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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 30, 2005
JACK HENRY & ASSOCIATES, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-14112 43-1128385
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
663 Highway 60, P.O. Box 807, Monett, MO 65708
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (417) 235-6652
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a.-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement
At a special meeting of the Board of Directors of Jack Henry &
Associates, Inc. (the "Company") on August 30, 2005, the Board approved
bonus plans for its executive officers and its general managers, authorized
the Company to enter into Termination Benefits Agreements with certain of
its executives, and increased certain meeting fees to be paid to its non-
employee directors.
The 2006 Executive Bonus Plan, a copy of which is attached hereto as
Exhibit 10.22 and incorporated by reference into this Item 1.01, establishes
a bonus plan for the Chief Executive Officer, the President and the Chief
Financial Officer of the Company. Under the plan, a bonus of up to 60% of
annual salary may be paid to an executive officer following the end of the
current fiscal year (July 1, 2005 - June 30, 2006) if net income growth of
20% for the current fiscal year is achieved by the Company and if other
specific objectives are attained by the officer. No bonus is payable to any
officer under the plan unless the net income growth goal of 20% increase is
achieved. Half of such bonus is payable if the net income growth goal is
met and the other half may be paid upon attainment of individual objectives
established by the Board of Directors or Compensation Committee of the
Board. Executive bonuses under this plan may be paid in cash, restricted
stock or deferred compensation.
The 2006 General Manager Bonus Plan, a copy of which is attached
hereto as Exhibit 10.23 and incorporated by reference into this Item 1.01,
establishes a bonus plan for the General Counsel, Corporate Secretary,
Controller and certain other General Managers of the Company. Under this
plan, a bonus of up to 50% of annual salary may be paid to a General Manager
following the end of the current fiscal year if net income growth of 20% for
the current fiscal year is achieved by the Company and if other specific
objectives are attained by the individual General Manager. As in the 2006
Executive Bonus Plan, no bonus is payable to any individual under this plan
unless the net income growth goal of 20% increase is achieved. Half of such
bonus is payable if the net income growth goal is met and the other half
may be paid upon attainment of individual objectives established by the
individual's direct supervisor.
Both of these bonus plans reflect the common purpose of rewarding
performance that achieves the Company's core business objective of year-
over-year growth in net income.
In conjunction with its annual consideration of changes in executive
compensation, the Board authorized the Company to enter into Termination
Benefits Agreements with the Chief Executive Officer, the President, the
Chief Financial Officer, and the General Counsel of the Company. The
common form of these agreements is attached hereto as Exhibit 10.24 and
incorporated by reference into this Item 1.01. Recognizing that any future
threatened or actual change in control such as an acquisition or merger
could cause disruption and harm to the Company in the event of resulting
loss of key executives, the Termination Benefits Agreements are intended
to provide an incentive to retain the specified executives through the
resolution of a threat or through the change in control. Under the
Agreement, the executive will receive two times his base salary if
terminated within the first 12 months after a change in control or one time
his base salary if terminated during the second 12 month period following a
change in control. Change in control is defined as an acquisition of 35% or
more of the stock of the Company, termination of service of a majority of
the members of the Board of Directors during any two year period for reasons
other than death, disability or retirement, approval by the shareholders of
liquidation of the Company or sale of 50% or more of its assets, or approval
by the shareholders of a merger or consolidation if the Company shareholders
own less than 50% of the combined voting power of the resulting corporation.
The termination benefits will be paid upon any termination of the executive
during the two years following any change in control unless the termination
occurs by reason of the executive's death, disability, retirement, or if the
termination is for "cause." The Termination Benefits Agreements have terms
of two years, will automatically renew thereafter for two year terms unless
terminated by the Board of Directors, and the Agreements may not be
terminated following any change in control.
The Board of Directors also increased the fees payable to the Company's
independent directors for attending in person Board meetings to $1,500, an
increase of $300 per meeting. The fee for attending telephone meetings of
the Audit Committee was increased to $600, an increase of $200 per meeting.
