LLC(7)
Common Stock
697,100
9.63
%
*less than 1%.
(1)The
address of (a) William Blair & Company LLC is 150 North Riverside Plaza, Chicago, IL60606, (b) Houston H. Harte is P.O. Box 17424, San Antonio, TX78217, (c) Westerly Holdings LLC, 201 Mission Street, Suite 580 San Francisco, CA94105,
and (d) each other beneficial owner is c/o Harte Hanks, Inc., 1 Executive Drive, Suite 303, Chelmsford, MA01824.
(2)Does not include shares that may be acquired upon the future exercise of options that will not vest within 60 days of March 31, 2024.
(3)Includes the following shares of the Company's common stock to which Mr. Copeland disclaims beneficial ownership: (a) 4,120 shares held as custodian for unrelated minors for which
Mr. Copeland is the sole custodian, (b) 30,140 shares that are owned by various trusts for which he serves as trustee or co-trustee and holds shared voting and dispositive power, (c) 306,246 shares owned by the Shelton Family Foundation, of which he is one of seven directors and an employee, and (d) an aggregate of 1,010 of the disclaimed shares are held in trusts of which Mr. Copeland serves as the sole trustee and holds sole voting and investment power. Information relating to this stockholder is based on the stockholder’s Schedule 13D, filed with the SEC on December 5, 2019 and stock transactions that Mr. Copeland informed the Company of since that time. Mr. Copeland was not nominated to stand for re-election at the Annual Meeting.
(4)Mr. Radoff directly owns 196,283
shares of the Company's common stock and indirectly owns (through his IRA) 20,000 shares of the Company's common stock. Information relating to this stockholder is based on Amendment No. 8 to the stockholder’s Schedule 13D, filed with the SEC on August 17, 2022, and stock transactions that Mr. Radoff informed the Company of since that time.
(5)Represents 660,845 shares of the Company's common stock held by William Blair & Company, L.L.C., in its capacity as investment adviser, to clients who have granted discretionary authority
to dispose of or direct the disposition of the shares to William Blair & Company, L.L.C. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. Information relating to this stockholder is based on Amendment No. 4 to the stockholder’s Schedule 13G, filed with the SEC on February 12, 2024.
(6)Represents 660,816 shares of the Company's common stock held in the Harte Management Trust, over which Houston H.
Harte, Carolyn Harte and Sarah Harte share voting and dispositive power. Information relating to this stockholder group is based on Amendment No. 3 to such group’s Schedule 13D, filed with the SEC on March 29, 2019.
(7)Represents 697,100 shares of the Company's common stock held by Westerly Capital Management, LLC ("Westerly Capital"), Westerly Holdings LLC ("Holdings"), and Christopher J. Galvin. Such shares are held for the accounts of Westerly Partners, L.P., a Delaware limited partnership, and Westerly Partners QP, L.P., a Delaware limited partnership. Westerly Capital serves as investment manager and Holdings serves as the general partner to Westerly Partners, L.P. and Westerly Partners QP, L.P. Mr. Galvin is a managing member of Westerly Capital and
of Holdings. For the purposes of the reporting requirements of the Exchange Act, Westerly Capital, Holdings and Mr. Galvin have shared voting power and shared dispositive power over 697,100 shares of the Company's common stock. Information relating to this stockholder group is based on Amendment No. 7 to such group's Schedule 13G, filed with the SEC on March 22, 2024. .
(8)This group includes Kirk Davis, David Garrison, Robert Wyman, David L. Copeland, John H. Griffin, Jr., Genni Combes, Bradley Radoff and Elizabeth Ross.
EXECUTIVE
COMPENSATION
Our Compensation Committee reviews our executive officers’ overall compensation packages on an annual basis or more frequently as it deems warranted. We provide our executives with an annual base salary as a fixed, stable form of compensation and an annual cash bonus opportunity to create additional performance incentives. We also from time to time grant our executives equity-based awards to provide an additional incentive to grow our business and further link their interests with those of our stockholders. We have also historically allowed our executive officers to elect to receive up to 30% of annual incentive plan (“AIP”) payments 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.
As a “smaller reporting company” (as
such term is defined under applicable securities laws), we are required to disclose the compensation for our principal executive officer and the next two most highly compensated executive officer serving as of the last day of the applicable fiscal year. In certain cases, disclosure may also be required for individuals who served as executive officers for a portion of the fiscal year but were not serving as executive officers at the end of the year. As a smaller reporting company, we are not required to include a compensation discussion and analysis in this proxy statement.
For the fiscal year ended December 31, 2023, the named executive officers were:
•Brian Linscott, our former Chief Executive Officer; and
•Laurilee Kearnes, our former Chief Financial Officer.
Mr. Linscott separated from the Company effective June 19, 2023, with Mr. Davis being appointed as Chief Executive Officer effective as of June 23, 2023. Ms. Kearnes separated from the Company effective October
13, 2023, with Mr. Garrison being appointed Interim Chief Financial Officer effective October 23, 2023. Mr. Garrison was appointed as Chief Financial Officer effective January 29, 2024.
