**Exhibit 10.24**

 

 

 

**JACKSON HEWITT TAX SERVICE INC.**

 

**2005 ANNUAL VOLUNTARY DEFERREDCOMPENSATION PLAN**

 

**HIGHLIGHTS**

 

•                 The Jackson Hewitt Tax Service Inc. 2005 AnnualVoluntary Deferred Compensation Plan (the “Plan”)****isa voluntary non-qualified plan and is independent of other retirement/deferralprograms.  Eligible employees mustexecute a Deferred Compensation Agreement to participate in the Plan, a form ofwhich agreement is attached hereto as Annex I.

 

•                 Certain membersof management are eligible to participate in the Plan.  Such employees may elect to defer a portionof their pre-tax compensation earned during a fiscal year.  Employees may elect to defer up to 100% fromtheir annual commission and up to 100% of their bonus.

 

•                 The Company hasthe right under the Plan to match the deferred contributions of participatingemployees.

 

•                 In exchange forthe employees’ pretax contribution, Jackson Hewitt Tax Service Inc. agrees topay the benefit payment in a lump sum or in annual installments with paymentsto commence based on the employees’ Participation Elections.  This benefit payment will be based on theactual rate of return of the investment alternatives the employees haveselected and will depend on the amount and timing of their investment.  Benefits will be paid in accordance with theParticipation Election Form.

 

•                 The Plan is unfunded and any compensationdeferred under the Plan by participating employees represents at all times anunfunded and unsecured contractual obligation of Jackson Hewitt Tax ServiceInc.  Participating employees and theirbeneficiaries will be unsecured creditors of the Jackson Hewitt Tax ServiceInc. with respect to all obligations owed to any of them under the Plan.  Amounts payable under the Plan will besatisfied solely out of the general assets of Jackson Hewitt Tax Service Inc.subject to the claims of its creditors.

 

•                 There is noguaranteed rate of return.  Theappreciation in the employees’ account will be tied to the performance of theinvestment alternatives that they select. There is no guarantee that the investment objectives of the funds willbe achieved and their account balance may be less than their original deferralamount.

 

•                 The employeewill be given an opportunity to reallocate among the investment performancealternatives, view their account, statements and plan documents through theCompany’s administrator for this plan, Brown Bridgman & Company.  They will later be given more informationincluding a username and password for accessing their account after enrollment.

 

•                 If the employeedies prior to receiving payments, their beneficiaries will receive theiraccount balance in a lump sum.

 

•                 If the employeedies after payments have commenced but before receiving all of the paymentsdue, the remaining payments will be paid to their designated beneficiary as alump sum.

 

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**INVESTMENT ALTERNATIVES**

 

Amounts that the employees defer under the Plan will be credited to anaccount established by Jackson Hewitt Tax Service Inc. in their name.  The account will be credited with earningsbased on the performance of various investment alternatives selected by theemployee.

 

The employee will be able to reallocate on the administrators (BrownBridgman & Company) website as often as they wish.

 

Theemployee may allocate their account balance among one or more of the investmentalternatives that Jackson Hewitt Tax Service Inc. may designate from time totime, in any combination of whole percentages adding up to 100%.

 

**IMPORTANT INFORMATION**

 

Theamount the employee contributes is pretax income and will not be part of theirtaxable income.  The amount they deferwill be indicated in a separate section of their W-2 form.  Benefits that they or their beneficiaryreceives will be taxable as ordinary income in the year received.  However, deferred compensation amounts aresubject to FICA and Medicare tax at time of deferral.

 

**RISK FACTORS**

 

•                 Under the Plan, participating employees areunsecured creditors of Jackson Hewitt Tax Service Inc with no rights in anyassets in which Jackson Hewitt Tax Service Inc. may invest.

 

•                 The amount oftheir benefit is tied to a variable investment alternative with no guaranteedrate of return.  Please be aware that ifthe vehicles of investment that they elect show negative returns, it ispossible that their account balance may be less than their original deferralamount.

