Attached files
file | filename |
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10-Q - FORM 10-Q - H&R BLOCK INC | c60134e10vq.htm |
EX-32.2 - EX-32.2 - H&R BLOCK INC | c60134exv32w2.htm |
EX-10.2 - EX-10.2 - H&R BLOCK INC | c60134exv10w2.htm |
EX-32.1 - EX-32.1 - H&R BLOCK INC | c60134exv32w1.htm |
EX-10.4 - EX-10.4 - H&R BLOCK INC | c60134exv10w4.htm |
EX-31.1 - EX-31.1 - H&R BLOCK INC | c60134exv31w1.htm |
EX-10.3 - EX-10.3 - H&R BLOCK INC | c60134exv10w3.htm |
EX-31.2 - EX-31.2 - H&R BLOCK INC | c60134exv31w2.htm |
Exhibit 10.1
H&R BLOCK, INC.
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
(Amended and Restated effective July 27, 2010)
1. Purposes. The purposes of this 2003 Long-Term Executive Compensation Plan are to provide
incentives and rewards to those employees and persons largely responsible for the success and
growth of H&R Block, Inc. and its subsidiary corporations, and to assist all such corporations in
attracting and retaining executives and other key employees and persons with experience and
ability.
2. Definitions.
(a) Award means one or more of the following: shares of Common Stock, Restricted
Shares, Stock Options, Incentive Stock Options, Stock Appreciation Rights, Performance
Shares, Performance Units and any other rights which may be granted to a Recipient under the
Plan.
(b) Committee means the Compensation Committee described in Section 3.
(c) Common Stock means the Common Stock, without par value, of the Company.
(d) Company means H&R Block, Inc., a Missouri corporation, and, unless the context
otherwise requires, includes its subsidiary corporations (as defined in Section 424(f) of
the Internal Revenue Code) and their respective divisions, departments and subsidiaries and
the respective divisions, departments and subsidiaries of such subsidiaries.
(e) Incentive Stock Option means a Stock Option which meets all of the requirements of
an incentive stock option as defined in Section 422(b) of the Internal Revenue Code.
(f) Internal Revenue Code means the Internal Revenue Code of 1986, as now in effect or
hereafter amended.
(g) Performance Period means that period of time specified by the Committee during
which a Recipient must satisfy any designated performance goals in order to receive an
Award.
(h) Performance Share means the right to receive, upon satisfying designated
performance goals within a Performance Period, shares of Common Stock, cash, or a
combination of cash and shares of Common Stock, based on the market value of shares of
Common Stock covered by such Performance Shares at the close of the Performance Period.
(i) Performance Unit means the right to receive, upon satisfying designated performance
goals within a Performance Period, shares of Common Stock, cash, or a combination of cash
and shares of Common Stock.
(j) Plan means this 2003 Long-Term Executive Compensation Plan, as the same may be
amended from time to time
(k) Recipient means an employee of the Company or other person who has been granted an
Award under the Plan.
(l) Restricted Share means a share of Common Stock issued to a Recipient hereunder
subject to such terms and conditions, including, without limitation, forfeiture or resale to
the Company, and to such restrictions against sale, transfer or other disposition, as the
Committee may determine at the time of issuance.
(m) Stock Appreciation Right means the right to receive, upon exercise of a stock
appreciation right granted under this Plan, shares of Common Stock, cash, or a combination
of cash and shares of Common Stock, based on the increase in the market value of the shares
of Common Stock covered by such stock appreciation right from the initial day of the
Performance Period for such stock appreciation right to the date of exercise.
(n) Stock Option means the right to purchase, upon exercise of a stock option granted
under this Plan, shares of the Companys Common Stock.
3. Administration of the Plan. The Plan shall be administered by the Committee which shall
consist of directors of the Company, to be appointed by and to serve at the pleasure of the Board
of Directors of the Company. A majority of the Committee members shall constitute a quorum and the
acts of a majority of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee, shall be valid acts of the Committee, however
designated, or the Board of Directors of the Company if the Board has not appointed a Committee.
The Committee shall have full power and authority to construe, interpret and administer the
Plan and, subject to the powers herein specifically reserved to the Board of Directors and subject
to the other provisions of this Plan, to make determinations which shall be final, conclusive and
binding upon all persons including, without limitation, the Company, the shareholders of the
Company, the Board of Directors, the Recipients and any persons having any interest in any Awards
which may be granted under the Plan. The Committee shall impose such additional conditions upon the
grant and exercise of Awards under this Plan as may from time to time be deemed necessary or
advisable, in the opinion of counsel to the Company, to comply with applicable laws and
regulations. The Committee from time to time may adopt rules and regulations for carrying out the
Plan and written policies for implementation of the Plan. Such policies may include, but need not
be limited to, the type, size and terms of Awards to be made to Recipients and the conditions for
payment of such Awards.
4. Absolute Discretion. The Committee may, in its sole and absolute discretion (subject to the
Committees power to delegate certain authority in accordance with the second
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paragraph of this Section 4), at any time and from time to time during the continuance of the
Plan, (i) determine which Recipients shall be granted Awards under the Plan, (ii) grant to any
Recipient so selected such an Award, (iii) determine the type, size and terms of Awards to be
granted (subject to Sections 6, 10 and 11 hereof), (iv) establish objectives and conditions for
receipt of Awards, (v) place conditions or restrictions on the payment or exercise of Awards, and
(vi) do all other things necessary and proper to carry out the intentions of this Plan; provided,
however, that, in each and every case, those Awards which are Incentive Stock Options shall contain
and be subject to those requirements specified in Section 422 of the Internal Revenue Code and
shall be granted only to those persons eligible thereunder to receive the same.
The Committee may at any time and from time to time delegate to the Chief Executive Officer of
the Company authority to take any or all of the actions that may be taken by the Committee as
specified in this Section 4 or in other sections of the Plan in connection with the determination
of Recipients, types, sizes, terms and conditions of Awards under the Plan and the grant of any
such Awards, provided that any authority so delegated (a) shall apply only to Awards to employees
of the Company that are not officers of Company under Regulation Section 240.16a-1(f) promulgated
pursuant to Section 16 of the Securities Exchange Act of 1934, and (b) shall be exercised only in
accordance with the Plan and such rules, regulations, guidelines, and limitations as the Committee
shall prescribe.
5. Eligibility. Awards may be granted to any employee of the Company or to the non- executive
Chairman of the Board of the Company. No member of the Committee (other than any ex officio member
or the non-executive Chairman of the Board of the Company) shall be eligible for grants of Awards
under the Plan. A Recipient may be granted multiple forms of Awards under the Plan. Incentive Stock
Options may be granted under the Plan to a Recipient during any calendar year only if the aggregate
fair market value (determined as of the date the Incentive Stock Option is granted) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time by such Recipient
during any calendar year under the Plan and any other incentive stock option plans (as defined in
the Internal Revenue Code) maintained by the Company does not exceed the sum of $100,000.
6. Stock Subject to the Plan. The total number of shares of Common Stock issuable under this
Plan may not at any time exceed 14,000,000 shares, subject to adjustment as provided herein. All of
such shares may be issued or issuable in connection with the exercise of Incentive Stock Options.
Shares of Common Stock not actually issued pursuant to an Award shall be available for future
Awards. Shares of common Stock to be delivered or purchased under the Plan may be either authorized
but unissued Common Stock or treasury shares. The total number of shares of Common Stock that may
be subject to one or more Awards granted to any one Recipient during a calendar year may not exceed
1,000,000, subject to adjustment as provided in Section 16 of the Plan.
