Document:

exv10w3

Exhibit 10.3

H&R BLOCK SEVERANCE PLAN

(Amended and Restated effective July 27, 2010)

1. Purpose. The H&R Block Severance Plan is a welfare benefit plan established by H&R Block
Management, LLC, an indirect subsidiary of H&R Block, Inc., for the benefit of certain subsidiaries
of H&R Block, Inc. in order to provide severance pay to certain employees to compensate for the
involuntary loss of employment and a period of readjustment under the conditions set forth herein.
This document constitutes both the plan document and the summary plan description required by the
Employee Retirement Income Security Act of 1974.

2. Definitions.

(a) “Average Commission Amount” means an average of the Participant’s prior three calendar
year commission earnings (calculated each year beginning January 1). For Participant’s with
less than three years of commission history, “Average Commission Amount” means the average
of total commissions earned.

(b) “Cause” means one or more of the following grounds of an Employee’s termination of
employment with a Participating Employer:

(i) misconduct that interferes with or prejudices the proper conduct of the
Company, the Employee’s Participating Employer, or any other affiliate of the
Company, or which may reasonably result in harm to the reputation of the Company,
the Employee’s Participating Employer, or any other affiliate of the Company;

(ii) commission of an act of dishonesty or breach of trust resulting or intending
to result in material personal gain or enrichment of the Employee at the expense of
the Company, the Employee’s Participating Employer, or any other affiliate of the
Company;

(iii) commission of an act materially and demonstrably detrimental to the good will
of the Company, the Employee’s Participating Employer, or any other affiliate of the
Company, which act constitutes gross negligence or willful misconduct by the
Employee in the performance of the Employee’s material duties;

(iv) material violations of the policies or procedures of the Employee’s
Participating Employer, including, but not limited to, the H&R Block Code of
Business Ethics & Conduct, except those policies or procedures with respect to which
an exception has been granted under authority exercised or delegated by the
Participating Employer;

(v) disobedience, insubordination or failure to discharge employment duties;

(vi) conviction of, or entrance of a plea of guilty or no contest, to a misdemeanor
(involving an act of moral turpitude) or a felony;

(vii) inability of the Employee, the Company, the Employee’s Participating
Employer, and/or any other affiliate of the Company to participate, in whole or in
part, in any activity subject to governmental regulation as the result of any action
or inaction on the part of the Employee;

 

 

(viii) the Employee’s death or total and permanent disability. The term “total and
permanent disability” will have the meaning ascribed thereto under any long-term
disability plan maintained by the Employee’s Participating Employer;

(ix) any grounds described as a discharge or other similar term on the
Participating Employer’s separation review form or other similar document stating
the reason for the Employee’s termination of employment, including poor performance;
or

(x) any other grounds of termination of employment that the Participating Employer
deems for cause.

Notwithstanding the definition of Cause above, if an Employee’s employment with a
Participating Employer is subject to an employment agreement that contains a definition of
“cause” for purposes of termination of employment, such definition of “cause” in such
employment agreement shall replace the definition of Cause herein for the purpose of
determining whether the Employee has incurred a Qualifying Termination, but only with
respect to such Employee.

(c) Reserved.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Company” means H&R Block, Inc.

(f) “Comparable Position” means a position where:

(i) the primary work location is within 50 miles of the Employee’s primary work
location prior to the Qualifying Termination, and

(ii) the compensation rate (salary and target bonus) is not more than 10% below the
Employee’s compensation rate at time of Qualifying Termination.

(g) “Employee” means a regular full-time or part-time, active employee of a
Participating Employer whose employment with a Participating Employer is not subject to an
employment contract that contains a provision that includes severance benefits. This
definition expressly excludes employees of a Participating Employer classified as seasonal,
temporary and/or inactive and employees who are customarily employed by a Participating
Employer less than 20 hours per week.

(h) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(i) “Equity Plan” means the Company’s 1993 Long-Term Executive Compensation Plan, 2003
Long-Term Executive Compensation Plan or any successor plan to its 2003 Long-Term Executive
Compensation Plan.

(j) “Hour of Service” means each hour for which an individual was entitled to compensation
as a regular full-time or part-time employee from a subsidiary of the Company.

(k) “Line of Business of the Company” with respect to a Participant means any line of
business of the Participating Employer by which the Participant was employed as of the

 

 

Termination Date, as well as any one or more lines of business of any other subsidiary of
the Company by which the Participant was employed during the two-year period preceding the
Termination Date, provided that, if Participant’s employment was, as of the Termination Date
or during the two-year period immediately prior to the Termination Date, with H&R Block
Management, LLC or any successor entity thereto, “Line of Business of the Company” shall
mean any lines of business of the Company and all of its subsidiaries.

(l) “Monthly Compensation” means –

(i) with respect to a Participant paid on a salary basis, the Participant’s current
annual salary divided by 12;

(ii) with respect to a Participant paid on an hourly basis, the Participant’s
current hourly rate times the number of hours he or she is regularly scheduled to
work per week multiplied by 52 and then divided by 12; or

(iii) with respect to a Participant, employed more than three years with a
Participating Employer, who is paid, in whole or in part, on commission, the
Participant’s current base wages or salary plus the Participant’s Average Commission
Amount divided by 12.

(m) “Participant” means an Employee who has incurred a Qualifying Termination and has
signed a Separation Agreement that has not been revoked during any revocation period
provided under the Separation Agreement.

(n) “Participating Employer” means a direct or indirect subsidiary of the Company (i) listed
on Schedule A, attached hereto, which may change from time to time to reflect new
Participating Employers or withdrawing Participating Employers, and (ii) approved by the
Plan Sponsor for participation in the Plan.

(o) “Plan” means the “H&R Block Severance Plan,” as stated herein, and as may be
amended from time to time.

(p) “Plan Administrator” and “Plan Sponsor” means H&R Block Management, LLC. The address
and telephone number of H&R Block Management, LLC is One H&R Block Way, Kansas City,
Missouri 64105, (816) 854-3000. The Employer Identification Number assigned to H&R Block
Management, LLC by the Internal Revenue Service is 43-1632589.

(q) “Qualifying Termination” means the involuntary termination of an Employee, but does not
include a termination resulting from:

(i) the elimination of the Employee’s position where the Employee was offered a
Comparable Position with a subsidiary or affiliate of the Company;

(ii) a sale of assets, stock sale, or other corporate acquisition or disposition
where the Employee is offered a Comparable Position with the acquiring entity;

(iii) the redefinition of an Employee’s position to a lower compensation rate or
grade;

(iv) the termination of an Employee for Cause as defined in Section 2(b); or

 

 

(v) the non-renewal of employment contracts.

(r) “Release and Severance Agreement” means that agreement signed by and between an Employee
who is eligible to participate in the Plan and the Employee’s Participating Employer under
which the Employee releases all known and potential claims against the Employee’s
Participating Employer and all of such employer’s parents, subsidiaries, and affiliates and
a Covenant Not to Sue. The Release and Severance Agreement also includes certain
post-employment restrictive covenants including non-competition, non-solicitation,
confidentiality, and, employee non-hire/non-solicitation.