 

•                 As with allbenefit programs, Jackson Hewitt Tax Service Inc. may alter, amend, modify,suspend or terminate the Plan at any time in its discretion. If the Plan isterminated Participant benefit payments will be paid in accordance with theParticipant’s Participation Election Form.

 

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**ANNEX I**

 

**JACKSONHEWITT TAX SERVICE INC.**

 

**FORM OF**

 

**DEFERRED COMPENSATION AGREEMENT**

 

This **DEFERRED COMPENSATIONAGREEMENT** (this “*Agreement*”)is made as of the date indicated on the signature page hereof by and between **JACKSON HEWITT TAX SERVICE INC.**, and its subsidiaries andaffiliates (collectively, the “*Company*”),and the employee identified on the signature page hereof (the “*Participant*”).

 

WHEREAS, the Participant wishes to make anirrevocable election to defer the receipt of a portion of his or her commissionand/or bonus earned during the 2005 Fiscal Year, as such term is definedherein;

 

WHEREAS, the Company and the Participant wish to setforth herein certain terms and conditions applicable to the amounts deferred asprovided herein;

 

WHEREAS, the Participant acknowledges that withrespect to deferred amounts subject to the terms and conditions of thisAgreement, the Participant will be an unsecured creditor of the Company with noownership rights in any assets of any kind; and

 

WHEREAS, the Participant further acknowledges that,while he or she may make elections, subject to the terms and conditions of thisAgreement, pursuant to which the balance of his or her Account (as definedherein) will be deemed to be allocated among the several InvestmentAlternatives (as defined herein) for purposes of measuring the increase ordecrease in the value thereof, nothing contained herein shall require theCompany to make an actual investment of assets corresponding to any amount ofcompensation deferred by the Participant;

 

NOW, THEREFORE, in consideration of the provisionscontained in this Agreement and with reference to the foregoing recitals, theCompany and the Participant agree as follows:

 

**1**.                **Defined Terms**.  As used in this Agreement, the followingterms shall have the indicated meanings:

 

(a)               “*Account*”means the bookkeeping account maintained on the books and records of theCompany to record Deferred Amounts and credits or debits thereto in

 

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accordance with this Agreement and any other termsof the Program.  An Account isestablished only for purposes of measuring a deferred benefit and not tosegregate assets or to identify assets that may be used to make paymentshereunder.

 

(b)              “*Account Value*”means the amount reflected on the books and records of the Company as the valueof the Account at any date of determination, as determined in accordance withthis Agreement.

 

(c)               “*Beneficiaries*”means the beneficiary or beneficiaries designated by the Participant to receiveany payments in the event of the Participant’s death.  Such designation may be revoked or changed bythe Participant at any time.  If theParticipant does not designate a Beneficiary to which payments are to be madeupon the Participant’s death, or if no Beneficiary survives the Participant,payments under this Agreement subsequent to the death of the Participant willbe made to the Participant’s estate.  Ifa Beneficiary survives the Participant but dies prior to the completion of thepayments contemplated to be made to that Beneficiary under this Agreement, theunpaid portion of such payments at the death of the Beneficiary shall be paidto the Beneficiary’s estate.

 

(d)              “*Deferral Election*”means an irrevocable election of the Participant to defer payment of a portionof his or her commission and/or bonus subject to the terms and conditions of theProgram.

 

(e)               “*Deferred Amount*”means the amount of commission and/or bonus deferred by the Participantpursuant to a Deferral Election.

 

(f)               “*DistributionElection*” means an irrevocable election of the Participant as to(i) the year in which distribution of the Account Value will begin and(ii) the payment method to be used for distribution of the Account Value.

 

(g)              “*Fiscal Year*”means the fiscal year of the Company, commencing on May 1st of such year andending on April 30th.

