Exhibit 10.17
SEPARATION AND RELEASE AGREEMENT
     This SEPARATION AND RELEASE AGREEMENT (the “Agreement”) is entered into as
of the 28th day of January, 2008, by and between H&R Block Management, LLC, a
Delaware limited liability company (“HRB”) and Marc West (“Executive”).
     WHEREAS, Executive and HRB are parties to an Employment Agreement dated
September 15, 2004 (the “Employment Agreement”),
     WHEREAS, Executive and HRB agree to terminate Executive’s employment with
HRB,
     WHEREAS, Executive and HRB intend the terms and conditions of this
Agreement to govern all issues related to Executive’s employment and separation
from HRB,
     NOW, THEREFORE, in consideration of the covenants and mutual promises
contained in this Agreement, Executive and HRB agree as follows:
     1. Termination of Employment. The parties agree that Executive’s employment
with HRB will terminate on May 1, 2008 (“Termination Date”). Until the
Termination Date, the Executive will remain on active payroll and be paid his
current salary in accordance with HRB’s regular payroll practices. Until the
Termination Date, Executive agrees that he will make himself available for
consultation on an as-needed basis as determined by HRB’s Interim Chief
Executive Officer with respect to matters within the scope of his employment,
and will respond to questions and provide guidance as requested by HRB from time
to time with respect to such matters. On or after the Termination Date,
Executive acknowledges and agrees that he will not represent himself as being an
employee, officer, director, trustee, member, partner, agent, or representative
of HRB for any purpose, and will not make any public statements on behalf of
HRB.
     2. Resignation. Executive agrees that as of the Termination Date, he
resigns from all offices, directorships, trusteeships, committee memberships,
and fiduciary capacities held with, or on behalf of, HRB or its subsidiaries or
affiliates (collectively as “Affiliates”), or any benefit plans of HRB or its
Affiliates. Executive will execute the resignations attached as Exhibit A on
minute book paper contemporaneously with his execution of this Agreement.
     3. Severance Benefits. The parties agree to treat the Executive’s
termination of employment as a termination without “cause” and a “Qualifying
Termination” (as defined in Section 1.07 of the Employment Agreement) for
purposes of Executive’s eligibility for severance compensation and benefits as
set forth in this Section. Subject to the terms and conditions of this
Agreement, including Executive’s executing this Agreement and the Supplemental
General Release, the Executive acknowledges and agrees that he will not be
eligible for any compensation or benefits after the Termination Date except for
the following:
     a. Severance Pay. Subject to the terms of the H&R Block Severance Plan
(“Severance Plan”), HRB will pay to Executive $640,000.00 (which amount
represents an aggregate of Executive’s (A) annual base salary of $400,000.00 and
(B) target short-term incentive compensation for HRB’s fiscal year 2008 of
$240,000.00, each determined as of the date of this Agreement) over a 12-month
period effective as of the

1

--------------------------------------------------------------------------------

 

Termination Date in semi-monthly equal installments (less required tax
withholdings and elected benefit withholdings).
     b. Short Term Incentive Bonus Payment. HRB will pay Executive a Short Term
Incentive bonus for Fiscal Year 2008 at 100% of his target in accordance with
the Company’s regular short term incentive process, and the terms and conditions
of the short term incentive plan in which Executive currently participates. The
Company will pay Executive the Short Term Incentive bonus due him at the time
the Company pays other such bonuses.
     c. Employee Benefits. Executive will remain eligible to participate in the
various health and welfare benefit plans maintained by HRB in accordance with
the terms of the Severance Plan. After his severance benefits cease, Executive
may be eligible to continue coverage of group health plan benefits under COBRA.
Conversion privileges may also be available for other benefit plans.
     d. Stock Options. Those portions of any outstanding incentive stock options
(“ISO Stock Options”) and nonqualified stock options (“NQ Stock Options”) to
purchase shares of HRB’s common stock granted to Executive by HRB that are
scheduled to vest between the Termination Date and 18 months thereafter (based
solely on the time-specific vesting schedule included in the applicable stock
option agreement) shall vest and become exercisable as of the Termination Date.
A list of the stock options vested as of the date of this Agreement and to
become vested pursuant to this Section is attached as Exhibit B. Any stock
options unaffected by the operation of this Section shall be forfeited to HRB on
the Termination Date. No later than the Termination Date, Executive will
complete an election form on which he will elect the time period during which he
may exercise his ISO and NQ Stock Options. Executive acknowledges and agrees
that he is solely responsible for the income tax treatment of his ISO and NQ
Stock Options election, and that HRB has not provided him any personal tax
advice about this election. HRB encourages Executive to seek independent tax
advice regarding this election.
     e. Restricted Shares. All restrictions on any shares of HRB’s common stock
awarded to Executive by HRB (“Restricted Shares”) that would have lapsed absent
a termination of employment in accordance with their terms by reason of time
between the Termination Date and 18 months thereafter shall terminate (and shall
be fully vested) as of the Termination Date. Any shares unaffected by the
operation of this Section shall be forfeited to HRB on the Termination Date. A
list of the Restricted Shares outstanding as of the date of this Agreement and
to become vested pursuant to this Section is attached as Exhibit C.
     f. Performance Shares. The number of performance shares Executive will
receive at the end of the performance period (June 30, 2009) of those awarded
him under the June 30, 2006 grant will be determined based upon (1) Executive’s
pro-rata length of service during the performance period, and (2) the
achievement of the performance goals at the end of the performance period. HRB
will pay any performance shares due Executive to him at the time payments are
generally made to other individuals who received an award of performance shares
on June 30, 2006. On the Termination Date, Executive shall forfeit to HRB any
Performance Shares HRB awarded him pursuant to a

