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EXHIBIT 10(h)
AMENDED AND RESTATED
HARTE-HANKS, INC.
1991 STOCK OPTION PLAN
1. Purpose of the Plan. This plan shall be known as the Harte-Hanks,
Inc. 1991 Stock Option Plan (the "Plan"). The purpose of the Plan is to attract
and retain the best available personnel for positions of substantial
responsibility and to provide additional incentives to key employees of
Harte-Hanks, Inc. or any present or future Parent or Subsidiary of Harte-Hanks,
Inc. to promote the success of the business of these corporations. It is
intended that options that qualify as incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended, as well as
nonqualified options may be granted pursuant to the Plan, and the Plan shall be
construed accordingly.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Corporation" shall mean Harte-Hanks, Inc.
(b) "Board" shall mean the Board of Directors of the Corporation
and, subject to such limitations as are prescribed by the
Board of Directors of the Corporation, the committee, if any,
appointed to administer the Plan pursuant to paragraph 4(a)
hereof.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Common Stock" shall mean common stock, par value $1.00 per
share, of the Corporation.
(e) "Employee" shall mean, with respect to Incentive Stock
Options, any person employed by the Corporation or any present
or future Parent or Subsidiary of the Corporation who would
qualify as an "employee" under Treas. Reg. Section
1.421-7(h)(1) or successor regulation. With respect to
non-qualified options, "Employee" shall also include
consultants and advisors who provide services to the
Corporation or any of its Subsidiaries or its Parent,
including outside directors of the Corporation.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(g) "Fair Market Value" shall mean the closing sale price (or
average of the quoted closing bid and asked prices if there is
no closing sale price reported) of the Common Stock on the
date specified as reported by the New York Stock Exchange or
by the principal national stock exchange on which the Common
Stock is then listed. If there is no reported price
information for the Common Stock, the Fair Market Value will
be determined by the Board, in its sole discretion. In making
such determination, the Board may, but shall not be obligated
to, commission and rely upon an independent appraisal of the
Common Stock.
(h) "Incentive Stock Option" or "ISO" shall mean an Option that
constitutes an incentive stock option within the meaning of
Section 422 of the Code. These options shall be designated as
Incentive Stock Options.
(i) "Option" shall mean a stock option granted pursuant to this
Plan.
(j) "Parent" shall mean any future corporation which would be a
"parent corporation" of the Corporation as defined in Section
425(e) and (g) of the Code.
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(k) "Participant" shall mean an Employee who receives an Option.
(l) "Plan" shall mean the Harte-Hanks, Inc. 1991 Stock Option
Plan.
(m) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(n) "Subsidiary" shall mean any present or future corporation
which would be a "subsidiary corporation" of the Corporation
as defined in Section 425(f) and (g) of the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
provisions of paragraph 7 hereof, the aggregate number of shares of Common Stock
issuable upon the exercise of Options pursuant to the Plan shall not exceed
11,000,000 shares. Such shares may be either authorized but unissued shares or
treasury shares.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject
thereto shall, unless the Plan shall have been terminated, be available for the
grant of other Options under the Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board; provided however,
that the Board at any time can appoint a committee, consisting
solely of non-employee directors, to administer the Plan.
(b) Powers of the Board. The Board (or a committee appointed
pursuant to Section 4(a) above) is authorized (but only to the
extent not contrary to the express provisions of the Plan) to
select from the persons who are eligible to receive Options
under the Plan the particular persons who will receive
Options, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to
determine the form and content of Options to be issued under
the Plan and to make other determinations and exercise such
other power and authority as may be necessary or advisable for
the administration of the Plan. A majority of the Board
members eligible to act shall constitute a quorum for purposes
of acting with respect to the Plan and the action of a
majority of the members present who are eligible to act at any
meeting at which a quorum is present shall be deemed the
action of the Board.
The President or any Vice President of the Corporation is
hereby authorized to execute instruments evidencing duly
granted Options on behalf of the Corporation and to cause them
to be delivered to the Participants.
(c) Effect of Board Decisions. All decisions, determinations and
interpretations of the Board with respect to the Plan and
Options granted thereunder shall be final and conclusive on
all persons affected thereby.
