Exhibit 10.20

JACKSON HEWITT TAX SERVICE INC.

2004 EQUITY AND INCENTIVE PLAN

STOCK OPTION AGREEMENT

 

                This STOCK OPTION AGREEMENT is effective as of August 19, 2004
(the “Grant Date”), between Jackson Hewitt Tax Service Inc., a Delaware
corporation (the “Company”), and the optionee specified on Exhibit A attached
hereto and made a part hereof (the “Optionee”).

 

                Pursuant to the Jackson Hewitt Tax Service Inc. 2004 Equity and
Incentive Plan (the “Plan”), the Compensation Committee of the Board of
Directors of the Company (the “Committee”) has determined that the Optionee is
to be awarded, on the terms and conditions set forth herein, and on the terms
and conditions set forth in the Plan, an option (an “Option”) to purchase shares
of common stock of the Company as specified below, and hereby grants such
Option.  Capitalized terms used herein which are not defined in this Stock
Option Agreement will have the meanings set forth in the Plan.  The Optionee
acknowledges that he or she has received a copy of the Plan Prospectus.

 

                1.             Number of Shares and Purchase Price.  The
Optionee is hereby granted an Option to purchase the number of shares of common
stock of the Company specified on Exhibit A (the “Option Shares”) at the Option
Price per Share specified on Exhibit A, pursuant to the terms of this Stock
Option Agreement and the provisions of the Plan.

 

                2.             Term of Option and Conditions of Exercise.

 

                                (a) The Option has been granted as of the Grant
Date and shall terminate on the Expiration Date specified on Exhibit A, subject
to earlier termination as provided herein and in the Plan.  Upon the termination
or expiration of the Option, all rights of the Optionee in respect of such
Option hereunder shall cease.

 

                                (b) Subject to the provisions of the Plan and
this Stock Option Agreement, the Option shall vest in accordance with the
schedule set forth on Exhibit A, so long as the Optionee continues to be
employed by the Company.

 

                3.             Termination of Employment.

 

                The Option may not be exercised following the Optionee’s
termination of employment with the Company and its subsidiaries; provided,
however; that the Optionee shall have the right to exercise the Option following
any such termination of employment as follows:  (I) during a period of twelve
(12) months following the Participant’s termination of employment for any reason
whatsoever, other than death or Disability; or (ii) the period of twenty-four
(24) months following the Participant’s termination of employment by reason of
his death or Disability.

 

 

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                4.             Exercise of Option.

 

                                The Option may only be exercised in accordance
with the terms of the Plan and the administrative procedures established by the
Company and/or the Committee from time to time.  The exercise of the Option is
subject to the Optionee making appropriate tax withholding arrangements with the
Company in accordance with the terms of the Plan and the administrative
procedures established by the Company and/or the Committee from time to time.

 

                5.             Adjustment upon Changes in Capitalization.

 

                                The Option is subject to adjustment in the event
of certain changes in the capitalization of the Company, to the extent set forth
in Section 3 of the Plan.

 

                6.             Miscellaneous.

 

                                (a)           Entire Agreement.  This Stock
Option Agreement and the Plan contain all of the understandings and agreements
between the Company and the Optionee concerning the Option and supersedes all
earlier negotiations and understandings, written or oral, between the parties
with respect thereto.  The Company and the Optionee have made no promises,
agreements, conditions or understandings, either orally or in writing, that are
not included in this Stock Option Agreement or the Plan.

 

                                (b)           Captions.  The captions and
section numbers appearing in this Stock Option Agreement are inserted only as a
matter of convenience.  They do not define, limit, construe or describe the
scope or intent of the provisions of this Stock Option Agreement.

 

                                (c)           Notices.  Any notice or
communication having to do with this Stock Option Agreement must be given by
personal delivery or by certified mail, return receipt requested, addressed, if
to the Company or the Committee, to the attention of the General Counsel of the
Company at the principal office of the Company and, if to the Optionee, to the
Optionee’s last known address contained in the personnel records of the Company.

 

                                (d)           Succession and Transfer.  Each and
all of the provisions of this Stock Option Agreement are binding upon and inure
to the benefit of the Company and the Optionee and their respective estate,
successors and assigns, subject to any limitations on transferability under
applicable law or as set forth in the Plan.

 

                                (e)           Governing Law.  This Stock Option
Agreement and the rights of all persons claiming hereunder will be construed and
determined in accordance with the laws of the State of Delaware without giving
effect to the choice of law principles thereof.

 

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                                (f)            Blackout Periods.  The Optionee
acknowledges that, from time to time as determined by the Company in its sole
discretion, the Company may establish “blackout periods” during which this
Option may not be exercised.  The Company may establish a blackout period for
any reason or for no reason.

 

This Stock Option Agreement is made under and subject to the provisions of the
Plan, and all of the provisions of the Plan are hereby incorporated by reference
herein as provisions of this Stock Option Agreement.  If there is a conflict
between the provisions of this Stock Option Agreement and the provisions of the
Plan, the provisions of the Plan will govern.

 

IN WITNESS WHEREOF, the Company has executed this Stock Option Agreement on the
date and year first above written.

 

 

 

 

 

 

 

 

JACKSON HEWITT TAX SERVICE INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael D. Lister

 

 

 

 

 

 

 

 

President & Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

 

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7 Sylvan Way

 

Parsippany, NJ 07054

 

 

 

Effective August 19, 2004 you have been granted a Stock Option to buy  shares of
Jackson Hewitt Tax Service Inc. (the Company), stock with an exercise price
equal to $18.20 per share.  The stock option is granted pursuant to the
Company’s 2004 Equity and Incentive Plan (the Plan).

 

Shares in each period will become vested on the dates shown below.

  

Total # of Options

 

08/19/05

 

08/19/06

 

08/19/07

 

08/19/08

 

Expiration*

 

 

 

 

 

 

 

 

 

 

 

08/19/14

 

 

By your signature and the Company’s signature below, you and the Company agree
that these stock options are granted under and governed by the terms and
conditions of the Plan and the Option Agreement, all of which are attached and
made a part of this document.

 

 

 

 

Jackson Hewitt Tax Service Inc.

 

Date

 

 

 

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

 

* The Stock Option will expire on such earlier date upon your termination of
employment with the Company, in accordance with the terms of the Plan and the
Award Agreement evidencing this Stock Option.

 

Note:      If there are any discrepancies in the name or address shown above,
please make the appropriate corrections on this form.

 

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