2

--------------------------------------------------------------------------------

 

cycle which is less than one year old. A list of the Performance Shares eligible
to become payable pursuant to this subsection is attached as Exhibit D.
     g. Outplacement Services. HRB will pay directly to Right Management
Services for twelve (12) months of outplacement services to be provided to
Executive.
     h. Deferred Compensation. Executive will receive his vested account balance
and payment in accordance with Executive’s payment elections under the H&R Block
Deferred Compensation Plan for Executives, as amended.
     h. Forfeiture. Executive agrees that the compensation and benefits
described in this Section will cease and no further compensation and benefits
will be provided to him if he violates any of the post-employment obligations
under Section 5 of this Agreement, or Articles Two and Three of the Employment
Agreement.
     4. Vacation. HRB will pay Executive for his accrued, unused paid time off
which includes vacation, floating holidays, and personal days (but excludes sick
leave as set forth in the Company’s policies) within 21 days of the Termination
Date. Executive will not receive any other payment for vacation or holidays.
     5. Executive’s Representations. Executive represents and acknowledges to
HRB that (a) HRB has advised him to consult with an attorney of his choosing;
(b) he has had twenty-one (21) days to consider the waiver of his rights under
the Age Discrimination in Employment Act of 1967, as amended (“ADEA”) prior to
signing this Agreement; (c) he has disclosed to HRB any information in his
possession concerning any conduct involving HRB or its Affiliates that he has
any reason to believe involves any false claims to any governmental agency, or
is or may be unlawful, or violates HRB policy in any respect; (d) the
consideration provided him under this Agreement is sufficient to support the
releases provided by him under this Agreement; and (e) he has not filed any
charges, claims or lawsuits against HRB involving any aspect of his employment
which have not been terminated as of the date of this Agreement. Executive
understands that HRB regards the representations made by him as material and
that HRB is relying on these representations in entering into this Agreement.
     6. Effective Date of this Agreement. Executive shall have seven (7) days
from the date he signs this Agreement to revoke his consent to the waiver of his
rights under the ADEA in writing addressed and delivered to Alan Bennett,
Interim Chief Executive Officer, which action shall revoke this Agreement. If
Executive revokes this Agreement, all of its provisions shall be void and
unenforceable. If Executive does not revoke his consent, this Agreement will
take effect on the day after the end of this revocation period (the “Effective
Date”).
     7. Surviving Employment Agreement Obligations. Executive and HRB agree that
the termination of Executive’s employment will not affect the following
provisions of the Employment Agreement which, by their express terms, impose
continuing obligations on one or more of the parties following termination of
the Employment Agreement: (a) Article Two, “Confidentiality” — Sections 2.01,
2.02; (b) Article Three, “Non-Hiring; Non-Solicitation; No Conflicts;
Non-Competition” — Sections 3.01, 3.02, 3.03, 3.05, 3.06; and (c) Article Four,
“Miscellaneous” — Section 4.03. Under Section 3.05 of the Employment Agreement,
the parties agree to revise “Line of Business” for purposes of Executive’s
non-compete restriction to include

