Filed
by the Registrant x
|
||
Filed
by a Party other than the Registrant o
|
||
Check
the appropriate box:
|
||
o
|
Preliminary
Proxy Statement
|
|
o
|
Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|
|
x
|
Definitive
Proxy Statement
|
|
o
|
Definitive
Additional Materials
|
|
o
|
Soliciting
Material Pursuant to
§240.14a-12
|
Harris
& Harris Group, 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):
|
||
x
|
No
fee required.
|
|
o
|
Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
(3)
|
Per
unit price or other underlying value of 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 transaction:
|
|
(5)
|
Total
fee paid:
|
|
o
|
Fee
paid previously with preliminary materials.
|
|
o
|
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.
|
|
(1)
|
Amount
Previously Paid:
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
(3)
|
Filing
Party:
|
|
(4)
|
Date
Filed:
|
|
|
1.
|
To
elect 10 directors of the Company to hold office until the next annual
meeting of shareholders or until their respective successors have been
duly elected and qualified;
|
|
2.
|
To
ratify, confirm and approve the Audit Committee's selection of
PricewaterhouseCoopers LLP as the independent registered public accountant
for the fiscal year ending December 31,
2009;
|
|
3.
|
To
transact such other business as may properly come before the meeting or
any postponements or adjournments
thereof.
|
By
Order of the Board of Directors,
|
|
March
25, 2009
|
Sandra
M. Forman
|
New
York, New York
|
Secretary
|
|
1.
|
To
elect 10 directors of the Company to hold office until the next annual
meeting of shareholders or until their respective successors have been
duly elected and qualified ("Election of Directors
Proposal");
|
|
2.
|
To
ratify, confirm and approve the Audit Committee's selection of
PricewaterhouseCoopers LLP as the independent registered public accountant
for the fiscal year ending December 31, 2009 ("Ratification of Auditor
Proposal"); and
|
|
3.
|
To
transact such other business as may properly come before the meeting or
any postponements or adjournments
thereof.
|
Name
and Address of Beneficial
Owner
|
Amount
and Nature
of
Beneficial
Ownership(1)
|
Percentage
of Outstanding
Common
Shares Owned(2)
|
||
Independent
Directors:
|
||||
W.
Dillaway Ayres, Jr.
|
8,743
|
*
|
||
Dr.
C. Wayne Bardin
|
31,611
|
*
|
||
Dr.
Phillip A. Bauman
|
34,242(3)
|
*
|
||
G.
Morgan Browne
|
37,726
|
*
|
||
Dugald
A. Fletcher
|
28,860
|
*
|
||
Charles
E. Ramsey
|
44,105
|
*
|
||
James
E. Roberts
|
29,236
|
*
|
||
Richard
P. Shanley
|
10,937
|
*
|
||
Interested
Directors:
|
||||
Douglas
W. Jamison
|
328,454(4)
|
1.3
|
||
Lori
D. Pressman
|
11,685
|
*
|
||
Named
Executive Officers:
|
||||
Alexei
A. Andreev
|
299,141(5)
|
1.1
|
||
Charles
E. and Susan T. Harris
|
2,239,752(6)
|
8.3
|
||
Michael
A. Janse
|
286,028(7)
|
1.1
|
||
Daniel
B. Wolfe
|
140,388(8)
|
*
|
||
All
directors and executive officers as
a
group (18 persons)
|
3,841,972(9)
|
13.6
|
(1)
|
Beneficial
ownership has been determined in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934 (the "1934
Act").
|
(2)
|
The
percentage of ownership is based on 25,859,573 shares of common stock
outstanding as of March 17, 2009, together with the exercisable options
for such shareholder, as applicable. In computing the
percentage ownership of a shareholder, shares that can be acquired upon
the exercise of outstanding options are not deemed outstanding for
purposes of computing the percentage ownership of any other
person.
