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EXHIBIT 4.1(a)
HARTE-HANKS COMMUNICATIONS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED
1. PURPOSE AND EFFECT OF PLAN.
The purpose of the 1994 Employee Stock Purchase Plan (the "Stock
Purchase Plan" or the "Plan") is to secure for Harte-Hanks Communications,
Inc., a Delaware corporation (the "Company), and its stockholders the benefits
of the incentive inherent in the ownership of the Company's capital stock by
employees of the Company and its subsidiaries. The Stock Purchase Plan is
intended to comply with the provisions of Section 423 of the Internal Revenue
Code of 1986, as amended (the Code), and the Plan shall be administered,
interpreted, and construed in accordance with such provisions.
2. SHARES RESERVED FOR THE PLAN.
There shall be reserved for issuance to and purchase by employees
under the Stock Purchase Plan an aggregate of 1,000,000 shares of Common Stock,
$1.00 par value per share, of the Company ("Common Stock), subject to
adjustment as provided in Section 12. Shares subject to the Plan may be shares
now or hereafter authored but unissued or shares that were once issued and
subsequently reacquired by the Company. If and to the extent that any right to
purchase reserved shares shall not be exercised by any employee for any reason
or if such right to purchase shall terminate as provided herein, such shares
which have not been so purchased hereunder shall again become available for the
purposes of the Plan unless the Plan shall have been terminated, but such
unpurchased shares shall not be deemed to increase the aggregate number of
shares specified above to be reserved for purposes of the Plan (subject to
adjustment as provided in Section 12).
3. ADMINISTRATION OF THE PLAN.
The Stock Purchase Plan shall be administered, at the expense of the
Company, by a committee appointed by the Board of Directors, which shall be
designated as the Employee Stock Purchase Plan Committee (the "Committee"),
consisting of not less than three members, who shall serve at the pleasure of
the Board of Directors. The Committee shall select one of its members as
chairman and shall hold meetings at such times and places as it may determine.
The Committee may request advice or assistance or employ such persons as are
necessary for proper administration of the Plan. Subject to the express
provisions of the Plan, the Committee shall have the discretionary authority to
interpret the Plan, to supply omissions or correct errors in the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to make
equitable adjustments for any mistakes made in the administration of the Plan,
and to make all other determinations necessary or advisable in administering
the Plan, all of which determinations
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shall be final and binding upon all persons unless otherwise determined by
the Board of Directors. A quorum of the Committee shall consist of a majority
of its members and the Committee may act by vote of a majority of its members
at a meeting at which a quorum is present or without a meeting by a written
consent to their action taken signed by all members of the Committee.
4. ELIGIBLE EMPLOYEES.
All present and future employees of the Company, its present and
future domestic subsidiaries and such of its present or future foreign
subsidiaries as may be designated from time to time by the Committee, shall be
eligible to participate in the Stock Purchase Plan, provided each of such
employees:
(a) is not an officer of the Company who is a "highly
compensated employee" as defined in Section 414(q) of the Code,
(b) has been employed by the Company and/or any of its
subsidiaries (or any predecessor thereof) since the June 30 or
December 31 immediately preceding the Enrollment Date in question, as
hereinafter defined,
(c) has customary employment of a minimum of 20 hours per
week during at least five months of the year, and
(d) does not own, immediately after the right is granted,
stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of capital stock of the Company
or of any subsidiary company.
In determining whether a corporation is a subsidiary, the rules of
Section 424(f) of the Code shall be followed and in determining stock ownership
under this paragraph, the rules of Section 424(d) of the Code shall apply and
stock which the employee may purchase under outstanding options shall be
treated as stock owned by the employee. Employees eligible to participate in
the Stock Purchase Plan pursuant to the provisions of this Section 4 are
hereinafter referred to as "Eligible Employees".
5. ELECTION TO PARTICIPATE.
Each Eligible Employee, at the effective date of the Stock Purchase
Plan and at August 1 in each calendar year after the calendar year which
includes the effective date, and at February 1, 1998 and each subsequent
February 1 (each such August 1 or February 1 being referred to as the
Enrollment Date), may participate in the Plan by filing with the Committee
prior to such effective date or Enrollment Date, as the case may be, an
Enrollment Form authorizing specified regular payroll deductions (in any whole
percent from one percent (1%) through ten percent (10%) over the following
twelve (12) month period not to exceed, in total amount over such period, ten
percent (10%) of his or her base compensation. Base compensation is gross
compensation actually paid for the pay period, excluding all bonuses, severance
pay, any
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extraordinary pay, expense allowances/ reimbursements, moving expenses
and income from restricted stock or stock option awards. Employees who so elect
to participate in the Plan are referred to herein as Participating Employees.