7. Awards.
(a) Awards under the Plan may include, but need not be limited to, shares of Common
Stock, Restricted Shares, Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Performance Shares and Performance Units. The amount of each Award may be based upon the
market value of a share of Common Stock. The
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Committee may make any other type of Award which it shall determine is consistent with
the objectives and limitations of the Plan.
(b) The Committee may establish performance goals to be achieved within such
Performance Periods as may be selected by it using such measures of the performance of the
Company as it may select as a condition to the receipt of any Award.
8. Vesting Requirements. The Committee may determine that all or a portion of an Award or a
payment to a Recipient pursuant to an Award, in any form whatsoever, shall be vested at such times
and upon such terms as may be selected by it.
9. Deferred Payments and Dividend and Interest Equivalents.
(a) The Committee may determine that the receipt of all or a portion of an Award or a
payment to a Recipient pursuant to an Award, in any form whatsoever, shall be deferred.
Deferrals shall be for such periods and upon such terms as the Committee may determine.
(b) Unless the Committee provides otherwise in an Award agreement, dividends and
dividend equivalents will not be paid with respect to any Award, except for dividends with
respect to which the dividend record date is on or after the date of issuance of
unrestricted vested shares of Common Stock with respect to such Award. The Committee may
provide, in its sole and absolute discretion, that a Recipient to whom an Award is payable
in whole or in part at a future time in shares of Common Stock shall be entitled to receive
an amount per share equal in value to the cash dividends paid per share on issued and
outstanding shares as of the dividend record dates occurring during the period from the date
of the Award to the date of delivery of such share to the Recipient. The Committee may also
authorize, in its sole and absolute discretion, payment of an amount which a Recipient would
have received in interest on (i) any Award payable at a future time in cash during the
period from the date of the Award to the date of payment, and (ii) any cash dividends paid
on issued and outstanding shares as of the dividend record dates occurring during the period
from the date of an Award to the date of delivery of shares pursuant to the Award. Any
amounts provided under this subsection shall be payable in such manner, at such time or
times, and subject to such terms and conditions as the Committee may determine in its sole
and absolute discretion.
10. Stock Option Price. The purchase price per share of Common Stock under each Stock Option
shall be determined by the Committee, but shall not be less than market value (as determined by the
Committee) of one share of Common Stock on the date the Stock Option or Incentive Stock Option is
granted. Payment for exercise of any Stock Option granted hereunder shall be made (a) in cash, or
(b) by delivery of Common Stock having a market value equal to the aggregate option price, or (c)
by a combination of payment of cash and delivery of Common Stock in amounts such that the amount of
cash plus the market value of the Common Stock equals the aggregate option price.
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11. Stock Appreciation Right Value. The base value per share of Common Stock covered by an
Award in the form of a Stock Appreciation Right shall be the market value of one share of Common
Stock on the date the Award is granted.
12. Continuation of Employment. The Committee shall require that a Recipient be an employee or
director of the Company at the time an Award is paid or exercised. The Committee may provide for
the termination of an outstanding Award if a Recipient ceases to be an employee or director of the
Company and may establish such other provisions with respect to the termination or disposition of
an Award on the death or retirement of a Recipient (or not being re-elected to the Board of
Directors) as it, in its sole discretion, deems advisable. The Committee shall have the sole power
to determine the date of any circumstances which shall constitute a cessation of employment or term
as a director and to determine whether such cessation is the result of retirement, death or any
other reason.
13. Registration of Stock. Each Award shall be subject to the requirement that if at any time
the Committee shall determine that qualification or registration under any state or federal law of
the shares of Common Stock, Restricted Shares, Stock Options, Incentive Stock Options, or other
securities thereby covered or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of or in connection with the granting of such Award or the
purchase of shares thereunder, the Award may not be paid or exercised in whole or in part unless
and until such qualification, registration, consent or approval shall have been effected or
obtained free of any conditions the Committee, in its discretion, deems unacceptable.
14. Employment Status. No Award shall be construed as imposing upon the company the obligation
to continue the employment or term of a Recipient. No employee or other person shall have any claim
or right to be granted an Award under the Plan.
15. Assignability. No Award granted pursuant to the Plan shall be transferable or assignable
by the Recipient other than by will or the laws of descent and distribution and during the lifetime
of the Recipient shall be exercisable or payable only by or to him or her; provided, however, that
a Recipient who was granted an Award in consideration for serving as the Companys non-executive
Chairman of the Board may transfer or assign an Award to an entity that is or was a shareholder of
the Company at any time during which the Recipient served as the Companys non-executive Chairman
of the Board (a Shareholder Entity) if (i) the Recipient is affiliated with the manager of the
investments made by such Shareholder Entity or otherwise serves on the Companys Board of Directors
at the Shareholder Entitys direction or request, and (ii) pursuant to the Shareholder Entitys
governance documents or any regulatory, contractual or other requirement, any consideration the
Recipient may receive as compensation for serving as a director of the Company must be transferred,
assigned, surrendered or otherwise paid to the Shareholder Entity.
16. Dilution or Other Adjustments. In the event of any changes in the capital structure of the
Company, including but not limited to a change resulting from a stock dividend or split-up, or
combination or reclassification of shares, the Board of Directors shall make such equitable
adjustments with respect to Awards or any provisions of this Plan as it deems necessary and
appropriate, including, if necessary, any adjustment in the maximum number of
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shares of Common Stock subject to the Plan, the maximum number of shares that may be subject
to one or more Awards granted to any one Recipient during a calendar year, or the number of shares
of Common Stock subject to an outstanding Award.
17. Merger, Consolidation, Reorganization, Liquidation, Etc. If the Company shall become a
party to any corporate merger, consolidation, major acquisition of property for stock,
reorganization, or liquidation, the Board of Directors shall make such arrangements it deems
advisable with respect to outstanding Awards, which shall be binding upon the Recipients of
outstanding Awards, including, but not limited to, the substitution of new Awards for any Awards
then outstanding, the assumption of any such Awards and the termination of or payment for such
Awards.
18. Withholding Taxes. The Company shall have the right to deduct from all Awards hereunder
paid in cash any federal, state, local or foreign taxes required by law to be withheld with respect
to such Awards and, with respect to Awards paid in other than cash, to require the payment (through
withholding from the Recipients salary or otherwise) of any such taxes. Subject to such conditions
as the Committee may establish, Awards payable in shares of Common Stock, or in the form of an
Incentive Stock Option or Stock Option, may provide that the Recipients thereof may elect, in
accordance with any applicable regulations, to satisfy all or any part of the tax required to be
withheld by the Company in connection with such Award, or the exercise of such Incentive Stock
Option or Stock Option, by electing to have the Company withhold a number of shares of Common Stock
awarded, or purchased pursuant to such exercise, having a fair market value on the date the tax
withholding is required to be made equal to or less than the amount required to be withheld.
19. Costs and Expenses. The cost and expenses of administering the Plan shall be borne by the
Company and not charged to any Award or to any Recipient.
20. Funding of Plan. The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of assets to assure the
payment of any Award under the Plan.
21. Award Contracts. The Committee shall have the power to specify the form of Award contracts
to be granted from time to time pursuant to and in accordance with the provisions of the Plan and
such contracts shall be final, conclusive and binding upon the Company, the shareholders of the
Company and the Recipients. No Recipient shall have or acquire any rights under the Plan except
such as are evidenced by a duly executed contract in the form thus specified. No Recipient shall
have any rights as a holder of Common Stock with respect to Awards hereunder unless and until
certificates for shares of Common Stock or Restricted Shares are issued to the Recipient.