3

--------------------------------------------------------------------------------

 

any business that is competitive with the primary business activities of HRB’s
Tax Services segment as of the date hereof (which are tax preparation,
accounting, and small business services). Executive acknowledges and agrees that
he will fully comply with these obligations. HRB may agree to waive any of
Executive’s surviving post-employment obligations under the Employment
Agreement. Any such waiver must be in writing and signed by Executive and the
Chief Executive Officer of HRB. Unless otherwise agreed by the parties in
writing, any payments made to Executive under this Agreement will immediately
cease upon any such waiver.
     8. Business Expenses and Commitments. As of the Termination Date, Executive
agrees that he will have submitted required documentation for all outstanding
expenses on his HRB corporate credit card. Executive further agrees that he will
not initiate, make, renew, confirm or ratify any contracts or commitments for or
on behalf of HRB or any Affiliate, nor will he incur any expenses on behalf of
HRB or any Affiliate without HRB’s prior written consent.
     9. Release. Executive and his heirs, assigns, and agents forever release,
waive, and discharge HRB and Released Parties as defined below from each and
every claim, action, or right of any sort, known or unknown, arising on or
before the Effective Date.
     a. The foregoing release includes, but is not limited to, (1) any claim of
retaliation or discrimination on the basis of race, sex, pregnancy, religion,
marital status, sexual orientation, national origin, handicap or disability,
age, veteran status, special disabled veteran status, or citizenship status or
any other category protected by law; (2) any other claim based on a statutory
prohibition or requirement such as the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act, the Americans With Disabilities Act, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of 1974, the
Missouri Human Rights Act, the Missouri Service Letter Statute, and the Civil
Rights Ordinance of Kansas City, Missouri; (3) any claim arising out of or
related to an express or implied employment contract, any other contract
affecting terms and conditions of employment, or a covenant of good faith and
fair dealing; (4) any tort claims such as wrongful discharge, detrimental
reliance, defamation, emotional distress, or compensatory or punitive damages;
(5) any personal gain with respect to any claim arising under the qui tam
provisions of the False Claims Act, 31 U.S.C. 3730, and (6) any claims to
attorney fees, expenses, costs, disbursements, and the like.
     b. Executive represents that he understands the foregoing release, that
rights and claims under the Age Discrimination in Employment Act of 1967, as
amended, are among the rights and claims against HRB he is releasing, and that
he understands that he is not releasing any rights or claims arising after the
Effective Date.
     c. Executive further agrees never to sue HRB or cause HRB to be sued
regarding any matter within the scope of the above release. If Executive
violates this release by suing HRB or causing HRB to be sued, Executive agrees
to pay all costs and expenses of defending against the suit incurred by HRB,
including reasonable attorneys’ fees except to the extent that paying such costs
and expenses is prohibited by law or would result in the invalidation of the
foregoing release.

4

--------------------------------------------------------------------------------

 

     d. “Released Parties” for purposes of this Agreement are HRB, all current
and former parents, subsidiaries, related companies, partnerships or joint
ventures, and, with respect to each of them, their predecessors and successors;
and, with respect to each such entity, all of its past, present, and future
employees, officers, directors, stockholders, owners, representatives, assigns,
attorneys, agents, insurers, employee benefit programs (and the trustees,
administrators, fiduciaries and insurers of such programs), and any other person
acting by, through, under or in concert with any of the persons or entities
listed in this paragraph, and their successors.
     10. Breach by Executive. HRB’s obligations to Executive after the Effective
Date are contingent on his obligations under this Agreement. Any material breach
of this Agreement by Executive will result in the immediate cancellation of
HRB’s obligations under this Agreement and of any benefits that have been
granted to Executive by the terms of this Agreement except to the extent that
such cancellation is prohibited by law or would result in the invalidation of
the foregoing release.
     11. Executive Availability. Executive agrees to make himself reasonably
available to HRB to respond to requests by HRB for information pertaining to or
relating to the Company and/or its Affiliates, agents, officers, directors or
employees. Executive will cooperate fully with HRB in connection with any and
all existing or future litigation or investigations brought by or against HRB or
any of its Affiliates, agents, officers, directors or employees, whether
administrative, civil or criminal in nature, in which and to the extent HRB
deems Executive’s cooperation necessary. HRB will reimburse Executive for
reasonable out-of pocket expenses incurred as a result of such cooperation.
Nothing herein shall prevent the Employee from communicating with or
participating in any government investigation.
     12. Non-Disparagement. Executive agrees, subject to any obligations he may
have under applicable law, that he will not make or cause to be made any
statements that disparage, are inimical to, or damage the reputation of HRB or
any of its Affiliates, agents, officers, directors, or employees. In the event
such a communication is made to anyone, including but not limited to the media,
public interest groups and publishing companies, it will be considered a
material breach of the terms of this Agreement and Executive will be required to
reimburse HRB for any and all compensation and benefits (other than those
already vested) paid under the terms of this Agreement and all commitments to
make additional payments to Executive will be null and void.
     13. Return of Company Property. Executive agrees that as of the Termination
Date he will have returned to HRB any and all HRB property or equipment in his
possession, including but not limited to, any computer, printer, fax, phone,
credit card, badge, Blackberry, and telephone card assigned to him.
     14. Severability of Provisions. In the event that any provision in this
Agreement is determined to be legally invalid or unenforceable by any court of
competent jurisdiction, and cannot be modified to be enforceable, the affected
provision shall be stricken from the Agreement, and the remaining terms of the
Agreement and its enforceability shall remain unaffected.
     15. Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties and may be changed only with the written
consent of both

