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Exhibit
10.11
AMENDED AND
RESTATED
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT (the “ Agreement
”) is effective as of December 4, 2007 by and
between Jackson Hewitt Tax Service Inc. (the “
Company ”) and Mark L. Heimbouch (the
“ Executive ”).
WHEREAS , the Company
and the Employee have entered into that certain Employment
Agreement dated as of July 20, 2006 (the “ Original
Agreement ”);
WHEREAS , the Company
and the Employee desire to amend and restate the Original Agreement
as provided hereby;
NOW THEREFORE , in
consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree to amend and restate the
Original Agreement as follows:
SECTION 1
EMPLOYMENT
1.1 The Company agrees
to employ the Executive and the Executive agrees to be employed by
the Company for the Period of Employment as provided in
Section 3 below and upon the terms and conditions provided in
this Agreement.
SECTION 2
POSITION AND
RESPONSIBILITIES
2.1 During the Period
of Employment, the Executive will serve as Senior Executive Vice
President and Chief Operating Officer of the Company and, subject
to the direction of the Chief Executive Officer of the Company (the
“ Supervising Officer ”), will perform such
duties and exercise such supervision with regard to the business of
the Company as are associated with such position, as well as such
additional duties as may be prescribed from time to time by the
Supervising Officer. In addition, Executive shall serve as Interim
Chief Financial Officer and Treasurer until such time that the
Supervising Officer determines that Executive shall no longer need
to serve in such capacities.
2.2 The Executive
will, during the Period of Employment, devote substantially all of
his time and attention during normal business hours to the
performance of services for the Company, except during customary
vacation periods and periods of illness. The Executive will
maintain a primary office and conduct his business in Parsippany,
New Jersey, except for normal and reasonable business travel in
connection with his duties hereunder. Nothing contained in this
Agreement will prevent the Executive from serving on civic and
charitable boards or from conducting his personal
affairs.
2.3 The Executive
will, in accordance with the Company’s policy and procedures
and applicable law, give the appropriate certifications with
respect to the Company’s publicly filed financial
statements.
SECTION 3
PERIOD OF
EMPLOYMENT
3.1 The period of the
Executive’s employment under this Agreement (the “
Period of Employment ”) will begin on the date of
this Agreement and end on the third anniversary of such date,
subject to extension or termination as provided in this Agreement.
The Period of Employment shall automatically be extended for
successive one year terms until such time that the Company delivers
written notice to the Executive that this Agreement shall not be so
extended in accordance with the following sentence. To be
effective, such written notice must be delivered by the Company to
the Executive not less than 90 nor more than 180 days prior to the
end of the initial Period of Employment (or any subsequent Period
of Employment, as the case may be).
SECTION 4
COMPENSATION AND
BENEFITS
4.1
Compensation . For all services rendered by the Executive
pursuant to this Agreement during the Period of Employment,
including services as an executive, officer, director or committee
member of the Company or any subsidiary or affiliate thereof, the
Executive will be compensated as follows:
(a) Base Salary
. The Company will pay the Executive a fixed base salary (“
Base Salary ”) of not less than $475,000, per
year. From time to time, the Executive may be eligible to receive
annual increases as the Company deems appropriate, in accordance
with the Company’s customary policies and procedures
regarding the salaries of executive officers, including pursuant to
annual compensation reviews to occur no less than once per year,
and with due consideration given to the published Consumer Price
Index applicable to the New York/New Jersey greater metropolitan
area. Annual salary increases shall be effective as of the
beginning of each fiscal year (commencing with the 2009 fiscal
year). Base Salary will be payable according to the customary
payroll practices of the Company, but in no event less frequently
than once each month.
(b) Annual
Incentive Awards . The Executive will be eligible for
discretionary annual incentive compensation awards. The Executive
will be eligible to receive an annual bonus opportunity in respect
of each fiscal year of the Company during the Period of Employment
based upon a target bonus equal to no less than 100% of his then
current Base Salary during such fiscal year (“ Target
Bonus ”); provided, however, that such bonus will be
subject to the attainment by the Company of applicable performance
targets reasonably established and certified by the Board or the
Compensation Committee of the Board (the “ Committee
”); provided, further, that such performance targets shall
provide for an annual bonus opportunity of not less than 200% of
Target Bonus. Performance criteria for the Executive shall be based
on Company performance targets and individual performance targets.