22. Guidelines. The Board of Directors of the Company shall have the power to provide
guidelines for administration of the Plan by the Committee and to make any changes in such
guidelines as from time to time the Board deems necessary.
23. Amendment and Discontinuance. The Board of Directors of the Company shall have the right
at any time during the continuance of the Plan to amend, modify, supplement,
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suspend or terminate the Plan, provided that in the absence of the approval of the holders of
a majority of the shares of Common Stock of the Company present in person or by proxy at a duly
constituted meeting of shareholders of the Company, no such amendment, modification or supplement
shall (i) increase the aggregate number of shares which may be issued under the Plan, unless such
increase is by reason of any change in capital structure referred to in Section 16 hereof, (ii)
change the termination date of the Plan provided in Section 24, (iii) delete or amend the market
value restrictions contained in Sections 10 and 11 hereof, (iv) materially modify the requirements
as to eligibility for participation in the Plan, or (v) materially increase the benefits accruing
to participants under the Plan, and provided further, that no amendment, modification or
termination of the Plan shall in any manner affect any Award of any kind theretofore granted under
the Plan without the consent of the Recipient of the Award, unless such amendment, modification or
termination is by reason of any change in capital structure referred to in Section 16 hereof or
unless the same is by reason of the matters referred to in Section 17 hereof.
24. Termination. The Committee may grant Awards at any time prior to July 1, 2013, on which
date this Plan will terminate except as to Awards then outstanding hereunder, which Awards shall
remain in effect until they have expired according to their terms or until July 1, 2023, whichever
first occurs. No Incentive Stock Option shall be exercisable later than 10 years following the date
it is granted.
25. Approval. This Plan shall take effect July 1, 2003, contingent upon prior approval by the
shareholders of the Company.
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H&R BLOCK, INC.
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
GRANT AGREEMENT
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
GRANT AGREEMENT
This Grant Agreement is entered into by and between H&R Block, Inc., a Missouri corporation
(the Company), and [Participant Name] (Participant).
WHEREAS, the Company provides certain incentive awards to key employees of subsidiaries of the
Company under the H&R Block, Inc. 2003 Long-Term Executive Compensation Plan (the Plan);
WHEREAS, receipt of such Awards under the Plan are conditioned upon a Participants execution
of a Grant Agreement within 180 days of [Grant Date], wherein Participant agrees to abide by
certain terms and conditions authorized by the Compensation Committee of the Board of Directors;
WHEREAS, the Participant has been selected by the Compensation Committee or the Chief
Executive Officer of the Company as a key employee of one of the subsidiaries of the Company and is
eligible to receive Awards under the Plan.
NOW THEREFORE, in consideration of the parties promises and agreements set forth in this Grant
Agreement, the sufficiency of which the parties hereby acknowledge,
IT IS AGREED AS FOLLOWS:
1. Definitions. Whenever a term is used in this Grant Agreement (Agreement), the
following words and phrases shall have the meanings set forth below unless the context plainly
requires a different meaning, and when a defined meaning is intended, the term is capitalized.
1.1 Amount of Gain Realized. The Amount of Gain Realized shall be equal to the
number of shares of Common Stock purchased pursuant to such exercise multiplied by the
difference between the FMV of one Share of the Companys Common Stock on the date of
exercise and the Option Price.
1.2 Change of Control means the occurrence of one or more of the following events:
(a) Any one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50 percent of the total fair market value or total voting
power of the stock of the Company. If any one person, or more than one person acting
as a group, is considered to own more than 50 percent of the total fair market value
or total voting power of the stock of the Company, the acquisition of additional
stock by the same person or persons shall not be considered to cause a change in the
ownership of the corporation. An increase in the percentage of stock owned by any
one person, or persons acting as a group, as a result of a transaction in which the
Company acquires its stock in exchange for
property will be treated as an acquisition of stock for purposes of this Section
1.2(a).
(b) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing
35 percent or more of the total voting power of the stock of the Company. If any one
person, or more than one person acting as a group, is considered to effectively
control a corporation within the meaning of Treasury Regulation §1.409A-3(i)(5)(vi),
the acquisition of additional control of the corporation by the same person or
persons is not considered to cause a change in the effective control of the
corporation.
(c) A majority of members of the Companys Board of Directors (the Board) is
replaced during any 12-month period by directors whose appointment or election is
not endorsed by two-thirds (2/3) of the members of the Board before the date of such
appointment or election.
(d) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 50 percent of the total gross fair
market value of all of the assets of the Company immediately before such acquisition
or acquisitions. For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets. Notwithstanding the
foregoing, there is no Change in Control event under this Section 1.2(d) when there
is a transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer. A transfer of assets by the Company is not treated
as a change in the ownership of such assets if the assets are transferred to: (i) a
shareholder of the Company (immediately before the asset transfer) in exchange for
or with respect to its stock; (ii) an entity, 50 percent or more of the total value
or voting power of which is owned, directly or indirectly, by the Company; (iii) a
person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Company; or (iv) an entity, at least 50 percent of the
total value or voting power of which is owned, directly or indirectly, by a person
described in (iii) above.
For purposes of the foregoing, persons will be considered acting as a group in accordance with
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, and Section 409A
of the Code.
1.3 Code. Code means the Internal Revenue Code of 1986, as amended.
1.4 Committee. Committee means the Compensation Committee of the Board of Directors
for H&R Block, Inc.
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1.5 Common Stock. Common Stock means the common stock, without par value, of the
Company.
1.6 Company. Company means H&R Block, Inc., a Missouri corporation, and, unless the
context otherwise requires, includes its subsidiary corporations (as defined in Section
424(f) of the Internal Revenue Code) and their respective divisions, departments and
subsidiaries and the respective divisions, departments and subsidiaries of such
subsidiaries.
1.7 Closing Price. Closing Price shall mean the last reported market price for one
share of Common Stock, regular way, on the New York Stock Exchange (or any successor
exchange or stock market on which such last reported market price is reported) on the day in
question. In the event the exchange is closed on the day on which Closing Price is to be
determined or if there were no sales reported on such date, Closing Price shall be computed
as of the last date preceding such date on which the exchange was open and a sale was
reported.
1.8 Disability. Disability or disabled shall be as defined in the employment
practices or policies of the applicable subsidiary of the Company in effect from time to
time during the term hereof or, absent such definition, then as defined in the H&R Block
Retirement Savings Plan or any successor plan thereto.
1.9 Early Retirement. Early Retirement means the Participants voluntary
termination of employment with the Company and each of its subsidiaries at or after the date
the Participant has both reached age 55 but has not yet reached age 65, and completed at
least ten (10) years of service with the company or its subsidiaries.
1.10 Fair Market Value. Fair Market Value (FMV) means the Closing Price for one
share of H&R Block, Inc. Stock.
1.11 Last Day of Employment. Last Day of Employment means the date the Participant
ceases for whatever reason to be an employee and is not immediately thereafter and
continuously employed as a regular active employee by any other direct or indirect
subsidiary of the Company
1.12 Line of Business. Line of Business of the Company means any line of business of
the subsidiary of the Company by which Participant was employed as of the Last Day of
Employment, as well as any one or more lines of business of any other subsidiary of the
Company by which Participant was employed during the two-year period preceding the Last Day
of Employment, provided that, if Participants employment was, as of the Last Day of
Employment or during the two-year period immediately prior to the Last Day of Employment,
with H&R Block Management, LLC or any successor entity thereto, Line of Business of the
Company shall mean any lines of business of the Company and all of its subsidiaries.