(s) “Release Date” means, (i) with respect to a Release and Severance Agreement that
includes a revocation period, the date immediately following the expiration date of the
revocation period in the Release and Severance Agreement that has been fully executed by
both parties; or (ii) with respect to a Release and Severance Agreement that does not
include a revocation period, the date the Release and Severance Agreement has been fully
executed by both parties. A Participant will be presented with a Release Agreement on
Participant’s Termination Date and will be required to execute such agreement within the
timeframe set forth therein.

(t) “Severance Period” means the period of time following the Termination Date which
will be the shorter of (i) 12 months or (ii) a number of months equal to the whole number of
Years of Service determined under Section 2(v).

(u) “Termination Date” means the date the Employee severs employment with a Participating
Employer.

(v) “Year of Service” means each period of 12 consecutive months ending on the Employee’s
employment anniversary date during which the Employee had at least 1,000 Hours of Service.
In determining a Participant’s Years of Service, the Participant will be credited with a
partial Year of Service for his or her final period of employment commencing on his or her
most recent employment anniversary date equal to a fraction calculated in accordance with
the following formula:

Number of days since most recent employment anniversary date

365

Despite an Employee’s Years of Service calculated in accordance with the above, an Employee
will be credited with no less than the specified minimum Years of Service as outlined in
Schedule “B”. Notwithstanding an Employee’s actual service, the maximum number of
creditable Years of Service shall be 18.

Notwithstanding the above, if an Employee has received credit for Years of Service under
this Plan or under any previous plan, program, or agreement for the purpose of receiving
severance benefits before a Qualifying Termination, such Years of Service will be
disregarded when calculating Years of Service for such Qualifying Termination under the
Plan; provided, however,
that if such severance benefits were terminated prior to completion because the Employee was
rehired by any subsidiary of the Company then the Employee will be re-credited with full
Years of Service for which severance benefits were not paid in full or in part because of
such termination.

3. Eligibility and Participation.

 

 

An Employee who incurs a Qualifying Termination and signs a Release and Severance Agreement
that has not been revoked during any revocation period under the Release and Severance
Agreement is eligible to participate in the Plan. An eligible Employee will become a
Participant in the Plan as of the later of the Termination Date or the Release Date.

4. Severance Compensation.

(a) Amount. Subject to Section 9, each Participant will receive from the applicable
Participating Employer aggregate severance compensation equal to:

(i) the Participant’s Monthly Compensation multiplied by the Participant’s Years of
Service; plus

(ii) a severance enhancement (as determined by the Participating Employer based upon
the Participant’s pay grade or band) multiplied by the Participant’s Year’s of
Service; plus

(iii) an amount to be determined by the Participating Employer at its sole
discretion, which amount may be zero.

(b) Timing of Payments. The sum of any amounts determined under Section 4(a) of the
Plan will be paid in one lump sum within 30 days after the latest of the Termination Date or
the Release Date, unless otherwise agreed in writing by the Participating Employer and
Participant, or otherwise required by law.

5. Stock Options.

(a) Accelerated Vesting. Any portion of any outstanding incentive stock options and
nonqualified stock options that would have vested during the 18-month period following the
Termination Date had the Participant remained an employee with the Participating Employer
during such 18-month period will vest as of the Termination Date. This Section 5(a) applies
only to options (i) granted to the Participant under the Equity Plan, not less than 6 months
prior to his or her Termination Date and (ii) outstanding at the close of business on such
Termination Date. The determination of accelerated vesting under this Section 5(a) shall be
made as of the Termination Date and shall be based solely on any time-specific vesting
schedule included in the applicable stock option agreement without regard to any accelerated
vesting provision not related to the Plan in such agreement. With respect to any incentive
stock options and nonqualified stock options granted after July 11, 2010, any portion of
such options not vested as of the Termination Date shall be forfeited.

(b) Post-Termination Exercise Period. Subject to the expiration dates and other
terms of the applicable stock option agreements, the Participant may elect to have the right
to exercise any
outstanding incentive stock options and nonqualified stock options granted prior to the
Termination Date to the Participant under the Equity Plan that are vested as of the
Termination Date (or, if later, the Release Date), whether due to the operation of Section
5(a), above, or otherwise, at any time during the Severance Period and for a period up to 3
months after the end of the Severance Period. Any such election shall apply to all
outstanding incentive stock options and nonqualified stock options, will be irrevocable and
must be made in writing and delivered to the Plan Administrator on or before the later of
the Termination Date or Release Date. If the

 

 

Participant fails to make an election, the
Participant’s right to exercise such options will expire 3 months after the Termination
Date.

(c) Stock Option Agreement Amendment. The operation of Sections 5(a) and 5(b),
above, are subject to the Participant’s execution of an amendment to any affected stock
option agreements, if necessary.

6. Restricted Shares. Any portion of any outstanding restricted shares awarded to the Participant
under the Equity Plan that would have vested in accordance with their terms by reason of lapse of
time within six months of the Termination Date shall terminate and such Restricted Shares shall be
fully vested. With respect to any restricted shares granted after July 11, 2010, any portion of
such restricted shares not vested as of the Termination Date shall be forfeited.

7. Outplacement Services. In addition to the benefits described above, career transition
counseling or outplacement services may be provided upon the Participant’s Qualifying Termination.
Such outplacement service will be provided at the Participating Employer’s sole discretion.
Outplacement services are designed to assist employees in their search for new employment and to
facilitate a smooth transition between employment with the Participating Employer and employment
with another employer. Any outplacement services provided under this Plan will be provided by an
outplacement service chosen by the Participating Employer. The Participant is not entitled to any
monetary payment in lieu of outplacement services.

8. Rehire/Reinstatement. In the event a Participant, who has been awarded Severance Pay under this
Plan or a similar plan sponsored by a subsidiary of the Company, is reinstated or hired by the
Participating Employer or a subsidiary of the Company in any position other than a position
classified as seasonal by the employer, prior to being rehired or reinstated, such Participant
shall return a pro rated portion of any severance compensation paid under Sections 4(a)(i), (ii)
and (iii). The pro ration of the severance compensation to be returned shall be calculated based
upon the number of days in the Severance Period reduced by the number of days of the Participant’s
break from service. Upon return of the severance compensation, described in this Section 8, the
Participant shall be credited with prior service credit for purposes of eligibility for all
benefits including any accrued, unused and unpaid Paid Time Off (“PTO”), seniority awards, health,
welfare and retirement benefits. Prior Service Credit means that the Participant’s prior period of
employment is added to the current period, but the severance period is not counted as part of the
total service credit. For purposes of future severance pay, the Participant’s Prior Service Credit
shall be reduced on a pro rata basis for Years of Service of severance pay the Participant received
during the severance period. Restoration of Prior Service Credit does not restore any rights under
the Equity Plan.