A fee of $400 was established for attendance of Compensation and Governance
Committee meetings.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.22 2006 Executive Bonus Plan
10.23 2006 General Manager Bonus Plan
10.24 Termination Benefits Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JACK HENRY & ASSOCIATES, INC.
(Registrant)
Date: September 2, 2005 By: /s/ Kevin D. Williams
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Kevin D. Williams
Chief Financial Officer
EXHIBIT 10.22
2006 Executive Bonus Plan
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Upon recommendation of the Compensation Committee, the Board of
Directors of Jack Henry & Associates, Inc. hereby establishes the following
as the 2006 Executive Bonus Plan for the company's Chief Executive Officer,
President and Chief Financial Officer (the "Executives") this 30th day of
August, 2005:
Following the end of the current fiscal year (July 1, 2005 - June 30,
2006), the Executives shall be paid a performance-based bonus of up to 60%
of their annual salary paid during the fiscal year. No bonuses under this
plan shall be paid to any Executive unless the company attains a growth
in net income of 20% for the current fiscal year (the "Net Income Growth
Goal"). Half of the bonus amount, equal to 30% of annual salary, would
be paid to each of the Executives upon attainment of the Net Income Growth
Goal. The remaining half of the bonus amount (30% of annual salary)
shall be paid to an Executive if specific objectives are attained by
the Executive. These specific objectives for each Executive shall
be established by the Board of Directors or, if so delegated, by the
Compensation Committee. Executive bonuses may be paid in cash, restricted
stock or deferred compensation.
EXHIBIT 10.23
2006 General Manager Bonus Plan
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Upon recommendation of the Compensation Committee, the Board of
Directors of Jack Henry & Associates, Inc. hereby establishes the following
as the 2006 General Manager Bonus Plan for the company's non-commissioned
General Managers, General Counsel, Corporate Secretary, and Controller (the
"General Managers") this 30th day of August, 2005:
Following the end of the current fiscal year (July 1, 2005 - June 30,
2006), the General Managers shall be paid a performance-based bonus of up
to 50% of their annual salary paid during the fiscal year. No bonuses under
this plan shall be paid to any General Manager unless the company attains a
growth in net income of 20% for the current fiscal year (the "Net Income
Growth Goal"). Half of the bonus amount, equal to 25% of annual salary,
would be paid to each of the General Managers upon attainment of the Net
Income Growth Goal. The remaining half of the bonus amount (25% of annual
salary) shall be paid to a General Manager if specific departmental or other
objectives are attained by the General Manager. These specific objectives
for each General Manager shall be established by the executive officer to
whom the General Manager reports.
EXHIBIT 10.24
TERMINATION BENEFITS AGREEMENT
THIS AGREEMENT, dated as of the ____ day of August, 2005, is by
and between Jack Henry & Associates, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), and ____________________________
(hereinafter the "Executive").
A. The Board of Directors of the Company (the "Board") considers
it essential to the best interests of the Company and its shareholders that
its key management personnel be encouraged to remain with the Company and
its subsidiaries and to continue to devote full attention to the Company's
business in the event that any third person expresses its intention to
complete a possible business combination with the Company, or in taking any
other action which could result in a change in control of the Company. The
Board has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of key members of
the Company's management to their assigned duties without distraction in
the face of the potentially disturbing circumstances arising from the
possibility of a change in control of the Company.
B. The Executive currently serves as a key executive of the
Company and his or her services and knowledge are valuable to the Company in
connection with the management of one or more of the Company's principal
operating facilities, divisions, subsidiaries or functions. The Board
believes the Executive has made and is expected to continue to make valuable
contributions to the productivity and profitability of the Company and its
subsidiaries.
C. Should the Company receive any proposal from a third person
concerning a possible business combination or any other action which could
result in a change in control of the Company, the Board believes it
imperative that the Company and the Board be able to rely upon the Executive
to continue in his or her position, and that the Company and the Board be
able to receive and rely upon his or her advice, if so requested, as to the
best interests of the Company and its shareholders without concern that he
or she might be distracted by the personal uncertainties and risks created
by such a proposal, and to encourage Executive's full attention and
dedication to the Company.
