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CFO Employment Agreement - Mark L. Heimbouch, dated July 20, 2006

This is an actual contract by Jackson Hewitt Tax Service.
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Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (the " Agreement" ) effective as of July 20, 2006 by and between Jackson Hewitt Tax Service Inc. (the " Company" ) and Mark L. Heimbouch (the " Executive" ).

WHEREAS, the Company desires to employ the Executive as its Executive Vice President and Chief Financial Officer, and the Executive desires to serve the Company in such capacities. 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 provided in Section III below and upon the terms and conditions provided in this Agreement.

SECTION II

POSITION AND RESPONSIBILITIES

During the Period of Employment, the Executive will serve as Executive Vice President and Chief Financial 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. Executive may also serve as Treasurer of the Company. The Executive currently serves as a member of the Board of Directors of the Company (the " Board" ) and shall continue to serve in such capacity during the Period of Employment, subject to re-nomination and re-election. Nothing herein shall require the Company to re-nominate Executive for election for additional terms of service on the Board during the Period of Employment. 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. The Executive will, in accordance with the Company' s policy and procedures and applicable law, certify to the accuracy of the Company' s publicly filed financial statements.

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 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 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 IV

COMPENSATION AND BENEFITS 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:

i. Base Salary .

The Company will pay the Executive a fixed base salary (" Base Salary" ) of not less than $320,000, 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. 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 75% 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 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" ).

iii. Long-Term Incentive Awards Annual 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, 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. iv. Additional Benefits

(a) 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.

(b) Vacation, Holidays and Sick Leave . During the Term, 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.

(c) 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 consistent with past practice or otherwise suitable.

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 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 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 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 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 VIII EFFECT OF TERMINATION OF EMPLOYMENT

A. 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 31 st of the year in which they would otherwise have expired or (2) the 15 th day of the 3 rd month following the month in which they would have expired; provided however, that awards granted after the date of execution of this Agreement shall be extended and remain exercisable until the later of the foregoing and the second anniversary of the date of termination (subject to the original expiration date of the option). In addition, Executive shall be entitled to continue coverage under all health and welfare plans for Executive and members of Executive' s immediate family including medical and dental benefits, for up to twenty-four (24) months with Executive' s cost being no greater than the cost applicable to Executive had Executive been an active full time employee of the Company at such time.

B. 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 Executive' s outstanding options, awards, incentives and compensation shall be governed by the plan and/or agreement pursuant to
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