(d) Approval of Grants. Each grant of Option must be approved in
one of the following ways:
(i) Board/Committee Approval. The entire Board of the
Corporation or a committee thereof may vote in advance
to approve such grant.
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(ii) Stockholder Approval/Ratification. In compliance with
Section 14 of the Exchange Act, a majority of the
stockholders of the Corporation duly entitled to vote on
such matters at meetings held in accordance with the
Delaware Corporation Law, may either in advance of the
grant or no later than the next annual meeting of
stockholders, affirmatively vote to approve such grant.
5. Eligibility.
(a) All Employees are eligible to receive Options under the Plan,
except that no Employee shall be eligible to receive an
Incentive Stock Option if, on the date of grant, such Employee
owns (including ownership through the attribution provisions
of Section 424 of the Code) in excess of 10% of the
outstanding voting stock of the Company (or of its parent or
subsidiary as defined in Section 424 of the Code).
(b) No Participant shall be eligible to be granted Options with
respect to more than 1,000,000 shares of Common Stock per
calendar year under the Plan.
6. Term of Plan. The Plan shall continue in effect until terminated
pursuant to Paragraph 12.
7. Effect of Change in Stock Subject to the Plan. In the event that
each of the outstanding shares of Common Stock (other than shares held by
dissenting stockholders) shall be changed into or exchanged for a different
number or kind of shares of stock of the Corporation or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
stock dividend, split-up, combination of shares, or otherwise), then there shall
be substituted for each share of Common Stock then under Option or available for
Option the number and kind of shares of stock into which each outstanding share
of Common Stock (other than shares held by dissenting stockholders) shall be so
changed or for which each such share shall be so exchanged, together with an
appropriate adjustment of the option price.
In the event there shall be any other change in the number of, or kind
of, issued shares of Common Stock, or of any stock or other securities into
which such Common Stock shall have been changed, or for which it shall have been
exchanged, the Board shall make such adjustment, if any, in the number, or kind,
or option price of shares then subject to an Option or available for Option as
is equitably required. Any such adjustment shall be effective and binding for
all purposes of the Plan.
8. Time of Granting Options. The date of grant of an Option under the
Plan shall for all purposes, be the date on which the Board awards the Option
or, if otherwise, the date specified by the Board as the date the award is to be
effective. Notice of the grant shall be given to each Employee to whom an Option
is so granted within a reasonable time after the date of such grant.
9. Manner of Exercise. Payment methods for the exercise of Options
granted under this Plan may include any of the following, as determined by the
Board or a committee at the date of the grant or prior to any exercise, provided
that such method is not prohibited by the applicable Option agreement (or the
law applicable thereto as the same may be amended from time to time):
(a) by check;
(b) in shares of Common Stock owned by the Participant;
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(c) partly by check and partly in shares of Common Stock.
Notwithstanding the foregoing, Incentive Stock Options granted prior to
January 1, 1998, may be exercised only by check. If Participant-owned Common
Stock is used to pay the purchase price, the Common Stock used must have been
held by the Participant for at least six months prior to the date of exercise.
Payments made in Common Stock shall be made by tendering to the Company shares
owned by the Participant having an aggregate Fair Market Value per share that is
not greater than the exercise price for the shares with respect to which the
Option is being exercised and by paying any remaining amount of the exercise
price by check. The Board or the committee may, in its discretion, authorize a
constructive exchange of existing shares, as follows: the Participant may
exercise the option by delivering a notarized statement that the Participant has
owned for at least six months the number of shares of Common Stock to be used
for the exercise of the Option (and delivering cash, to the extent the value of
such shares is less than the exercise price), and thereupon, a new certificate
shall be issued to the Participant for the number of shares being acquired
pursuant to the exercise of the Option, less the number of shares being
constructively tendered as set forth in the Participant's notarized statement.
The Board or committee, in its discretion, may also authorize: (a) Participants
to deliver Common Stock as payment for the withholding taxes due upon exercise
of a non-qualified option; or (b) at the request of the Participant, withholding
of a number of shares from the certificate satisfactory to pay the withholding
taxes due on exercise of a non-qualified option.