|
(3)
|
Includes
5,637 shares owned by Ms. Milbry C. Polk, Dr. Bauman's wife; 100 shares
owned by Adelaide Polk-Bauman, Dr. Bauman's daughter; 100 shares owned by
Milbry Polk-Bauman, Dr. Bauman's daughter; and 100 shares owned by Mary
Polk-Bauman, Dr. Bauman's daughter. Ms. Milbry C. Polk is the
custodian for the accounts of the three
children.
|
(4)
|
Includes
306,811 shares that can be acquired upon the exercise of outstanding
options.
|
(5)
|
Includes
288,872 shares that can be acquired upon the exercise of outstanding
options.
|
(6)
|
Includes
1,039,559 shares owned by Mrs. Susan T. Harris, Mr. Harris's wife, 45,266
shares owned by Mr. Harris and 1,154,927 shares that can be acquired upon
the exercise of outstanding options by Mr. Harris. Mr. Harris
retired from the Company on December 31, 2008, pursuant to the Company's
Executive Mandatory Retirement Benefit
Plan.
|
(7)
|
Amount
represents 286,028 shares that can be acquired upon the exercise of
outstanding options.
|
(8)
|
Includes
133,791 shares that can be acquired upon the exercise of outstanding
options.
|
(9)
|
Includes
2,472,618 shares that can be acquired upon the exercise of outstanding
options.
|
Name
of Director or Nominee
|
Dollar
Range of Equity Securities
Beneficially
Owned (1)(2)(3)
|
Independent Directors
|
|
W.
Dillaway Ayres, Jr.
|
$10,001
- $50,000
|
Dr.
C. Wayne Bardin
|
Over
$100,000
|
Dr.
Phillip A. Bauman
|
Over
$100,000
|
G.
Morgan Browne
|
Over
$100,000
|
Dugald
A. Fletcher
|
Over
$100,000
|
Charles
E. Ramsey
|
Over
$100,000
|
James
E. Roberts
|
Over
$100,000
|
Richard
P. Shanley
|
$10,001
- $50,000
|
Interested Directors
|
|
Douglas
W. Jamison (4)
|
Over
$100,000
|
Lori
D. Pressman (5)
|
$10,001
- $50,000
|
(1)
|
Beneficial
ownership has been determined in accordance with Rule 16a-1(a)(2) of the
1934 Act.
|
(2)
|
The
dollar ranges are: none, $1-$10,000, $10,001-$50,000,
$50,001-$100,000 and over $100,000.
|
(3)
|
The
dollar ranges are based on the price of the equity securities as of March
17, 2009.
|
(4)
|
Denotes
an individual who is an "interested person" as defined in the Investment
Company Act of 1940 (the "1940
Act").
|
(5)
|
Denotes
an individual who may be considered an "interested person" because of
consulting work performed for us.
|
Executive
|
Audit
|
Compensation
|
Charles
E. Harris*
|
Richard
P. Shanley (1)
|
James
E. Roberts (1)
|
Douglas
W. Jamison (1)
|
W.
Dillaway Ayres
|
Dr.
Phillip A. Bauman
|
Dr.
C. Wayne Bardin
|
G.
Morgan Browne
|
Dugald
A. Fletcher
|
G.
Morgan Browne
|
Dugald
A. Fletcher
|
Charles
E. Ramsey
|
Charles
E. Ramsey
|
James
E. Roberts
|
|
*
Chairman until December 31, 2008.
(1)
Denotes the Chairman of the
Committee.
|
Nominating
|
Valuation
|
Independent Directors
|
Dr.
C. Wayne Bardin(1)
|
G.
Morgan Browne (1)
|
Dugald
A. Fletcher
(1)
|
W.
Dillaway Ayres
|
W.
Dillaway Ayres
|
W.
Dillaway Ayres
|
Dr.
Phillip A. Bauman
|
Dr.
C. Wayne Bardin
|
Dr.
C. Wayne Bardin
|
Richard
P. Shanley
|
Dr.
Phillip A. Bauman
|
Dr.
Phillip A. Bauman
|
Dugald
A. Fletcher
|
G.
