Exhibit 10.2
 
 

April 27, 2011

Mr. William C. Cobb
c/o H&R Block, Inc.
One H&R Block Way
Kansas City, Missouri   64105

Re:  Employment Agreement

This is your EMPLOYMENT AGREEMENT (this “Agreement”) with H&R Block Management,
LLC, a Delaware limited liability company (the “Company”) and H&R Block, Inc., a
Missouri corporation and the indirect parent corporation of the Company
(“Block”).  It sets forth the terms of your employment with the Company and its
Affiliates (as defined below) from time to time.

1.  
Your Position, Performance and Other Activities

 
(a) Agreement as to Employment; Titles.  Effective as of May 2, 2011 (the
“Employment Date”), your employment with the Company shall commence, and
effective as of May 16, 2011 (the “CEO Date”), you shall serve in the capacity
of President and Chief Executive Officer of the Company and Block, and you
hereby accept such employment, subject to the terms of this Agreement.
 
(b) Duties.  During the Term, you will have the duties, authorities and
responsibilities commensurate with the duties, authorities and responsibilities
of chief executive officers in publicly traded United States-based companies of
similar size, and such other duties, authorities and responsibilities as Block’s
Board of Directors (the “Board”) designates from time to time that are not
inconsistent with your positions; provided, that prior to the CEO Date, you will
be engaged in training and transition activities, without a corporate title, and
shall have such limited duties, authorities and responsibilities as shall be
reasonably determined by the Board.  You will report solely to the Board.
 
(c) Location of Employment.  Your location of employment will be the principal
executive office of the Company in Kansas City, Missouri.  You have agreed to
relocate your family and your primary residence to the greater Kansas City area
as soon as reasonably practicable.
 
(d) Performance and Other Activities.  So long as you are employed under this
Agreement, you agree to devote substantially all of your business time and
attention (excepting vacation time, holidays, sick days and periods of
disability) to the good faith performance of your duties hereunder, provided
that the foregoing shall not prevent you from (i) continuing to serve on the
board of directors of the Bay Harbor Foundation, and with prior Board Approval,
which will not be unreasonably withheld or delayed, serving on the boards of
directors of other
 

 
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non-profit organizations, (ii) continuing to serve on the board of directors of
one of the for-profit boards you now serve on with resignation from the other
within a reasonable period of time (but no other for-profit boards of directors
without prior Board approval), (iii) participating in charitable, civic,
educational, professional, community or industry affairs, including, without
limitation, delivering lectures, and fulfilling speaking engagements, provided
that you shall decline or contribute to charity any honorarium you receive and
may not retain any remuneration (in each case, other than reasonable expense
reimbursement), and (iv) managing your and your family’s personal investments
(whether or not passive in nature), so long as such activities described in
clauses (i), (ii), (iii) and (iv) do not materially interfere or conflict with
the performance of your duties and responsibilities hereunder and do not
materially violate the other provisions of either this Agreement or the H&R
Block, Inc. Code of Business Ethics & Conduct.  You will use reasonable efforts
to comply in all material respects with all reasonable policies of the Company
as are from time to time in effect and applicable to your position.  You
understand that the business of Block, the Company, and/or any other direct or
indirect subsidiary of Block (each such other subsidiary an “Affiliate”) may be
subject to governmental regulation, some of which may require you to submit to
background investigation as a condition of Block, the Company, and/or
Affiliates’ participation in certain activities subject to such regulation.
 
(e) Board Membership.  During the Term, the Board will nominate you for
re-election as a member of the Board at the expiration of your then current
term, provided that the foregoing shall not be required to the extent prohibited
by legal or regulatory requirements.  Equity awards made to you related to your
service on the Board prior to the effective date hereof shall continue to remain
outstanding and subject to their original terms and conditions.
 
2.  
Term of Your Employment

 
Your employment under this Agreement will begin on the Employment Date and end
upon the fifth anniversary hereof or an earlier date of termination of this
Agreement pursuant to the terms hereof (the “Term”).

3.  
Your Compensation

 
(a) Base Salary.  The Company will pay to you a gross salary during the Term of
$950,000 per annum (as increased from time to time, the “Base Salary”), payable
semimonthly or at such other pay period under the Company’s normal payroll
policies for its other executive-level employees.  The Base Salary shall be
reviewed annually for increases by the Compensation Committee of the Board (the
"Compensation Committee") and may be adjusted upward but not downward without
your consent.
 
(b) Cash Signing Bonus.  The Company will pay to you a cash signing bonus of
$900,000 on the first practicable payroll date on or after the Employment
Date.  This amount will be repaid by you in the event you voluntarily terminate
your employment hereunder prior to November 16, 2011 without Good Reason.
 
(c) Annual Bonus.  You will be eligible for an annual cash bonus under the
annual cash bonus plan applicable to senior executive officers of the Company
upon achievement of performance goals for each fiscal year during the Term, as
adopted by the Compensation
 

 
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Committee in consultation with you, with a target bonus equal to 125% of Base
Salary and a maximum bonus equal to the greater of 175% of the target bonus or
such higher amount as may be permitted by the annual cash bonus plan, and a
threshold level in accordance with the terms of the cash bonus plan.  Your
annual bonus will be payable when bonuses are paid to other senior executive
officers of the Company. Your annual bonus for fiscal year 2012 will not be
pro-rated based on the number of days employed or otherwise.
 
(d) Initial Option Grant.  Under the H&R Block 2003 Long-Term Executive
Compensation Plan, as amended (the “2003 Plan”), you will be granted as of 5:30
p.m. Central Time on May 2, 2011 (the “Grant Date”) a non-qualified stock option
(the “Initial Stock Option”) to purchase shares of Block’s common stock having a
grant date value under the Black-Scholes method of $2.25 million at an option
price per share equal to its closing price on the New York Stock Exchange on the
Grant Date, such option to expire on the earlier of (i) the fifth anniversary of
the termination of your employment with the Company, or (ii) the tenth
anniversary of the Grant Date.  The Initial Stock Option will be granted in
substantially the form attached hereto as Exhibit A (the “Initial Option
Agreement”) and shall vest and become exercisable in three equal installments,
on December 24 of each of 2011, 2012, and 2013, respectively, subject to the
terms and conditions of the Initial Option Agreement..
 
(e) Initial Restricted Share Grant.  As authorized under the 2003 Plan, you will
be granted as of 5:30 p.m. Central Time on May 2, 2011 (the “Grant Date”) a
number of Restricted Shares (the “Initial RS Grant”) under the 2003 Plan of
Block’s common stock having a grant date value of $2.25 million, such Restricted
Shares will be granted in substantially the form attached hereto as Exhibit B
(the “Initial Restricted Share Agreement”) and shall vest and become exercisable
in three equal installments, on December 24 of each of 2011, 2012, and 2013,
respectively, subject to the terms and conditions of the Initial Restricted
Share Agreement.
 
(f) Long-term Incentives.   You will eligible to participate in the Company’s
equity incentive plan for each fiscal year during the Term as determined by the
Compensation Committee in consultation with you.  For fiscal year 2012, on such
date that other senior executive officers of the Company receive their
respective equity grants, (which is expected to be June 21, 2011), you will
receive an equity grant having an aggregate grant-date value (with options
valued under the Black-Scholes method) of no less than $4.5 million.  The terms,
conditions and form of such equity award will be no less favorable than the
awards made to other Company senior executives as determined by the Compensation
Committee.
 
(g) Relocation Benefits.   You will be entitled to reimbursement for expenses
incurred in relation to the relocation of your family to the greater Kansas City
area as provided by the Company's executive relocation policy.
 
(h) Business Expenses.  The Company will promptly pay directly, or reimburse you
for, all business expenses, to the extent such expenses are paid or incurred by
you during the Term in the good faith performance of your duties or otherwise in
the interests of the Company and/or Block in accordance with the Company’s
policy in effect from time to time.
 