The table below presents the compensation paid to our named executive officers in respect of fiscal years 2023 and 2022:
Summary Compensation Table - Fiscal Years
2023 and 2022
Name and Principal Position
Fiscal Year
Salary
($)(1)
Bonus ($)(2)
Stock Awards ($)(4)
All Other Compensation ($)
Total ($)
Kirk Davis, Chief Executive Officer
2023
$
233,654
$ 293,750(3)
$
908,964
$
3,462
$
1,439,830
David
Garrison, Interim Chief Financial Officer
2023
150,400
—
—
—
150,400
Robert Wyman, General Counsel
2023
275,000
40,000
—
—
315,000
2022
275,000
78,000
143,688
—
496,688
Brian
Linscott, former Chief Executive Officer
2023
216,346
—
—
725,967
942,313
2022
425,000
450,000
592,890
—
1,467,890
Laurilee
Kearnes, former Chief Financial Officer
2023
282,692
120,000
—
396,649
799,341
2022
337,500
250,000
239,780
667
827,947
(1)For
Mr. Garrison, reflects the fees paid by the Company to BTG pursuant to the terms of the Consulting Agreement for the period ending December 31, 2023.
(2)Bonus amounts shown for 2023 and 2022 represent amounts earned in respect of 2023 and 2022 annual incentives, respectively, which were paid in the year following the year in which such amount was earned.
(3)This amount for 2023 includes 2023 annual incentive bonus of $243,750 awarded to Mr. Davis for the achievement of certain operational performance measures determined by the Board plus a $50,000 sign-on bonus at the time of his commencement of employment with Harte Hanks.
(4)The
amounts in this column reflect the full grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see note G of our audited financial statements for the fiscal year ended December 31, 2023 included in our Form 10-K for the same period. For performance-based stock units, the fair value assumed such awards would vest based on probable outcome of the performance conditions as of the grant date.
All Other Compensation
Name
and Principal Position
Year
Insurance Premium ($)(1)
PTO ($)
401(k) Plan Contribution ($)(2)
Other ($)(3)
Total ($)
Kirk Davis, Chief Executive Officer
2023
$
—
$
—
$
3,462
$
—
$
3,462
Brian
Linscott, former Chief Executive Officer
2023
—
8,913
13,200
703,855
725,968
Laurilee Kearnes, former Chief Financial Officer
2023
667
15,488
13,200
367,294
396,649
2022
667
—
—
—
667
(1)Reflects
annual premium paid by the Company for life insurance policies obtained in connection with providing salary continuation benefit.
(2)Represents 401(k) matching contributions made by the Company.
(3)Represents the severance and COBRA amounts paid to Mr. Linscott of $703,855 and paid to Ms. Kearnes of $367,294, respectively.
Stock Ownership Guidelines & Hedging Policies
The Committee believes that stock ownership requirements encourage officers to maintain a significant
financial stake in our company, thus reinforcing the alignment of their interests with those of our stockholders. Consistent with this philosophy, we have stock ownership guidelines that require all officers to acquire and hold significant levels of our common stock. Under these guidelines (revised in February 2018), a corporate officer must reach the minimum required level of common stock ownership no later than five years from commencement of employment (and sooner in some cases). Officers promoted to a level with a higher minimum equity ownership level have three years to reach the higher level of ownership. The target ownership level (relative to base annual salary) is 500% for the CEO, 200% for executive vice presidents and senior vice presidents, and 100% for vice presidents.
The recent stock ownership of our executive officers is reflected in the section above entitled “Security Ownership of Management and Principal Stockholders.” For purposes of measuring compliance with these stock ownership guidelines, all common stock (including restricted stock units) owned by an executive officer is included. Compliance with the target ownership level is measured by the greater of (i) the aggregate of the consideration paid for qualifying shares (but for unvested awards, the grant date value), or (ii) the result of multiplying the number of qualifying shares by the average closing price of the Company’s common stock over the trailing 12 months. Neither options nor performance awards are included in the compliance calculation.
If an officer has not previously
met the minimum equity ownership level, the officer must retain half of the “net shares” related to any option exercise or vesting of restricted stock or performance awards. “Net shares” means the number of shares remaining after the sale of shares to cover the exercise price of options and the sale of shares sufficient to pay taxes related to the exercise of options or vesting of restricted stock or performance awards. If an executive officer has previously met the applicable target ownership level, then so long as such officer maintains the number of shares needed for compliance at that time, the officer will be deemed to be in compliance notwithstanding any stock price fluctuations.
The ownership guidelines, and compliance by officers with the guidelines, are reviewed annually by the Committee. Any remedial action for failure to comply with the stock ownership guidelines is to be determined by the Committee
on a case-by-case basis. Mr. Linscott and Ms. Kearnes have met the holding requirements under the guidelines. Mr. Wyman has through 2024 to meet the holding requirements.
As part of our Business Conduct Policy, we have adopted an insider trading policy that, among other things, forbids officers from engaging in hedging activities with respect to our securities.