10. Effective Date. The Plan became effective on February 28, 1991, the
date it was adopted by the Board of Directors of the Corporation. For purposes
of the ten year limit on Incentive Stock Option grants set forth in Section 12
below, if the Plan is amended to increase the number of shares available under
the Plan, this will be considered as adoption of a new plan, effective as of the
later of the date the increase is approved by the Board or by the shareholders.
11. Modification of Options. At any time and from time to time the
Board may execute an instrument providing for the modification of any
outstanding Option, provided no such modification, extension or renewal shall
confer on the holder of said Option any right or benefit which could not be
conferred on such holder by the grant of a new Option at such time, or impair
the Option without the consent of the holder of the Option.
12. Amendment and Termination of the Plan. The Board may alter, suspend
or discontinue the Plan at any time. However, all Incentive Stock Options must
be granted within ten years of the effective date of the Plan, or the date the
Plan is approved by the shareholders, whichever is earlier. No action of the
Board may impair any then outstanding Option without the consent of the holder
of the Option.
No amendment may be made without the approval of the stockholders
of the Corporation by the affirmative votes of the holders of a majority of
shares of Common Stock casting votes at a duly held stockholder's meeting which
amendment would (i) increase the number of shares available under the Plan; (ii)
change the employees or class of employees eligible to participate in the Plan;
or (iii) change the material terms of the Plan as construed under Section 162(m)
of the Code.
13. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act, the Exchange Act, the rules and regulations
promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the shares may then be listed.
The Corporation shall not be liable for refusing to sell or issue any
shares if the Corporation cannot obtain from the appropriate regulatory
body(ies) authority deemed by the Corporation's counsel to be necessary lawfully
to issue or sell such shares.
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As a condition to the exercise of an Option, the Corporation may
require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
14. Restrictions on Shares. The Board may impose such restrictions on
the ownership and transfer of shares issued pursuant to this Plan as it deems
desirable; any such restrictions shall be set forth in any Option agreement
entered into hereunder.
15. Reservation of Shares. The Corporation during the term of this Plan
will reserve and keep available a number of shares sufficient to satisfy the
requirements of the Plan.
16. Change of Control.
(a) In order to maintain the Participants' rights in the event of
a Change of Control or Potential Change of Control of the
Corporation, as hereinafter defined, the Board, in its sole
discretion, may, in addition to and notwithstanding anything
to the contrary contained in the Plan, either at the time an
Option is granted hereunder or at any time prior to or upon
the occurrence of a Change of Control or Potential Change of
Control, provide, in whole or in part, for the accelerated
exercisability of and/or the waiver of any conditions to the
full and immediate exercisability of, each Option outstanding
at the time of such Change of Control or Potential Change of
Control event. The Board may, in its discretion, include such
further provisions and limitations in any agreement entered
into with respect to an Option as it may deem equitable and
in the best interests of the Corporation.
(b) For the purposes of this paragraph 16, a "Change of Control"
shall be deemed to have occurred if: (i) any person (as
defined in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended from time to time (the "Exchange Act") and
as used in Sections 13(d) and 14(d) thereof), excluding the
Corporation, its Subsidiaries and any employee benefit plan
sponsored or maintained by the Corporation or its
Subsidiaries (including any trustee of such plan acting as
trustee), but including a "group" as defined in Section
13(d)(3) of the Exchange Act (a "Person"), becomes beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of at
least fifty percent (50%) of the total number of shares which
are entitled to vote for the election of directors of the
Corporation (the "Voting Shares"); or (ii) the stockholders
of the Corporation shall approve any merger or other business
combination of the Corporation, sale of substantially all the
Corporation's assets or a combination of the foregoing
transactions (a "Transaction") other than a Transaction
involving only the Corporation and one or more of its
Subsidiaries, or a Transaction immediately following which
the stockholders of the Corporation immediately prior to the
Transaction continue to have a majority of the voting power
in the resulting entity. Two or more persons owning in the
aggregate fifty percent (50%) or more of the Voting Shares
shall not be deemed to be a "group" for the purposes of
paragraph 16(b)(i) hereof solely because such persons are
officers or directors of the Corporation.