(i) Other Benefits.  During the Term, the Company will make available to you
such health, life and disability benefits, insurance, sick leave, pension,
deferred compensation, and
 

 
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other like benefits as are provided from time to time to the senior executive
officers of the Company or Affiliates.  Coverage and eligibility for any such
benefits are subject to the terms of the applicable plans as they may be amended
from time to time pursuant to their respective terms.  Without limiting Section
3(f) above, you will also be eligible for additional long term incentive awards,
as determined by the Compensation Committee.
 
(j) Vacation; Sick Leave.  During the Term, you shall be entitled to vacation
and sick leave in accordance with the policies and practices with respect to
senior executives of the Company, provided that your vacation days shall not be
less than four weeks per year.
 
4.  
Termination of Employment

 
(a) With or Without Cause.  The Company may, at any time, in its sole
discretion, terminate your employment upon written notice with or without
Cause.  For purposes of this Agreement, the term “Cause” means:
 
1. your commission of an act that is materially and demonstrably detrimental to
Block, the Company or any Affiliate, which act constitutes gross negligence or
willful misconduct by you in the performance of your material duties to Block,
the Company or any Affiliate; or
 
2. your commission of any material act of dishonesty or breach of trust
resulting in or intending to result in your material personal gain or your
material enrichment at the expense of Block, the Company or any Affiliate, but
in each case, excluding good faith disputes regarding your expense account or
expense reimbursement; or
 
3. your material violation of Sections 5 or 6 of this Agreement which violation,
if curable, is not cured by you within 30 days of the Company providing you with
written notice of such material violation; or
 
4. the inability of Block, the Company and/or an Affiliate to participate, in
whole or in part, in any current activity subject to governmental regulation and
material to the business of Block, the Company and their Affiliates solely as
the result of any willful action or inaction by you, as described in the last
sentence Section 1(d), which action or inaction, if curable, is not cured by you
within 30 days of the Company providing you with written notice of such action
or inaction.
 
For purposes of this Section 4(a), no act, or failure to act, by you will be
considered “willful” unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that the action or omission was in the best
interests of Block.  Any act, or failure to act, based upon (A) authority given
pursuant to a resolution duly adopted by the Board or (B) the advice of counsel
for Block shall be conclusively presumed to be done, or omitted to be done, by
you in good faith and in the best interests of the Company.  The termination of
your employment shall not be deemed to be for Cause unless and until there shall
have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than the majority of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to you and you are given an opportunity to be
heard, together with
 

 
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your counsel, before the Board), finding that, in the good faith opinion of the
Board, you are guilty of the conduct described in Section 4(a), and specifying
the particulars thereof in detail.
 
(b) With or Without Good Reason.  You may terminate your employment for Good
Reason or without Good Reason, by providing not less than thirty (30) days’
prior written notice of such termination to the Company, and, if such notice is
properly given, your employment hereunder will terminate as of the close of
business on the thirtieth (30th) day after such notice is deemed to have been
given or such later date as is specified in such notice.  Notwithstanding the
foregoing, in order to terminate your employment for Good Reason, you must give
written notice of termination as the result of Good Reason within 90 days of the
occurrence of the circumstances constituting Good Reason and the Company must
fail to cure such Good Reason circumstances within thirty (30) days of such
notice, and your termination will be effective at the end of such 30-day cure
period.
 
(c) Death or Disability.  If your employment is terminated because of your
death, the termination will be effective immediately.  If the Company determines
in good faith that your Disability has occurred, it may give you a written
notice of termination.  If within 30 days of such notice of termination you do
not return to full-time performance of your responsibilities, your employment
will terminate.  If you return to full-time performance in that 30-day period,
the notice of termination will be cancelled for all purposes of this
Agreement.  Notwithstanding the foregoing, if you die or become Disabled after
you provide a valid notice of termination with Good Reason or the Company
provides a notice of termination without Cause, your termination will be treated
as a termination by the Company not for Cause, effective as of the date of
termination of your employment due to death or Disability pursuant to this
section.
 
(d) Severance Not Related to a Change in Control.  Except as otherwise provided
in Section 4(e) below:
 
1. Upon a termination of your employment prior to the end of the Term by the
Company without Cause or by you for Good Reason, you will be entitled to
receive:
 
(A) payment of your accrued and unpaid Base Salary through the date of
termination, your accrued and unused vacation days as of the date of
termination, and reimbursement of incurred and unreimbursed expenses under
Section 3(h), within thirty (30) days following the date of termination
(collectively, the amounts in this subsection (A), the “Accrued Obligations”);
 
(B) any annual bonus earned with respect to a fiscal year ending prior to the
date of such termination but unpaid as of such date, payable at the same time in
the year of termination as such payment would be made if you continued to be
employed by the Company (the “Prior Year Bonus”);
 
(C) a lump sum payment, on the date sixty (60) days after the date of
termination, equal to the sum of (1) one times your Base Salary plus (2) one
times your target bonus (such lump sum payment, the “Base Severance”);
 
(D) for eighteen (18) months after the date of termination, the Company shall
pay you each month an amount equal to the monthly premium for
 

 
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COBRA continuation coverage under the Company’s health, dental and vision plans,
which payment shall be paid in advance on the first payroll day of each month
during the such 18-month period, commencing with the month immediately following
the date of termination; provided, however, that the first such payment shall be
made on the date sixty (60) days after the date of termination, and will include
payment of any amounts that were otherwise due prior;
 
(E) any performance bonus related to the year in which the termination occurs
calculated based on actual performance through the end of the applicable
performance period and prorated for the number of days of your employment in the
year in which the termination occurs, payable in a single lump sum at the same
time as such payment would be made if you continued to be employed by the
Company (the “Pro-Rata Bonus”);
 
(F) any other amounts or benefits due to you in accordance with the Company’s
benefit, equity or fringe benefit plans, programs or policies or this Agreement,
payable at such times and otherwise in accordance with the terms and conditions
such arrangements (the “Other Benefits”); and
 
(G) only in the event of a termination by you for Good Reason, full and
immediate vesting of the Initial Stock Option and the Initial RS Grant.
 
2. Upon a termination of your employment prior to the end of the Term by the
Company for Cause or by you without Good Reason, you will only receive the
Accrued Amounts and the Other Benefits; provided, however, that in the event of
a termination by you without Good Reason, you shall also be entitled to the
Prior Year Bonus.
 
3. Upon a termination of employment due to your death or Disability, you or your
representatives shall be entitled to the Accrued Obligations, the Other
Benefits, the Prior Year Bonus, the Pro-Rata Bonus, and full and immediate
vesting of the Initial Stock Option and the Initial RS Grant.
 
4. Upon a termination of employment in connection with the expiration of the
Term, you shall be entitled to the Accrued Obligations, the Other Benefits, the
Prior Year Bonus, and the Pro-Rata Bonus.
 
(e) Severance Related to a Change in Control.  If within 24 months following a
Change in Control or within 120 days prior to a 409A Change in Control:
 
1. your employment is terminated by the Company without Cause or by you for Good
Reason, you will be entitled to receive:
 
(A) the Accrued Obligations, Prior Year Bonus and the Other Benefits;
 
(B) a lump sum payment equal to the Base Severance, payable in a single lump sum
on the date sixty (60) days after the date of termination;
 

 
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(C) an additional lump sum payment equal to the sum of (1) the sum of your Base
Salary and (2) an amount equal to six (6) times the monthly premium for COBRA
continuation coverage under the Company’s health, dental and vision plans,
payable in a single lump sum on the later of the date one-hundred twenty (120)
days after the date of termination and, if the Change in Control is a 409A
Change in Control, the date of the 409A Change in Control;
 
(D) any performance bonus related to the year in which the termination occurs
calculated based on actual performance through the applicable performance
period, prorated for the number of days of your employment in the year in which
the termination occurs (the “Pro-Rata CIC Bonus”), payable in a single lump sum
at the same time as such payment would be made if you continued to be employed
by the Company; provided, however, that for purposes of this Agreement, the
Pro-Rata CIC Bonus shall be determined without the use of negative discretion
based on (A) Company performance for the applicable performance period equal to
the actual level of performance achievement against annual Company performance
objectives for such fiscal year as determined with respect to the other senior
executives of the Company and its affiliates and (B) individual performance
criteria achievement of 100% of target level; and
 
(E) full and immediate vesting of the Initial Stock Option and the Initial RS
Grant;
 
2. If your employment terminates due to your death or Disability, you or your
representatives shall be entitled to the Accrued Obligations, the Prior Year
Bonus, the Pro-Rata CIC Bonus, and the full and immediate vesting of the Initial
Stock Option and the Initial RS Grant.
 