Clawback Policy
On October 22, 2023, the Compensation Committee adopted a Clawback Policy intended to comply with the listing requirements of the NASDAQ. The Clawback Policy requires the Company to clawback erroneously awarded incentive
compensation “received” (i.e., earned) by the covered officers during the three fiscal years that precede the date on which the Company determines it is required to prepare a “Big R” or “little r” accounting restatement. The Clawback Policy applies to those current and former officers who are subject to Section 16(a) of the Exchange Act, and applies to incentive-based compensation (i.e., compensation that is earned in whole or in part based on the attainment of financial performance measures). A copy of the Clawback Policy is included as an exhibit in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Outstanding
Equity Awards at Year End
The following table sets forth information regarding outstanding equity awards held at the end of 2023 by our named executive officers. These equity awards were issued pursuant to our 2023 Plan, 2020 Plan as well as our 2013 Plan.
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 ($)
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) (2)
Kirk Davis
240,000
—
$
5.60
8/14/2033
—
$
—
—
$
—
David
Garrison
—
—
$
—
—
—
$
—
0
—
$
—
Robert Wyman
297
—
$
82.3
4/15/2024
10,667(5)
$
72,429
12,000(3)
$
81,480
Brian
Linscott
—
—
$
—
—
10,000(6)
$
67,900
—
$
—
Lauri
Kearnes
297
—
$
82.3
1/11/2024
6,667(6)
$
45,269
6,000(4)
$
40,740
854
—
$
76.8
1/11/2024
—
$
—
0
—
$
—
(1)Based
upon the closing market price of our common stock as of December 31, 2023 ($6.79), as reported on the NASDAQ.
(2)In 2022, 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.
(3)12,000 of these performance stock units generally vest if, following a period of at least one full year from May
26, 2022, certain share price targets ($11.00 for 90 consecutive days for 3,600 shares, $13.00 for 90 consecutive days for 3,600 shares, and $15.00 for 90 consecutive days for 4,800 shares) are met.
(4)These performance stock units generally vest if, following a period of at least one full year from May 26, 2022, certain share price targets ($11.00 for 90 consecutive days for 6,000 shares) are met. In connection with Ms. Kearnes separation from the Company, these PSUs were forfeited in January 2024.
(5)6,667 of these restricted stock units are scheduled to vest on August 6, 2024; 2,000 of these restricted stock units are scheduled to vest on May
26, 2024 and 2025, respectively.
(6)These restricted stock units are scheduled to be settled on May 26, 2024.
Equity Compensation Plan Information at Year-End 2023
The following table provides information as of December 31, 2023 regarding total shares subject to outstanding stock options and rights and total additional shares available for issuance under Harte Hanks, Inc. 2020 Equity Incentive Plan (as amended, the “2020 Plan”).
Plan
Category
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)
Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights(2)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column 1)(3)
Equity compensation plans approved by security holders
524,074
$7.61
1,530,356
(1)Consisting
of outstanding options, restricted stock units and stock-denominated performance units. If actual performance under the performance-based restricted stock units falls below the prescribed level for these awards, fewer shares would be issued.
(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 and 2020 Plan; all shares remaining available for issuance under the 2013 Plan were rolled into 2020 Plan when the 2020 Plan was approved by stockholders. Shares available for issuance under our 2020 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 2020 Plan. If actual performance under the performance-based restricted stock units falls below the prescribed level for these awards, fewer shares would be issued.
Executive Employment and Severance Agreements
During 2023, we had the following types of severance arrangements with our named executive officers, each addressing or intended to address different employment and/or termination circumstances:
•our executive severance policy (the “Executive Severance Policy”);
•our “change in control”
severance agreement (the “CIC Agreements”);
•an employment agreement with Mr. Linscott, our Chief Executive Officer (“Linscott Agreement”);
•An employment agreement with Mr. Davis, which was entered into in connection with his appointment as CEO (the "Davis Agreement"); and
•a consulting agreement with Mr. Garrison.
Executive Severance Policy
In January 2015, we adopted an Executive Severance Policy applicable to corporate officers and certain other executive employees designated by the Compensation Committee. The Executive Severance Policy
applies only for named executive officers in circumstances when they do not have a specific agreement that determines their rights to severance. During 2023, both Ms. Kearnes and Mr. Wyman were covered by the Executive Severance Policy. The Executive Severance Policy provides a participating executive whose employment is terminated without “cause,” (i) severance payments equal to such executive’s then-current base salary for the one-year severance period and (ii) subject to certain conditions, up to a year of contributions toward health care coverage. In exchange, executives are required to deliver a full
release to the
Company and adhere to non-competition and non-solicitation covenants. The Executive Severance Policy does not contain any provision regarding the acceleration of vesting for equity awards in the event of an executive’s termination. The Executive Severance Policy can be amended upon six months’ notice by the Compensation Committee, and it terminates immediately prior to a change of control of the Company.
