Exhibit 10.5
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 May 2, 2011,
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 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 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 May 2, 2011 (the “Grant Date”), the Company
grants the Participant the right and option to purchase 606,470 shares of Common
Stock (this “Stock Option”) identified as non-qualified stock options.
2.2 Option Price. The Price per share of Common Stock subject to this Stock
Option is $17.48, which is the Closing Price on the 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
April 27, 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 May 2, 2021. Except as provided in the Employment Agreement, all
Stock

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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

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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 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

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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.
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]

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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:
   

H&R BLOCK, INC.

                  By:   /s/ Tammy Serati         Name:   Tammy Serati       
Title:   Senior Vice President, Human Resources     

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