3. Upon a termination of employment in connection with the expiration of the
Term, you shall be entitled to the Accrued Obligations, the Other Benefits, the
Prior Year Bonus and the Pro-Rata CIC Bonus.
 
(f) Related Definitions.
 
1. “Good Reason” means any of the following events, without your express written
consent, unless such events are corrected by the Company within 30 days after
you give a termination notice:
 
(A) A material diminution in your Base Salary or target bonus opportunity;
 
(B) Relocation of your location of employment outside of the Kansas City,
Missouri metropolitan area;
 
(C) A material diminution in your status, duties, or authority as President and
Chief Executive Officer of Block, or a requirement to report to anyone other
than the Block Board (but, if Block becomes a subsidiary of another
 

 
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entity, “Block Board” shall be deemed to refer to the board of directors (or
other governing body) of the ultimate parent entity of Block); or
 
(D) Any other action or inaction that constitutes a material breach by the
Company of this Agreement.
 
If you do not give a termination notice within 90 days after an event
constituting Good Reason has occurred, the event will no longer constitute Good
Reason.
 
2. "Change in Control" shall have the meaning set forth in the 2003 Plan.
 
3. “409A Change in Control” shall mean a Change in Control that constitutes a
“change in control” under Code Section 409A (regarding change in the ownership
or effective control of a corporation or a change in the ownership of a
substantial portion of the assets of a corporation).
 
4. "Disability" means your absence from your material duties and
responsibilities with the Company for 130 business days in any consecutive 12
months as a result of incapacity due to mental or physical illness or injury.
 
(g) Resignations.  Upon any termination of your employment with the Company for
any reason, you agree to promptly resign as a director of Block and from any
other offices, directorships, trusteeships, committee memberships and fiduciary
capacities held with, or on behalf of, Block and/or any Affiliate.  You shall
promptly execute any further documentation thereof as requested by the Company
and, if you are to receive any payments from the Company, execution of such
further documentation shall be a condition thereof.
 
(h) No Duplication of Benefits.  Any termination payments made and benefits
provided under this Agreement to you shall be in lieu of any other severance
payments or benefits for which you may be eligible under any of the plans,
policies or programs of Block and/or any Affiliate or under the Worker
Adjustment Retraining Notification Act of 1988 or any similar state statute or
regulation.  In the event any plan or grant provides for better treatment as to
equity on a termination of employment than that provided herein, such better
provision shall apply.
 
5.  
Confidentiality

 
(a) Background and Relationship of Parties.  The parties hereto acknowledge (for
all purposes including, without limitation, Sections 5 and 6 of this Agreement)
that Block, the Company, or Affiliates have been and will be engaged in a
continuous program of acquisition and development respecting their businesses,
present and future, and that, in connection with your employment by the Company,
you will be expected to have access to all information of value to the Company
and Block and that your employment creates a relationship of confidence and
trust between you and Block with respect to any information applicable to the
businesses of Block, the Company, or Affiliates.  You will possess or have
unfettered access to information that has been created, developed, or acquired
by Block, the Company, or Affiliates or otherwise become known to Block, the
Company, or Affiliates and which has commercial value in the businesses in which
Block, the Company, or Affiliates have been and will be engaged and has
 

 
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not been publicly disclosed by Block.  All information described above is
hereinafter called “Proprietary Information.”  By way of illustration, but not
limitation, Proprietary Information includes trade secrets, customer lists and
information, employee lists and information, developments, systems, designs,
software, data bases, know-how, marketing plans, product information, business
and financial information and plans, strategies, forecasts, new products and
services, financial statements, budgets, projections, prices, and acquisition
and disposition plans.  Notwithstanding anything herein to the contrary,
“Proprietary Information” does not include any portions of such information
which are now or hereafter become publicly known other than by you in violation
of this Agreement.
 
(b) Proprietary Information is Property of Block.
 
1. All Proprietary Information is the sole property of Block (or the applicable
Affiliate) and its assigns, and Block (or the applicable Affiliate) is the sole
owner of all patents, copyrights, trademarks, names, and other rights in
connection therewith and without regard to whether Block (or any Affiliate) is
at any particular time developing or marketing the same.  You hereby assign to
Block any rights you may have or may acquire in such Proprietary
Information.  At all times during and after your employment with the Company or
any Affiliate, you will keep in strictest confidence and trust all Proprietary
Information and you will not use or disclose any Proprietary Information without
the written consent of Block, except in the ordinary course of performing duties
as Chief Executive Officer and President of the Company or as may be required by
law, regulation or the order of any court or governmental authority or other
legal process.
 
2. In the event of any termination of your employment hereunder, you will
promptly deliver to the Company all copies of all documents, notes, drawings,
programs, software, specifications, documentation, data, Proprietary
Information, and other materials and property of any nature belonging to Block
or any Affiliate and obtained during the course of your employment with the
Company.  In addition, upon such termination, you will not remove from the
premises of Block or any Affiliate any of the foregoing or any reproduction of
any of the foregoing or any Proprietary Information that is embodied in a
tangible medium of expression.
 
3. Notwithstanding anything to the contrary set forth herein, the Company hereby
acknowledges and agrees that (A) you may retain, as your own property, copies of
your individual personnel documents, such as payroll and tax records and similar
personal records, and your rolodex and similar address book and (B) to the
extent you use your personal, pre-existing blackberry (or a replacement
purchased by you) and/or mobile phone number in the performance of your duties
to the Company, you shall retain such blackberry and/or mobile phone number as
your own at all times during the Term and following the termination of your
employment for any reason.
 
6.  
Covenants

 
(a) General.  The parties hereto acknowledge that, during the course of your
employment by the Company, you will have access to information valuable to the
Company, Block and/or Affiliates concerning the employees of Block, the Company
and/or Affiliates
 

 
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(“Block Employees”) and, in addition to your access to such information, you
may, during (and in the course of) your employment by the Company, develop
relationships with such Block Employees whereby information valuable to Block,
the Company and/or Affiliates concerning the Block Employees was acquired by
you.  Such information includes, without limitation: the identity, skills, and
performance levels of the Block Employees, as well as compensation and benefits
paid by Block, the Company and/or Affiliates to such Block Employees.  You agree
and understand that it is important to protect Block, the Company, Affiliates
and their employees, agents, directors, and clients from the unauthorized use
and appropriation of Block Employee information, Proprietary Information, and
trade secret business information developed, held, or used by Block, the
Company, or Affiliates, and to protect Block, the Company, and Affiliates and
their employees, agents, directors, and customers you agree to the covenants
described in this Section 6.
 
(b) Non-Hiring.  During the Term, and for a period of one year after your last
day of employment with the Company, you may not directly or indirectly recruit,
solicit, or hire any Block Employee or otherwise induce any such Block Employee
to leave the employment of Block, the Company and/or an Affiliate to become an
employee of or otherwise be associated with any other party or with you or any
company or business with which you are or may become
associated.  Notwithstanding the foregoing, the restrictions in this Section
6(b) shall not apply with regard to (i) general solicitations that are not
specifically directed to Block Employees but the restrictions shall still apply
to the hiring of any person who responds to such general solicitation), (ii)
serving as a reference at the request of an employee or (iii) actions taken in
the good faith performance of your duties for and/or for the benefit of Block,
the Company and/or their Affiliates.  The running of the applicable no-hire
period will be suspended and shall not apply during any period of violation
and/or any period of time during which litigation to enforce this covenant is
pending, but only to the extent the Company prevails in such litigation;
provided, that, to the extent the Company prevails in such litigation, the
applicable period shall apply for not more than the number of days following the
conclusion of such litigation equal to the difference between 365 and the number
of days (but not in excess of 365) from the date of termination until the date
on which such litigation commenced.
 
