Exhibit 10.1
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT
AGREEMENT (the
“Agreement”) is effective as of July 13, 2009, by
and between JACKSON HEWITT TAX SERVICE INC. (the
“Company”) and HARRY W. BUCKLEY (the
“Executive”).
WHEREAS , the Company desires to employ the Executive as
its President and Chief Executive Officer, and the Executive
desires to serve the Company in such capacities, effective as of
the date hereof.
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 as follows:
SECTION I
EMPLOYMENT
The Company agrees to employ the
Executive, and the Executive agrees to be employed by the Company,
for the Period of Employment (as defined in Section III) and upon
the terms and conditions provided in this Agreement.
SECTION II
POSITION AND
RESPONSIBILITIES
A. During the Period of Employment,
the Executive will serve as the President and Chief Executive
Officer of the Company and, subject to the direction of the Board
of Directors of the Company (the “Board”), will perform
such duties and exercise such supervision with regard to the
business of the Company as are associated with such positions, as
well as perform such additional duties as may be prescribed from
time to time by the Board. Without limiting the generality of the
foregoing, the Executive’s duties as the President and Chief
Executive Officer of the Company will include assisting the Board,
or the appropriate committee thereof, in identifying, evaluating
and recruiting the Executive’s successor. In addition, the
Executive has been elected to serve as a member of the Board and
will continue to serve in such capacity during the Period of
Employment, subject to the Executive’s re-nomination and
re-election to the Board. The Board, or the appropriate committee
thereof, will re-nominate the Executive for re-election for
additional terms of service on the Board during the Period of
Employment. During the Period of Employment, the Executive shall
not be entitled to any additional compensation for his service on
the Board.
B. 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, but the Executive shall not be required to move
his principal residence to such location. Nothing contained in
this
Agreement will prevent the Executive from
serving on civic and charitable boards or from conducting his
personal affairs.
C. The Executive will, in accordance
with the Company’s policy and procedures and applicable law,
give appropriate certifications with respect to the accuracy of the
Company’s publicly-filed financial statements, as
applicable.
SECTION III
PERIOD OF
EMPLOYMENT
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 June 4, 2011, subject to termination as provided in this
Agreement.
SECTION IV
COMPENSATION AND
BENEFITS
For all services rendered by the
Executive pursuant to this Agreement during the Period of
Employment, including services as an officer, director or committee
member of the Company or any subsidiary or affiliate thereof, the
Executive will be compensated as follows:
(i) Base Salary . The Company
will pay the Executive a fixed base salary of not less than
$500,000 per year (the “Base Salary”). 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. Base Salary will be payable
according to the customary payroll practices of the Company, but in
no event less frequently than once each month.
(ii) 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 a specified percentage of the
Executive’s then-current Base Salary during such fiscal year
(the “Target Level”), which percentage shall be
established by the Compensation Committee (the
“Committee”) of the Board; 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 Committee. The
performance targets may relate to such financial and/or business
criteria of the Company and its subsidiaries or business units, as
well as the Executive’s personal performance, as determined
by the Board or the Committee in its sole discretion (each such
annual bonus, an “Incentive Compensation
Award”).
(iii) Long-Term Incentive
Awards . At such times as the Board or the 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.
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(iv) Additional Benefits
.
(a) 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 generally receive all perquisites
offered to similarly situated employees of 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.
(b) Signing Bonus . The
Executive will receive a signing bonus of $100,000 payable as
follows: (1) $50,000, less applicable withholding taxes,
payable by the Company to Executive promptly upon the execution of
this Agreement by both parties hereto; and (2) $50,000, less
applicable withholding taxes, payable by the Company to Executive
no later than thirty (30) days after the first anniversary of
the date of this Agreement; provided , however , that
the Company is obligated to make the payment referenced in
subclause (2) of this paragraph only if the Executive
continues to be employed by the Company pursuant to this Agreement
on such anniversary date.
(c) Vacation, Holidays and Sick
Leave . During the Period of Employment, the Executive will be
entitled to paid vacation and paid holidays and sick leave in
accordance with the Company’s standard policies for its
officers.