1.13 Qualifying Termination. Qualifying Termination shall mean Participants
termination of employment which meets the definition of a Qualifying Termination under a
severance plan sponsored by the Company or a subsidiary of the Company. In the
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event that no formal severance plan exists for the Participants subsidiary, the definition
of Qualifying Termination contained in any applicable severance plan for the Company will
govern.
1.14 Retirement. Retirement means the Participants voluntary termination of
employment with the Company and each of its subsidiaries, at or after attaining age 65.
1.15 Stock Option. Stock Option means the right to purchase, upon exercise of a
stock option granted under the Plan, shares of the Companys Common Stock. A Stock Option
may be an Incentive Stock Option which meets the requirements of Code Section 422(b) or a
Nonqualified Stock Option. The right and option to purchase shares of Common Stock
identified as subject to Nonqualified Stock Option shall not constitute and shall not be
treated for any purpose as an incentive stock option, as such term is defined in the Code.
2. Stock Option.
2.1 Grant of Stock Option. As of [Grant Date] (the Grant Date), the Company grants
the Participant the right and option to purchase [Number of Shares Granted] shares of Common
Stock (this Stock Option) identified as [Grant Type].
2.2 Option Price. The Price per share of Common Stock subject to this Stock Option
is [Grant Price], which is the Closing Price on [Grant Date].
2.3 Vesting. This Stock Option shall vest and become exercisable in installments,
which shall be cumulative, with regard to the percentage of the number of shares of Common
Stock subject to this Stock Option indicated next to each vesting date set forth in the
table below provided that the Participant remains continuously employed by the Company
through such date:
Percent of Shares Subject to this | ||||
Stock Option Vesting on Such | ||||
Vesting Date | Vesting Date | |||
First Anniversary of the Grant Date |
25 | % | ||
Second Anniversary of the Grant Date |
25 | % | ||
Third Anniversary of the Grant Date |
25 | % | ||
Fourth Anniversary of the Grant Date |
25 | % |
(Note: If the percentage of the aggregate number of shares of Common Stock subject to this Stock
Option scheduled to vest on a vesting date is not a whole number of shares, then the amount vesting
shall be rounded down to the nearest whole number of shares for each vesting date, except that the
amount vesting on the final vesting date shall be such that 100% of the aggregate number of shares
of Common Stock subject to this Stock Option shall be cumulatively vested as of the final vesting
date.)
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2.4 Acceleration of Vesting. Notwithstanding Section 2.3, the Participant shall
become vested in all or a portion of the Stock Options awarded under this Grant Agreement on
the occurrence of any of the following events:
(a) Change of Control. In the event the Participant incurs a Qualifying
Termination in the 24 months immediately following a Change of Control, as defined
in Section 1.2, such Participant shall become 100% vested in all outstanding stock
options granted under this Grant Agreement. The Participant may exercise such
options until the earlier of: (i) ninety (90) days following the Participants Last
Day of Employment unless the Participant elects in writing to extend this time
period through the severance period as defined by the applicable severance plan or
(ii) the last day the stock options would have been exercisable if the Participant
had not incurred a termination of employment. Receipt of this award may be
conditioned on the execution of a separation agreement.
(b) Retirement. The Participant may purchase 100% of the total Stock Options
granted under this Stock Option provided that the Participant retires more than one
year after the Grant Date. Receipt of this award may be conditioned upon
Participants execution of a separation agreement.
(c) Qualifying Termination. The Participant experiences a Qualifying
Termination, all or a portion of the then outstanding Stock Options granted under
this Stock Option shall vest according to any applicable severance plan and
Participant may purchase 100% of such vested Stock Options. Receipt of this award
may be conditioned upon Participants execution of a separation agreement.
(d) Employment Agreement. The Participant may purchase all or a portion of
the total vested Stock Options granted under this Stock Option upon the occurrence
of certain events specified in the Participants employment agreement.
If application of this Section 2.4 results in the acceleration of vesting of all or any portion of
the Stock Options, shares of Common Stock then subject to Stock Options shall be allocated such
that the number of shares subject to Incentive Stock Option shall be the maximum number of shares
that may be subject to Incentive Stock Option under Section 422 of the Code for the calendar year
in which the acceleration of vesting results.
2.5 Term of Option. No Stock Option granted under this Grant Agreement may be
exercised after [Expiration Date]. Except as provided in this Section 2.5 and Section 2.6,
all Stock Options shall terminate when the Participant ceases, for whatever reason, to be an
employee of any of the subsidiaries of the Company. In the event the Participant ceases to
be an employee of any of the subsidiaries of the Company because of Retirement, Early
Retirement or Disability, Participant may exercise any vested Stock Options up to twelve
months after employment ceases. In the event the Participant experiences a Qualifying
Termination, this Stock Option may be eligible for an extension of the exercise period
pursuant to an applicable severance plan.
5
2.6 Participants Death. In the event the Participant ceases to be an employee of
any of the subsidiaries of the Company because of Death, the person or persons to whom the
Participants rights under the Stock Option shall pass by the Participants will or laws of
descent and distribution may exercise any vested Stock Options for a period up to twelve
months after the date of death.
2.7 Exercise of Stock Option. The Stock Option granted under the Plan shall be
exercisable from time to time by the Participant by giving notice of exercise to the
Company, in the manner specified by the Company, specifying the number of whole shares to be
purchased, and accompanied by full payment of the purchase price. The right to purchase
shall be cumulative, so that the full number of shares of Common Stock that become
purchasable at any time need not be purchased at such time, but may be purchased at any time
or from time to time thereafter (but prior to the termination of the Stock Option).
2.8 Payment of the Option Price. Full payment of the Option Price for shares
purchased shall be made at the time the Participant exercises the Stock Option. Payment of
the aggregate Option Price may be made in (a) cash, (b) by delivery of Common Stock (with a
value equal to the Closing Price of Common Stock on the last trading date preceding the date
on which the Stock Option is exercised), or (c) a combination thereof. Payment shall be made
only in cash unless at least six months have elapsed between the date of Participants
acquisition of each share of Common Stock delivered by Participant in full or partial
payment of the aggregate Option Price and the date on which the Stock Option is exercised.
2.9 No Shareholder Privileges. Neither the Participant nor any person claiming under
or through him or her shall be, or have any of the rights or privileges of, a shareholder of
the Company with respect to any of the Common Stock issuable upon the exercise of this Stock
Option, unless and until certificates evidencing such shares of Common Stock shall have been
duly issued and delivered.
3. Covenants.
3.1 Consideration for Award under the Plan. Participant acknowledges that
Participants agreement to this Section 3 is a key consideration for any Award under the
Plan. Participant hereby agrees to abide by the Covenants set forth in Sections 3.2, 3.3,
and 3.4.
3.2 Covenant Against Competition. During the period of Participants employment and
for two (2) years after his/her Last Day of Employment, Participant acknowledges and agrees
he/she will not engage in, or own or control any interest in, or act as an officer, director
or employee of, or consultant, advisor or lender to, any entity that engages in any business
that is competitive with the primary business activities of the Companys Tax Services
business which are tax preparation, accounting, and small business services.
6
3.3 Covenant Against Hiring. Participant acknowledges and agrees the he/she will not
directly or indirectly recruit, solicit, or hire any Company employee or otherwise induce
any such employee to leave the Companys employment during the period of Participants
employment and for one (1) year after his/her Last Day of Employment.
3.4 Covenant Against Solicitation. During the period of Participants employment and
for two (2) years after his/her Last Day of Employment, Participant acknowledges and agrees
that he/she will not directly or indirectly solicit or enter into any business transaction
of the nature performed by the Company with any Company client for which Participant
personally performed services or acquired material information.