(c) Non-Solicitation.  During the Term, and for a period of one year after your
last day of employment with the Company, you may not directly or indirectly
solicit or enter into any business arrangement with any person or entity which
is, at the time of the solicitation, a significant customer of the Company or an
Affiliate, for the purpose of engaging in any business transaction of the nature
performed by the Company or such Affiliate, or contemplated to be performed by
the Company or such Affiliate, for such customer, provided that this Section
6(c) will only apply to customers for whom you personally provided services
while employed by the Company or an Affiliate; provided, that the foregoing
shall not apply with regard to (i) actions taken in the good faith performance
of your duties for Block, the Company or their Affiliates, (ii) general
solicitations that are not specifically directed to customers or suppliers of
Block, the Company or their Affiliate or (iii) ultimate consumers or
taxpayers.  The running of the applicable no-solicitation period will be
suspended and shall not apply during any period of violation and/or any period
of time during which litigation to enforce this covenant is pending, but only to
the extent the Company prevails in such litigation; provided, that, to the
extent the Company prevails in such litigation, the applicable period shall
apply for not more than the number of days following the conclusion of such
litigation equal to the difference between 365
 

 
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and the number of days (but not in excess of 365) from the date of termination
until the date on which such litigation commenced.
 
(d) Non-competition.  During the Term and for a one year period following your
last day of employment, you will not engage in, own, or control any interest in
(except as a passive investor in less than one percent of the outstanding
securities of publicly held companies), or act as an officer, director or
employee of, or consultant, advisor or lender to, any firm, corporation,
partnership, limited liability company, institution, business, or entity that is
competitive with the primary business activities of the Company's tax
preparation, accounting, and small business tax services (each, a “Competitive
Activity”).  Notwithstanding the foregoing, the provisions of this Section 6(d)
shall not be violated by your being employed, after the last day of your
employment with the Company, by or otherwise providing services to (i) a
subsidiary, division or unit of any entity engaged in a Competitive Activity
where less than five percent (5%) of the gross operating revenues in the prior
fiscal year of such competitive entity (at the date of commencement of your
employment with such entity) were received from any Competitive Activity or (ii)
an entity with a subsidiary, division or unit engaged in Competitive Activities
so long as you do not provide material services to such subsidiary, division or
unit.  You recognize that irreparable injury to the Company would result from
your violation of this Section 6(d), and therefore, you agree that in the event
of any such violation, whether threatened or actual, the Company shall be
entitled to injunctive relief to prohibit or restrain such violation in addition
to all other remedies available at law or equity. You agree that no bond need be
filed in connection with any request by the Company for injunctive relief. In
addition to any injunctive relief, EMPLOYEE acknowledges that the COMPANY is
entitled to damages for any and all violations of this Section 6(d).  The
running of the applicable noncompete period will be suspended and shall not
apply during any period of violation and/or any period of time during which
litigation to enforce this covenant is pending, but only to the extent the
Company prevails in such litigation; provided, that, to the extent the Company
prevails in such litigation, the applicable period shall apply for not more than
the number of days following the conclusion of such litigation equal to the
difference between 365 and the number of days (but not in excess of 365) from
the date of termination until the date on which such litigation commenced.
 
(e) No Conflicts.  You represent in good faith that, to the best of your
knowledge, based on the current business of Block and its Affiliates, your
performance of all the terms of the Agreement will not breach any agreement to
which you are or were a party and which requires you to keep any information in
confidence or in trust.  You have not brought and will not bring to the Company
or Block nor will you knowingly use in the performance of employment
responsibilities at the Company any proprietary materials or documents of a
former employer that are not generally available to the public, unless you have
obtained express written authorization from such former employer for their
possession and use.  You have not and will not knowingly breach any obligation
of confidentiality that you may have to former employers.
 
(f) Reasonableness of Restrictions.  You and the Company acknowledge that the
restrictions contained in this Agreement are reasonable, but should any
provisions of any Section of the Agreement be determined to be invalid, illegal,
or otherwise unenforceable or unreasonable in scope by any court of competent
jurisdiction, 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
 

 
11

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by the Company and you 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.
 
(g) Cooperation.  During the period of your employment hereunder and thereafter,
you agree to reasonably assist and cooperate with Block and/or any Affiliate
(and their outside counsel) at mutually convenient times and places in
connection with the defense or prosecution of any claim that may be made or
threatened against or by Block or any Affiliate, or in connection with any
ongoing or future investigation or dispute or claim of any kind involving Block
or any Affiliate, including any proceeding before any arbitral, administrative,
judicial, legislative, or other regulatory body or agency, including preparing
for and testifying in any proceeding to the extent such claims, investigations
or proceedings materially relate to services performed or required to be
performed by you, or pertinent knowledge possessed by you, in each case, other
than any such proceeding in which you and Block and/or its Affiliates are
adverse parties to one another or are reasonably likely to be or which relate to
matters exclusively related to the period after termination of your employment
with the Company.  Upon presentment to the Company of appropriate documentation,
the Company will pay directly or reimburse you for the reasonable out-of-pocket
expenses incurred as a result of such cooperation.
 
(h) Survival.  The obligations contained in this Section 6 shall survive the
termination or expiration of the Term and your employment by the Company and
shall be fully enforceable thereafter.
 
7.  
Miscellaneous

 
(a) Block’s Rights.  The parties hereto agree that Block is a beneficiary as to
the obligations imposed upon you under this Agreement and as to the right and
privileges to which the Company is entitled pursuant to this Agreement, and that
Block is entitled to all of the rights and privileges associated with such
status.
 
(b) Release required for any Severance Benefits.  The Company’s obligation to
make any payment of any amounts or provide any benefits to you under Sections
4(d) or 4(e) hereof (other than the Accrued Obligations and the Other Benefits)
is contingent upon your execution and delivery to the Company of a Release in
favor of the Company in the form attached as Exhibit C hereto (the
“Release”).  Such Release shall be executed and delivered (and no longer subject
to revocation) within sixty (60) days following termination; provided, however,
that with respect to any payment subject to the Release that is (a) paid in
installments that would otherwise commence prior to the sixtieth (60th) day
after the date of termination, the first payment of any such payment shall be
made on the sixtieth (60th) day after the date of termination, and will include
payment of any amounts that were otherwise due prior thereto, or (b) paid in a
lump sum that would otherwise be paid prior to the sixtieth (60th) day after the
date of termination, such payment shall be made on the sixtieth (60th) day after
the date of termination.
 
(c) Block Obligation.  Block and the Company hereby agree to be jointly and
severally liable for the performance of all obligations and duties of the
entities hereunder and the payment of all amounts and provision of all benefits
due to you under this Agreement.
 

 
12

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(d) Entire Agreement.  This Agreement supersedes all previous employment
agreements, whether written or oral between you and the Company and constitutes
the entire agreement and understanding between the Company and you concerning
the subject matter hereof.  No modification, amendment, termination, or waiver
of this Agreement will be binding unless in writing and signed by you and a duly
authorized officer of the Company.  Failure of the Company, Block, or you to
insist upon strict compliance with any of the terms, covenants, or conditions
hereof will not be deemed a waiver of such terms, covenants, and
conditions.  If, and to the extent that, any other written or oral agreement
between you and Company or Block is inconsistent with or contradictory to the
terms of this Agreement, the terms of this Agreement will apply.
 
(e) Specific Performance.  The parties hereto acknowledge that money damages
alone will not adequately compensate the Company or Block or you for breach of
any of the covenants and agreements set forth in Sections 5 and 6 herein and,
therefore, in the event of the breach or threatened breach of any such covenant
or agreement by either party, in addition to all other remedies available at
law, in equity or otherwise, a wronged party will be entitled to injunctive
relief compelling specific performance of (or other compliance with) the terms
hereof.
 
(f) Successors and Assigns.  This Agreement is binding upon and will inure to
the benefit of you and your heirs, executors, assigns and administrators or your
estate and property and the Company, Block and their successors and permitted
assigns.  You may not assign or transfer to others the obligation to perform
your duties hereunder.  The Company may assign this Agreement to an Affiliate
with your consent, in which case, after such assignment, the “Company” means the
Affiliate to which this Agreement has been assigned.  Block may not assign this
Agreement other than to a successor to all or substantially all of its business
and then only upon such assignee’s delivery to  you of a written assumption of
this Agreement.
 
