The Board of Directors (the "Board") of Harte-Hanks, Inc., a Delaware corporation (the "Company"), adopted this Compensation Committee Charter (the "Charter") on January 28, 2004.


    The purpose of the Committee is to have direct responsibility to (a) review and approve corporate goals and objectives relevant to Chief Executive Officer ("CEO") compensation, evaluate the CEO's performance in light of those goals and objectives, and either as a committee or together with the other independent directors (as directed by the Board), determine and approve the CEO's compensation level based on this evaluation; (b) make recommendations to the Board with respect to non-CEO compensation, incentive—compensation plans and equity-based plans; and (c) produce a compensation committee report on executive compensation as required by the Securities and Exchange Commission (the "Commission") to be included in the Company's annual proxy statement or annual report on Form 10-K filed with the Commission.

    The Committee shall be comprised of the number of directors determined by the Board and consistent with the Company's By-laws, all of whom must qualify as independent directors under the listing standards of the New York Stock Exchange, Inc. (the "NYSE") and the Commission. Each of the members of the Committee must also qualify as (i) a "disinterested person" (as such term is defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act") with regard to any compensation or benefit plan administered by the Committee that is subject to Rule 16b-3 promulgated under the Exchange Act and (ii) an "outside director" (as such term is defined under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "IRC").

    The members of the Committee shall be appointed by majority vote of the full Board at a duly convened meeting of the Board. The Committee may recommend, and the Board will designate, one member of the Committee to serve as the Chairman of the Committee (the "Chairman"). If a Chairman is not designated or is not present at any meeting, the members of the Committee may designate a chairman for such meeting by majority vote of the Committee. The members of the Committee will serve until their resignation, retirement or removal, or the due appointment and qualification of their successors. A member of the Committee may be removed only by majority vote of the independent directors then in office, provided that the failure of the full Board to re-appoint a member during any reconstitution of the Committee at the first duly convened meeting of the Board following the annual meeting of stockholders will not constitute "removal" for this purpose. No reduction in the number of members constituting the full Committee shall have the effect of shortening the term of any incumbent member.

    The Committee's rules of procedure shall be consistent with the By-laws of the Company and this Charter including any By-law provisions governing notice of meetings and waiver thereof. The Committee shall meet at least once annually, or more frequently as may be necessary to carry out its responsibilities. In addition, the Chairman or a majority of the members of the Committee may call a special meeting of the Committee. A majority of the members of the Committee shall constitute a quorum.

    The Committee may appoint subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate. Notwithstanding the foregoing (a) no subcommittee shall consist of fewer than two (2) members, and (b) the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.

    Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a description of all actions taken by the Committee at the meeting. The Committee shall keep written minutes of its meetings and such minutes shall be maintained with the books and records of the Company.

    The Committee shall have the power to perform the following (it being understood that the Committee may condition its approval of any compensation on Board ratification to the extent so required to comply with applicable law including, without limitation, Section 162(m) of the IRC):

    Review and Approve Corporate Goals and Objectives Relevant to Chief Executive Officer Compensation
    1. Assist the Board in evaluating potential candidates for executive positions, including the Company's CEO, and in overseeing the development of executive succession plans.
    2. Participate with management in reviewing and approving the Company's goals and objectives with respect to compensation for the CEO.
    3. Annually evaluate the CEO's performance in light of these established goals and objectives and, based upon these evaluations, set the CEO's annual compensation, including salary, bonus and incentive and equity-based compensation.
    4. Review publicly available data to assess the competitiveness of the CEO's base salary, bonus and incentive and equity-based compensation. In determining the long-term incentive component of the CEO's compensation, the Committee shall consider the Company's performance and relative stockholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the CEO in prior years.

Review and Approve Corporate Goals and Objectives Relevant to Other Executives' Compensation

    1. Participate with management in reviewing the annual goals and objectives with respect to compensation for the Company's officers and, to the extent the Committee deems necessary or appropriate, other key employees (collectively, the "Principal Executives")
    2. Annually evaluate the performance of the Principal Executives in light of these established goals and objectives, and review compensation recommendations for the Principal Executives made by the CEO and the Board.
    3. Annually review publicly available data to assess the Company's competitive position with respect to the Company's executive compensation program, including consideration of base salaries, annual incentives, long-term incentives and equity-based compensation.

Review the Company's Incentive Compensation and Other Equity-Based Plans

    1. Review, adopt, amend or take any other action related to the Company's incentive compensation plans and equity-based plans including, but not limited to (a) approving option and restricted stock guidelines and general size of overall awards, (b) approving awards, (c) interpreting the plans, (d) determining rules and regulations relating to the plans, (e) modifying or canceling existing awards, (f) designating employees eligible to participate in the long-term incentive plans, (g) appointing and reviewing the performance of one or more administrators for the plans and (h) imposing limitations, restrictions and conditions upon awards.
    2. Monitor awards made under the Company's long-term incentive plans for compliance with any restrictions placed thereon by any applicable laws, rules, or regulations, the plans or the Board including overseeing the Company's policies on structuring compensation programs to preserve tax deductibility and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162 (m) of the IRC.
    3. Periodically review useful and relevant compensation plans and practices in other companies to assure that the Company's compensation practices are current and responsive to key employees' needs.

Review and Approve Corporate Goals and Objectives Relevant to Director Compensation

    1. Review compensation recommendations for the Company's outside directors made by the CEO and the Board and make recommendations to the full Board with respect thereto.

Issue an Annual Report

    1. Annually issue a report on executive compensation in accordance with applicable rules and regulations of the Commission for inclusion in the Company's proxy statement that complies with the rules and regulations of the Commission, the NYSE and any other applicable rules and regulations.

    The Committee shall conduct a self-evaluation of its performance annually, which evaluation shall compare the performance of the Committee with the requirements of this Charter. In conducting its self-evaluation, the Committee may address all matters that it considers relevant to its performance, including the following:

L.      The adequacy, appropriateness and quality of the information and recommendations presented to the Committee by management, and by the Committee to the Board;

M.    The manner in which they were discussed or debated; and

N.     Whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.

The Committee shall deliver to the Board a written report setting forth the results of any self-evaluation, including any recommended amendments to this Charter and any recommended changes to the Company's or the Board's corporate governance policies and procedures.


    The Committee may conduct or authorize investigations into or studies of matters within the scope of the Committee's authority and responsibilities, and may retain, at the Company's expense, such outside advisors as it deems necessary or appropriate.

    The Committee shall have the sole authority to retain or terminate any consulting firm engaged to assist in the evaluation of director, CEO or Principal Executive compensation, and to retain outside counsel and any other advisors as the Committee may deem appropriate in its sole discretion. The Committee shall have the sole authority to approve related fees and retention terms.