CIC Agreements
The CIC Agreements are designed to allow us to attract and retain key talent by providing defined compensation in the event of a change in control. The payout levels and other terms of the CIC Agreements are based on the Compensation Committee’s review of publicly
available market data regarding severance agreements and prior iterations of these agreements. During 2023, Mr. Linscott, Mr. Wyman and Ms. Kearnes were each party to a CIC Agreement with the Company. The CIC Agreements provide that if, after a change in control, an executive (i) is terminated other than for “cause” (as defined in the agreement), death or disability or (ii) elects to terminate the executive’s employment for “good reason,” then such executive is entitled to severance compensation (18 months for Mr. Linscott, and 12 months for Ms. Kearnes and Mr. Wyman) and a cash payment sufficient to cover health insurance premiums for a defined period of time (12 months for Mr. Linscott, and 24 months for Ms. Kearnes and Mr. Wyman). The amount of severance compensation is the sum of (A) the executive’s annual base salary in effect immediately prior to the change in control
or termination date, whichever is larger, plus (B) the executive’s target-level bonus or incentive compensation as approved in the then existing management incentive plan.
Mr. Linscott’s Separation Agreement
The Linscott Agreement provided for the following severance payments and benefits upon a termination of Mr. Linscott’s employment by the Company without “cause” or his resignation for “good reason” (each as defined in the CEO Agreement): (i) 18 months of continued base salary and (ii) 12 months of continued health benefit coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 and (iii) accelerated vesting of a portion of the time-based restricted stock
units granted to Mr. Linscott in connection with the Employment Agreement. Mr. Linscott’s separation from service constituted a termination without “cause” pursuant to the terms of his employment agreement. In connection with Mr. Linscott’s separation, the Company and Mr. Linscott entered into a separation agreement honoring the terms of Mr. Linscott’s employment agreement and providing for the following, subject to his execution of an effective release of claims and continued compliance with certain restrictive covenants: (A) continued base salary payments for 18 months following the separation date, and (B) reimbursement for the employer portion of continuation coverage premiums under COBRA for 12 months following his separation date. In addition, pursuant to the terms of the applicable award agreements, all of the unvested time-based restricted stock units held by Mr. Linscott
vested, and a portion of the performance-based restricted stock units held by Mr. Linscott remained eligible to be earned during the 90-day period following his separation of employment subject to achievement of the applicable stock price goals during such period.
Mr. Davis’ Employment Agreement
In connection with his appointment as Chief Executive Officer, the Company and Mr. Davis have entered into an employment agreement (the “Davis Agreement”), effective as of June 19, 2023. Pursuant to the Davis Agreement, Mr. Davis will receive an annual base salary of $450,000 and a target annual bonus opportunity equal to 100% of his base
salary (with a maximum annual bonus opportunity equal to 125% of his base salary). In consideration for entering into the Davis Agreement and commencing employment with the Company, the Company paid Mr. Davis a cash sign-on bonus of $50,000. If Mr. Davis’ employment is terminated by the Company for “cause” or if Mr. Davis resigns without “good reason,” in each case prior to June 19, 2024, Mr. Davis will be required to repay to the Company the after-tax portion of the sign-on bonus. Mr. Davis also received an initial equity grant consisting of approximately 240,000 stock options
to purchase shares of the Company’s common stock, which will vest in three equal installments on each of the first three anniversaries of June 19, 2023, subject to Mr. Davis’ continued employment with the Company. In the event that Mr. Davis’ employment is terminated by the Company without “cause” or if Mr. Davis resigns for “good reason,”the Company will provide Mr. Davis with the following severance payments and benefits: (i) 18 months’ of continued base salary payments, payable over 18 months, and (ii) reimbursement for the employer portion of continuation coverage premiums
under COBRA for 12 months following his separation date. Mr. Davis’ receipt of the foregoing payments and benefits would be subject to his execution of an effective release of claims against the Company and certain of its affiliates. Subject to any limitations under applicable law, Mr. Davis will be required to continue to comply with confidentiality, non-solicitation and non-competition obligations in order to continue to receive these severance benefits.
In connection with his appointment as Interim CFO, the Company entered into a Master Consulting Services Agreement (the “Consulting Agreement”) with Business Talent Group, LLC (“BTG”), a global consulting firm, effective as of October 23, 2023. Pursuant to the Consulting Agreement, Mr. Garrison will provide services as Interim CFO in the capacity of a consultant, and the Company will pay BTG $3,200 per calendar day that Mr. Garrison serves as Interim CFO. The Consulting Agreement is for a term beginning on October 23, 2023 and ending on February 26, 2024, but may
be extended as mutually agreed upon between both parties.