Payroll deductions for each Participating Employee shall be made regularly
commencing on the Enrollment Date, by the Company and shall be credited to an
account which the Company shall establish in the name of each participant (the
"Payroll Deduction Account"). A Participating Employee may at any time withdraw
the entire balance accumulated in his or her Payroll Deduction Account and
thereby cease to be a Participating Employee in the Plan until the following
Enrollment Date of the Plan. Such payroll deductions shall continue until the
Plan terminates or the Participating Employee elects to cease participating or
elects to change his or her contribution percentage. A Participating Employee
may at any time (but not more than once during a six month period) decrease his
or her payroll deduction, but not to less than one percent (1%), by filing a
new Enrollment Form which shall become effective on the following payroll date,
or as soon thereafter as practicable. All funds in Payroll Deduction Accounts
may be used by the Company for any corporate purpose. Payroll Deduction
Accounts are not credited with interest.
6. LIMITATION OF NUMBER OF SHARES WHICH AN EMPLOYEE MAY PURCHASE.
No right to purchase shares under this Stock Purchase Plan shall
permit an employee to purchase stock under all employee stock purchase plans of
the Company and its subsidiaries at a rate which exceeds $25,000 of fair market
value of such stock (determined at the time the right is granted) for any
calendar year in which the right is outstanding.
7. PURCHASE PRICE.
The purchase price for each share of Common Stock shall be eighty-five
percent (85%) of the fair market value of such share on the Investment Date, as
defined in Section 8.
"Fair market value" shall be determined by the Committee by any fair
and reasonable means, including if the Common Stock is listed for trading on a
national securities exchange, the mean of the high and low sales prices on such
exchange on the date in question, or if the Common Stock shall not have been
traded on such exchange on such date, the mean of the high and low sales prices
on such exchange on the first day prior thereto on which the Common Stock was
traded.
8. METHOD OF PAYMENT.
As of the last business day in October, January, April and July during
the life of the Plan (each of such dates being known as an "Investment Date"),
each Participating Employee shall have the right to purchase the number of
whole shares of Common Stock determined by dividing the amount of the balance
in his or her Payroll Deduction Account by the purchase price as determined in
Section 7. Each Participating Employee having funds in his or her Payroll
Deduction Account on an Investment Date shall be deemed, without any further
action, to have purchased with the funds in such account the number of whole
shares which such Participating Employee has the right to purchase at the
purchase price on that Investment Date. A certificate or
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certificates representing such shares shall be issued promptly to the
Participating Employee. Any amount remaining in a Participating Employee's
Payroll Deduction Account after any Investment Date shall be retained in his or
her Payroll Deduction Account for use in purchasing shares of Common Stock on
subsequent Investment Dates or refunded to the Participating Employee if for
any reason he or she ceases to participate in the Plan.
9. REGISTRATION OF CERTIFICATES.
Stock certificates may be registered only in the name of the employee.
10. RIGHTS AS A STOCKHOLDER.
When a Participating Employee's Payroll Deduction Account shall be
charged with the amount of the purchase price of stock, he shall immediately
thereupon have all of the rights or privileges of a stockholder of the Company
with respect to shares purchased under the Plan, whether or not certificates
representing the purchased shares shall have been issued.
11. RIGHTS NOT TRANSFERABLE.
Rights under the Plan are not transferable by a Participating Employee
and are exercisable only by the Participating Employee.
12. ADJUSTMENT IN CASE OF CHANGES AFFECTING THE COMPANY'S STOCK
In the event of a subdivision of outstanding shares of Common Stock or
the payment of a stock dividend thereon, the number of shares reserved or
authorized to be reserved under this Stock Purchase Plan shall be increased
proportionately, and such other adjustment shall be made as may be deemed
necessary or equitable by the Board of Directors. In the event of any other
change affecting the Common Stock, such adjustment shall be made as may be
deemed equitable by the Board of Directors to give proper effect to such event,
subject to the limitations of Section 424 of the Code. In the event of a
corporate transaction described in Section 424(a) of the Code, the Board of
Directors of the Company may, alternatively, approve the assumption of the Plan
by a successor corporation that becomes the employer of a significant number of
Participating Employees ("Successor Employer"). In such event, any uninvested
amounts in the Payroll Deduction Accounts of Participating Employees who become
employees of the Successor Employer (or its subsidiary) shall be invested in
stock of the Successor Employer in accordance with Section 424(a), and such
Participating Employees' most recent Enrollment Forms shall be deemed to
continue in effect, subject to the right of any Participating Employee to cease
participating at any time. In the event of assumption of the Plan,
Participating Employees who do not become employees of the Successor Employer
(or one of its subsidiaries) shall be deemed to have terminated employment,
solely for purposes of this Plan.