 

(h)              “*InvestmentPerformance Alternative*” means the Investment PerformanceAlternatives made available from time to time for selection by the Participantto measure the return (positive or negative) to be attributed to DeferredAmounts.

 

(i)                “*Program*”means the 2005 Annual Voluntary Deferred Compensation Plan, the terms andconditions of the Participant’s participation in which are set forth in the2005 Annual Voluntary Deferred Compensation Plan document and this Agreement.

 

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(j)                “*Subsidiary*”means a corporation or other entity which is consolidated with the Company forfinancial statement purposes.

 

(k)               “*Total Disability*”means the inability to perform the normal duties of one’s occupation due todisability or sickness.

 

**2**.                **Deferral Elections**.

 

(a)               ***Acknowledgment of Deferral Election***.  The Participant and the Company herebyacknowledge the Participant’s Deferral Election, made on or prior to theexecution of this Agreement, to defer, in accordance with the terms andconditions of the Program, payment of specified dollar amounts of commissionand/or bonus as indicated on the signature page hereof with respect to the 2005Fiscal Year.

 

(b)              ***Subsequent Deferrals***.  The terms of this Agreement shall apply toany Deferral Election by the Participant with respect to the 2005 FiscalYear.  Any such subsequent DeferralElection shall be made by the Participant’s completion, execution andsubmission of a deferral election form prescribed for such purpose by theCompany, in the manner established by the Company for subsequent DeferralElections.  The Participant’sparticipation in the Program for the 2005 Fiscal Year, however, shall notconfer on the Participant any right to participate in the Program, or in anysimilar program that may be established by the Company, with respect to anysubsequent Fiscal Year, and the Participant’s eligibility so to participatewill depend upon the satisfaction of eligibility criteria for such subsequentYears to be established by the Company in its sole discretion.

 

**3.                TheAccount**.

 

(a)               ***Credits and Charges to the Account***.  The Deferred Amount for the 2005 Fiscal Yearwill be credited to the Account no later than 30 days after the date on whichsuch amount would otherwise have been paid to the Participant.  The Account will be charged with any amountdistributed to the Participant or any of his or her Beneficiaries.

 

(b)              ***Election of Investment PerformanceAlternatives***.  TheParticipant agrees that the Account Value will be deemed allocated (forpurposes only of determining the value of the Account), in minimum allocationsof at least 1%, among one or more Investment Performance Alternatives asindicated on the Initial Investment Allocation Form (or such other form as maybe prescribed for such purposes from time to time by the Company) submitted bythe Participant to the Company and/or their administrator on or prior to theexecution of this Agreement.  TheParticipant acknowledges that such deemed allocation is made exclusively forthe purpose of determining the Account Value from time to time in accordancewith this Agreement, and that the Company will have no obligation to investamounts corresponding to Deferred Amounts (including, without limitation, ininvestment vehicles corresponding to the Investment Alternatives selected bythe Participant). The Participant may change the deemed

 

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allocationof his or her Account Value among the Investment Alternatives then availableunder the Program by utilizing the web based administration program provided bythe administrator.  In the event that theParticipant’s employment with the Company or any Subsidiary or affiliatethereof terminates for any reason, then following such termination ofemployment the Participant will continue to have the right to change the deemedallocation of his or her Account Value among the Investment Alternatives.

 

(c)               ***Determination of Account Value***.  The Company and/or their administrator willcalculate the Account Value based on the Participant’s Deferred Amounts and hisor her then effective elections with respect to deemed allocation of theAccount among the available Investment Performance Alternatives on a dailybasis during the next business day.  TheCompany and/or their administrator will furnish the Participant with access toa website where current account values can be viewed.  The Account Value reflected will be based onthe best information available to the Company and/or their administrator as ofthe end of the period.