9. Termination of Benefits/Return of Severance Compensation. Any right of a Participant to
severance compensation or other benefits under this Plan are subject to and conditioned upon
Participant’s agreement to abide by certain restrictive covenants. In the event a Participant
violates the terms of the Separation Agreement by engaging in any conduct described in Sections
9(a), 9(b), 9(c), 9(d)
or 9(e) below, such Participant shall return any Severance Compensation received under this Plan
within ten (10) business days after the date of any written demand by the Participating Employer or
the Plan.

(a) During the Severance Period, the Participant’s engagement in, ownership of, or control
of any interest in (except as a passive investor in less than one percent of the outstanding
securities of publicly held companies), or acting as an officer, director or employee of, or
consultant, advisor or lender to, any firm, corporation, partnership, limited liability
company, institution, business, government agency, or entity that engages in any line of
business that is competitive

 

 

with any Line of Business of the Company, provided that this
Section 9(a) shall not apply to the Participant if the Participant’s primary place of
employment by a subsidiary of the Company as of the Termination Date is in either the State
of California or the State of North Dakota.

(b) During the Severance Period, the Participant employs or solicits for employment by any
employer other than a subsidiary of the Company any employee of any subsidiary of the
Company, or recommends any such employee for employment to any employer (other than a
subsidiary of the Company) at which the Participant is or intends to be (i) employed, (ii) a
member of the Board of Directors, (iii) a partner, or (iv) providing consulting services.

(c) During the Severance Period, the Participant directly or indirectly solicits or enters
into any arrangement with any person or entity which is, at the time of the solicitation, a
significant customer of a subsidiary of the Company for the purpose of engaging in any
business transaction of the nature performed by such subsidiary, or contemplated to be
performed by such subsidiary, for such customer, provided that this Section 9(c) shall only
apply to customers for whom the Participant personally provided services while employed by a
subsidiary of the Company or customers about whom or which the Participant acquired material
information while employed by a subsidiary of the Company.

(d) During the Severance Period, the Participant misappropriates or improperly uses or
discloses confidential information of the Company and/or its subsidiaries.

(e) If the Participant engaged in any of the conduct described in Sections 9(a), 9(b), 9(c)
or 9(d) during or after Participant’s term of employment with a Participating Employer, but
prior to the commencement of the Severance Period, and such engagement becomes known to the
Participating Employer during the Severance Period, such conduct shall be deemed, for
purposes of Sections 9(a), 9(b), 9(c) or 9(d) to have occurred during the Severance Period.

(f) If the Participant is a party to an employment contract with a Participating Employer
that contains a covenant or covenants relating to the Participant’s engagement in conduct
that is the same as or substantially similar to the conduct described in any of Sections
9(a), 9(b), 9(c) or 9(d), and any specific conduct regulated in such covenant or covenants
in such employment contract is more limited in scope geographically or otherwise than the
corresponding specific conduct described in any of such Sections 9(a), 9(b), 9(c) or 9(d),
then the corresponding specific conduct addressed in the applicable Section 9(a), 9(b), 9(c)
or 9(d) shall be limited to the same extent as such conduct is limited in the employment
contract and the Participating Employer’s rights and remedy with respect to such conduct
under this Section 9 shall apply only to such conduct as so limited.

10. Amendment and Termination. The Plan Sponsor reserves the right to amend the Plan or to
terminate the Plan and all benefits hereunder in their entirety at any time.

11. Administration of Plan. The Plan Administrator has the power and discretion to construe the
provisions of the Plan and to determine all questions relating to the eligibility of employees of
Participating Employers to become Participants in the Plan, and the amount of benefits to which any
Participant may be entitled thereunder in accordance with the Plan. Not in limitation, but in
amplification of the foregoing and of the authority conferred upon the Plan Administrator, the Plan
Sponsor specifically intends that the Plan Administrator have the greatest permissible discretion
to construe the terms of the Plan and to determine all questions concerning eligibility,
participation and benefits. Any such decision made by the Plan Administrator will be binding on
all Employees, Participants, and beneficiaries, and is

 

 

intended to be subject to the most
deferential standard of judicial review. Such standard of review is not to be affected by any real
or alleged conflict of interest on the part of the Plan Administrator. The decision of the Plan
Administrator upon all matters within the scope of its authority will be final and binding.

12. Claims Procedures.

(a) Filing a Claim for Benefits. Participants are not required to submit claim forms to
initiate payment of benefits under this Plan. To make a claim for benefits, individuals
other than Participants who believe they are entitled to receive benefits under this Plan
and Participants who believe they have been denied certain benefits under the Plan must
write to the Plan Administrator. These individuals and such Participants are hereinafter
referred to in this Section 12 as “Claimants.” Claimants must notify the Plan Administrator
if they will be represented by a duly authorized representative with respect to a claim
under the Plan.

(b) Initial Review of Claims. The Plan Administrator will evaluate a claim for benefits
under the Plan. The Plan Administrator may solicit additional information from the Claimant
if necessary to evaluate the claim. If the Plan Administrator denies all or any portion of
the claim, the Claimant will receive, within 90 days after the receipt of the written claim,
a written notice setting forth:

(i) the specific reason for the denial;

(ii) specific references to pertinent Plan provisions on which the Plan
Administrator based its denial;

(iii) a description of any additional material and information needed for the
Claimant to perfect his or her claim and an explanation of why the material or
information is needed; and

(iv) that any appeal the Claimant wishes to make of the adverse determination must
be in writing to the Plan Administrator within 60 days after receipt of the notice
of denial of benefits. The notice must advise the Claimant that his or her failure
to appeal the action to the Plan Administrator in writing within the 60-day period
will render the Plan Administrator’s determination final, binding and conclusive.
The notice must further advise the Claimant of his or her right to bring a civil
action under §502(a) of ERISA following the exhaustion of the claims procedures
described herein.

(c) Appeal of Denied Claim and Final Decision. If the Claimant should appeal to the Plan
Administrator, the Claimant, or his or her duly authorized representative, must submit, in
writing, whatever issues and comments the Claimant or his or her duly authorized
representative feels are pertinent. The Claimant, or his or her duly authorized
representative, may review and request pertinent Plan documents. The Plan Administrator will
reexamine all facts related to the appeal and make a final determination as to whether the
denial of benefits is justified under the circumstances. The Plan Administrator will advise
the Claimant in writing of its decision within 60 days of the Claimant’s written request for
review, unless special circumstances (such as a hearing) require an extension of time, in
which case the Plan Administrator will make a decision as soon as possible, but no later
than 120 days after its receipt of a request for review.

 

 

13. Plan Financing. The benefits to be provided under the Plan will be paid by the applicable
Participating Employer, as incurred, out of the general assets of such Participating Employer.

14. General Information. The Plan’s records are maintained on a calendar year basis. The Plan
Number is 509. The Plan is self-administered and is considered a severance plan.

15. Governing Law. The Plan is established in the State of Missouri. To the extent federal law
does not apply, any questions arising under the Plan will be determined under the laws of the State
of Missouri.