(g) Withholding Taxes.  From any payments due hereunder to you from the Company,
there will be withheld amounts required to satisfy liabilities for federal,
state, and local taxes and withholdings.  In addition, the Company agrees that
except as would violate applicable securities law, (i) you shall be permitted to
sell Shares in order to satisfy any such taxes and withholding obligations and
(ii) any minimum required tax withholding obligations on your equity
compensation awards in respect of Shares may be satisfied by reducing the number
of Shares otherwise payable under such award by an amount of such Shares having
a fair market value equal to the amount of such tax withholding obligations and
(iii) the required minimum tax withholding obligations in connection with
vestings of the Initial RS Grant shall be satisfied automatically by reducing
the number of Shares otherwise payable in connection with such vestings by an
amount of Shares otherwise subject to the Initial RS Grant having a fair market
value equal to the amount of such tax withholding obligations.
 
(h) Indemnification.  To the fullest extent permitted by law and Block’s current
Bylaws or any right thereunder, the Company and Block hereby indemnify and hold
you harmless, during and after the period of your employment hereunder, from and
against all loss, costs, damages, and expenses including, without limitation,
legal expenses of counsel selected by the Company to represent your interests
(which expenses the Company will, to the extent so permitted, advance to you as
the same are incurred), arising out of or in connection with the fact that you
are or were a director, officer, attorney, employee, or agent of the Company or
Block or
 

 
13

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serving in such capacity for another corporation at the request of the Company
or Block, or as a fiduciary of any benefit plan of any of the foregoing. You
also shall have the right under the foregoing circumstances to decline the
counsel selected by the Company to represent your interests and to select your
own counsel or to have your own counsel as co-counsel to the counsel selected by
the Company, but the fees incurred with respect to your own counsel will be at
your own expense; provided, however, that if it is reasonably likely that there
may be a conflict of interest with the Company or Block, then the Company shall
pay or reimburse any of the fees, expenses or other costs incurred by you in
respect of your own counsel.  Subject to the foregoing, the indemnification
provided in this Section 7(h) will not apply to any loss, costs, damages, and
expenses arising out of or relating in any way to your employment by any former
employer or the termination of any such employment.
 
(i) D&O Insurance.  The Company and Block shall cover you under directors and
officers liability insurance both during and, while potential liability exists,
after the term of this Agreement on the most favorable terms as provided to any
current or former director or executive officer of the Company or Block.
 
(j) Legal Expenses.  The Company will pay your legal fees and expenses incurred
in connection with preparation of this Agreement not to exceed $35,000 within
thirty (30) days after receipt of an invoice.  In the event of any dispute with
the Company under this Agreement, your legal fees and expenses will be paid by
the Company if you prevail on any material issue in the dispute.
 
(k) No Duty to Mitigate.  You shall have no duty to attempt to mitigate the
level of benefits payable by the Company to you hereunder and the Company shall
not be entitled to set off against the amounts payable hereunder any amounts
received by the Executive from any other source, including any subsequent
employer.  The Company shall be permitted to offset any amount that you owe the
Company against any amounts due to you by Block, the Company, or their
Affiliates under this Agreement, provided that any such set-off shall not be
permitted (i) except as to any amounts acknowledged by you or a final court
judgment that such amounts are due from you to Block, the Company or such
Affiliates or (ii) against any non-qualified deferred compensation under Code
Section 409A.
 
(l) Mutual Nondisparagement
 
1. During the Term and for two years thereafter (the “Restricted Period”), you
agree not to, with intent to damage, disparage or encourage or induce others to
disparage Block, the Company or its officers or directors as of the date of
termination of your employment (the “Company Parties”).  For purposes of this
7(l), the term “disparage” includes, without limitation, comments or statements
to the press, to the employees of Block, the Company, or their Affiliates or to
any individual or entity with whom Block, the Company, or their Affiliates has a
business relationship (including, without limitation, any vendor, supplier,
customer or distributor), or any public statement, that in each case is intended
to, or can be reasonably expected to, damage any of the Company Parties in more
than a de minimis manner.  Notwithstanding the foregoing, nothing in this
Section 7(l) shall prevent you from (i) making any truthful statement to the
extent, but only to the extent (A) necessary with respect to any litigation,
arbitration
 

 
14

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or mediation involving this Agreement, including, but not limited to, the
enforcement of this Agreement, in the forum in which such litigation,
arbitration or mediation properly takes place or (B) required by law, legal
process or by any court, arbitrator, mediator or administrative or legislative
body (including any committee thereof) with apparent jurisdiction over you, (ii)
making normal competitive statements during any period after the termination of
your employment, (iii) making any statements in the good faith performance of
your duties to Company, and (iv) rebutting any statements made by the Block, the
Company, or their Affiliates or their respective officers, directors, employees
or other service providers.
 
2. During the Restricted Period, the Company agrees that neither the Company nor
its officers or directors shall, with intent to damage, disparage or encourage
or induce others to disparage you, provided, that the foregoing shall not apply
to: (i) truthful statements to the extent, but only to the extent (A) necessary
with respect to any litigation, arbitration or mediation involving this
Agreement, in the forum in which such litigation, arbitration or mediation
properly takes place or (B) required by law, legal process or by any court,
arbitrator or mediator or legislative body (including the committee thereof)
with apparent jurisdiction over the Company or its Subsidiaries or the
applicable officer; (ii) normal competitive statements during any period after
the termination of your employment, or (iii) rebuttals of any statements made by
you.  For purposes of this Section 7(l), the term “disparage” includes, without
limitation, comments or statements to the press or to any individual or entity
with whom you have a business relationship, or any public statement, that in
each case is intended to, or can be reasonably expected to, damage you in
connection with your then current or future employment or business
relationships.
 
(m) Clawback.  If Block is required to restate its financial results due for
fiscal year 2012 or thereafter while you are Chief Executive Officer of Block to
material noncompliance with financial reporting requirements under United States
federal securities laws as a result of misconduct or error (as determined in
good faith by the Audit Committee or by the full Board), Block may (but shall
not be required to), in the good faith discretion of the Committee, take action
to recoup from you all or any portion of any performance-based or other
incentive-based compensation, and profits realized from the sale of Shares (each
such amounts shall be referred to as an "Award") received as equity compensation
by you, the amount of which had been determined in whole or in part upon
performance goals relating to the restated financial results, or upon the Fair
Market Value of Shares, regardless of whether you engaged in any misconduct or
were at fault or responsible in any way for causing the need for the
restatement. In such an event, the Company, Block or any Affiliate shall be
entitled to recoup up to the amount, if any, by which the Award, or the Fair
Market Value of the Shares, actually received by you exceeded the payment or
Fair Market Value, as applicable, that would have been received based on the
restated financial results, and any profits from the sale of Shares transferred
pursuant to an Award in excess of the profits that would have been received
based on the restated financial results. The Company’s, Block's and each
Affiliate's right of recoupment shall apply only if demand for recoupment is
made not later than three years following the payment of the applicable
Award.  Any recoupment shall be made net of any taxes you paid (to the extent
such taxes may not be reasonably recovered by you) on the compensation subject
to recoupment.  You acknowledge that you are aware of the provision of Section
304 of the Sarbanes-Oxley Act of
 

 
15

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2002 and the right of the Securities Exchange Commission with respect
thereto.  The following definitions apply for purposes of this paragraph 7(m):
 
1. "Fair Market Value" means, as of any given date, (i) if the Shares are listed
on the New York Stock Exchange (or another U.S. national securities exchange),
the closing price on the date at issue, or if there is no closing price on such
date, the closing price on the last preceding day for which there was a closing
price; (ii) if the Shares are not listed on the New York Stock Exchange (or
another U.S. national securities exchange), a value determined by the reasonable
application of a reasonable valuation method as determined by the Committee in
accordance with Section 409A of the Code.
 
2. "Shares" means shares of the common stock, without par value, of the Company.
 