D. Should the Company receive any such proposal, in addition to
the Executive's regular duties, the Executive may be called upon to assist
in the assessment of such proposal, advise management and the Board as to
whether such proposal would be in the best interests of the Company and its
shareholders, to negotiate and structure the transaction, and to take such
other actions as the Board might determine to be necessary or appropriate.
NOW, THEREFORE, to assure the Company and its subsidiaries that it
will have the continued, undivided attention, dedication and services of the
Executive and the availability of the Executive's advice and counsel
notwithstanding the possibility, threat or occurrence of a change in control
of the Company, and to induce the Executive to remain in the employ of the
Company and its subsidiaries, and for other good and valuable consideration,
the adequacy and sufficiency of which are hereby acknowledged, the Company
and the Executive agree as follows:
1. Change in Control. For purposes of this Agreement, a "Change in
Control" of the Company shall be deemed to have occurred upon (a) the
acquisition at any time by a "person" or "group" (as that term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (excluding, for this purpose, the Company or
any subsidiary or any employee benefit plan of the Company or any
subsidiary) of beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly, of securities representing 35% or
more of the combined voting power in the election of directors of the
then-outstanding securities of the Company or any successor of the Company;
(b) the termination of service as directors, for any reason other than
death, disability or retirement from the Board, during any period of two
consecutive years or less, of individuals who at the beginning of such
period constituted a majority of the Board, unless the election of or
nomination for election of each new director during such period was approved
by a vote of at least two-thirds of the directors still in office who were
directors at the beginning of the period; (c) approval by the shareholders
of the Company of liquidation of the Company or any sale or disposition, or
series of related sales or dispositions, of 50% or more of the assets or
earning power of the Company; or (d) approval by the shareholders of the
Company and consummation of any merger or consolidation or statutory share
exchange to which the Company is a party as a result of which the persons
who were shareholders of the Company immediately prior to the effective date
of the merger or consolidation or statutory share exchange shall have
beneficial ownership of less than 50% of the combined voting power in the
election of directors of the surviving corporation following the effective
date of such merger or consolidation or statutory share exchange.
2. Termination Following Change in Control. If any of the events
described in Section 1 hereof constituting a Change in Control of the
Company shall have occurred, the Executive shall be paid an amount equal to
two (2) times his Annual Base Salary (as defined below) upon any termination
by the Company or its successor of the Executive's employment with the
Company or its successor within the initial twelve months, or shall be paid
an amount equal to one (1) time his Annual Base Salary upon any termination
by the Company or its successor of the Executive's employment with the
Company or its successor within the second twelve months following a Change
in Control, which amounts shall be paid upon any termination except the
following:
(i) Termination by reason of the Executive's death;
(ii) Termination by reason of the Executive's disability;
for the purposes of this Agreement, "disability" shall be defined as the
Executive's inability by reason of illness or other physical or mental
disability to perform the principal duties required by the position held by
the Executive at the inception of such illness or disability for any
consecutive 90-day period. A determination of "disability" shall be subject
to the certification of a qualified medical doctor agreed to by the Company
and the Executive or, in the Executive's incapacity to designate a doctor,
the Executive's legal representative. If the Company and the Executive
cannot agree on the designation of a doctor, each party shall nominate a
qualified medical doctor and the two doctors shall select a third doctor;
the third doctor shall make the determination as to "disability";
(iii) Termination by reason of retirement in accordance
with and under the Company's retirement plan; or
(iv) Termination by the Company for "Cause". For purposes of
this Agreement, "Cause" shall mean (A) failure of the Executive to
adequately perform his duties assigned by the Board; (B) any act or acts of
gross dishonesty or gross misconduct on the Executive's part which result or
are intended to result directly or indirectly in gain or personal enrichment
at the expense of the Company or its subsidiaries to which the Executive is
not legally entitled; or (C) any material violation by the Executive of his
or her obligations under this Agreement (other than any violation resulting
from the Executive's incapacity due to physical or mental illness), which
violation is demonstrably willful and deliberate on the Executive's part and
which results in material damage to the business or reputation of the
Company or its subsidiaries.