5

--------------------------------------------------------------------------------

 

parties and only if both parties make express reference to this Agreement. The
parties have not relied on any oral statements that are not included in this
Agreement. This Agreement supersedes all prior agreements and understandings
concerning the subject matter of this Agreement. Any modifications to this
Agreement must be in writing and signed by Executive and the Chief Executive
Officer of HRB. Failure of HRB to insist upon strict compliance with any of the
terms, covenants, or conditions of this Agreement will not be deemed a waiver of
such terms, covenants, or conditions.
     16. Applicable Law. This Agreement shall be construed, interpreted, and
applied in accordance with the law of the State of Missouri.
     17. Successors and Assigns. This Agreement and each of its provisions will
be binding upon Executive and his executors, successors, and administrators, and
will inure to the benefit of HRB and its successors and assigns. Executive may
not assign or transfer to others the obligation to perform his duties hereunder.
     18. Specific Performance by Executive. The parties acknowledge that money
damages alone will not adequately compensate HRB for Executive breach of any of
the covenants and agreements herein and, therefore, in the event of the breach
or threatened breach of any such covenant or agreement by Executive, in addition
to all other remedies available at law, in equity or otherwise, HRB will be
entitled to injunctive relief compelling Executive’s specific performance of (or
other compliance with) the terms hereof.
     19. Counterparts. This Agreement may be signed in counterparts and
delivered by facsimile transmission confirmed promptly thereafter by actual
delivery of executed counterparts.
     20. Supplemental Release. Executive agrees that within 21 days after the
Termination Date, he will execute an additional release covering the period from
the Effective Date to the Termination Date. Executive agrees that all HRB
covenants that relate to its obligations beyond the last day of employment will
be contingent on Executive’s execution of the supplemental release. The
supplemental release will be in the form of Exhibit E to this Agreement.

          EXECUTIVE
      /s/ Marc West       Marc West            Dated: 1/22/08     

6

--------------------------------------------------------------------------------

 

          Accepted and Agreed:

H&R BLOCK, INC.
      By:   /s/ Alan Bennett         Alan Bennett        Interim Chief Executive
Officer          Dated: 1/28/08       

7

--------------------------------------------------------------------------------

 

         

EXHIBIT A
RESIGNATION

TO:   The Board of Directors of H&R Block, Inc.:

     Effective May 1, 2008, I hereby resign my position from the following
companies as follows:

  •   Group President, Burr Oak Technical Solutions, Inc., a Delaware
corporation;     •   Director, H&R Block (India) Private Limited, an India
corporation;     •   Group President, Commercial Markets, H&R Block Management,
LLC, a Delaware limited liability company;     •   Group President, Commercial
Markets, H&R Block, Inc., a Missouri corporation;     •   President, RedGear
Technologies, Inc., a Missouri corporation;     •   Group President,
ServiceWorks, Inc., a Delaware corporation; and     •   Group President,
TaxWorks, Inc., a Delaware corporation.

                Dated: 1/28/08  /s/ Marc West       Marc West           

A-1

--------------------------------------------------------------------------------

 

EXHIBIT B
STOCK OPTION SUMMARY

                                  Grant Date   Grant Price   Outstanding  
Vested   Accelerated  
 
                               
9/13/2004
  $ 24.145       60,000       60,000       0  
 
                               
6/30/2005
  $ 29.175       48,000       32,000       16,000  
 
                               
6/30/2006
  $ 23.86       80,000       26,666       53,334  
 
                               
6/30/2007
  $ 23.37       100,000       0       66,666                
 
                               
 
            288,000       118,666       136,000  

A-2

--------------------------------------------------------------------------------

 

EXHIBIT C
RESTRICTED SHARES SUMMARY

                                  Grant Date   Grant Price   Outstanding  
Vested   Accelerated  
 
                               
6/30/05
  $ 0.00       1,334               1,334  

A-3

--------------------------------------------------------------------------------

 

EXHIBIT D
PERFORMANCE SHARES SUMMARY

                                  Grant Date   Grant Price   Outstanding  
Vested   Accelerated  
 
                               
6/30/2006
  $ 0.00       9,000               *  

 

*   The number of shares actually awarded will be determined at the end of the
3-year performance cycle (6/30/2009) based upon actual performance results.

