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


 





 


	
   

  	
   

  
	
   

  	
  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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