16. Enforceability; Severability. If a court of competent jurisdiction determines that any
provision of the Plan is not enforceable, then such provision shall be enforceable to the maximum
extent possible under applicable law, as determined by such court. The invalidity or
unenforceability of any provision of the Plan, as determined by a court of competent jurisdiction,
will not affect the validity or enforceability of any other provision of the Plan and all other
provisions will remain in full force and effect.

17. Withholding of Taxes. The applicable Participating Employer may withhold from any benefit
payable under the Plan all federal, state, city or other taxes as may be required pursuant to any
law, governmental regulation or ruling. The Participant shall pay upon demand by the Company or the
Participating Employer any taxes required to be withheld or collected by the Company or the
Participating Employer upon the exercise by the Participant of a nonqualified stock option granted
under the Company’s 1993 Long-Term Executive Compensation Plan or the 2003 Long-Term Executive
Compensation Plan or any successor Plan thereto. If the Participant fails to pay any such taxes
associated with such exercise upon demand, the Participating Employer shall have the right, but not
the obligation, to offset such taxes against any unpaid severance compensation under this Plan.

18. Code §409A/Taxation. To the extent applicable, this Plan shall be construed and administered
consistently with Code §409A and the regulations and guidance issued thereunder. If the
Participant is a “specified employee” as described in Code §409A, on his Separation Date, then any
amount to which the Participant would otherwise be entitled during the first six months following
his Separation from Service that constitutes nonqualified deferred compensation within the meaning
of Code §409A and therefore is not exempt from Code §409A shall be accumulated and paid in a
single lump sum (without interest) on the date which is six (6) months following the Participant’s
Separation from Service, but only to the extent required by Code §409A(a)(2)(B)(i). Because the
requirements of Code §409A are still being developed and interpreted by government agencies,
certain issues under Code §409A remain unclear as of the Effective Date of this Plan, and the
Company has made a good faith effort to comply with current guidance under Code §409A.
Notwithstanding the foregoing or any provision in this Plan to the contrary, the Company does not
warrant or promise compliance with Code §409A of the Code and no
Participant or other person shall have any claim against the Company for any good faith effort
taken by the Company to comply with Code §409A.

19. Not an Employment Agreement. Nothing in the Plan gives an Employee any rights (or imposes any
obligations) to continued employment by his or her Participating Employer or other subsidiary of
the Company, nor does it give such Participating Employer any rights (or impose any obligations)
for the continued performance of duties by the Employee for the Participating Employer or any other
subsidiary of the Company.

20. No Assignment. The Employee’s right to receive payments of severance compensation and benefits
under the Plan are not assignable or transferable, whether by pledge, creation of a security
interest, or otherwise. In the event of any attempted assignment or transfer contrary to this
Section 19, the

 

 

applicable Participating Employer will have no liability to pay any amount so
attempted to be assigned or transferred.

21. Service of Process. The Secretary of the Plan Administrator is designated as agent for service
of legal process. Service of legal process may be made upon the Secretary of the Plan
Administrator at:

	 	 	 	 	 
	 	 	All Jurisdictions but Missouri
	 	In Missouri

	 

	 	The Corporation Trust Company
	 	CT Corporation System

	 

	 	1209 Orange Street
	 	120 South Central Avenue

	 

	 	Wilmington, Delaware 19801
	 	Clayton, Missouri 63105

22. Statement of ERISA Rights. In accordance with ERISA, each Participant shall be entitled to:

(a) Examine without charge, (by contacting the Plan Administrator), all Plan documents and
copies of all documents governing the Plan and a copy of the latest annual report (Form 5500
series) filed by the Plan with the U.S. Department of Labor and available at the Public
Disclosure Room of the Employee Benefits Security Administration;

(b) Obtain copies of all Plan documents and other Plan information upon written request to
the Plan Administrator. A reasonable fee may be charged for these copies; and

(c) Receive a summary of the Plan’s annual financial report. The Plan Administrator is
required to furnish each Participant with a copy of this summary annual report; and

(d) Obtain a statement showing the Participant’s account balance (if any).

     In addition to creating rights for Plan Participants, ERISA imposes duties upon the persons
who are responsible for the operation of the Plan. The persons who operate the Plan are called
“fiduciaries” and have a duty to operate the Plan prudently and in the interest of Plan
Participants and beneficiaries. No one, including the employer, may fire a Participant or
otherwise discriminate against the Participant in any way to prevent him from obtaining a benefit
or exercising his rights under ERISA.

     If a claim for a benefit is denied in whole or in part the Participant must receive a written
explanation of the reason for the denial. The Participant has the right to have the Plan
Administrator review and reconsider the claim.

     Under ERISA, there are steps a Participant can take to enforce the above rights. For
instance, if a Participant requests any of the materials listed above from the Plan Administrator
and does not receive them within 30 days, the Participant may file suit in a Federal court. In
such a case, the court may require the Plan Administrator to provide the materials and pay up to
$110 a day until the Participant receives the materials, unless the materials were not provided
because of reasons beyond the control of the Plan Administrator.

     If a claim for benefits is denied or ignored, either in whole or in part, the Participant may
file suit in a state or federal court. In the event that Plan fiduciaries misuse the Plan’s funds,
or if the Participant is discriminated against for asserting his rights, he may seek assistance
from the U. S. Department of Labor, or file suit in a federal court. The court will decide who
should pay court costs and legal fees. If a Participant is successful, the court may order the
person the Participant has sued to pay these costs and fees. But if a Participant loses, the court
may order the Participant to pay these costs and

 

 

fees, for example if, if the court finds the claim
is frivolous.

     Any questions concerning the Plan should be directed to the Plan Administrator. Additional
information about this statement or a Participant’s rights under ERISA may be obtained from the
nearest Office of the Employee Benefits Security Administration, U.S. Department of Labor, listed
in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits
Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C.
20210. A Participant may also obtain certain publications about his rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

EFFECTIVE February 28, 2010

 

 

Schedule A

Participating Employers

Block Financial LLC

Express Tax Service, Inc.

Franchise Partner, Inc.

H&R Block Bank Corporation

H&R Block Eastern Enterprises, Inc.

H&R Block Enterprises, LLC

H&R Block Management, LLC

H&R Block Tax & Business Services, Inc.

H&R Block Tax Services, LLC

HRB Corporate Services, LLC

HRB Corporate Enterprises, LLC

HRB Digital Technology Resources, LLC

HRB Digital, LLC

HRB Expertise, LLC

HRB International, LLC

HRB Products, LLC

HRB Support Services, LLC

HRB Tax Group, Inc.

HRB Tax & Technology Leadership, LLC

HRB Technology, LLC

Tax Works, Inc.

	 	•	 	Block Financial LLC
	 
	 	•	 	Franchise Partner, Inc.
	 
	 	•	 	H&R Block Bank Corporation
	 
	 	•	 	H&R Block Services, Inc. and its U.S.-based direct and indirect subsidiaries
	 
	 	•	 	H&R Block Management, LLC
	 
	 	•	 	HRB Products, LLC
	 
	 	•	 	HRB Corporate Enterprises, LLC
	 
	 	•	 	Tax Works, Inc.
	 