Separation Agreement with Ms. Kearnes
In connection with Ms. Kearnes’ separation from the Company, the Company entered into a separation agreement honoring the terms of the Company’s Executive Severance Policy (the “Severance Policy”). Ms. Kearnes’ separation from the Company constitutes an involuntary termination by the
Company“without cause” under the Severance Policy, entitling her to receive, subject to her execution of an effective release of claims and continued compliance with certain restrictive covenants: (i) any “accrued amounts” (i.e., base salary earned but unpaid through October 13, 2023 (the “Separation Date”), accrued but unused vacation, and any unreimbursed expenses), (ii) a “severance payment” of Ms. Kearnes’ base salary of $350,000, payable over 12 months following the Separation Date and (iii) continued coverage under the Company’s health insurance plans for a period of 12 months following the Separation Date, provided that she continues to make the employee-side premium payments at the current applicable employee rate for such coverage. In consideration for Ms. Kearnes providing transition assistance
to the Company on an as-needed basis through December 31, 2023, the Company paid Ms. Kearnes a 2023 annual bonus payment of $120,000, which amount was paid in January of 2024. In addition, pursuant to the terms of the applicable award agreements, all of the unvested time-based restricted stock units held by Ms. Kearnes will vest, and a portion of the performance-based restricted stock units held by Ms. Kearnes will remain eligible to be earned during the 90-day period following her Separation Date subject to achievement of the applicable stock price goal during such period.
Annual
Incentive Plan
We provide an annual incentive opportunity (an “AIP”) for named executive officers to achieve certain milestones within the Company and, where appropriate, to advance business line performance on a year-over-year basis. This annual short-term cash incentive opportunity provides an incentive for our executives to manage our businesses to achieve targeted financial results. We paid the following amounts to our named executive officers under the 2022 AIP, based on various financial performance and operational efficiency goals: $450,000 to Mr. Linscott, $250,000 to Ms. Kearnes and $78,000 for Mr. Wyman.
Equity
Incentive Plan
From time to time, the Company grants equity incentive awards to our named executive officers and other selected employees. Prior to adoption of the 2020 Plan, such awards were granted under the 2013 Plan. The 2020 Plan was approved by stockholders at the 2020 annual meeting of stockholders, and therefore no new awards will be granted under the 2013 Plan (although outstanding awards under the 2013 Plan will continue to be governed by the terms of the 2013 Plan). The 2020 Plan is administered by our Board of Directors, or a committee thereof. Currently the plan is administered by the Compensation Committee. The administrator has authority to interpret the plan provisions and make all required determinations under the 2020 Plan (including making appropriate adjustments to reflect stock
splits and similar events). Employees, directors and consultants of the Company and its subsidiaries are eligible for award grants under the 2020 Plan. Awards of stock options, stock appreciation rights, restricted stock, restricted stock units and other awards may be granted under the plan.
Pursuant to Section 953(a) of the Dodd-Frank Act and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” (or “CAP”) to the Company’s principal executive officer (PEO) and non-PEO named executive officers (the Non-PEO NEOs), and certain aspects of the financial performance of the Company. For further information concerning our compensation philosophy and how we align executive compensation with our performance, please see our Compensation Discussion & Analysis.
Year
Summary
Compensation table total for PEO(1)(2)
Compensation actually paid to PEO(1)(4)
Average Summary Compensation Table total for Non-PEO Named Executive Officers(2)(3)
Average compensation actually paid to Non-PEO Named Executive Officers(4)
Value of initial fixed $100 investment based on Total stockholder return(5)
Net income (thousands)(6)
2023
$
2,382,143
$
1,259,121
$
421,580
$
108,158
$
89.34
$
(1,570)
2022
1,467,890
2,628,928
662,318
966,754
460.85
36,777
2021
2,195,745
2,710,495
535,261
798,450
294.57
14,971
(1)During
2023, Mr. Brian Linscott served as PEO until June 16, 2023. Kirk Davis succeeded Brian Linscott as PEO on June 19, 2023. During 2022, Mr. Linscott was our only PEO. In 2021, Andrew Bennett was our PEO through June 23rd, 2021, followed by the appointment of Mr. Linscott for the balance of the year.
(2)Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table (“SCT”) for the applicable year in the case of our PEOs, Messrs. Davis and Linscott, and (ii), average of the total compensation reported in the SCT for the applicable year for our Non-PEO NEOs reported for that applicable year. The total compensation for Mr. Bennett in 2021 was $580,208.
(3)Our
Non-PEO NEOs for 2022 and 2021 are Laurilee Kearnes and Robert Wyman. Our Non-PEO NEOs for 2023 are Laurilee Kearnes, Robert Wyman and David Garrison.
(4)Amounts reported in these columns represent “compensation actually paid” as calculated in accordance with Item 402(v) of Regulation S-K. A reconciliation of the adjustments for our PEOs, Messrs. Davis, Linscott and Bennett, and for the average of the Non-PEO NEOs is set forth in the Reconciliation of SCT to CAP Table below, which describes the adjustments, each of which is prescribed by the SEC rules, to calculate the CAP Amounts from SCT amounts. The compensation actually paid to Mr. Bennett in 2021 was $333,208.
(5)Total Stockholder Return (TSR) is cumulative for the measurement periods beginning on December
31, 2020 and ending on December 31, of each of 2023, 2022, and 2021, respectively, calculated in accordance with Item 201(e)(1)(ii) of Regulation S-K.