The performance targets may relate to such financial and/or
business criteria of the Company and its subsidiaries or business
units, as determined by the Board and/or the Committee in its sole
discretion (each such annual bonus, an “ Incentive
Compensation Award ”).
(c) Long-Term
Incentive Awards . At such times as the Board or the
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Committee determines to conduct annual
or periodic grants of long term incentive awards to employees and
officers of the Company, the Executive will be eligible to receive
such grants, subject to the sole and complete discretion of the
Board or the Committee, and upon such terms and conditions as
determined by the Board or the Committee, but with due
consideration given to the Executive’s position with the
Company and the Executive’s historical performance and
anticipated future contributions to the Company.
(d) Additional
Benefits .
(i) Other Compensation
. The Executive will be entitled to participate in all other
compensation and employee benefit plans or programs offered
generally to employees of the Company, and will receive all
perquisites offered to executive officers of the Company, in either
case pursuant to any plan or program now in effect, or later
established by the Company. The Executive will participate to the
extent permissible under the terms and provisions of such plans or
programs, and in accordance with the terms of such plans and
programs.
(ii) Vacation, Holidays
and Sick Leave . During the Period of Employment, the Executive
shall be entitled to paid vacation and paid holidays and sick leave
in accordance with the Company’s standard policies for its
executive officers.
(iii) Services
Furnished . The Company shall furnish the Executive with office
space, secretarial assistance and such other facilities and
services as shall be suitable to the Executive’s position and
adequate for the performance of his duties hereunder or otherwise
suitable.
SECTION 5
BUSINESS
EXPENSES
5.1 The Company will
reimburse the Executive for all reasonable travel and other
expenses incurred by the Executive in connection with the
performance of his duties and obligations under this Agreement. The
Executive will comply with such limitations and reporting
requirements with respect to expenses as may be established by the
Company from time to time and will promptly provide all appropriate
and requested documentation in connection with such
expenses.
SECTION 6
DISABILITY
6.1 If the Executive
becomes Disabled, as defined below, during the Period of
Employment, the Period of Employment may be terminated at the
option of the Executive upon notice of resignation to the Company,
or at the option of the Company upon 30 days’ advance notice
of termination to the Executive. The Company’s obligation to
make payments to the Executive under this Agreement will cease as
of such date of termination, except for Base Salary and Incentive
Compensation Awards earned but unpaid as of the date of such
termination, and except for payment of a pro rata portion of his
Incentive Compensation Award in respect of the fiscal year in which
such termination occurs (paid at target level). In addition, upon
such event, all of the Executive’s outstanding and unvested
stock options and any other equity awards or
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other incentive or compensation that is
subject to vesting will become immediately and fully vested and
exercisable and all such options, awards, incentives and
compensation shall remain exercisable in accordance with the terms
of the respective plans and/or agreements. For purposes of this
Agreement, “ Disabled ” means the
Executive’s inability to perform his duties hereunder as a
result of serious physical or mental illness or injury for a period
of no less than 180 days, together with a determination by an
independent medical authority that the Executive is currently
unable to perform such duties. Such medical authority shall be
mutually and reasonably agreed upon by the Company and the
Executive and such opinion shall be binding on the Company and the
Executive.
SECTION 7
DEATH
7.1 In the event of
the death of the Executive during the Period of Employment, the
Period of Employment will end and the Company’s obligation to
make payments under this Agreement will cease as of the date of
death, except for Base Salary and Incentive Compensation Awards
earned but unpaid through the date of death, and except for payment
of a pro rata portion of his Incentive Compensation Award in
respect of the fiscal year in which his death occurs (paid at
target level); provided that such Incentive Compensation Award
shall not be prorated if the date of death occurs in the last four
months of the fiscal year. In addition, upon such event, all of the
Executive’s outstanding and unvested stock options and any
other equity awards or other incentive or compensation that is
subject to vesting will become immediately and fully vested and
exercisable and all such options, awards, incentives and
compensation shall remain exercisable in accordance with the terms
of the respective plans and/or agreements. All such amounts will be
paid to the Executive’s surviving spouse, estate or personal
representative, as applicable.