Morgan Browne
|
|
Charles
E. Ramsey
|
Charles
E. Ramsey
|
|
James
E. Roberts
|
James
E. Roberts
|
|
Richard
P. Shanley
|
Richard
P. Shanley
|
|
·
|
Reviewing
the Company's competitive market data with respect to private venture
capital firms, public companies with similar market capitalizations and
compliance professionals;
|
|
·
|
Providing
recommendations for the option awards granted to employees in 2008 and
proposing awards for grants in 2009;
and
|
|
·
|
Reviewing
the CD&A.
|
|
·
|
The
name of the shareholder and evidence of the person's ownership of shares
of the Company, including the number of shares owned and the length of
time of ownership;
|
|
·
|
The
name of the candidate, the candidate's resume or a listing of his or her
qualifications to be a director of the Company and the person's consent to
be named as a director if selected by the Nominating Committee and
nominated by the Board; and
|
|
·
|
If
requested by the Nominating Committee, a completed and signed director's
questionnaire.
|
|
·
|
Charles
E. Harris, Chairman, Chief Executive Officer and a Managing
Director;
|
|
·
|
Douglas
W. Jamison, President, Chief Operating Officer and a Managing
Director;
|
|
·
|
Daniel
B. Wolfe, Chief Financial Officer and a Managing
Director;
|
|
·
|
Alexei
A. Andreev, an Executive Vice President and a Managing Director;
and
|
|
·
|
Michael
A. Janse, an Executive Vice President and a Managing
Director.
|
|
·
|
attract,
motivate and retain employees by providing market-competitive compensation
while preserving company resources;
|
|
·
|
maintain
our leadership position as a venture capital firm specializing in
nanotechnology and microsystems;
and
|
|
·
|
align
management's interests with shareholders'
interests.
|
Expiration
Date
of Options
|
Year of Vesting
2008
|
Exercise
Price
|
|
9.4
Yr NQSO (vest 100% on 12/31/08)
|
12/27/2017
|
187,039
|
$6.92
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Option
Awards(1)
($)
|
Non-Equity
Incentive Plan Compensation (2)
($)
|
Change
in Pension Value and Nonqualified Deferred Compensation Earnings(3)
($)
|
All
Other Compensation
($)(4)(6)(7)
|
Total
($)
|
Charles
E. Harris
Chairman
of the Board,
Chief
Executive Officer, Managing Director(5)
|
2008
2007
2006
|
314,623
306,187
300,000
|
0
0
0
|
2,225,350
3,374,224
2,034,482
|
0
0
29,067
|
4,141
42,063
54,692
|
432,590
418,479
405,628
|
2,976,704
4,140,953
2,823,869
|
Douglas
W. Jamison
President,
Chief Operating Officer, Chief Financial Officer (2007),
Managing Director
|
2008
2007
2006
|
274,770
267,403
262,000
|
75,000
0
0
|
795,931
953,931
668,677
|
0
0
3,957
|
0
0
0
|
15,500
15,500
15,000
|
1,161,201
1,236,834
949,634
|
Daniel
B. Wolfe
Chief
Financial Officer and Managing Director (2008)
Former
Vice President
|
2008
2007
2006
|
274,770
210,000
175,000
|
75,000
0
0
|
401,956
438,159
322,130
|
0
7,849
56,416
|
0
0
0
|
15,500
15,500
15,000
|
767,226
663,661
576,393
|
Alexei
A. Andreev
Managing
Director, Executive Vice President
|
2008
2007
2006
|
274,770
267,403
262,000
|
75,000
0
0
|
724,448
897,250
668,677
|
0
0
0
|
0
0
0
|
15,500
15,500
15,000
|
1,089,718
1,180,153
945,677
|
Michael
A. Janse
Managing
Director, Executive Vice President(8)
|
2008
2007
2006
|
274,770
184,211
0
|
75,000
0
0
|
792,957
873,201
0
|
0
0
0
|
0
0
0
|
15,500
45,500
0
|
1,158,227
1,102,912
0
|
(1)
|
The
figures in this column do not represent amounts actually paid to the named
executive officers, but represent the aggregate dollar amount of
compensation cost recognized by us in 2008, 2007 and 2006 under FAS 123(R)
for options granted in 2008 and prior years. We use the
Black-Scholes model to calculate compensation cost under FAS
123(R). You may find more information about the assumptions we
use in the Black-Scholes model under "Fair Valuation of Option
Awards."