3.5 Forfeiture of Rights. Notwithstanding anything herein to the contrary, if
Participant violates any provisions of this Section 3, Participant shall forfeit all rights
to payments or benefits under the Plan. All Stock Options outstanding on such date shall
terminate.
3.6 Remedies. Notwithstanding anything herein to the contrary, if Participant
violates any provisions of this Section 3, whether prior to, on or after any Settlement of
an Award under the Plan, then Participant shall promptly pay to Company an amount equal to
the aggregate Amount of Gain Realized by the Participant on all Stock Options exercised
after a date commencing one year prior to Participants Last Day of Employment. The
Participant shall pay Company within three (3) business days after the date of any written
demand by the Company to the Participant.
3.7 Remedies payable in Companys Common Stock or Cash. The Participant shall pay
the amounts described in Section 3.6 in the Companys Common Stock or cash.
3.8 Remedies without Prejudice. The remedies provided in this Section 3 shall be
without prejudice to the rights of the Company and/or the rights of any one or more of its
subsidiaries to recover any losses resulting from the applicable conduct of the Participant
and shall be in addition to any other remedies the Company and/or any one or more
subsidiaries may have, at law or in equity, resulting from such conduct.
3.9 Survival. Participants obligations in this Section 3 shall survive and continue
beyond settlement of all Awards under the Plan and any termination or expiration of this
Agreement for any reason.
4. Non-Transferability of Awards. Any Stock Option (including all rights, privileges and
benefits conferred under such Award) shall not be transferred, assigned, pledged, or hypothecated
in any way (whether by operation of law or otherwise) and shall not be subject to sale under
execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate, or otherwise dispose of any Stock Option, or of any right or privilege conferred
hereby, contrary to the provisions hereof, or upon any attempted sale under any execution,
attachment, or similar process upon the rights and privileges hereby granted, then and in any such
event such Award and the rights and privileges hereby granted shall immediately become null and
void.
7
5. Miscellaneous.
5.1 No Employment Contract. This Agreement does not confer on the Participant any
right to continued employment for any period of time, is not an employment contract, and
shall not in any manner modify any effective contract of employment between the Participant
and any subsidiary of the Company.
5.2 Clawback for Negligence or Misconduct. If the Committee determines that the
Participant has engaged in negligence or intentional misconduct that results in a
significant restatement of the Companys financial results and a resulting overpayment in
compensation or Awards under this Plan, the Committee may seek reimbursement of any portion
of the Amount of Gain Realized from such Awards where such Awards were greater than the
Awards would have been if calculated on the restated financial results.
5.3 Adjustment of Shares. If there shall be any change in the capital structure of
the Company, including but not limited to a change in the number or
kind of the outstanding shares of the Common Stock resulting from a stock dividend or split-up, or combination or
reclassification of such shares (or of any stock or other securities into which shares shall
have been changed, or for which they shall have been exchanged), then the Board of Directors
of the Company shall make such equitable adjustments with respect to the Stock Option, or
any other provisions of the Plan, as it deems necessary or appropriate to prevent dilution
or enlargement of the Stock Option rights hereunder or of the shares subject to this Stock
Option.
5.4 Merger, Consolidation, Reorganization, Liquidation, etc. If the Company shall
become a party to any corporate merger, consolidation, major acquisition of property for
stock, reorganization, or liquidation, the Board of Directors shall, acting in its absolute
and sole discretion, make such arrangements, which shall be binding upon the Participant of
outstanding Awards, including but not limited to, the substitution of new Awards or for any
Awards then outstanding, the assumption of any such Awards and the termination of or payment
for such Awards.
5.5 Interpretation and Regulations. The Board of Directors of the Company shall have
the power to provide regulations for administration of the Plan by the Committee and to make
any changes in such guidelines as from time to time the Board may deem necessary. The
Committee shall have the sole power to determine, solely for purposes of the Plan and this
Agreement, the date of and circumstances which shall constitute a cessation or termination
of employment and whether such cessation or termination is the result of retirement, death,
disability or termination without cause or any other reason, and further to determine,
solely for purposes of the Plan and this Agreement, what constitutes continuous employment
with respect to the exercise of Stock Option or delivery of Shares under the Plan (except
that leaves of absence approved by the Committee or transfers of employment among the
subsidiaries of the Company shall not be considered an interruption of continuous employment
for any purpose under the Plan).
5.6 Reservation of Rights. If at any time counsel for the Company determines that
qualification of the Shares under any state or federal securities law, or the consent or
8
approval of any governmental regulatory authority, is necessary or desirable as a condition
of the executing an Award or benefit under the Plan, then such action may not be taken, in
whole or in part, unless and until such qualification, registration, consent or approval
shall have been effected or obtained free of any conditions such counsel deems unacceptable.
5.7 Reasonableness of Restrictions, Severability and Court Modification. Participant
and the Company agree that, the restrictions contained in this Agreement are reasonable,
but, should any provision of this Agreement be determined by a court of competent
jurisdiction to be invalid, illegal or otherwise unenforceable or unreasonable in scope, the
validity, legality and enforceability of the other provisions of this Agreement will not be
affected thereby, and the provision found invalid, illegal, or otherwise unenforceable or
unreasonable will be considered by the Company and Participant to be amended as to scope of
protection, time or geographic area (or any one of them, as the case may be) in whatever
manner is considered reasonable by that court, and, as so amended will be enforced.
5.8 Withholding of Taxes. To the extent that the Company is required to withhold
taxes in compliance with any federal, state, local or foreign law in connection with any
payment made or benefit realized by a Participant or other person under this Plan, it shall
be a condition to the receipt of such payment or the realization of such benefit that the
Participant or such other person make arrangements satisfactory to the Company for the
payment of all such taxes required to be withheld. At the discretion of the Committee, such
arrangements may include relinquishment of a portion of such benefit. In the event the
Participant has not made arrangements, the Company shall withhold the amount of such tax
obligations from such dividend payment or instruct the Participants employer to withhold
such amount from the Participants next payment(s) of wages. The Participant authorizes the
Company to so instruct the Participants employer and authorizes the Participants employer
to make such withholdings from payment(s) of wages.
5.9 Waiver. The failure of the Company to enforce at any time any terms, covenants
or conditions of this Agreement shall not be construed to be a waiver of such terms,
covenants or conditions or of any other provision. Any waiver or modification of the terms,
covenants or conditions of this Agreement shall only be effective if reduced to writing and
signed by both Participant and an officer of the Company.
5.10 Incorporation. The terms and conditions of this Grant Agreement are authorized
by the Compensation Committee of the Board of Directors of H&R Block, Inc. The terms and
conditions of this Grant Agreement are deemed to be incorporated into and form a part of
every Award under the H&R Block, Inc. 1993 Long-Term Executive Compensation Plan and H&R
Block, Inc. 2003 Long-Term Executive Compensation Plan unless the Award Certificate relating
to a specific grant or award provides otherwise. If the Participant has previously executed
a Grant Agreement, such Grant Agreement shall only cover those Awards subject to such
specific Grant Agreement.
5.11 Notices. Any notice to be given to the Company or election to be made under the
terms of this Agreement shall be addressed to the Company (Attention: Long-Term
9
Incentive Department) at One H&R Block Way, Kansas City Missouri 64105 or at such other
address as the Company may hereafter designate in writing to the Participant. Any notice to
be given to the Participant shall be addressed to the Participant at the last address of
record with the Company or at such other address as the Participant may hereafter designate
in writing to the Company. Any such notice shall be deemed to have been duly given when
deposited in the United States mail via regular or certified mail, addressed as aforesaid,
postage prepaid.