	 	•	 	HRB International, LLC
	 
	 	•	 	RSM McGladrey Business Services, Inc.

Schedule B

Pay Bands

	 	 	 	 	 
	Pay Band	 	Minimum Years of Service	 	Maximum Years of Service
	Band 006 and above
	 	6
	 	18
	Band 005
	 	3
	 	18
	Bands 001-004
	 	1
	 	18exv10w4

Exhibit 10.4

H&R BLOCK, INC.

DEFERRED COMPENSATION PLAN FOR EXECUTIVES

(Amended and Restated Effective July 27, 2010)

Purpose

          H&R Block, Inc. (the “Company”) amended and restated the H&R Block, Inc. Deferred Compensation
Plan for Executives effective as of July 1, 2002. This amendment and restatement is effective
December 31, 2008, and is intended to comply with the requirements of section 409A of the Code.

          The purpose of this Plan is to provide specified benefits to a select group of management or
highly compensated employees who contribute materially to the continued growth, development and
future business success of the Company and its Affiliates, if any, that sponsor this Plan. This
Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

          Notwithstanding any provision in the Plan to the contrary, pursuant to IRS Notice 2007-86, all
amounts accrued under the Plan for a Participant as of December 31, 2008 will be paid in a lump sum
on April 11, 2009, unless the Participant elects to defer Salary and Bonus earned in 2009 in
accordance with Article 3. If a Participant elects to defer for 2009, the Participant may elect
one time and form of payment for all amounts attributable to pre-2009 deferrals, as well as a time
and form of payment for deferrals for 2009 and subsequent years. For Participants in pay status on
or before December 31, 2008 (i) payments of pre-2004 deferrals shall be paid according to the Plan
as grandfathered under Code §409A, and (ii) payments of deferrals made after 2004 shall be governed
by the Participant’s payment elections and the terms of the Amended and Restated Plan.

          The H&R Block, Inc. Deferred Compensation Trust Agreement, dated December 13, 1988, is hereby
revoked, effective December 31, 2008, in accordance with §2.03. The H&R Block, Inc. Deferred
Compensation Trust Agreement is reinstated, effective December 31, 2008 except that §§2.02-3 and
2.02-4 are deleted in the entirety.

ARTICLE 1

Definitions

          For the purposes of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

	1.1	 	“Account Balance” means, with respect to a Participant, a credit on the records of the
Employer equal to the sum of the Participant’s Deferral Account balance, the Company Matching
Account balance, and the Discretionary Company Contributions Account balance. The Account
Balance, and each other specified account balance, shall be a bookkeeping entry only and shall
be utilized solely as a device for the measurement and determination of the amounts to be paid
to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
	 
	1.2	 	“Affiliate” or “Affiliates” means a group of entities, including the Company, which
constitutes a controlled group of corporations (as defined in section 414(b) of the Code), a
group of trades or businesses (whether or not incorporated) under common control (as defined
in section 414(c) of the Code).

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	1.3	 	“Annual Company Matching Contributions” means for any one Plan Year, the amount determined in
accordance with Section 4.1.
	 
	1.4	 	“Annual Contributions” means the Participant’s Annual Deferral Amount plus Annual Company
Matching Contributions for any one Plan Year.
	 
	1.5	 	“Annual Deferral Amount” means that portion of a Participant’s Salary and Bonus that a
Participant defers in accordance with Section 3.1(a) for any one Plan Year. In the event of a
Participant’s Unforeseeable Financial Emergency (if deferrals are revoked in accordance with
Section 6.1), Disability (if deferrals cease in accordance with Section 8.1), death, or a
Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount
shall be the actual amount withheld prior to such event.
	 
	1.6	 	“Beneficiary” means one or more persons, trusts, estates or other entities, designated by a
Participant in accordance with Section 10.2, or in the absence of such designation, the
persons specified in Section 10.3, that are entitled to receive benefits under this Plan upon
the death of a Participant.
	 
	1.7	 	“Beneficiary Designation Form” means the form (which may be digital and require electronic
transmission) established from time to time by the Committee by which a Participant designates
one or more Beneficiaries in accordance with the Committee’s procedures.
	 
	1.8	 	“Board” means the Board of Directors of the Company, as constituted at the relevant time.
	 
	1.9	 	“Bonus” means performance-based compensation paid under the Employer’s short-term incentive
plan (or other annual incentive program) which is contingent on the satisfaction of
pre-established organizational or individual performance criteria over the Company’s
12-consecutive month Fiscal Year; but excluding any amounts paid under an incentive program
that will be paid regardless of performance or based upon a level of performance that is
substantially certain to be met at the time the criteria is established.
	 
	1.10	 	“Claimant” shall have the meaning set forth in Section 14.1.
	 
	1.11	 	“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.
References to a Code section shall be deemed to be to that section or any successor to that
section.
	 
	1.12	 	“Committee” means the Compensation Committee of the Board.
	 
	1.13	 	“Company” means H&R Block, Inc., a Missouri corporation, and any successor to all or
substantially all of its assets or business.
	 
	1.14	 	“Company Matching Account” means (i) the sum of all of a Participant’s Annual Company
Matching Contributions, plus (ii) amounts credited in accordance with all the applicable
crediting and debiting provisions of this Plan that relate to the Participant’s Company
Matching Account, less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant’s Company Matching Account.
	 
	1.15	 	“Deferral Account” means (i) the sum of all of a Participant’s Annual Deferral Amounts, plus
(ii) amounts credited in accordance with all the applicable crediting and debiting provisions
of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions
made to the

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	 	 	Participant or his or her Beneficiary pursuant to this Plan that relate to his or her
Deferral Account.
	 
	1.16	 	“Disability” or “Disabled” means a Participant is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income replacement benefits
under the group long-term disability insurance program maintained by the Participant’s
Employer, and shall be deemed to be incurred on the date as of which such income replacement
benefits commence.
	 
	1.17	 	“Discretionary Company Contributions” means the amount credited to an Employee in accordance
with Section 4.2.
	 
	1.18	 	“Discretionary Company Contributions Account” means the (i) sum of all of a Participant’s
Discretionary Company Contributions, plus (ii) amounts credited in accordance with all the
applicable crediting and debiting provisions of the Plan that relate to the Participant’s
Discretionary contributions Account, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to the Plan that relate to the Participant’s Discretionary
Company Contributions Account.
	 
	1.19	 	“Disability Benefit” means the benefit set forth in Article 8.
	 
	1.20	 	“Election Form” means the form (which form or forms may be in a digital format and require
electronic transmission) established from time to time by the Committee by which a Participant
makes elections under the Plan in accordance with the Committee’s procedures.
	 
	1.21	 	“Eligibility Committee” means the Chief Executive Officer of the Company, the Chief Financial
Officer of the Company, and the senior officer of the Company responsible for human resources.
	 
	1.22	 	“Employee” means a person who is an employee of any Employer.
	 
	1.23	 	“Employer” means the Company and/or any of its Affiliates (now in existence or hereafter
formed or acquired) that have been selected by the Board to participate in the Plan and have
agreed to participate in the Plan.
	 