(n) Notices.  All notices required or desired to be given hereunder must be in
writing and will be deemed served and delivered if delivered in person or
mailed, postage prepaid to you at: your address than on file with the Company’s
payroll department and to the Company at: HRM Management, Inc., c/o H&R Block,
Inc., One H&R Block Way, Kansas City, Missouri  64105, Attn: Corporate
Secretary; or to such other address and/or person designated by either party in
writing to the other party.  Any notice given by mail will be deemed given as of
the date it is so mailed and postmarked or received by a nationally recognized
overnight courier for delivery.
 
(o) Counterparts.  This Agreement may be signed in counterparts and delivered by
facsimile transmission confirmed promptly thereafter by actual delivery of
executed counterparts.
 
(p) Section 409A.  It is intended that this Agreement will comply with, or be
exempt from, Section 409A of the Code and any regulations and guidelines
promulgated thereunder (collectively, “Section 409A”), to the extent the
Agreement is subject thereto, and the Agreement shall be interpreted on a basis
consistent with such intent.  Notwithstanding any provision to the contrary in
this Agreement, if you are deemed on the date of your “separation from service”
(within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company to be a
“specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)),
then with regard to any payment or benefit that is considered non-qualified
deferred compensation under Section 409A payable on account of a “separation
from service” that is required to be delayed pursuant to Section 409A(a)(2)(B)
of the Code (after taking into account any applicable exceptions to such
requirement), such payment or benefit shall be made or provided on the date that
is the earlier of (i) the expiration of the six (6)-month period measured from
the date of your “separation from service,” or (ii) the date of your death (the
“Delay Period”).  Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this Section 7(p) (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to you in a lump sum and any remaining
payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them
herein.  Notwithstanding any provision of this Agreement to the contrary, for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or
 

 
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following a termination of employment that are considered deferred compensation
under Section 409A, references to your “termination of employment” (and
corollary terms) with the Company shall be construed to refer to your
“separation from service” (within the meaning of Treas. Reg. Section
1.409A-1(h)) with the Company.  With respect to any reimbursement or in-kind
benefit arrangements of the Company and its Affiliates that constitute deferred
compensation for purposes of Section 409A, except as otherwise permitted by
Section 409A, the following conditions shall be applicable: (i) the amount
eligible for reimbursement, or in-kind benefits provided, under any such
arrangement in one calendar year may not affect the amount eligible for
reimbursement, or in-kind benefits to be provided, under such arrangement in any
other calendar year (provided, that, this clause (i) shall not be violated with
regard to expenses reimbursed under any arrangement covered by Code Section
105(b) solely because such expenses are subject to a limit related to the period
the arrangement is in effect), (ii) any reimbursement must be made on or before
the last day of the calendar year following the calendar year in which the
expense was incurred, and (iii) the right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit.  Whenever
payments under this Agreement are to be made in installments, each such
installment shall be deemed to be a separate payment for purposes of Section
409A.  Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty (30)
days following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.  Anything
in this Agreement to the contrary notwithstanding, any tax gross-up payment
(within the meaning of Treas. Reg. Section 1.409A-3(i)(1)(v)) provided for in
this Agreement shall be made to you no later than the end of your taxable year
next following your taxable year in which you remit the related taxes.
 
(q) Section 280G “Best-net Approach.  In the event that a Change in Control or
other transaction occurs and it is determined that any payment, award, benefit
or distribution (including, without limitation, the acceleration of any payment,
award, distribution or benefit), by the Company, Block or any of their
Affiliates or an acquirer of Block or its Affiliates, to or for your benefit
(whether pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the
Code or any corresponding provisions of state or local excise tax law, or any
interest or penalties are incurred by you with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Company shall pay or
provide to you the greatest of the following, whichever gives you the highest
net after-tax amount (after taking into account federal, state, local and
payroll taxes at your actual marginal rates and the Excise Tax): (1) all of the
Payments or (2) Payments not in excess of the greatest amount of Payments that
can be paid that would not result in the imposition of the excise tax under
Section 4999 of the Code (the “Safe Harbor Amount”).  The Payments to be reduced
hereunder, if any, will be determined in a manner which has the least economic
cost to you and, to the extent the economic cost is equivalent, will be reduced
in the inverse order of when the Payment would have been made to you until the
reduction specified herein is achieved.  All determinations required to be made
under this Section 7(q) shall be made by a certified public accounting firm or
executive compensation consulting firm, in either case of national standing (a
“Qualified Firm”) as mutually agreed to by the Company and you (or, if the
Company and you cannot reach such mutual agreement, each shall select a
Qualified Firm and such Qualified Firms shall mutually select a third Qualified
Firm) and such selected Qualified Firm shall provide detailed supporting
 

 
17

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calculations both to the Company and you within 15 business days of the receipt
of notice from you that there has been a Payment, or such earlier time as is
requested by the Company or you.  All fees and expenses of the Qualified Firms
(and the third Qualified Firm if one is required to be selected) shall be borne
solely by the Company.  Any determination by the Qualified Firm shall be binding
upon the Company and you, subject to any adjustments required by the Internal
Revenue Service.  You shall cooperate, to the extent your reasonable out-of
pocket expenses are reimbursed by the Company, with any reasonable requests by
the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax.
 
(r) Arbitration.  The parties hereto may attempt to resolve any dispute
hereunder informally via mediation or other means.  Otherwise, any controversy
or claim arising out of or relating to this Agreement, or any breach thereof,
will, except as provided in Section 7(e), be adjudicated only by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon such award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.  The arbitration will be held
in Kansas City, Missouri, or such other place as may be agreed upon at the time
by the parties to the arbitration.  Each party shall bear its own fees and
expenses in connection with any such arbitration, provided that in the event you
prevail on any material issue in such dispute, the arbitrator(s) shall, in their
award, require the Company and Block to pay the costs of arbitration, which will
include your reasonable attorneys’ fees and expenses, as well as the
arbitrator’s fees and expenses, to you.
 
(s) Choice of Law.  This Agreement will be governed by, construed or enforced in
accordance with the Laws of the State of Missouri, excluding any conflicts or
law, rule or principle that might otherwise refer to the substantive law of
another jurisdiction.
 
(t) Survival.  Upon the expiration or other termination of this Agreement or
your, the respective rights and obligations of the parties hereto shall survive
to the extent necessary to carry out the intentions of the parties under this
Agreement.
 

[Signature Page Follows]

 
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Very truly yours,

 
H&R Block Management, LLC
 
 

 
 

 
 
Name:
 
 
Title:
 

H&R Block, Inc.

Name:
Title:

April 27, 2011

BY SIGNING THIS AGREEMENT, I HEREBY CERTIFY THAT I (A) HAVE RECEIVED A COPY OF
THIS AGREEMENT FOR REVIEW AND STUDY BEFORE SIGNING IT, (B) HAVE READ THIS
AGREEMENT CAREFULLY BEFORE SIGNING IT, (C) HAVE HAD SUFFICIENT OPPORTUNITY TO
REVIEW THE AGREEMENT WITH ANY ADVISOR I DESIRED TO CONSULT, INCLUDING LEGAL
COUNSEL, (D) HAVE HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING IT TO ASK ANY
QUESTIONS ABOUT THIS AGREEMENT AND HAVE RECEIVED SATISFACTORY ANSWERS TO ALL
SUCH QUESTIONS, AND (E) UNDERSTAND MY RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT.

Accepted and agreed to:

William C. Cobb                                

April 27, 2011

 
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Exhibit A

Initial Option Agreement

H&R BLOCK, INC.
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 William C. Cobb (“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”); and

WHEREAS, receipt of such Awards under the Plan are conditioned upon a
Participant’s 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.

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 capitalizedCode. Code means the Internal Revenue Code of
1986, as amended.

1.1  
Code. Code means the Internal Revenue Code of 1986, as amended.

1.2  
Committee. Committee means the Compensation Committee of the Board of Directors
for H&R Block, Inc.

1.3  
Common Stock. Common Stock means the common stock, without par value, of the
Company.

1.4  
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.

1.5  
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

 
20

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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.