 

(d)              ***Company’s Right to Change InvestmentPerformance Alternatives***. The Company may, from time to time and in its sole discretion, changethe Investment Performance Alternatives available under the Program, andnothing in this Agreement shall be construed to confer on the Participant theright to continue to have any particular Investment Performance Alternativeavailable for purposes of measuring the value of his Account.

 

**4.****                                     ****Termination of Employment Prior to the Benefit Election Date on your 2005Benefit Commencement Election Form.**

 

(a)               ***Termination other than retirement***.  If the Participant’s employment with theCompany or any Subsidiary or affiliate thereof terminates for any reason otherthan retirement, death or total disability prior to the year selected on the2005 Benefit Commencement Election Form, then during the following year of suchtermination of employment the Participant will be entitled to a lump sumpayment of his or her account and such payment shall be an amount equal to theAccount Value, determined on or around May 31st of such year.  Following such payment neither theParticipant nor any Beneficiary of the Participant will have any further rightsunder this Agreement.

 

**5.                Disability**.

 

Anything in this Agreement to the contrarynotwithstanding, in the event of the Participant’s Total Disability (whether ornot his or her employment terminates), the Participant will be entitled toreceive benefits in accordance with the Benefit Commencement Election Form.

 

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**6.                Mannerof Payment.**

 

(a)               ***U.S. Dollars***.  All payments to the Participant under theProgram will be in U.S. dollars.  TheParticipant will have no right to any other form of payment.

 

(b)              ***Benefit Commencement Election***.  The Participant will make a Benefit CommencementElection specifying (i) a date for commencement of the distribution of theAccount Value and (ii) the payment method, as described in subsection (d)below, that the Participant elects for such distribution.  The Benefit Commencement Election will beirrevocable and must be completed at time of deferral.  If at a later date Participant wishes toamend the Benefit Commencement Election Form, the amendment must take place atleast twelve (12) months from the last amendment or deferral and effect benefitsscheduled for at least twelve (12) months later than the date of the amendment –and the benefits must be received no sooner than five (5) years later than theywould have otherwise been received prior to the amendment.

 

(c)               ***Payment Options***.  In the Distribution Election the Participantwill elect to have the Account Value distributed pursuant to one of thefollowing installment payment methods:

 

(i)                                     Lump sum; or

 

(ii)                                  Annualinstallments of between two and 20 years.

 

The amount of each annual installment will equal “(1/A)x B”, where “A” equals the number of annual installments remaining to be made(including the installment with respect to which the calculation is made) and “B”equals the Account Value as of the date the amount of such installment isdetermined.

 

(d)              ***No Withdrawals or Loans***.  Prior to the commencement of distributions,the Participant will have no rights under the Program or this Agreement to makewithdrawals from the Account for any reason other than Section 6(f)below.  In no event will the Participantbe entitled to receive loans from the Company based upon the Account Value.

 

(e)               ***Unforeseen Emergency.*** If you have a severe financial hardshipresulting from illness or accident to you, your spouse, or a dependent, or lossof property due to casualty or other similar extraordinary unforeseeablecircumstances arising as a result of events beyond your control you may applyto the Company for a distribution. However, the amount of the distribution may not exceed the amountnecessary to satisfy the emergency including taxes on the distribution.

 

**7.                Death**.

 

If the Participant dies before the commencement ofbenefit payments, the Account Value as of the date of death will be paid in alump sum to the Participant’s Beneficiaries as soon

 

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aspracticable following the date of death or on or around the next May 31st atthe discretion of the Company.  If theParticipant dies following payment of the first installment payment, theremaining account balance will be paid to the Participant’s Beneficiarycontinued in installments.

 

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**8.                Terminationand Amendment.**

 

The Company may alter, amend, modify, suspend orterminate the Program, in whole or in part as to some or all participants inthe Program, at any time in its discretion. No further deferrals will be permitted after the effective date of suchtermination.  If the Plan were to beterminated benefits would still be paid in accordance with the 2005 BenefitCommencement Election Form.

