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Exhibit
10.1
TRANSITION AND
CONSULTING AGREEMENT
This Transition and
Consulting Agreement (“ Agreement ”) is made and
entered into as of August 29, 2007, (“ Effective
Date ’) by and between Richard M. Hochhauser
(“ Executive ”) and Harte-Hanks, Inc., a
Delaware corporation (“ Company ”).
RECITALS:
The Executive and the Company
desire to provide for an orderly transition to the
Executive’s successor as President and Chief Executive
Officer of the Company; and
The parties also wish to
enter into a consulting arrangement upon the termination of the
Executive’s employment with the Company.
For good and valuable
consideration, the parties hereto agree as follows:
1. Employment
Transition . Except as hereinafter otherwise provided, the
Executive will remain employed as Chief Executive Officer through
February 4, 2008. The Executive agrees not to stand for
reelection to the Company’s Board of Directors (“
Board ”) at the May 2008 Annual Meeting of
Shareholders. The Executive agrees to resign from his positions as
officer and/or director of all Company subsidiaries and affiliates,
and all fiduciary positions that he may hold with respect to any
Company, subsidiary, or affiliate employee benefit plans, effective
as of February 4, 2008.
2. Employment Term .
The term of the Executive’s employment under this Agreement
(“ Employment Term ”) shall commence on the
Effective Date and shall terminate on February 4, 2008, unless
sooner terminated as provided in Section 7.
3. Employment Duties .
During the Employment Term, the Executive agrees that he will
devote his full business time, attention, and energies to
performing such duties on behalf of the Company as from time to
time may be assigned to him by the Board or Chairman of the Board,
including without limitation providing assistance with the
transition of the new Chief Executive Officer.
4. Compensation During
Employment Term .
(a) Base Salary .
During the Employment Term, the Company shall continue to pay the
Executive a base salary at his current rate of $820,000 per annum
(“ Base Salary ”). Such Base Salary shall be
payable during the Employment Term in substantially equal
installments in accordance with the Company’s standard
payroll policy for executives.
(b) Bonus . The
Executive shall continue to participate in the Company’s 2007
annual incentive compensation plan under its existing terms. The
Executive shall not be eligible for a bonus or other incentive
compensation for the Executive’s services to the Company in
2008 or thereafter.
(c) Equity Awards .
The Executive shall not receive additional equity or long-term
incentive plan awards for services to the Company during the
Employment Term or thereafter.
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(d) Employee Benefits
. The Executive shall continue to be eligible during the Employment
Term to participate in the Company’s health, life, and
disability insurance plans, and the Company’s retirement
plans, in accordance with the terms of the Company’s plans.
Except for any policy conversion rights exercisable at the sole
expense of the Executive, all life insurance coverages otherwise in
effect during the Employment Term shall expire on the last day of
the Employment Term.
(e) Automobile
Allowance . During the Employment Term, the Executive shall
continue to be entitled to a monthly automobile allowance in the
amount of $1,325.
5. Consulting
Arrangement .
(a) Consulting Period
. Except as hereinafter otherwise provided, the Company agrees to
engage the Executive as a consultant of the Company effective as of
February 5, 2008, and the Executive agrees to render services
as a consultant to the Company as of such date on the terms and
conditions set forth below. The term of service as a consultant to
the Company will continue through February 4, 2011, unless
sooner terminated as provided in Section 7 (“
Consulting Period ”).
(b) Consulting Duties
. During the Consulting Period, the Executive agrees to be
available to provide such consulting services as reasonably
requested from to time by the Company. The Executive will use his
good faith efforts to perform such services to the best of his
abilities.
(c) Consulting Fees .
During the Consulting Period, and provided that the Executive is
not in breach of his obligations under this Agreement, the
Executive will be paid a consulting fee as follows: (i) for
the period from February 5, 2008, through February 4,
2009, $162,500 per quarter; (ii) for the period from
February 5, 2009, through February 4, 2010, $112,500 per
quarter; and (iii) for the period from February 5, 2010,
through February 4, 2011, $50,000 per quarter. This consulting
fee will be prorated for any partial quarters in the Consulting
Period, and will be payable in arrears promptly after the end of
each applicable quarter in the Consulting Period.
(d) Consulting
Expenses . The Executive will be reimbursed for all reasonable
business expenses that he incurs at the request of the Company in
performing services for the Company during the Consulting Period,
subject to substantiating such expenses in accordance with the
Company’s reimbursement policies, and to obtaining the prior
approval of the Chief Executive Officer of the Company.
(e) Independent Contractor
Status . The Executive will be performing consulting services
as an independent contractor during the Consulting Period, and not
as an employee or officer of the Company. The Executive will be
responsible for all taxes and non-reimbursable expenses
attributable to the rendition of his consulting services. The
consulting arrangement shall not be deemed to constitute a
partnership or joint venture between the Company and the Executive,
nor shall the consulting arrangement be deemed to constitute the
Executive as an agent of the Company.
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(f) COBRA . Unless
this Agreement is terminated prior to February 5, 2008, within
30 days of the commencement of the Consulting Period the Company
shall pay to the Executive a lump sum cash payment in the amount
necessary (taking into account applicable taxes) for the Executive
to make COBRA continuation coverage payments under the
Company’s group medical and dental plans in which the
Executive (and any spouse or other eligible dependents) are then
enrolled for a period of 18 months following the end of the month
in which the Employment Term ends using the COBRA premium rates
then in effect at the Company.
6. Restrictive
Covenants . The Executive shall continue to be bound by the
Confidentiality/Nondisclosure Agreement that he previously executed
dated October 27, 2005 (“ Confidentiality
Agreement ”), and the Non-Compete Agreement that he
previously executed dated February 10, 2006 (“
Non-Compete Agreement ”), both of which are made part
of, and incorporated by reference into, this Agreement
(collectively, the “ Restrictive Covenants ”),
except that any references in the Restrictive Covenants to the
termination or end of the employee’s employment shall be
deemed to refer instead to the termination or end of the
Executive’s Consulting Period under this Agreement. Except as
modified in this Section 6, the Restrictive Covenants will
survive the termination
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