Award will be prorated based upon the number of days worked by Executive during
the three year performance cycle.

A-4

--------------------------------------------------------------------------------

 

EXHIBIT E
SUPPLEMENTAL GENERAL RELEASE
This Supplemental General Release is delivered by Marc West (“Executive”) to and
for the benefit of the Released Parties (as defined below). The Executive
acknowledges that this Supplemental General Release is executed in accordance
with Section 20 of the Separation Agreement and Release between the parties.
     1. General Release. Executive and his heirs, assigns, and agents forever
release, waive, and discharge HRB and Released Parties as defined below from
each and every claim, action, or right of any sort, known or unknown, arising on
or before the Effective Date.
     a. The foregoing release includes, but is not limited to, (1) any claim of
retaliation or discrimination on the basis of race, sex, pregnancy, religion,
marital status, sexual orientation, national origin, handicap or disability,
age, veteran status, special disabled veteran status, or citizenship status or
any other category protected by law; (2) any other claim based on a statutory
prohibition or requirement such as the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act, the Americans With Disabilities Act, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of 1974, the
Missouri Human Rights Act, the Missouri Service Letter Statute, and the Civil
Rights Ordinance of Kansas City, Missouri; (3) any claim arising out of or
related to an express or implied employment contract, any other contract
affecting terms and conditions of employment, or a covenant of good faith and
fair dealing; (4) any tort claims such as wrongful discharge, detrimental
reliance, defamation, emotional distress, or compensatory or punitive damages;
(5) any personal gain with respect to any claim arising under the qui tam
provisions of the False Claims Act, 31 U.S.C. 3730, and (6) any claims to
attorney fees, expenses, costs, disbursements, and the like.
     b. Executive represents that he understands the foregoing release, that
rights and claims under the Age Discrimination in Employment Act of 1967, as
amended, are among the rights and claims against HRB he is releasing, and that
he understands that he is not releasing any rights or claims arising after the
Effective Date.
     c. Executive further agrees never to sue HRB or cause HRB to be sued
regarding any matter within the scope of the above release. If Executive
violates this release by suing HRB or causing HRB to be sued, Executive agrees
to pay all costs and expenses of defending against the suit incurred by HRB,
including reasonable attorneys’ fees except to the extent that paying such costs
and expenses is prohibited by law or would result in the invalidation of the
foregoing release.
     d. “Released Parties” for purposes of this Agreement are HRB, all current
and former parents, subsidiaries, related companies, partnerships or joint
ventures, and, with respect to each of them, their predecessors and successors;
and, with respect to each such entity, all of its past, present, and future
employees, officers, directors, stockholders,

I-1

--------------------------------------------------------------------------------

 

owners, representatives, assigns, attorneys, agents, insurers, employee benefit
programs (and the trustees, administrators, fiduciaries and insurers of such
programs), and any other person acting by, through, under or in concert with any
of the persons or entities listed in this paragraph, and their successors.
     2. No Existing Suit. Executive represents and warrants that, as of the
Effective Date of this Supplemental General Release, he has not filed or
commenced any suit, claim, charge, complaint, or other legal proceeding of any
kind against the Released Parties. The Executive acknowledges that this
Supplemental General Release does not prohibit him from filing a charge of
discrimination with the Equal Employment Opportunity Commission.
     3. Knowing and Voluntary Waiver. By signing this Supplemental General
Release (“Release”), Executive expressly acknowledges and agrees (a) HRB has
advised him to consult with an attorney of his choosing; (b) he has had
twenty-one (21) days to consider the waiver of his rights under the Age
Discrimination in Employment Act of 1967, as amended (“ADEA”) prior to signing
this Agreement; (c) he has carefully read this Release and know what it means;
(d) the consideration provided him under this Release is sufficient to support
the releases provided by him under this Release; and (e) Executive shall have
seven (7) days from the date he signs this Release to revoke his consent to the
waiver of his rights under the ADEA in writing addressed and delivered to Alan
Bennett, Interim Chief Executive Officer, which action shall revoke this
Release. If Executive revokes this Release, he agrees that he will not be
entitled to receive any of the payments or benefits under Section 2 of the
Separation Agreement. If Executive does not revoke his consent, this Agreement
will take effect on the day after the end of this revocation period (the
“Effective Date”).

            EXECUTIVE
      /s/ Marc West       Marc West 

    DATE: 1/29/08     

I-2