|
(2)
|
In
2006, these amounts represent the actual amounts earned as a result of
realized gains during the year ended December 31, 2005, and paid out in
2006 and 2007, under the Harris & Harris Group Employee Profit-Sharing
Plan. These 2006 amounts are in addition to the $1,107,088 for
Mr. Harris and $165,308 for Mr. Jamison reported in the 2005 proxy and
were determined in 2006 based on the finalization of our 2005 tax
returns.
|
(3)
|
Represents
increase in pension obligation. There were no preferential or
above market earnings on Mr. Harris's deferred
compensation.
|
(4)
|
The
amounts reported for Mr. Harris for 2008 represent actual amounts of
benefits paid or payable including personal use of an automobile,
membership in a private club totaling $11,569, membership in a health club
and use of a trainer totaling $10,601, medical care reimbursement,
consultation with a financial planner totaling $20,214, long-term
disability insurance, group term-life insurance, long-term care insurance
for him and his wife and $20,500 in employer contributions to the Harris
& Harris Group, Inc. 401(k) Plan. It also includes the
employer contribution to his SERP totaling
$314,623.
|
(5)
|
In
2008, 2007 and 2006, Mr. Harris's wife received compensation of $24,000,
$25,000 and $21,000, respectively, for serving as our
Secretary.
|
(6)
|
The
amounts reported for Mr. Janse for 2007 represent qualified moving
expenses paid totaling $30,000 and $15,500 in employer contributions to
the Harris & Harris Group 401(k)
Plan.
|
(7)
|
Except
for Mr. Harris (see footnote 4 above) and Mr. Janse (see footnote 6
above), amounts reported for 2008 represent our contributions on behalf of
the named executive to the Harris & Harris Group, Inc. 401(k)
Plan. The named executive did not earn any other compensation
reportable in this column for 2008 that met the threshold reporting
requirements.
|
(8)
|
Mr.
Janse joined the Company in April
2007.
|
Number
|
Expected
|
Expected
|
Expected
|
Risk-free
|
Fair
|
||
Contractual
|
of
Options
|
Term
|
Volatility
|
Dividend
|
Interest
|
Value
|
|
Type of Award
|
Term
|
Granted
|
in Yrs
|
Factor
|
Yield
|
Rate
|
Per Share
|
Non-qualified
stock options
|
9.78
Years
|
348,032
|
6.14
|
57.1%
|
0%
|
2.62%
|
$3.45
|
Non-qualified
stock options
|
9.38
Years
|
1,163,724
|
Ranging
from 4.88 to 5.94
|
Ranging
from 50.6% to 55.1%
|
0%
|
Ranging
from 3.24% to 3.40%
|
Ranging
from $3.25 to $3.79
|
Total
|
1,511,756
|
Name
|
Grant
Date
|
All
Other Option
Awards:
Number
of
Securities
Underlying
Options
(#)
|
Exercise
or
Base
Price
of
Option Awards*
($/Sh)
|
Closing
Price
on
Grant Date
($)
|
Grant
Date Fair
Value
of Option
Awards
|
Charles
E. Harris
|
August
13, 2008
|
187,039
|
$6.92
|
$7.14
|
$607,877
|
Douglas
W. Jamison
|
March
19, 2008
|
72,550
|
$6.18
|
$6.20
|
$250,298
|
August
13, 2008
|
199,682
|
$6.92
|
$7.14
|
$756,795
|
|
Daniel
B. Wolfe
|
March
19, 2008
|
72,550
|
$6.18
|
$6.20
|
$250,298
|
August
13, 2008
|
199,682
|
$6.92
|
$7.14
|
$756,795
|
|
Alexei
A. Andreev
|
March
19, 2008
|
72,550
|
$6.18
|
$6.20
|
$250,298
|
August
13, 2008
|
199,682
|
$6.92
|
$7.14
|
$756,795
|
|
Michael
A. Janse
|
March
19, 2008
|
72,550
|
$6.18
|
$6.20
|
$250,298
|
August
13, 2008
|
199,682
|
$6.92
|
$7.14
|
$756,795
|
|
*Equals
the closing volume weighted average price on the date of
grant.