5.12 Choice of Law. This Grant Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Missouri without reference to
principles of conflicts of laws.
5.13 Choice of Forum and Jurisdiction. Participant and Company agree that any
proceedings to enforce the obligations and rights under this Grant Agreement must be brought
in Missouri District Court located in Jackson County, Missouri, or in the United States
District Court for the Western District of Missouri in Kansas City, Missouri. Participant
agrees and submits to personal jurisdiction in either court. Participant and Company further
agree that this Choice of Forum and Jurisdiction is binding on all matters related to Awards
under the Plan and may not be altered or amended by any other arrangement or agreement
(including an employment agreement) without the express written consent of Participant and
H&R Block, Inc.
5.14 Attorneys Fees. Participant and Company agree that in the event of litigation
to enforce the terms and obligations under this Grant Agreement, the party prevailing in any
such cause of action will be entitled to reimbursement of reasonable attorney fees.
5.15 Relationship of the Parties. Participant acknowledges that this Grant Agreement
is between H&R Block, Inc. and Participant. Participant further acknowledges that H&R Block,
Inc. is a holding company and that Participant is not an employee of H&R Block, Inc.
5.16 Headings. The section headings herein are for convenience only and shall not be
considered in construing this Agreement.
5.17 Amendment. No amendment, supplement, or waiver to this Agreement is valid or
binding unless in writing and signed by both parties.
5.18 Execution of Agreement. This Agreement shall not be enforceable by either
party, and Participant shall have no rights with respect to the Long Term Incentive Award,
unless and until it has been (1) signed by Participant and on behalf of the Company by an
officer of the Company, provided that the signature by such officer of the Company on behalf
of the Company may be a facsimile or stamped signature, and (2) returned to the Company.
In consideration of said Award and the mutual covenants contained herein, the parties agree to the
terms set forth above.
10
The parties hereto have executed this Grant Agreement.
Associate Name:
|
[Participant Name] | |
Date Signed:
|
[Acceptance Date] | |
H&R BLOCK, INC. |
||
By: |
President and Chief Executive Officer
11
H&R BLOCK, INC.
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
GRANT AGREEMENT
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
GRANT AGREEMENT
This Grant Agreement is entered into by and between H&R Block, Inc., a Missouri corporation
(the Company), and [Participant Name] (Participant).
WHEREAS, the Company provides certain incentive awards to key employees of subsidiaries of the
Company under the H&R Block, Inc. 2003 Long-Term Executive Compensation Plan (the Plan);
WHEREAS, receipt of such Awards under the Plan are conditioned upon a Participants execution
of a Grant Agreement within 180 days of [Grant Date], wherein Participant agrees to abide by
certain terms and conditions authorized by the Compensation Committee of the Board of Directors;
WHEREAS, the Participant has been selected by the Compensation Committee or the Chief
Executive Officer of the Company as a key employee of one of the subsidiaries of the Company and is
eligible to receive Awards under the Plan.
NOW THEREFORE, in consideration of the parties promises and agreements set forth in this Grant
Agreement, the sufficiency of which the parties hereby acknowledge,
IT IS AGREED AS FOLLOWS:
1. Definitions. Whenever a term is used in this Agreement or an Award Certificate issued
under the Plan, the following words and phrases shall have the meanings set forth below unless the
context plainly requires a different meaning, and when a defined meaning is intended, the term is
capitalized.
1.1 Amount of Gain Realized. The Amount of Gain Realized shall be equal to the
number of Shares delivered to the Participant multiplied by the Fair Market Value (FMV) of
one Share of the Companys Common Stock on the date the Shares were no longer considered to
be held by the Company.
1.2 Change of Control means the occurrence of one or more of the following events:
(a) Any one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50 percent of the total fair market value or total voting
power of the stock of the Company. If any one person, or more than one person acting
as a group, is considered to own more than 50 percent of the total fair market value
or total voting power of the stock of the Company, the acquisition of additional
stock by the same person or persons shall not be considered to cause a change in the
ownership of the corporation. An increase in the percentage of stock owned by any
one person, or persons acting as a group, as
a result of a transaction in which the Company acquires its stock in exchange for
property will be treated as an acquisition of stock for purposes of this
Section 1.2(a).
(b) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing
35 percent or more of the total voting power of the stock of the Company. If any one
person, or more than one person acting as a group, is considered to effectively
control a corporation within the meaning of Treasury Regulation §1.409A-3(i)(5)(vi),
the acquisition of additional control of the corporation by the same person or
persons is not considered to cause a change in the effective control of the
corporation.
(c) A majority of members of the Companys Board of Directors (the Board) is
replaced during any 12-month period by directors whose appointment or election is
not endorsed by two-thirds (2/3) of the members of the Board before the date of such
appointment or election.
(d) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 50 percent of the total gross fair
market value of all of the assets of the Company immediately before such acquisition
or acquisitions. For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets. Notwithstanding the
foregoing, there is no Change in Control event under this Section 1.2(d) when there
is a transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer. A transfer of assets by the Company is not treated
as a change in the ownership of such assets if the assets are transferred to: (i) a
shareholder of the Company (immediately before the asset transfer) in exchange for
or with respect to its stock; (ii) an entity, 50 percent or more of the total value
or voting power of which is owned, directly or indirectly, by the Company; (iii) a
person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Company; or (iv) an entity, at least 50 percent of the
total value or voting power of which is owned, directly or indirectly, by a person
described in (iii) above.
For purposes of the foregoing, persons will be considered acting as a group in accordance with
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, and Section 409A
of the Code.
2
1.3 Code. Code means the Internal Revenue Code of 1986, as amended.
1.4 Committee. Committee means the Compensation Committee of the Board of Directors
for H&R Block, Inc.
1.5 Common Stock. Common Stock means the common stock, without par value, of the
Company.
1.6 Company. Company means H&R Block, Inc., a Missouri corporation, and, unless the
context otherwise requires, includes its subsidiary corporations (as defined in Section
424(f) of the Internal Revenue Code) and their respective divisions, departments and
subsidiaries and the respective divisions, departments and subsidiaries of such
subsidiaries.
1.7 Closing Price. Closing Price shall mean the last reported market price for one
share of Common Stock, regular way, on the New York Stock Exchange (or any successor
exchange or stock market on which such last reported market price is reported) on the day in
question. In the event the exchange is closed on the day on which Closing Price is to be
determined or if there were no sales reported on such date, Closing Price shall be computed
as of the last date preceding such date on which the exchange was open and a sale was
reported.
1.8 Disability. Disability or disabled shall be as defined in the employment
practices or policies of the applicable subsidiary of the Company in effect from time to
time during the term hereof or, absent such definition, then as defined in the H&R Block
Retirement Savings Plan or any successor plan thereto.
1.9 Fair Market Value. Fair Market Value (FMV) means the Closing Price for one
share of H&R Block, Inc. Stock.
1.10 Last Day of Employment. Last Day of Employment means the date the Participant
ceases for whatever reason to be an employee and is not immediately thereafter and
continuously employed as a regular active employee by any other direct or indirect
subsidiary of the Company
1.11 Line of Business. Line of Business of the Company means any line of business of
the subsidiary of the Company by which Participant was employed as of the Last Day of
Employment, as well as any one or more lines of business of any other subsidiary of the
Company by which Participant was employed during the two-year period preceding the Last Day
of Employment, provided that, if Participants employment was, as of the Last Day of
Employment or during the two-year period immediately prior to the Last Day of Employment,
with H&R Block Management, LLC or any successor entity thereto, Line of Business of the
Company shall mean any lines of business of the Company and all of its subsidiaries.