(6)Amounts reported in this column represent “Net Income” for each applicable year as set forth in our Consolidated Statements of Comprehensive Income included in our Annual Report on Form 10-K for each of the applicable years.
Addition:
Fair value at year end of awards granted during the covered fiscal year that are outstanding and unvested at year end
1,077,056
—
853,110
274,256
902,500
152,000
Addition: Year over Year change in Fair Value as of the Last day of the covered year of outstanding and unvested equity awards granted
in prior years
(49,000)
(90,900)
348,086
103,958
242,500
161,662
Addition: Vesting date fair value of equity awards granted and vested in the covered year
—
—
138,151
—
322,500
—
Addition:
Change in Fair value as of the vesting date of equity awards granted in prior years that vested during the covered year (measured from the end of the prior fiscal year).
(288,354)
(144,002)
414,581
117,956
201,250
75,127
(Minus): Fair value at the end of the prior year of equity awards that failed
to meet vesting conditions in the covered year
(953,760)
(78,520)
—
—
(412,500)
—
Compensation actually paid
$
1,259,121
$
108,158
$
2,628,928
$
966,754
$
2,710,495
$
798,450
Relationship
Between “Compensation Actually Paid” and Certain Performance Measures shown in the Table
Relationship between CAP and TSR
The graphs below illustrate the relationship between CAP for the PEO and Non-PEO NEOs and our TSR.
The
graph below reflects the relationship between the PEO and Average Non-PEO NEOs CAP and our Net Income.
DIRECTOR COMPENSATION
Under our director compensation program in 2023, we provided compensation to our directors who are not employed by us or any of our subsidiaries (referred to herein as “non-employee directors”) as follows:
Annual
Retainer for General Director
$60,000
Annual Retainer for Chairman of the Board
$90,000
Annual Equity Awards
16,216 Shares which equals to $90,000
Annual Committee Chair Fee
$7,500 to $20,000
Each independent director was able to elect, annually or in connection with such director’s appointment to the Board, to receive all or a portion of such director’s cash compensation otherwise payable for such director’s services in shares of the
Company’s common stock. These shares of common stock are granted as soon as administratively practicable following the end of each of the Company’s fiscal quarters. The number of shares delivered is based on the market value of one share of the Company’s common stock on the NASDAQ as of the last day of the immediately preceding quarter, in accordance with the 2020 Plan.
In 2019, the annual cash retainer was increased to $60,000 and the annual equity retainer was increased to $90,000, to compensate the directors for their increased time and efforts. In December of 2019, the Board determined to maintain the annual retainers at 2019 levels. During 2020, the Board decided to reduce the annual equity retainer to 18,000 shares of the
Company's common stock. In addition, in July of 2020 the Board determined to eliminate the separate committee retainer fees (other than a stipend for the Chair of each Committee) and ceased paying such fees on July 22, 2020. Non-employee directors only received their annual retainer fee after that date. This practice continued in 2023 and 2022.
2023 Director Compensation
for Non-Employee Directors
The following table sets forth the total compensation paid to our non-employee directors for their service on our board of directors during fiscal 2023:
Name
Fees Earned or Paid in Cash($)(1)
Option
Awards ($)
Stock Awards ($)(2)
Total ($)
John H. Griffin Jr.
$157,500
$—
$90,000
$247,500
David L. Copeland
60,000
—
90,000
150,000
Genni
Combes
80,000
—
90,000
170,000
Bradley Radoff
75,000
—
90,000
165,000
(1)This Column includes annual Board fees, and the committee retainers directors received in cash.
(2)Each
of the non-employee directors was granted restricted stock units in 2023 with a grant date fair value of $90,000 (rounded down to the nearest whole share), computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see note G of our audited financial statements for the fiscal year ended December 31, 2023 included in our Form 10-K for the same period. Restricted stock units granted in 2023 provide for vesting on the first anniversary of the date of grant.
Director Stock Ownership Guidelines
Under our Corporate Governance Principles and Stock Ownership Guidelines, non-employee
directors are expected to hold five times the annual cash retainer amount in company stock (an increase from three times the annual cash retainer amount). Employee directors are also subject to the Stock Ownership Guidelines, but such guidelines relate to their management level, rather than directorship status. Currently, each of our directors is in compliance with/is endeavoring to work toward compliance with this policy.
We currently have five non-executive directors, and one member of management, our CEO, director serving on our Board, and we are nominating four of our five sitting directors for reelection. David L. Copeland was not renominated for election as a director. The directors elected at the Annual Meeting will be elected to serve a term ending at our 2025 annual meeting of stockholders (and, in each case foregoing, until their successors are duly elected and qualified, or their earlier death, resignation or removal).
Directors will be elected with the affirmative vote of a majority of the
votes cast in favor of his or her election at the Annual Meeting virtually or by proxy (i.e., the number of votes “for” such director’s election constitutes more than the number of votes “withheld” with respect to such director’s election). Pursuant to our Bylaws, each nominee has submitted an irrevocable resignation as a director, which resignation will become effective upon (1) that person not receiving a majority of the votes cast in favor of his or her election in an uncontested election and (2) acceptance by the Board of that resignation in accordance with the policies and procedures adopted by the Board for such purpose.