 

**9.                ProgramUnfunded**.

 

The Program is unfunded.  The Account represents at all times anunfunded and unsecured contractual obligation of the Company.  The Participant and each of his Beneficiarieswill be unsecured creditors of the Company with respect to all obligations owedto any of them under this Agreement or otherwise under the Program.  Amounts payable under the Program and thisAgreement will be satisfied solely out of the general assets of the Companysubject to the claims of its creditors.

 

**10.              NoInvestment Obligation**.

 

The Participant acknowledges and agrees that theCompany has no obligation to invest amounts corresponding to Deferred Amountsin investment vehicles corresponding to the Investment Alternatives selected bythe Participant for purposes of determining the Account Value of his or herAccount.  The Participant furtheracknowledges and agrees that if the Company, in its sole discretion, elects toinvest amounts corresponding to Deferred Amounts in any such investmentvehicles, the Participant will have no right or interest in any such investmentvehicle by virtue of this Agreement.

 

**11.              GeneralTerms**.

 

(a)               ***Administration***.  The Program is administered by the Company orsuch other individual or firm as the Company may from time to time appoint toadminister the Program.  Neither theCompany nor such other individual the Company may appoint to administer theProgram shall be liable to the Participant for any action or determination.

 

(b)              ***No Right to Continued Employment orParticipation***.  Neitherthis Agreement nor any action taken or omitted to be taken hereunder shall bedeemed to create or confer on the Participant any right to be retained in theemploy of the Company or any subsidiary or other affiliate or to create orconfer on the Participant any right to participate in the Program, or in anysimilar program that may be established by the Company, in respect of anyfuture Deferral.

 

(c)               ***Tax Advice***.  The Participant acknowledges that he or shehas been advised by the Company to consult with his or her tax and otherfinancial advisors prior to

 

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makingthe Deferral Election.  The Company makesno representations or warranties concerning the tax or other financialconsequences of the Participant’s Deferral Election or any payments providedfor under this Agreement.

 

(d)              ***Taxes and Withholding***.  As a condition to any payment or distributionpursuant to this Agreement, the Company may require the Participant to pay suchsum to the Company as may be necessary to discharge the Company’s obligationswith respect to any taxes, assessments or other governmental charges imposed onproperty or income received by the Participant hereunder.  In the discretion of the Company, the Companymay deduct or withhold such sum from any payment or distribution to theParticipant.

 

(e)               ***Governing Law***.  This Agreement and the legal relationsbetween the parties shall be construed in accordance with and governed by thelaws of the State of New Jersey.

 

(f)               ***Construction***.  The headings in this Agreement have beeninserted for convenience of reference only and are to be ignored in anyconstruction of any provision hereof.  Ifa provision of this Agreement is not valid or enforceable, that fact shall inno way affect the validity or enforceability of any other provision.  Use of one gender includes the other, and thesingular and plural include each other.

 

(g)              ***Successors***.  The provisions of this Agreement shall bebinding on the Participant and his or her heirs and legal representatives andupon the Company and its successors and assigns.  The Participant’s rights hereunder (includingwithout limitation the right to receive payments as provided herein) may not beassigned.

 

(h)              ***Signature in Counterparts***.  This Agreement may be signed in counterparts,each of which shall be an original, with the same effect as if signaturesthereto and hereto were upon the same instrument.

 

**[Signaturepage follows]**

 

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**IN WITNESS WHEREOF**, the Companyand the Participant have duly executed and delivered this Agreement as of this      day of                  ,2005.

 

 
|   | **JACKSON HEWITT TAX SERVICE INC.** |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | By:                                 |   |   |
|   | Name:                               |   |   |
|   | Title:                              |   |   |
|   |                                |
|   |                                |
|   | **PARTICPANT**                      |
|   |                                |
|   |                                |   |
|   | Name:                               |   |   |
|   | SS #:                               |   |   |
|        |                                     |  |  |  |  |  |

 

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