	1.24	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as it may be amended from
time to time. References to an ERISA section shall be deemed to be to that section or any
successor to that section.
	 
	1.25	 	“In-Service Distribution” means a date-based distribution as set forth in Section 7.1
providing for distribution no earlier than the third Plan Year after the Plan Year for which
the Annual Contributions are made.
	 
	1.26	 	“Installment Method” means installment payments over a number of years selected by the
Participant in accordance with this Plan. Each installment payment shall be calculated by
multiplying the Account Balance of the Participant by a fraction, the numerator of which is
one and the denominator of which is the remaining number of payments due the Participant. For
purposes of this calculation, the Account Balance of the Participant (or the appropriate
portion thereof) shall be calculated as of the close of business on or around the date of the
Participant’s payment.

3

 

	1.27	 	“Measurement Fund” means one or more investment funds which may, but need not, include the
investment funds provided under the H&R Block Retirement Savings Plan (including Company
stock) available as a measuring standard for crediting earnings and losses to a Participant’s
Account Balance. Notwithstanding any other provision in this Plan that may be interpreted to
the contrary, the Measurement Funds are to be used for measurement purposes only, and a
Participant’s election of any Measurement Fund, the allocation to his or her Account Balance
thereto, the calculation of additional amounts and the crediting or debiting of such amounts
to a Participant’s Account Balance shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any Measurement Fund.
	 
	1.28	 	“Open Enrollment” means, with respect to the deferral of Salary for a Plan Year, such period
as established by the Committee ending before the beginning of such Plan Year. With respect
to the deferral of a Bonus, such period as established by the Committee ending before the date
that is no later than 6 months prior to the expiration of the performance period with respect
to such Bonus.
	 
	1.29	 	“Participant” means any Employee (i) who is selected to participate in the Plan, (ii) who
elects to participate in the Plan, (iii) who executes an Election Form in a form acceptable to
the Committee, (iv) who commences participation in the Plan, and (v) whose participation has
not terminated. A spouse or former spouse of a Participant shall not be treated as a
Participant in the Plan or have an account balance under the Plan, even if he or she has an
interest in the Participant’s benefits under the Plan as a result of applicable law or
property settlements resulting from legal separation or divorce.
	 
	1.30	 	“Payment Date” means the date during a month on which payments under this Plan are made, as
selected by the Committee from time to time.
	 
	1.31	 	“Plan” means the H&R Block, Inc. Deferred Compensation Plan for Executives, which shall be
evidenced by this instrument as it may be amended from time to time and Participant’s Election
Forms.
	 
	1.32	 	“Plan Year” means a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.
	 
	1.33	 	“Qualified Plan” means the H&R Block Retirement Savings Plan or any successor plan that is
intended to satisfy the requirements of section 401 of the Code.
	 
	1.34	 	“Salary” means the total salary and wages , including fee based earnings and commissions paid
by all Affiliates to a Participant relating to services performed during any Plan Year,
excluding any other remuneration paid by Affiliates such as Bonuses, other bonuses, overtime,
incentive pay, stock options, distributions of compensation previously deferred, restricted
stock, severance pay, allowances for expenses (such as relocation, travel, and automobile
allowances), non-monetary awards and fringe benefits (cash or noncash). Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed by the
Participant pursuant to all qualified or non-qualified plans of any Affiliate and shall be
calculated to include amounts not otherwise included in the Participant’s gross income under
Code Sections 125, or 402(e)(3) pursuant to plans established by any Affiliate; provided,
however, that all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the Participant.
	 
	1.35	 	“Survivor Benefit” means the benefit set forth in Article 9.

4

 

	1.36	 	“Termination Benefit” means the benefit set forth in Section 7.4.
	 
	1.37	 	“Termination of Employment” means a separation from service within the meaning of Code §409A.
A Participant who is an employee will generally have a Termination of Employment if the
Participant voluntarily or involuntarily terminates employment with the Employer. A
termination of employment occurs if the facts and circumstances indicate that the Participant
and the Employer reasonably anticipate that no further services will be performed after a
certain date or that the level of bona fide services the Participant will perform after such
date (whether as an employee, director or other independent contractor) for the Employer will
decrease to no more than 20 percent of the average level of bona fide services performed
(whether as an employee, director or other independent contractor) over the immediately
preceding 36-month period (or full period of services if the Participant has been providing
services for less than 36 months). Notwithstanding the foregoing, the employment relationship
is treated as continuing while the Participant is on military leave, sick leave or other bona
fide leave of absence if the period does not exceed 6 months, or if longer, so long as the
Participant retains the right to reemployment with an Employer under an applicable statute or
contract. When a leave of absence is due to any medically determinable physical or mental
impairment that can be expected to result in death or to last for a period of at least 6
months and such impairment causes the Participant to be unable to perform duties of his or her
position or any substantially similar position, a 29-month maximum period of absence shall be
substituted for the 6-month maximum period described in the preceding sentence.
	 
	1.38	 	“Trust” means one or more trusts established with respect to the Plan between the Company and
the trustee named therein, as amended from time to time.
	 
	1.39	 	“Unforeseeable Financial Emergency” means a severe financial hardship to the Participant
resulting from (i) an illness or accident of the Participant, a Beneficiary or a dependent (as
defined in Code §152, without regard to §152(b)(1), (b)(2), and (d)(1)(B)) of the Participant,
(ii) a loss of the Participant’s property due to casualty, or (iii) such other extraordinary
and unforeseeable circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Committee consistent with the
requirements of Code Section 409A.

ARTICLE 2

Selection, Enrollment, Eligibility

	2.1	 	Selection by Committee. Participation in the Plan shall be limited to a select group
of management or highly compensated Employees, as determined by the Committee or if the
Committee so directs, the Eligibility Committee. The Eligibility Committee will report to the
Compensation Committee not less frequently than annually the individuals it selects for
participation.
	 
	2.2	 	Enrollment Requirements. As a condition to a selected Employee’s participation, the
Committee must receive, in accordance with the Committee’s procedures, an Election Form during
Open Enrollment or within thirty (30) days after he or she is first selected for participation
in the Plan. In addition, the Committee may establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary. Notwithstanding the
foregoing, an Employee shall be deemed to satisfy the enrollment requirements with respect to
Discretionary Company Contributions by approval of a Discretionary Company Contribution for
the Participant in accordance with Section 4.2.

5

 

	2.3	 	Eligibility; Commencement of Participation. Provided an Employee selected to
participate in the Plan has met all enrollment requirements set forth in this Plan and
required by the Committee, the Employee shall commence participation in the Plan on the first
day of the month following the month in which the Employee executes all enrollment
requirements or such later date as the Committee shall determine in its sole discretion with
respect to compensation paid for services performed after the election. If an Employee fails
to meet all such requirements within the period required, in accordance with Section 2.2, that
Employee shall not be eligible to participate in the Plan until the first day of the Plan Year
following the delivery to and acceptance by the Committee of the required documents; provided,
however, that such Employee must continue to be eligible to participate in the Plan as
determined by the Committee in its sole discretion.
	 