1.12 Qualifying Termination. Qualifying Termination shall mean Participants
termination of employment which meets the definition of a Qualifying Termination
3
under a severance plan sponsored by the Company or a subsidiary of the Company. In the event
that no formal severance plan exists for the Participants subsidiary, the definition of
Qualifying Termination contained in any applicable severance plan for the Company will
govern.
1.13 Restricted Shares. Restricted Share (Shares) means a share of Common Stock
issued to a Participant under the Plan subject to such terms and conditions, including
without limitation, forfeiture or resale to the Company, and to such restrictions against
sale, transfer or other disposition, as the Committee may determine at the time of issuance.
1.14 Retirement. Retirement means the Participants voluntary termination of
employment with the Company and each of its subsidiaries, at or after attaining age 65.
2. Restricted Shares.
2.1 Issuance of Shares. As of [Grant Date] (the Award Date), the Company shall
issue [Number of Shares Granted] [Grant Type] (the Shares) evidenced by this Grant
Agreement to the Participant which shall be held by the Company and subject to the
substantial risk of forfeiture.
2.2 Substantial Risk of Forfeiture. Each grant of an Award shall provide that the
Shares covered thereby shall be subject to a substantial risk of forfeiture within the
meaning of Code Section 83 for a period time as designated by Section 2.7, and any such
Award may provide for the earlier termination of such risk of forfeiture in the event of
change of control of the Company or other similar transaction or event.
2.3 Restrictions on Transfer. During for period the Shares are subject to
substantial risk of forfeiture, the Shares shall be held by the Company, or its transfer
agent or other designee and shall be subject to restrictions on transfer.
2.4 [RESERVED]
2.5 Requirement of Employment. The Participant must remain in continuous employment
of the Company during the period any Shares are subject to substantial risk of forfeiture.
Absent an agreement to the contrary, if Participants employment with the Company should
terminate for any reason, other than Retirement, all Shares then held by the Company or its
transfer agent or other designee, if any, shall be forfeited by the Participant and
Participant authorizes the Company and its stock transfer agent to cause delivery, transfer
and conveyance of the Shares to the Company.
2.6 Delivery of Shares. Any Shares to be delivered to the Participant by the Company
in accordance with the following Schedule:
4
Percent of Shares Subject to Vesting | ||||
Vesting Date | on Such Vesting Date | |||
First Anniversary of the Award Date |
25 | % | ||
Second Anniversary of the Award Date |
25 | % | ||
Third Anniversary of the Award Date |
25 | % | ||
Fourth Anniversary of the Award Date |
25 | % |
Upon the vesting date, Shares shall be transferred directly into a brokerage account established
for the Participant at a financial institution the Committee shall select at its sole discretion
(the Financial Institution) or delivered in certificate form free of restrictions, such method to
be selected by the Committee in its sole discretion. The Participant agrees to complete any
documentation with the Company or the financial institution that is necessary to affect the
transfer of Shares to the financial institution before the delivery will occur.
2.7 Acceleration of Vesting. Notwithstanding Section 2.6, the Participant shall
become vested in all or a portion of the Shares awarded under this Grant Agreement on the
occurrence of any of the following events:
(a) Change of Control. In the event the Participant incurs a Qualifying
Termination in the 24 months immediately following a Change of Control, as defined
in Section 1.2, such Participant shall become 100% vested in all outstanding Shares
granted under this Grant Agreement. Receipt of this award may be conditioned upon
Participants execution of a separation agreement.
(b) Qualifying Termination. The Participant experiences a Qualifying
Termination, all or a portion of the then outstanding Shares granted under this
Grant Agreement shall vest according to the terms of the applicable severance plan.
Receipt of this award may be conditioned upon Participants execution of a
separation agreement.
(c) Retirement. If a Participant retires from employment with any subsidiary
of the Company at least one year after the anniversary of the Grant Date, all Shares
issued on such Grant Date shall no longer be considered to be held by the Company.
Receipt of this retirement award may be conditioned upon Participants execution of
a separation agreement.
5
3. Covenants.
3.1 Consideration for Award under the Plan Participant acknowledges that Participants
agreement to this Section 3 is a key consideration for any Award under the Plan. Participant
hereby agrees to abide by the Covenants set forth in Sections 3.2, 3.3, and 3.4.
3.2 Covenant Against Competition. During the period of Participants employment and
for two (2) years after his/her Last Day of Employment, Participant acknowledges and agrees
he/she will not engage in, or own or control any interest in, or act as an officer, director
or employee of, or consultant, advisor or lender to, any entity that engages in any business
that is competitive with the primary business activities of the Companys Tax Services
business which are tax preparation, accounting, and small business services.
3.3 Covenant Against Hiring. Participant acknowledges and agrees the he/she will not
directly or indirectly recruit, solicit, or hire any Company employee or otherwise induce
any such employee to leave the Companys employment during the period of Participants
employment and for one (1) year after his/her Last Day of Employment.
3.4 Covenant Against Solicitation. During the period of Participants employment and
for two (2) years after his/her Last Day of Employment, Participant acknowledges and agrees
that he/she will not directly or indirectly solicit or enter into any business transaction
of the nature performed by the Company with any Company client for which Participant
personally performed services or acquired material information.
3.5 Forfeiture of Rights. Notwithstanding anything herein to the contrary, if
Participant violates any provisions of this Section 3, Participant shall forfeit all rights
to payments or benefits under the Plan. All Shares held by the Company and subject to
forfeiture on such date shall terminate.
3.6 Remedies. Notwithstanding anything herein to the contrary, if Participant
violates any provisions of this Section 3, whether prior to, on or after any Settlement of
an Award under the Plan, then Participant shall promptly pay to Company an amount equal to
the aggregate Amount of Gain Realized by the Participant on all Shares received after a date
commencing one year prior to Participants Last Day of Employment. The Participant shall pay
Company within three (3) business days after the date of any written demand by the Company
to the Participant.
3.7 Remedies payable in Companys Common Stock or Cash. The Participant shall pay
the amounts described in Section 3.6 in the Companys Common Stock or cash.
3.8 Remedies without Prejudice. The remedies provided in this Section 3 shall be
without prejudice to the rights of the Company and/or the rights of any one or more of its
subsidiaries to recover any losses resulting from the applicable conduct of the Participant
and shall be in addition to any other remedies the Company and/or any one or more
subsidiaries may have, at law or in equity, resulting from such conduct.
6
3.9 Survival. Participants obligations in this Section 3 shall survive and continue
beyond settlement of all Awards under the Plan and any termination or expiration of this
Agreement for any reason.
4. Transfer Restrictions.
4.1 Transfer Restrictions on Shares. During the period that Shares are held by the
Company hereunder for delivery to the Participant, such Shares and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged, or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to sale under execution,
attachment or similar process. Upon any attempt, contrary to the terms hereof, to transfer,
assign, pledge, hypothecate, or otherwise so dispose of such Shares or any right or
privilege conferred hereby, or upon any attempted sale under any execution, attachment, or
similar process upon such Shares or the rights and privileges hereby granted, then and in
any such event this Agreement and the rights and privileges hereby granted shall immediately
terminate. Immediately after such termination, such Shares shall be forfeited by the
Participant and the Participant hereby authorizes the Company and its stock transfer agent
to cause the delivery, transfer and conveyance of such Shares to the Company.