SECTION 8
EFFECT OF TERMINATION
OF EMPLOYMENT
8.1 Without Cause
Termination and Constructive Discharge . If the
Executive’s employment terminates due to either a Without
Cause Termination or a Constructive Discharge, as defined below,
the Company will pay the Executive (or his surviving spouse, estate
or personal representative, as applicable) upon such Without
Cause Termination or Constructive Discharge (i) a lump sum
cash payment equal to the sum of the Executive’s then current
Base Salary plus his then current target Incentive Compensation
Award, multiplied by the Severance Multiplier (as defined below),
(ii) any and all Base Salary and Incentive Compensation Awards
earned but unpaid through the date of such termination and
(iii) an amount equal to Incentive Compensation Award at
target level for the year in which the termination occurs. In
addition, upon such event;, all of the Executive’s
outstanding and unvested stock options and any other equity awards
or other incentive or compensation that is subject to vesting will
become immediately and fully vested and exercisable and all
outstanding options, awards, incentives and compensation shall be
extended and remain exercisable until the later of
(1) December 31st of the year in which they would
otherwise have expired or (2) the 15th day of the 3rd month
following the month in which they would have expired; provided
however, that awards granted after the date of execution of the
Original Agreement shall be extended and remain exercisable until
the later of the foregoing and the second anniversary of the date
of termination (subject to
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the original expiration date of the
option). In addition, the Executive shall be entitled to continue
coverage under all health and welfare plans for the Executive and
members of the Executive’s immediate family including medical
and dental benefits, for up to twenty-four (24) months with
the Executive’s cost being no greater than the cost
applicable to the Executive had the Executive been an active full
time employee of the Company at such time.
8.2 Termination for
Cause; Resignation . If the Executive’s employment
terminates due to a Termination for Cause or a Resignation, Base
Salary and any Incentive Compensation Awards earned but unpaid as
of the date of such termination will be paid to the Executive in a
lump sum. Except as provided in this paragraph, the Company will
have no further obligations to the Executive hereunder. All of the
Executive’s outstanding options, awards, incentives and
compensation shall be governed by the plan and/or agreement
pursuant to which it was granted, issued or provided.
8.3 For purposes of
this Agreement, the following terms have the following
meanings:
(a) “
Termination for Cause ” means (i) the
Executive’s willful failure to substantially perform his
duties as an employee of the Company or any subsidiary thereof
(other than any such failure resulting from incapacity due to
physical or mental illness), (ii) any act of fraud,
misappropriation, embezzlement, material dishonesty or similar
conduct, in each case against the Company or any subsidiary,
(iii) the Executive’s conviction of a felony or any
crime involving moral turpitude (which conviction, due to the
passage of time or otherwise, is not subject to further appeal),
(iv) the Executive’s gross negligence in the performance
of his duties or (v) the Executive makes (or has been found to
have made) a false certification to the Company pertaining to
its financial statements. The Company will provide the Executive a
written notice which describes the circumstances being relied on
for the termination with respect to this paragraph. The Executive
will have thirty (30) days after receipt of such notice to
remedy the situation prior to the effectiveness of the Termination
for Cause, unless the Company reasonably and in good faith
determines that such situation is incurable. A Termination for
Cause shall not be effective hereunder unless the Executive is
first given an opportunity to address the Board, with his counsel
present if he so elects, upon reasonable notice in advance of any
action taken by the Board.
(b) “
Constructive Discharge ” means (i) any material
failure of the Company to fulfill its obligations under this
Agreement (including without limitation any reduction of the Base
Salary, as the same may be increased during the Period of
Employment, or other element of compensation), (ii) a material
and adverse change to the Executive’s titles, positions,
duties, scope of authority, and responsibilities to the Company,
(iii) the relocation of the Executive’s primary business
office to a location more than 20 miles from Parsippany, New Jersey
or (iv) the Company fails to cause this Agreement to be
assumed by any successor to the business of the Company. The
Executive will provide the Company a written notice which describes
the circumstances being relied on for the termination with respect
to this Agreement within sixty (60) days after the event
giving rise to the notice. The Company will have sixty
(60) days after receipt of such notice to remedy the situation
prior to the termination for Constructive Discharge.
(c) “ Without
Cause Termination ” or “ Terminated Without
Cause ” means termination of the Executive’s
employment by the Company other than due to death, disability, or
Termination for Cause.
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(d) “
Resignation ” means a termination of the
Executive’s employment by the Executive, other than in
connection with a Constructive Discharge.
(e) “
Severance Multiplier ” means 200%; provided, however,
that Severance M
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