	2.4	 	Termination of Participation. Subject to Section 2.6, once an Employee has become a
Participant in the Plan, his or her participation shall continue until the earlier of (i)
payment in full of all benefits to which the Participant or his or her Beneficiary is entitled
under the Plan or (ii) the occurrence of an event specified in Section 2.5 which results in
loss of benefits. Except as otherwise specified in the Plan, the Company may not terminate an
individual’s participation in the Plan.
	 
	2.5	 	Missing Persons. If the Company is unable to locate a Participant or his or her
Beneficiary for purposes of making a distribution, the amount of the Participant’s benefits
under this Plan that would otherwise be considered as non-forfeitable, shall be forfeited
effective four (4) years after (i) the last date a payment of said benefit was made, if at
least one such payment was made, or (ii) the first date a payment of said benefit was to be
made pursuant to the terms of the Plan, if no payments had been made. If such person is
located after the date of such forfeiture, the benefits for such Participant or Beneficiary
shall not be reinstated hereunder.
	 
	2.6	 	Changes in Employment Status. If a Participant has a change in his or her employment
responsibilities, title, compensation, and/or performance, such that the Participant would not
qualify for initial participation in the Plan, as determined by the Committee in its sole
discretion, (i) the Participant shall continue to defer his or her Annual Deferral Amount in
accordance with the Participant’s election for the Plan Year during which the change in
employment responsibilities, title, compensation, and/or performance occurs, (ii) the
Participant shall not be eligible to elect an Annual Deferral Amount or to be credited with a
Discretionary Company Contribution in Plan Years following the Plan Year during which the
change in employment responsibilities, title, compensation, and/or performance occurs unless
and until the Participant again is selected to elect an Annual Deferral Amount, as determined
by the Committee in its sole discretion, and (iii) the Participant shall otherwise continue to
participate in the Plan.
	 
	2.7	 	Participation upon Reemployment. If a Participant terminates employment with all
Affiliates and later becomes reemployed by an Affiliate, such reemployment shall not suspend
or delay benefit payments such Participant is receiving or is eligible to receive under the
Plan as a result of the Termination of Employment. Upon reemployment, the Participant shall
not be eligible to make deferrals unless and until the Participant again qualifies for initial
participation as determined by the Committee.

ARTICLE 3

Open Enrollment/ Annual Elections

	3.1	 	Elections. A Participant shall complete an election for Salary and Bonus by
completing and delivering an Election Form to the Committee during Open Enrollment for the
Plan Year in the

6

 

	 	 	case of Salary and for the applicable performance period in the case of Bonus. The
Participant shall be entitled to elect the following:

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect,
subject to withholding described in Section 5.2(a), to defer Salary and Bonus according
to the following schedule:

	 	 	 	 	 	 	 	 	 
	 	 	Minimum	 	Maximum
	Deferral	 	Percentage	 	Percentage
	Salary
	 	 	0	%	 	 	100	%
	Bonus
	 	 	0	%	 	 	100	%

	 	 	 	Timely receipt of an Election Form by the Committee is a condition to deferral of
either Salary or Bonus. If no Election Form is timely received by the Committee,
the applicable deferral percentage shall be zero.
	 
	 	(b)	 	Measurement Funds. A Participant may elect one or more Measurement
Fund(s) to be used to determine the amounts to be credited or debited to his or her
Account Balance. If a Participant does not elect any Measurement Funds, the
Participant’s Annual Deferral Amount shall be allocated according to the Participant’s
most recent election. If a Participant has not previously elected any Measurement
Fund, amounts will be credited or debited according to a default Measurement Fund as
determined by the Committee, in its sole discretion.
	 
	 	(c)	 	Time and Form of Payment. During the Open Enrollment for a Plan Year,
a Participant may make a payment election designating the time of commencement of
payment of the portion of the Participant’s Account Balance attributable to his Annual
Deferral Amount and Annual Company Matching Contributions for the Plan Year, and the
form of payment (either lump sum or installments) for such portion according to the
permissible distribution events provided under the Plan which may include any
distribution or payment options provided for under Article 7. The time and form of
payment of any Discretionary Company Contribution for an Employee for a Plan Year shall
be established by the Committee at the time any such Discretionary Company Contribution
is authorized.

	3.2	 	Effect of Elections/Changes to Elections.

	 	(a)	 	Irrevocable Deferral Elections. Once a Plan Year has commenced, a
Participant may not elect to change his or her deferral election that is in effect for
that Plan Year, except if and to the extent permitted by the Committee and made in
accordance with the provisions of Section 3.2(c) and Code section 409A specifically
relating to a change and/or revocation of deferral elections related to a Participant’s
Disability or an Unforeseeable Financial Emergency or a hardship distribution under the
Qualified Plan.
	 
	 	(b)	 	Allocations to Measurement Funds. The Participant may add, delete or
change allocations to one or more Measurement Funds used to determine the amounts to be
credited or debited to his or her Account Balance by submitting an Election Form that
is accepted by the Committee. Allocations may be made in one percent (1%) increments.
Election changes will be applied as follows:

7

 

	 	(i)	 	Changes. Changes to allocations for future deferrals will be
applied to the next contribution period following the date of the election.
	 
	 	(ii)	 	Exchanges. Exchanges to allocations to Measurement Funds shall
be applied at the close of the next market day following the date the election
is received by the Committee.

	 	(c)	 	Subsequent changes to Time and Form of Payment. A Participant may
elect one time to change the time or form of payment elected for his Deferral Account
attributable to Annual Deferral Amounts for any Plan Year, and for his Company Matching
Account attributable to Company Matching Contributions for any Plan Year, only in
accordance with this Section 3.2(c). Any election under this Section 3.2(c) must
comply with Code Section 409A and the regulations and other guidance thereunder.
Except as permitted under this Plan with respect to an Unforeseeable Financial
Emergency or as described in Section 7.5, a Participant may not elect to accelerate the
date payment is to be made or commenced. A Participant may elect to delay the time
payment is to be made or commenced, and may change the form of payment from lump sum to
installments, or vice versa, only if the following conditions are met:

	 	(i)	 	the election is received by the Committee not less than twelve
(12) months before the date payment would have otherwise been made or commenced
without regard to this election;
	 
	 	(ii)	 	the election shall not take effect until at least twelve (12)
months after the date on which the election is received by the Committee; and
	 
	 	(iii)	 	except in the case of payment on account of death or
Disability, payment pursuant to the election shall not be made or commenced
sooner than five (5) years from the date payment would have otherwise been made
or commenced without regard to this election.

	 	 	 	For these purposes, installment payments shall be treated as a single payment, with
the result that an election to change from installments to a lump sum will require
that the lump sum be postponed until a date which is at least five (5) years after
the scheduled payment date of the first installment.