|
Option
Awards
|
||||
Name
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Charles
E. Harris
|
681,530
|
0
|
$10.11
|
June
26, 2016
|
18,711
|
0
|
$10.11
|
June
26, 2016
|
|
26,666
|
0
|
$10.11
|
June
26, 2009
|
|
240,981
|
0
|
$11.11
|
June
26, 2016
|
|
187,039
|
0
|
$6.92
|
Dec.
27, 2017
|
|
Douglas
W. Jamison
|
18,538
|
59,346 (1)
|
$10.11
|
June
26, 2016
|
160,000
|
0
|
$10.11
|
June
26, 2009
|
|
0
|
92,365(2)
|
$11.11
|
Dec.
27, 2010
|
|
110,135
|
0
|
$11.11
|
Dec.
27, 2009
|
|
0
|
72,550(3)
|
$6.18
|
Dec.
27, 2017
|
|
0
|
199,682(4)
|
$6.92
|
Dec.
27, 2017
|
|
Daniel
B. Wolfe
|
27,076
|
59,346 (1)
|
$10.11
|
June
26, 2016
|
53,334
|
0
|
$10.11
|
June
26, 2009
|
|
0
|
29,557(2)
|
$11.11
|
Dec.
27, 2010
|
|
35,243
|
0
|
$11.11
|
Dec.
27, 2009
|
|
0
|
72,550(3)
|
$6.18
|
Dec.
27, 2017
|
|
0
|
199,682(4)
|
$6.92
|
Dec.
27, 2017
|
|
Alexei
A. Andreev
|
22,626
|
59,346(1)
|
$10.11
|
June
26, 2016
|
160,000
|
0
|
$10.11
|
June
26, 2009
|
|
88,108
|
0
|
$11.11
|
Dec.
27, 2009
|
|
0
|
73,892(2)
|
$11.11
|
Dec.
27, 2010
|
|
0
|
72,550(3)
|
$6.18
|
Dec.
27, 2017
|
|
0
|
199,682(4)
|
$6.92
|
Dec.
27, 2017
|
|
Michael
A. Janse
|
248,108
|
0
|
$11.11
|
Dec.
27, 2009
|
0
|
73,892(2)
|
$11.11
|
Dec.
27, 2010
|
|
19,782
|
59,346(5)
|
$11.11
|
June
26, 2016
|
|
0
|
72,550(4)
|
$6.18
|
Dec.
27, 2017
|
|
0
|
199,682(4)
|
6.92
|
Dec.
27,
2017
|
(1)
|
Options
vest in six equal installments on June 26, 2009, June 26, 2010, June 26,
2011, June 26, 2012, June 26, 2013, and June 26,
2014.
|
(2)
|
Options
vest 100% on December 27, 2009.
|
(3)
|
Options
vest in four equal installments on March 19, 2009, March 19, 2010, March
19, 2011, and March 19, 2012.
|
(4)
|
Options
vest in four equal installments on August 13, 2009, August 13, 2010,
August 13, 2011 and August 13,
2012.
|
(5)
|
Options
vest in six equal installments on June 27, 2009, June 27, 2010, June 27,
2011, June 27, 2012, June 27, 2013, and June 27,
2014.