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13. RETIREMENT, TERMINATION AND DEATH.
In the event of a Participating Employee's retirement or termination
of employment, the amount in his or her Payroll Deduction Account shall be
refunded to such Participating Employee or, in the event of his or her death,
shall be paid to his or her surviving spouse; or, if there is no surviving
spouse, to the person or persons properly designated as his or her
beneficiary(ies) under the Company's group term life insurance program; or, if
there is no such beneficiary surviving, the Committee, in its sole discretion,
may direct payment to the deceased Participating Employee's estate or to one or
more of his or her surviving family members.
14. AMENDMENT OF THE PLAN.
The Board of Directors may at any time, or from time to time, amend
the Plan in any respect, except that, without the approval of the holders of a
majority of the shares of Common Stock of the Company voting thereon, no
amendment shall be made (a) increasing or decreasing the number of shares to be
reserved under the Plan (other than as provided in Section 12) or (b) altering
the eligibility criteria for participation in the Plan.
15. TERMINATION OF THE PLAN.
The Plan and all rights of employees hereunder shall terminate:
(a) on any Investment Date when Participating Employees
become entitled to purchase a number of shares greater than the number
of reserved shares remaining available for purchase; or
(b) if the Plan is terminated at any time, at the discretion
of the Board of Directors.
In the event that the Plan terminates under circumstances described at
(a) above, reserved shares remaining as of the termination date shall be issued
to Participating Employees in proportion to the balances in the Payroll
Deduction Accounts of such employees. Upon termination of the Plan, all amounts
held in the Payroll Deduction Accounts shall, to the extent not used to
purchase shares of the Common Stock, be refunded to the Participating Employee
entitled thereto.
16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective the latest of (a) August 1, 1994, (b)
the date on which stockholders' approval is obtained and (c) the date on which
a Registration Statement under the Securities Act of 1933, as amended, covering
the shares to be issued under the Plan becomes effective.
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17. GOVERNMENTAL AND OTHER REGULATIONS.
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Company's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
Federal, state and foreign laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may, in the opinion of counsel for
the Company, be required.
18. INDEMNIFICATION OF COMMITTEE.
Members of the Committee shall be indemnified and entitled to
reimbursement of expenses pursuant to the Company's Certificate of
Incorporation and bylaws to the same extent as if they were directors of the
Company.
19. LISTING OF SHARES AND RELATED MATTERS.
If at any time the Board of Directors or the Committee shall
determine, based on opinion of counsel, that the listing, registration or
qualification of the shares covered by the Plan upon any national securities
exchange or under any state or federal law or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the sale of purchase of shares under the Plan, no shares will
be sold, issued or delivered unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to counsel.
20. THIRD PARTY BENEFICIARIES.
None of the provisions of the Plan shall be for the benefit of or
enforceable by any creditor of a Participating Employee or any other third
party. A Participating Employee may not create a lien, encumbrance or
assignment on any portion of the cash balance accumulated in his or her Payroll
Deduction Account or on any shares covered by a right to purchase before a
stock certificate for such shares is issued for his or her benefit.
21. GENERAL PROVISIONS.
The Plan shall neither impose any obligation on the Company or on any
parent or subsidiary corporation to continue the employment of any
Participating Employee, nor in any way limit or restrict the right of the
Company or any parent or subsidiary to discharge any Participating Employee or
to change his or her position or compensation. For purposes of the Plan, an
employment relationship shall be deemed to exist between an individual and a
corporation if, at the time of the determination, the individual is an
"employee" of such corporation within the meaning of Section 423(a)(2) of the
Code and the regulations and rulings interpreting such Section. For purposes of
the Plan, the transfer of a Participating Employee from employment with the
Company to employment with a parent or subsidiary of the Company, or vice
versa, shall not be deemed a termination of employment of the Participating
Employee. Subject to the specific terms of the Plan, all Participating
Employees granted rights to purchase shares hereunder shall have the same
rights and privileges.
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22. GOVERNING LAW.
The Plan and rights to purchase shares that may be granted hereunder
shall be governed by and construed and enforced in accordance with the laws of
the State of Texas without regard to principles of conflicts of laws.
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