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(c) For the purposes of this paragraph 16, a Potential Change of
Control shall be deemed to have occurred if: (i) a Person
commences a tender offer for at least fifty percent (50%) of
the Voting Shares; (ii) approval of any Transaction
(excluding any Transaction that is excluded for purposes of
paragraph 16(b)(ii) above) is requested of stockholders;
(iii) proxies for the election of directors of the
Corporation are solicited by anyone other than the
Corporation; or (iv) any other event occurs which is deemed
to be a Potential Change of Control by the Board.
(d) Notwithstanding the foregoing, no Change of Control or
Potential Change of Control shall be deemed to have occurred
for purposes of the Plan with respect to an Employee by
reason of any actions or events in which such Employee
participates in a capacity other than in his or her capacity
as an Employee (or as a director of the Company, where
applicable).
(e) Notwithstanding the foregoing, in no event shall the
acceleration of any option hereunder upon a Change of Control
occur to the extent an "excess parachute payment" (as defined
in Code Sec. 280G) would result. In the event that the Board
or a committee appointed thereby determines that such an
excess parachute payment would result if the full
acceleration provision of this section 16(e) occurred (when
added to any other payments or benefits contingent on a
change of control under any other agreements, arrangements or
plans) then the number of shares as to which exercisability
is accelerated shall be reduced so that total parachute
payments do not exceed 299% of the optionee's "base amount,"
as defined in Code Sec. 280G(b)(3).
17. Transferability. All or a portion of the nonqualified options to be
granted to a Participant may, in the discretion of the Board or committee, as
the case may be, be on terms that permit transfer without consideration by such
Participant to (i) the spouse, children or grandchildren of the Participant
("Immediate Family Members"), (ii) a trust or trusts, or to a guardian under the
Uniform Gift to Minors Act, for the exclusive benefit of such Immediate Family
Members, or (iii) a partnership or other entity in which such Immediate Family
Members are the only partners, provided that (x) the stock option agreement
pursuant to which such nonqualified options are granted must be approved by the
committee, and must expressly provide for transferability in a manner consistent
with this Section, and (y) subsequent transfers of transferred Options shall be
prohibited except by will or the laws of descent and distribution. Following
transfer, any such Options shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that for
purposes of each agreement and Section 9 hereof the term "Participant" shall be
deemed to refer to the transferee (however, the events of termination of
employment, if any, set forth in the agreement and the obligation to pay
withholding taxes shall continue to apply to the transferor). Incentive Stock
Options shall be nontransferable except by will or the laws of descent and
distribution, and may only be exercisable during the Participant's lifetime, by
the Participant.
18. Stock Option Price. The option price per share of Common Stock
deliverable upon the exercise of an Incentive Stock Option shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the date the
Incentive Stock Option is granted. As to nonqualified options awarded to
executive officers whose compensation may otherwise exceed the deduction limit
of Section 162(m) of the Code, if the option price per share is not less than
the Fair Market Value of the Common Stock at the date of the grant, such options
shall be deemed to be "qualified performance based compensation" under Code
Section 162(m)(4)(C), and shall be administered in a manner consistent with that
section.
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19. Exercise of Incentive Stock Options. No Incentive Stock Option
shall be exercisable at any time after the expiration of ten (10) years from the
date of grant. Otherwise, the Board, or a committee appointed by the Board, will
set the option terms and exercisability schedule. The total fair market value
(determined as of the date of grant) of stock with respect to which ISO's
(whether granted under this Plan or under any other agreement or plan of the
Company or any of its subsidiaries) are first exercisable by a Participant in
any one calendar year shall not exceed $100,000. In the event that the
Participant's total ISO's exceed the $100,000 limit in any year (whether due to
acceleration of exercisability under Section 16 above, miscalculation, error or
otherwise) the amount of ISO's that exceed such limit shall be treated as
non-qualified stock options. The ISO's granted earliest (whether under this Plan
or any other agreement or plan) shall be applied first to the $100,000 limit. In
the event that only a portion of the options granted at the same time can be
applied to the $100,000 limit, the Company shall issue separate share
certificate(s) for such number of shares as does not exceed the $100,000 limit,
and shall designate such shares as ISO stock in its share transfer records.