4.2 Non-Transferability of Awards Generally. Any Award (including all rights,
privileges and benefits conferred under such Award) shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to sale under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate, or otherwise dispose of any Award, or of any right or
privilege conferred hereby, contrary to the provisions hereof, or upon any attempted sale
under any execution, attachment, or similar process upon the rights and privileges hereby
granted, then and in any such event such Award and the rights and privileges hereby granted
shall immediately become null and void.
5. Miscellaneous.
5.1 No Employment Contract. This Agreement does not confer on the Participant any
right to continued employment for any period of time, is not an employment contract, and
shall not in any manner modify any effective contract of employment between the Participant
and any subsidiary of the Company.
5.2 Clawback for Negligence or Misconduct. If the Committee determines that the
Participant has engaged in negligence or intentional misconduct that results in a
significant restatement of the Companys financial results and a resulting overpayment in
compensation or Awards under this Plan, the Committee may seek reimbursement of any portion
of the Amount of Gain Realized from such Awards where such Awards were greater than the
Awards would have been if calculated on the restated financial results.
5.3 Adjustment of Shares. If there shall be any change in the capital structure of
the Company, including but not limited to a change in the number or
kind of the outstanding shares of the Common Stock resulting from a stock dividend or split-up, or combination
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or reclassification of such shares (or of any stock or other securities into which shares
shall have been changed, or for which they shall have been exchanged), then the Board of
Directors of the Company shall make such equitable adjustments with respect to the Shares,
or any other provisions of the Plan, as it deems necessary or appropriate to prevent
dilution or enlargement of the Stock Option rights hereunder or of the shares subject to
this Grant Agreement.
5.4 Merger, Consolidation, Reorganization, Liquidation, etc. If the Company shall
become a party to any corporate merger, consolidation, major acquisition of property for
stock, reorganization, or liquidation, the Board of Directors shall, acting in its absolute
and sole discretion, make such arrangements, which shall be binding upon the Participant of
outstanding Awards, including but not limited to, the substitution of new Awards or for any
Awards then outstanding, the assumption of any such Awards and the termination of or payment
for such Awards.
5.5 Interpretation and Regulations. The Board of Directors of the Company shall have
the power to provide regulations for administration of the Plan by the Committee and to make
any changes in such guidelines as from time to time the Board may deem necessary. The
Committee shall have the sole power to determine, solely for purposes of the Plan and this
Agreement, the date of and circumstances which shall constitute a cessation or termination
of employment and whether such cessation or termination is the result of retirement, death,
disability or termination without cause or any other reason, and further to determine,
solely for purposes of the Plan and this Agreement, what constitutes continuous employment
with respect to the delivery of Shares under the Grant Agreement (except that leaves of
absence approved by the Committee or transfers of employment among the subsidiaries of the
Company shall not be considered an interruption of continuous employment for any purpose
under the Plan).
5.6 Reservation of Rights. If at any time counsel for the Company determines that
qualification of the Shares under any state or federal securities law, or the consent or
approval of any governmental regulatory authority, is necessary or desirable as a condition
of the executing an Award or benefit under the Plan, then such action may not be taken, in
whole or in part, unless and until such qualification, registration, consent or approval
shall have been effected or obtained free of any conditions such counsel deems unacceptable.
5.7 Reasonableness of Restrictions, Severability and Court Modification. Participant
and the Company agree that, the restrictions contained in this Agreement are reasonable,
but, should any provision of this Agreement be determined by a court of competent
jurisdiction to be invalid, illegal or otherwise unenforceable or unreasonable in scope, the
validity, legality and enforceability of the other provisions of this Agreement will not be
affected thereby, and the provision found invalid, illegal, or otherwise unenforceable or
unreasonable will be considered by the Company and Participant to be amended as to scope of
protection, time or geographic area (or any one of them, as the case may be) in whatever
manner is considered reasonable by that court, and, as so amended will be enforced.
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5.8 Withholding of Taxes. To the extent that the Company is required to withhold
taxes in compliance with any federal, state, local or foreign law in connection with any
payment made or benefit realized by a Participant or other person under this Plan, it shall
be a condition to the receipt of such payment or the realization of such benefit that the
Participant or such other person make arrangements satisfactory to the Company for the
payment of all such taxes required to be withheld. At the discretion of the Committee, such
arrangements may include relinquishment of a portion of such benefit. In the event the
Participant has not made arrangements, the Company shall withhold the amount of such tax
obligations from such dividend payment or instruct the Participants employer to withhold
such amount from the Participants next payment(s) of wages. The Participant authorizes the
Company to so instruct the Participants employer and authorizes the Participants employer
to make such withholdings from payment(s) of wages.
5.9 Waiver. The failure of the Company to enforce at any time any terms, covenants
or conditions of this Agreement shall not be construed to be a waiver of such terms,
covenants or conditions or of any other provision. Any waiver or modification of the terms,
covenants or conditions of this Agreement shall only be effective if reduced to writing and
signed by both Participant and an officer of the Company.
5.10 Notices. Any notice to be given to the Company or election to be made under the
terms of this Agreement shall be addressed to the Company (Attention: Long-Term Incentive
Department) at One H&R Block Way, Kansas City Missouri 64105 or at such other address as the
Company may hereafter designate in writing to the Participant. Any notice to be given to the
Participant shall be addressed to the Participant at the last address of record with the
Company or at such other address as the Participant may hereafter designate in writing to
the Company. Any such notice shall be deemed to have been duly given when deposited in the
United States mail via regular or certified mail, addressed as aforesaid, postage prepaid.
5.11 Choice of Law. This Grant Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Missouri without reference to
principles of conflicts of laws.
5.12 Choice of Forum and Jurisdiction. Participant and Company agree that any
proceedings to enforce the obligations and rights under this Grant Agreement must be brought
in Missouri District Court located in Jackson County, Missouri, or in the United States
District Court for the Western District of Missouri in Kansas City, Missouri. Participant
agrees and submits to personal jurisdiction in either court. Participant and Company further
agree that this Choice of Forum and Jurisdiction is binding on all matters related to Awards
under the Plan and may not be altered or amended by any other arrangement or agreement
(including an employment agreement) without the express written consent of Participant and
H&R Block, Inc.
5.13 Attorneys Fees. Participant and Company agree that in the event of litigation
to enforce the terms and obligations under this Grant Agreement, the party prevailing in any
such cause of action will be entitled to reimbursement of reasonable attorney fees.
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5.14 Relationship of the Parties. Participant acknowledges that this Grant Agreement
is between H&R Block, Inc. and Participant. Participant further acknowledges that H&R Block,
Inc. is a holding company and that Participant is not an employee of H&R Block, Inc.
5.15 Headings. The section headings herein are for convenience only and shall not be
considered in construing this Agreement.
5.16 Amendment. No amendment, supplement, or waiver to this Agreement is valid or
binding unless in writing and signed by both parties.
5.17 Execution of Agreement. This Agreement shall not be enforceable by either
party, and Participant shall have no rights with respect to the Long Term Incentive Award,
unless and until it has been (1) signed by Participant and on behalf of the Company by an
officer of the Company, provided that the signature by such officer of the Company on behalf
of the Company may be a facsimile or stamped signature, and (2) returned to the Company.
In consideration of said Award and the mutual covenants contained herein, the parties agree to the
terms set forth above.
The parties hereto have executed this Grant Agreement.
Associate Name:
|
[Participant Name] | |
Date Signed:
|
[Acceptance Date] | |
H&R BLOCK, INC. |
||
By: |
President and Chief Executive Officer
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