1.6  
Fair Market Value. Fair Market Value (“FMV”) means the Closing Price for one
share of H&R Block, Inc. Stock.

1.7  
Stock Option. Stock Option means the right to purchase, upon exercise of a stock
option granted under the Plan, shares of the Company’s 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
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
December 24, 2011
 
33%
December 24, 2012
 
33%
December 24, 2013
 
34%

(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.)

2.4  
Acceleration of Vesting. Notwithstanding anything herein to the contrary, the
acceleration of the vesting of this Stock Option shall occur in accordance with
the terms and conditions of that certain Employment Agreement dated [  ], 2011,
between Participant and H&R Block Management, LLC (the “Employment Agreement”).

2.5  
Term of Option. No Stock Option granted under this Grant Agreement may be
exercised after [Expiration Date]. Except as provided in the Employment

 
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Agreement, all Stock Options shall terminate when the Participant ceases, for
whatever reason, to be an employee of any of the subsidiaries of the Company.

2.6  
Participant’s Death. In the event the Participant ceases to be an employee of
any of the subsidiaries of the Company because of death, the Participant’s
rights under the Stock Option shall pass by the Participant’s will or laws of
descent and distribution.

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 Participant’s 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.  
RESERVED

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.

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.

 
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5.2  
[RESERVED]

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.  Notwithstanding the foregoing, the Stock Option may be terminated
unless the Stock Option is fully vested as of such date and the Participant is
either paid the value thereof or given a reasonable opportunity to exercise the
Stock Option in full.

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).  Notwithstanding anything herein or in the Plan to the contrary, any
interpretation of terms used in the Employment Agreement shall be resolved in
accordance with the dispute mechanisms therein and shall bind the Company and
the Participant.

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  
[RESERVED]

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

 
23

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payment made or benefit realized by a Participant or other person under this
Award, 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. Such arrangements shall include relinquishment of a portion of such
payment or benefit, and in the event the Participant has not made any such
arrangements, such relinquishment shall be automatic.

5.9  
Waiver. The failure of the Company to enforce at any time any terms or
conditions of this Agreement shall not be construed to be a waiver of such terms
or conditions or of any other provision. Any waiver or modification of the terms
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.

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
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 and Company agree and submit 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  
[RESERVED]

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.

 
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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.

5.19  
Conflicts.  To the extent there is any conflict between this Agreement and the
Employment Agreement, the Employment Agreement shall control.

 
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:
 
William C. Cobb
     
Date Signed:
 
[Acceptance Date]

H&R BLOCK, INC.

By:                                                      
Name:                      Alan M. Bennett
Title: President and Chief Executive Officer

 
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Exhibit B

Initial Restricted Share Agreement

H&R BLOCK, INC.
 
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 William C. Cobb (“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”); and

WHEREAS, receipt of such Awards under the Plan are conditioned upon a
Participant’s 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.

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. Code. Code means the Internal Revenue Code of 1986, as amended.
1.2. Committee. Committee means the Compensation Committee of the Board of
Directors for H&R Block, Inc.
1.3. Common Stock. Common Stock means the common stock, without par value, of
the Company.
1.4. 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.
1.5. 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.

 
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1.6. Fair Market Value. Fair Market Value (“FMV”) means the Closing Price for
one share of H&R Block, Inc. Stock.
1.7. 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.

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. The Shares covered hereby shall be subject
to a “substantial risk of forfeiture” within the meaning of Code Section 83 for
a period time as designated by Section 2.6, subject to Section 2.7.
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
Participant’s 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:

 
8. 
 
   
9. 
 
Percent of Shares Subject to Vesting
Vesting Date
10. 
 
on Such Vesting Date
December 24, 2011
11. 
 
33%
December 24, 2012
12. 
 
33%
December 24, 2013
13. 
 
34%

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

 
27

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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 anything herein to the contrary,
the acceleration of the vesting of any Shares shall occur in accordance with the
terms and conditions of that certain Employment Agreement dated [  ], 2011,
between Participant and H&R Block Management, LLC (the “Employment Agreement”).

3.  
[RESERVED]

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. [RESERVED]
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

 
28

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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 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.  Notwithstanding the foregoing, no Award may be terminated unless the
Award is fully vested as of such date and the Participant is paid the value
thereof.
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).  Notwithstanding anything herein or in the Plan to the contrary, any
interpretation of terms used in the Employment Agreement shall be resolved in
accordance with the dispute mechanisms therein and shall bind the Company and
the Participant.
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. [RESERVED]
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 Award, 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. Such arrangements shall include relinquishment of a
portion of such payment or benefit, and in the event the Participant has not
made any such arrangements, such relinquishment shall be automatic.
5.9. Waiver. The failure of the Company to enforce at any time any terms or
conditions of this Agreement shall not be construed to be a waiver of such terms
or conditions or of any other provision. Any waiver or modification of the terms
or conditions of this Agreement shall only be effective if reduced to writing
and signed by both Participant and an officer of the Company.

 
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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.
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 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 and Company agree and submit 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. [RESERVED]
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.
5.19. Conflicts.  To the extent there is any conflict between this Agreement and
the Employment Agreement, the Employment Agreement shall control.

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:
 
William C. Cobb
     
Date Signed:
 
[Acceptance Date]

 
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H&R BLOCK, INC.

By:                                                      
Name:                      Alan M. Bennett
Title: President and Chief Executive Officer

 
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Exhibit C

Form of Release

SEVERANCE AND RELEASE AGREEMENT
 
William Cobb (“EMPLOYEE”) and H&R Block Management, LLC and its parents,
subsidiaries, affiliates, and assigns (collectively as “COMPANY”) enter into
this Severance and Release Agreement (“Release Agreement”) under the terms and
conditions recited below:
I.  
Recitations

A)  
EMPLOYEE and COMPANY are party to that certain Employment Agreement, dated
__________, 2011 (the “Employment Agreement”) (capitalized terms used but not
defined herein shall have the respective meanings ascribed thereto in the
Employment Agreement).

B)  
EMPLOYEE and COMPANY desire to enter into a full and final settlement of all
issues and matters between them, occurring on or before the date EMPLOYEE signs
this Release Agreement.  These include, but are not limited to, any issues and
matters that may have arisen out of EMPLOYEE’s employment with or separation
from COMPANY, except as otherwise excluded under paragraph II(B)(6) below).

C)  
EMPLOYEE specifically acknowledges that COMPANY has told him/her to consult with
a lawyer prior to signing this Release Agreement.

D)  
EMPLOYEE specifically agrees that he will not sign this Release Agreement until
on or after the date of EMPLOYEE’s termination of employment with COMPANY.

 
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E)  
In exchange for the mutual promises of EMPLOYEE and COMPANY set forth in this
Release Agreement, EMPLOYEE and COMPANY agree to the terms and conditions set
out below.

 
II.  
 
Basic Terms of the Release Agreement

 
(a) COMPANY agrees to the following:
1.  
Subject to receipt of a fully executed copy of this Release Agreement and the
expiration of the period defined in paragraph III (C) below, COMPANY shall
provide EMPLOYEE with all payments and benefits to which EMPLOYEE is entitled
under Section 7[(●)(●)] of the Employment Agreement in connection with a
termination of employment under such Section 7[(●)(●)].  EMPLOYEE is not
entitled to any payments or benefits under Section 7[(●)(●)] of the Employment
Agreement (other than the Accrued Obligations and the Other Benefits) unless
EMPLOYEE signs and returns this Release Agreement within fifty-two (52) calendar
days of termination date.  EMPLOYEE may sign this Release Agreement at any time
prior to conclusion of the fifty-two (52) day period.  Assuming EMPLOYEE chooses
to sign this Release Agreement and that such signature becomes binding because
EMPLOYEE has not revoked his signature within seven (7) calendar days after
signing, the terms of the Employment Agreement govern the timing, form and
amount of payments and benefits to which EMPLOYEE is entitled under Section
7[(●)(●)] of the Employment Agreement.