For purposes of this Agreement, the "Annual Base Salary" shall be the
higher of the Executive's annual base salary then in effect at the time of
termination or in effect at the time of the Change in Control.
Payment of this benefit shall be made in a single lump cash sum within
30 days following such termination.
3. Excise Tax Payments. Notwithstanding anything contained in this
Agreement to the contrary, in the event that any payment (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended or replaced (the "Code")), or distribution to or for the benefit of
the Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise in connection with, or
arising out of, his or her employment with the Company (a "Payment" or
"Payments"), would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, interest and penalties
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all such taxes (including
any interest or penalties imposed with respect to such taxes), including any
Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. The Gross-Up Payment shall be made at the same time as the
payment under Section 2.
4. Mitigation. The Executive is not required to seek other
employment or otherwise mitigate the amount of any payments to be made by
the Company pursuant to this Agreement, and employment by the Executive will
not reduce or otherwise affect any amounts or benefits due the Executive
pursuant to this Agreement.
5. Successors.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement
to assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if
no such succession had taken place. For purposes of this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, beneficiaries, devises and
legatees. If the Executive should die while any amounts are payable to him
or her hereunder, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, beneficiary or other designee or, if there be no such
designee, to the Executive's estate.
6. Term. This Agreement shall have a term of two years from the
date hereof, and shall automatically renew for successive two year terms
thereafter unless terminated by written notice from the Board of Directors
to the Executive given at least 30 days prior to the end of a term;
provided, however, that this Agreement may not be terminated following any
Change in Control.
7. Notices. For the purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered by
hand, (ii) on the date of transmission, if delivered by confirmed facsimile,
(iii) on the first business day following the date of deposit if delivered
by guaranteed overnight delivery service, or (iv) on the third business day
following the date delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: ______________________________
______________________________
______________________________
______________________________
If to the Company: Jack Henry & Associates, Inc.
663 Highway 60
Monett, MO 65708
Attention: President
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
8. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Missouri, without regard to principles of conflicts of laws.
9. Miscellaneous. No provisions of this Agreement may be amended,
modified, waived or discharged unless such amendment, waiver, modification
or discharge is agreed to in writing signed by the Executive and the
Company. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. Section headings
contained herein are for convenience of reference only and shall not affect
the interpretation of this Agreement.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which will constitute one and the same instrument.
11. Non-Assignability. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other,
assign, or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 11. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or
otherwise, other than a transfer by his or her will or trust or by the laws
of descent or distribution, and in the event of any attempted assignment or
transfer contrary to this paragraph the Company shall have no liability to
pay any amount so attempted to be assigned or transferred.
12. No Setoff. The Company shall have no right of setoff or
counterclaim in respect of any claim, debt or obligation against any payment
provided for in this Agreement.
13. Non-Exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company
or any of its subsidiaries or successors and for which the Executive may
qualify, nor shall anything herein limit or reduce such rights as the
Executive may have under any other agreements with the Company or any of its
subsidiaries or successors. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
Company or any of its subsidiaries shall be payable in accordance with such
plan or program, except as explicitly modified by this Agreement.
14. No Guaranteed Employment. The Executive and the Company
acknowledge that this Agreement shall not confer upon the Executive any
right to continued employment and shall not interfere with the right of the
Company to terminate the employment of the Executive at any time.
15. Invalidity of Provisions. In the event that any provision of
this Agreement is adjudicated to be invalid or unenforceable under
applicable law in any jurisdiction, the validity or enforceability of the
remaining provisions thereof shall be unaffected as to such jurisdiction and
such adjudication shall not affect the validity or enforceability of such
provision in any other jurisdiction.
16. Non-Waiver of Rights. The failure by the Company or the
Executive to enforce at any time any of the provisions of this Agreement or
to require at any time performance by the other party of any of the
provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement, or any part
hereof, or the right of the Company or the Executive thereafter to enforce
each and every provision in accordance with the terms of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
JACK HENRY & ASSOCIATES, INC.
By: _______________________________
Title: _______________________________
EXECUTIVE:
______________________________________