The nominees for directors are (1) Kirk Davis, (2) Genni Combes, (3) Elizabeth Ross, (4) John H. Griffin, Jr. and (5) Bradley Radoff, each of whom is currently serving as a director. Each nominee has
indicated his or her willingness to serve as a director if elected. If, however, a nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such substitute as the Board may recommend, or the Board may reduce the number of directors to eliminate the vacancy, and if any director is unable to serve his full term, the Board may reduce the size of the Board or designate a substitute to fill the vacancy.
Information with respect to the nominees is set forth in the section of this proxy statement entitled “Directors and Executive Officers.” Our Board believes each of the nominees possess the necessary experience, qualifications, attributes and skills to provide significant value to Harte Hanks.
The accompanying proxy card will not be voted for anyone other than the Board’s nominees or designated substitutes. The persons named in the
accompanying proxy card will vote to elect the Board’s nominees unless, by marking the appropriate space on the proxy card, the stockholder instructs that he, she or it withholds authority from the proxy holder to vote.
Board Recommendation on Proposal
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL OF OUR DIRECTOR NOMINEES NAMED ON THE ENCLOSED PROXY CARD.
The management proxy holders will vote all duly submitted proxies FOR election of all of our director nominees named on the enclosed
proxy card unless duly instructed otherwise.
ADVISORY APPROVAL OF COMPENSATION OF NAMED EXECUTIVE OFFICERS (SAY ON PAY)
Say-on-Pay
Pursuant
to the SEC proxy rules and the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing our stockholders with an advisory (non-binding) vote to approve the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Summary Compensation Table and related tables and disclosure (commonly referred to as “say-on-pay”). Our Board recognizes the interest our investors have in the compensation of our executives, and how our company manages compensation in light of business needs and market expectations. Specifically, we are seeking a vote on the following resolution:
RESOLVED, that the stockholders of Harte Hanks, Inc. approve, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to Item 402 of Regulation S-K.
We
have adopted a policy of holding say-on-pay votes on an annual basis. We have adopted an executive compensation philosophy designed to provide strong alignment between executive pay and performance, and to focus executives on making decisions that enhance our stockholder value in both the short and long term. Executives are compensated in a manner consistent with our strategy, competitive practices, stockholder interest alignment, and the Compensation Committee’s view of evolving compensation governance standards. Stockholders are encouraged to read the compensation tables and the related narrative disclosure in this proxy statement. The Compensation Committee monitors our compensation policies and decisions to ensure that they are focused on pay-for-performance principles and are strongly aligned with the long-term interests of our stockholders. Compensation of our named executive officers is designed to enable us to attract and retain talented and experienced senior
executives to lead the Company successfully in a challenging and competitive environment. The Compensation Committee has designed our executive compensation and benefit programs to attract, motivate and retain a talented management team and to appropriately reward individual contributions to the achievement of our strategic goals. We believe that stockholders are generally supportive of our executive compensation programs, as evidenced by the fact that our executive compensation program was approved by 99.95% of the votes cast at last year’s say on pay vote.
The Board, like the Company’s executive officers, is cognizant of the prior declines faced by the Company. Nevertheless, the
Company operates in an environment where there is competition for talent, and when executive officers take on additional responsibilities as they navigate a turnaround, providing meaningful compensation that serves to reward their efforts, if successful, is essential. The Compensation Committee believes the compensation for our executive officers is competitive and that our compensation practices have enabled Harte Hanks to attract and retain the executive talent needed for the turnaround the Company is engaged in. The Compensation Committee also finds the named executive officers’ total compensation to be fair and reasonable for our circumstances, and consistent with the Company’s executive compensation philosophy.
Board
Recommendation on Proposal
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL (ON A NON-BINDING ADVISORY BASIS) OF OUR NAMED EXECUTIVE OFFICER COMPENSATION DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE RESOLUTION ABOVE.
The management proxy holders will vote all duly submitted proxies FOR the approval (on a non-binding advisory basis) of our named executive officer compensation disclosed in this proxy statement pursuant to the resolution above unless duly instructed otherwise.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Description of Proposal
In accordance with its charter, the Audit Committee has selected Baker Tilly US, LLP (“BT”) as the Company’s independent registered public accounting firm to audit our consolidated financial statements for fiscal 2024 and to
render other services required of them. The Board is submitting the selection of BT for ratification at the Annual Meeting. Representatives of BT are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Selection of Independent Registered Public Accounting Firm
The submission of this matter for ratification by stockholders is not legally required. However, the Board and its Audit Committee believe that such submission provides an opportunity for stockholders to give direct feedback to the Board and its Audit Committee on an important
issue of corporate governance. If the stockholders do not ratify the selection of BT, the Audit Committee will reconsider the selection of such firm as our independent registered public accounting firm, although the results of the vote are not binding on the Audit Committee.