 
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(b)  
EMPLOYEE agrees to the following:

1. In consideration of the recitations and agreements listed above, EMPLOYEE
releases, and forever discharges COMPANY and each and every one of its parent,
affiliate, subsidiary, component, predecessor, and successor companies, and in
such capacities, their respective past and present agents, officers, executives,
employees, attorneys, directors, and assigns (collectively the “Releasees”),
from any and all matters, claims, charges, demands, damages, causes of action,
debts, liabilities, controversies, claims for attorneys’ fees, judgments, and
suits of every kind and nature whatsoever, foreseen or unforeseen, known or
unknown, which have arisen between EMPLOYEE and the Releasees up to the date
EMPLOYEE signs this Release Agreement.
2. Subject to paragraph II(B)(6) below, this release of claims includes, but is
not limited to:  (A) any claims he may have relating to any aspect of her/his
employment with the Releasees and/or the separation of that employment, (B) any
breach of an actual or implied contract of employment between EMPLOYEE and the
Releasees, (C) any claim of unjust or tortuous discharge, (D) any common-law
claim (including but not limited to fraud, negligence, intentional or negligent
infliction of emotional distress, negligent hiring/retention/supervision, or
defamation), and (E)(i) any claims arising under the Civil Rights Act of 1866,
42 U.S.C. § 1981, (ii) the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et
seq., as amended by the Civil Rights Act of 1991, (iii) the Age Discrimination
in Employment Act, 29 U.S.C. §§ 621, et seq. (including but not limited to the
Older Worker Benefit Protection Act), (iv) the Employee Retirement Income
Security Act, 29 U.S.C. §§ 1001, et seq., (v) the Rehabilitation Act of 1973, 29
U.S.C. §§ 701, et seq., (vi) the American with Disabilities Act, 42 U.S.C. §§
12101, et seq., (vii) the

 
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Occupational Safety and Health Act, 29 U.S.C. §§ 651, et. seq., (viii) the
National Labor Relations Act, 29 U.S.C. §§ 151, et. seq., (ix) the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq., (F) any
applicable state employment discrimination statute, (G) any applicable state
worker’s compensation statute, and (H) any other federal, state, or local
statutes or ordinances.
3. EMPLOYEE further agrees in the event any person or entity should bring such a
charge, claim, complaint, or action on her/his behalf, he hereby waives and
forfeits any right to recovery under said claim.  This Release Agreement does
not affect, however, the Equal Employment Opportunity Commission’s (“EEOC’s”)
rights and responsibilities to investigate or enforce applicable employment
discrimination statutes.
4. For purposes of the Age Discrimination in Employment Act (“ADEA”) only, this
Release Agreement does not affect the EEOC’s rights and responsibilities to
enforce the ADEA, nor does this Release Agreement prohibit EMPLOYEE from filing
a charge under the ADEA (including a challenge to the validity of the waiver of
claims in this Release Agreement) with the EEOC, or participating in any
investigation or proceeding conducted by the EEOC.  Nevertheless, EMPLOYEE
agrees that the Releasees will be shielded against any recovery by EMPLOYEE,
provided this Release Agreement is valid under applicable law.
5. EMPLOYEE agrees he waives any right to participate in any settlement, verdict
or judgment in any class action against the Releasees arising from conduct
occurring on or before the date EMPLOYEE signs this Release Agreement, and that
he waives any right to accept anything of value or any injunctive relief
associated with any such pending or threatened class action against the
Releasees.

 
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6. Notwithstanding anything set forth in this Release to the contrary, this
Release shall not extend to or include the following:  (A) EMPLOYEE’s rights
with regard to vested and/or accrued benefits under any employee benefit plan,
policy or arrangement maintained by the COMPANY or any Releasee, (B) documented,
accrued and unpaid wages, benefits and expense reimbursement owing for the
period through the effective date of EMPLOYEE’s employment termination, (C) the
accrued and unpaid welfare benefit claims incurred prior to EMPLOYEE’s
employment termination, (D) the payments and benefits specifically provided in
Section 4 of the Employment Agreement, (E) treatment of EMPLOYEE’s equity awards
as provided in the applicable equity plan or award agreement or the Employment
Agreement, (F) any right to indemnification under law, the Agreement or the
by-laws of the COMPANY or the Releasees or any benefit plan of the COMPANY or
the Releasees, or any agreement between EMPLOYEE and the COMPANY and/or the
Releasees, (H) any rights as an insured, or to coverage, under any director’s
and officer’s liability insurance policy of the COMPANY or the Releasees, (G)
any rights or obligations under applicable law which cannot be waived or
released pursuant to an agreement, (I) EMPLOYEE’s rights to enforce this
Release, and (J) EMPLOYEE’s rights under the provisions of the Employment
Agreement that are intended to survive EMPLOYEE’s termination of employment.
 
III.  
Acknowledgments and Additional Terms

 
(A) Confidentiality; Restrictive Covenants.  Each of EMPLOYEE and COMPANY
acknowledge the obligations of the respective parties under Sections 5 and 6 of
the Employment Agreement and that such Sections 5 and 6 of the Employment
Agreement shall survive the termination of EMPLOYEE’S employment with the
COMPANY.

 
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(B) Revocation Period.  EMPLOYEE acknowledges that if he accepts the terms of
this Release Agreement he will have seven (7) calendar days after the date he
signs this Release Agreement to revoke his/her acceptance of its terms.  Such
revocation, to be effective, must be delivered by written notice, in a manner so
the notice is received on or before the seventh day by:  Human Resources,
Compensation Department, H&R Block, One H&R Block Way, Kansas City, MO  64105.
(C) Opportunity to Consult Attorney.  EMPLOYEE acknowledges he has consulted or
has had the opportunity to consult with her/his attorney prior to executing the
Release Agreement.
(D) No Admission of Liability.  EMPLOYEE and COMPANY agree nothing in this
Release Agreement is an admission by either of any wrongdoing, and that nothing
in this Release Agreement is to be construed as such by anyone.
(E) Choice of Law, Forum, and Jurisdiction.  All disputes which arise out of the
interpretation and enforcement of this Release Agreement shall be governed by
the laws of the State of Missouri without giving effect to its choice of law
provisions. EMPLOYEE and COMPANY agree that any proceedings to enforce this
Release Agreement must be brought in the United States District Court for the
Western District of Missouri, Western Division, or in the Circuit Court of
Jackson County, Missouri.  EMPLOYEE agrees and submits to personal jurisdiction
in either court.
(F) Entire Agreement.  This Release Agreement, together with the Employment
Agreement, is the entire agreement between the parties.  The parties acknowledge
the terms of the Employment Agreement can only be terminated or changed
according to the terms set forth in the Employment Agreement.  The parties
acknowledge the terms of this Release Agreement can only be changed by a written
amendment to the Release Agreement signed by both parties.
(G) No Reliance.  The parties have not relied on any representations, promises,
or agreements of any kind made to them in connection with this Release
Agreement, except for those set forth in writing in this Release Agreement or in
the Agreement.
(H) Separate Signatures.  Separate copies of this Release Agreement shall
constitute originals which may be signed separately but which together will
constitute one single agreement.
(I) Effective Date.  This Release Agreement becomes effective and binding on the
eighth calendar day following EMPLOYEE’s execution of the Release Agreement.
(J) Severability.  If any provision of this Release Agreement, including the
Employment Agreement, is held to be invalid, the remaining provisions shall
remain in full force and effect.
(K) Continuing Obligations.  Any continuing obligations EMPLOYEE has after
separation of employment pursuant to the Employment Agreement or by operation of
law survive this Release Agreement.  The terms of this Release Agreement add to
any such obligations and are not intended to otherwise modify them in any way.
 
THIS IS A RELEASE OF CLAIMS - READ CAREFULLY BEFORE SIGNING
 
I have read this Release Agreement.  I have had the opportunity to obtain the
advice of legal counsel concerning the meaning and effect of this Release
Agreement.  COMPANY advised me to seek the advice of counsel on this issue.  I
fully understand the terms of this Release Agreement and I understand it is a
complete and final release of any of my claims against COMPANY.  I sign the
Release Agreement as my own free act and deed.

Date                                                                EMPLOYEE

COMPANY

Date                                                                By