SECTION V
BUSINESS
EXPENSES
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 VI
DISABILITY
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 thirty (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 such termination, except for the payment of:
(i) Base Salary and Incentive Compensation Awards earned but
unpaid as of the date of such termination and (ii) a pro rata
portion of the Incentive Compensation Award in respect of the
fiscal year in which such termination occurs (paid at the Target
Level), provided that all performance targets relating to such
Incentive Compensation Award are attained, with such pro rata
portion to be paid at such time or times as incentive compensation
awards in respect of such fiscal year are payable by the Company to
its other executive officers. In addition, upon such event, all of
the Executive’s outstanding and unvested stock options and
any other equity awards or other incentives or compensation that is
subject to vesting will become
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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 the Executive’s duties hereunder as a result of
serious physical or mental illness or injury for a period of no
less than sixty (60) 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 VII
DEATH
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 the
payment of: (i) Base Salary and Incentive Compensation Awards
earned but unpaid through the date of death and (ii) a pro
rata portion of the Incentive Compensation Award in respect of the
fiscal year in which death occurs (paid at the Target Level),
provided that all performance targets relating to such Incentive
Compensation Award are attained, with such pro rata portion to be
paid at such time or times as incentive compensation awards in
respect of such fiscal year are payable by the Company to its other
executive officers. In addition, upon such event, all of the
Executive’s outstanding and unvested stock options and any
other equity awards or other incentives 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 VIII
EFFECT OF TERMINATION OF
EMPLOYMENT
A. Without Cause Termination;
Constructive Discharge . If the Executive’s employment
terminates due to either a Without Cause Termination or a
Constructive Discharge (each as defined below), then the Company
will pay the Executive (or the Executive’s surviving spouse,
estate or personal representative, as applicable): (i) a lump
sum cash payment equal to the aggregate Monthly Base Salary (as
defined below) for the period (the “Continuation
Period”) which is the longer of (a) the number of months
remaining in the Guaranteed Payment Period (as defined below) as of
the date of such termination and (b) six (6) months;
(ii) any and all Base Salary and Incentive Compensation Awards
earned but unpaid through the date of such termination; and
(iii) a pro rata portion of the Incentive Compensation Award
in respect of the fiscal year in which such Without Cause
Termination or Constructive Discharge occurs (paid at the Target
Level), provided that all performance targets relating to such
Incentive Compensation Award are attained. The amounts payable to
the Executive by the Company pursuant to this Section VIII(A) shall
be paid: (1) with respect to amounts set forth in Section
VIII(A)(i) or (ii), no later than thirty (30) days after the
Without Cause Termination or Constructive Discharge occurs and
(2) with respect to amounts set forth in Section VIII(A)(iii),
at such time or times as incentive compensation awards in respect
of the fiscal year in which the Without Cause Termination or
Constructive Discharge occurs are payable by the Company to its
other executive
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officers. In addition, upon such event, all of
the Executive’s outstanding and unvested stock options and
any other equity awards or other incentives 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 (a) December 31st of the year in which they
would otherwise have expired or (b) the 15th day of the third
month following the month in which they would have expired.
Furthermore, upon such event, 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, during the Continuation
Period, 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 during such period.
B. Termination After a Change in
Control . Notwithstanding anything herein to the contrary, if
the Executive’s employment terminates due to either a Without
Cause Termination or a Constructive Discharge during the six
(6)-month period immediately following a Change in Control (as
defined below), then the Company will pay the Executive (or the
Executive’s surviving spouse, estate or personal
representative, as applicable), no later than thirty (30) days
after such Without Cause Termination or Constructive Discharge, a
lump sum cash payment equal to the Executive’s then-current
Base Salary, plus any and all Base Salary and Incentive
Compensation Awards earned but unpaid through the date of such
termination. In addition, upon such event, all of the
Executive’s outstanding and unvested stock options and any
other equity awards or other incentives 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 (a) December 31st of the year in which they
would otherwise have expired or (b) the 15th day of the third
month following the month in which they would have expired.
Furthermore, upon such event, 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, during the twelve (12)-month
period immediately following such termination, 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 during such period. The payments to be made, and the
benefits to be provided, by the Company to the Executive pursuant
to this Section VIII(B) are in lieu of any payments, benefits or
compensation the Executive may otherwise be entitled to receive
pursuant to Section VIII(A).
C. Termination for Cause;
Resignation . If the Executive’s employment terminates
due to a Termination for Cause or a Resignation, Base Salary earned
but unpaid as of the date of such termination will be paid to the
Executive. Except as provided in this paragraph, the Company will
have no further obligations to the Executive hereunder.
D. Certain Definitions . For
purposes of this Agreement, the following terms have the following
meanings:
(i) “Change in Control”
means a “Change in Control” as defined from time to
time in the Company’s Amended and Restated 2004 Equity and
Incentive Plan, as may be amended, or in any subsequent
plan.
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(ii) “Constructive
Discharge” means: (a) any material failure of the
Company to fulfill its obligations under this Agreement (including,
without limitation, any reduction of the Base Salary, as