The Audit Committee has the sole authority and responsibility to retain, evaluate, and, where appropriate, replace our independent registered public accounting firm. Ratification by the stockholders of the selection of BT does not limit the authority of the Audit Committee to direct the appointment of a new independent registered public accounting firm at any time during the year or thereafter, and the failure to gain such ratification does not limit the Audit Committee’s authority to retain BT.
Board
Recommendation on Proposal
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF BT AS HARTE HANKS’ INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024.
The management proxy holders will vote all duly submitted proxies FOR the ratification of the selection of BT as Harte Hanks’ independent registered public accounting firm for the fiscal year ended December 31, 2024 unless duly instructed otherwise.
In connection with the Company’s consolidated financial statements for the year ended December 31, 2023, the Audit Committee:
•reviewed and discussed the audited financial statements with management;
•discussed with the independent registered public accounting firm auditing the Company’s financial statements, BT, the matters required to be discussed by Auditing Standard No. 1301
Communications with Audit Committee; and
•received the written disclosures and the letter from BT as required by the Public Company Accounting Oversight Board regarding BT’s communications with the Audit Committee concerning independence and has discussed with BT its independence.
Based on the review and discussions with the Company’s management and the independent registered public accounting firm, as set forth above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for filing with the SEC.
The
foregoing report is respectfully submitted by the members of the Audit Committee at the time the Company’s consolidated financial statements for the year ended December 31, 2023 were approved.
Genni Combes, Chair
Elizabeth Ross
John H. Griffin, Jr.
Bradley Radoff
The foregoing report shall not be deemed incorporated by reference by any general statement or reference to this Proxy Statement
into any filing under the Securities Act or under the Exchange Act, except to the extent that the Company specifically incorporates this information by reference and shall not otherwise be deemed filed under those Acts.
Independent Auditor Fees and Services
Baker Tilly US, LLP (“BT”) served as our independent accountant in fiscal 2023 and 2022. BT continues to serve as our independent accountant.
The following table sets forth the aggregate amount of various professional fees billed by our principal accountants:
Tax
Fees (relating to state, federal and international tax matters)
—
—
All Other Fees
—
—
Total audit and audit-related fees
$
615,000
$
546,000
Audit
Fees. Audit fees consist of aggregate fees for the annual financial statement audit, quarterly financial statement reviews and services in connection with filings with the SEC. All audit fees are approved by the Board.
Audit-Related Fees. Audit-related fees consist of aggregate fees for assurance and related services other than those included under “Audit Fees” above. Includes charges for statutory audits of certain of the Company’s foreign subsidiaries required by countries in which they are domiciled in 2023 and 2022.
Tax Fees. Tax fees include fees for professional services for tax
compliance, tax advice and tax planning, primarily, fees related to tax preparation services. All tax fees are approved by the Audit Committee.
All Other Fees: Other fees include fees for products and services other than the services reported above. All other fees are approved by the Audit Committee.
Our Audit Committee has established procedures for pre-approval of audit and non-audit services as set forth in the Audit Committee Charter. The Audit Committee considers whether the audit fees disclosed
above are compatible with maintaining BT’s independence and has so determined that the service provided by BT is compatible with maintaining BT’s independence. The Audit Committee pre-approved all audit services provided to us by BT in 2023 and those proposed to be provided by BT in 2024.
OTHER BUSINESS
The Board is not aware of any matter to be presented for action at the Annual Meeting other than the matters set forth above, and no matter has been presented to the Company within the proper time period afforded by the Bylaws. If
any other matter requiring a vote of stockholders was timely properly preserved, then the proxies in the enclosed form confer upon the person or persons entitled to vote the shares represented by such proxies discretionary authority to vote the same in accordance with their best judgment.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2025 ANNUAL MEETING
There are two different deadlines for the submission of stockholder proposals.
1.Stockholder proposals that are being submitted for inclusion in our proxy statement and form of proxy for our 2025 annual meeting of stockholders (the “2025
Meeting”) must be received by us at our principal executive offices located at 1 Executive Drive, Suite 303, Chelmsford, MA01824. on or before December 13, 2024. Such proposals when submitted must be in full compliance with applicable laws, including Rule 14a-8 of the Exchange Act.
2.Under our Bylaws, stockholder nominations for election of directors or stockholder proposals that are being submitted other than for inclusion in the proxy statement and form of proxy for our 2025 Meeting
must be received at our principal executive offices no earlier than January 23, 2025 and no later than February 22, 2025. Such proposals when submitted must be in full compliance with applicable law and our Bylaws. Any stockholder proposals not received by such applicable dates will be considered untimely.
ALL STOCKHOLDERS ARE URGED TO PROMPTLY SUBMIT THEIR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD, WHICH WILL BE MAILED TO YOU ON OR ABOUT APRIL 12, 2024.
IMPORTANT
Your vote at the Annual Meeting is especially
important, no matter how many or how few shares you own. Please sign and date the enclosed proxy card and return it in the enclosed postage-paid envelope promptly.