|
Option
Awards
|
||
Name
|
Number
of Shares
Acquired
on Exercise
(#)
|
Value
Realized on
Exercise
($)
|
Charles
E. Harris
|
0
|
0
|
Douglas
W. Jamison
|
0
|
0
|
Daniel
B. Wolfe
|
0
|
0
|
Alexei
A. Andreev
|
0
|
0
|
Michael
A. Janse
|
0
|
0
|
Name
|
Plan
Name
|
Number
of Years
Credited
Service
(#)
|
Present
Value of
Accumulated
Benefits
($)
|
Payments
During
Last
Fiscal Year
($)
|
Charles
E. Harris
|
Executive
Mandatory
Retirement
Plan
|
25
|
151,443
|
0
|
Douglas
W. Jamison
|
Executive
Mandatory
Retirement
Plan
|
4
|
0
|
0
|
Daniel
B. Wolfe
|
Executive
Mandatory
Retirement
Plan
|
1
|
0
|
0
|
Name
|
Executive
Contributions
in
Last FY
($)
|
Registrant
Contribution
in
Last
FY
($)(1)
|
Aggregate
Earnings
in
Last
FY
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last
FYE
($)
|
Charles
E. Harris
|
0
|
314,623
|
96,528
|
2,889,717
|
188,454
|
(1)
|
This
amount is included in the Summary Compensation Table under "All Other
Compensation."
|
Name
of Director
|
Fees
Earned or Paid
in
Cash ($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||
Independent
Directors:
|
||||||
W.
Dillaway Ayres, Jr.
|
40,500
|
0
|
40,500
|
|||
Dr.
C. Wayne Bardin
|
39,000
|
0
|
39,000
|
|||
Dr.
Phillip A. Bauman
|
42,000
|
0
|
42,000
|
|||
G.
Morgan Browne
|
43,500
|
0
|
43,500
|
|||
Dugald
A. Fletcher
|
52,500
|
0
|
52,500
|
|||
Charles
E. Ramsey
|
37,500
|
0
|
37,500
|
|||
James
E. Roberts
|
51,000
|
0
|
51,000
|
|||
Richard
P. Shanley
|
41,750
|
0
|
41,750
|
|||
Interested
Directors:
|
||||||
Charles
E. Harris(1)(2)
|
0
|
0
|
0
|
|||
Douglas
W. Jamison(1)
|
0
|
0
|
0
|
|||
Kelly
S. Kirkpatrick
|
6,025
|
3,000(3)
|
9,025
|
|||
Lori
D. Pressman
|
21,000
|
41,863(4)
|
62,863
|
(1)
|
Mr.
Harris and Mr. Jamison do not receive additional compensation as
Directors. Refer to the "2008 Summary Compensation Table" for
details of Mr. Harris's and Mr. Jamison's compensation for
2008.
|
(2)
|
Mr.
Harris retired pursuant to the Company's Mandatory Retirement Benefit Plan
on December 31, 2008.
|
(3)
|
Represents
$3,000 for consulting services. Kelly S. Kirkpatrick did not
stand for re-election at the Annual Meeting held on May 1,
2008.
|
(4)
|
Represents
$41,863 for consulting services. Ms. Pressman may be considered
an "interested person" because of consulting work performed for
us. Additionally, Ms. Pressman was paid $22,413 and $3,438 in
2008 for consulting work for two of our portfolio companies, Ancora
Pharmaceuticals and Phoenix Molecular, respectively. Ms.
Pressman's total compensation paid by us and our portfolio companies for
the last two fiscal years is
$153,777.
|
Fiscal
Year Ended
December
31, 2008
|
Fiscal
Year Ended
December
31, 2007
|
|||||||
Audit
Fees
|
$ | 395,500 | $ | 338,800 | ||||
Audit-Related
Fees
|
0 | 0 | ||||||
Tax
Fees
|
33,000 | 30,000 | ||||||
All
Other Fees
|
1,626 | 1,626 | ||||||
TOTAL
FEES:
|
$ | 430,126 | $ | 370,426 |
By
Order of the Board of Directors,
|
|
New
York, New York
|
Sandra
M. Forman
|
March
25, 2009
|
Secretary
|