ARTICLE 4

Company Contribution Amounts/Vesting

	4.1	 	Annual Company Matching Contributions. A Participant’s Annual Company Matching
Contributions for any Plan Year shall be determined by the Participant’s Employer. In order
to receive Annual Company Matching Contributions with respect to a Plan Year, the Participant
shall have contributed through elective compensation deferrals in the Qualified Plan, an
amount equal to the maximum deferral permitted under the Qualified Plan for the Plan Year, and
shall be an Employee as of the last day of the Plan Year. If the Participant fulfills these
requirements with respect to a Plan Year, the Annual Company Matching Contributions shall be
equal to (i) the Employer matching contribution that would have been provided to the
Participant in the Qualified Plan, assuming that the Annual Deferral Amount had been included
in the definition of compensation in the Qualified Plan, and assuming further that the
limitations of IRC Sections 401(a)(17), 402(g)(1) and 415 did not apply, minus (ii) the amount
of the Employer matching contribution provided to the Participant during such Plan Year under
the Qualified Plan. The

8

 

	 	 	amount so credited to a Participant under this Plan shall be the Annual Company Matching
Contributions for that Plan Year and shall be credited to the Participant’s Company Matching
Account on a date or dates to be determined by the Committee, in its sole discretion.
	 
	4.2	 	Discretionary Company Contributions. Apart from the Annual Company Matching
Contribution, the Committee may make discretionary contributions for any Participant under
this Plan at the times and in the amount(s) designated by the Participant’s Employer, in its
sole discretion. Amounts so credited to a Participant under this Plan shall be credited to
the Participant’s Discretionary Company Contributions Account.
	 
	4.3	 	Vesting.

	 	(a)	 	Participant Contributions. A Participant shall at all times be 100% vested in
his or her Deferral Account.
	 
	 	(b)	 	Annual Company Matching Contributions. A Participant’s Company Matching
Contributions Account shall be vested to the same extent as the Participant’s matching
contributions account under the Qualified Plan.
	 
	 	(c)	 	Discretionary Company Contributions. Unless otherwise determined by the
Committee prior to awarding any Discretionary Company Contributions, amounts credited
to a Participant’s Discretionary Company Contributions Account shall be vested to the
same extent as the Participant’s matching contributions account under the Qualified
Plan.

ARTICLE 5

Crediting/Taxes

	5.1	 	Crediting/Debiting of Account Balances. Subject to the rules and procedures that are
established from time to time by the Committee, amounts shall be credited or debited to a
Participant’s Account Balance in accordance with the performance of the Measurement Funds
selected by the Participant under Sections 3.1(b) and 3.2(b). The performance of such
Measurement Funds (either positive or negative) shall be determined by the Committee in its
sole discretion.
	 
	5.2	 	Employer-Provided Benefits, FICA and Other Taxes.

	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s Employer shall
withhold from that portion of the Participant’s Salary and Bonus, that are not being
deferred, in a manner determined by the Employer, the Participant’s share of any
Employer-provided welfare and fringe benefits elected by the Participant and/or FICA or
other employment taxes on such Annual Deferral Amount, as determined by the Committee
in its sole discretion. If necessary, the Committee may reduce the Annual Deferral
Amount in order to satisfy the Participant’s election with respect to Employer-provided
welfare and fringe benefits and the Employer’s obligation to withhold FICA and other
employment taxes.
	 
	 	(b)	 	Company Matching Account. When a Participant becomes vested in a
portion of his or her Company Matching Account the Participant’s Employer shall
withhold from the Participant’s Salary and Bonus that are not being deferred, in a
manner determined by the Employer, the Participant’s share of FICA and/or other
employment taxes, as determined

9

 

	 	 	 	by the Committee in its sole discretion. If necessary, the Committee may reduce the
vested portion of the Participant’s Company Matching Account, as applicable, in
order to comply with this Section 5.2.
	 
	 	(c)	 	Distributions. A Participant’s Employer, or the trustee of the Trust,
shall withhold from any payments made to the Participant under this Plan all federal,
state and local income, employment and other taxes required to be withheld by the
Employer, or the trustee of the Trust, in connection with such payments, in amounts and
in a manner to be determined in the sole discretion of the Employer, or the trustee of
the Trust.

ARTICLE 6

Unforeseeable Financial Emergencies

If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition
the Committee (i) to revoke deferrals of Salary and/or Bonus elected by such Participant or (ii) to
revoke deferrals of Salary and Bonus elected by such Participant and receive a partial or full
payout from the Plan. Any such payout shall not exceed the lesser of the Participant’s vested
Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the
amount reasonably needed to satisfy the Unforeseeable Financial Emergency. A Participant may not
receive a payout from the Plan to the extent that the Unforeseeable Financial Emergency is or may
be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by
liquidation of the Participant’s assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship or (iii) by revocation of deferrals under this Plan.

ARTICLE 7

Distributions/Payments

	7.1	 	In-Service Date-Based Distribution.

	 	(a)	 	Annual Contributions. In connection with each election to defer Annual
Contributions, a Participant may elect to receive an In-Service Distribution from the
Plan with respect to all or a portion of such Annual Deferral Amounts credited for such
Plan Year. The In-Service Distribution shall be a lump sum payment in an amount that
is equal to the portion of the Annual Deferral Amounts that the Participant elected to
have distributed as an In-Service Distribution, plus amounts credited or debited in the
manner provided in Section 5.1 on that amount, calculated as of the close of business
on or around the date on which the In-Service Distribution becomes payable, as
determined by the Committee in its sole discretion.
	 
	 	(b)	 	Payment of In-Service Distributions. Subject to the other terms and
conditions of this Plan, each In-Service Distribution elected shall be paid out on the
first Payment Date commencing immediately after the date designated by the Participant.
	 
	 	(c)	 	Other Benefits Take Precedence Over In-Service Distributions. Should
an event occur that triggers a benefit under this Article 7, Article 8 or Article 9,
any Annual Deferral Amounts, plus amounts credited or debited thereon, that is subject
to an In-Service Distribution election under Section 7.1 shall not be paid in
accordance with Section 7.1 but shall be paid in accordance with the other applicable
Article or Section.

	7.2	 	Disability Benefit. A Participant may elect to receive a Disability Benefit equal to
the Account Balance attributable to Annual Contributions for the Plan Year in one of the
following forms: (i) a

10

 

	 	 	single lump sum payment, or (ii) installment payments over one (1) to fifteen (15) years
according to the Installment Method. If the Participant fails to make an election as to the
time and form of payment for a Disability Benefit, the election shall default to a single
lump sum payment.
	 
	7.3	 	Termination Benefit. A Participant may elect to receive a Termination Benefit equal
to the vested Account Balance attributable to Annual Contributions for the Plan Year in one of
the following forms: (i) a single lump sum payment, or (ii) installment payments over one (1)
to fifteen (15) years according to the Installment Method. If the Participant fails to make
an election as to the time and form of payment for a Termination Benefit, the election shall
default to a single lump sum payment. Unless otherwise delayed according to Section 7.5, a
Termination Benefit shall not be made before the date that is six (6) months after the date of
the Participant’s Termination of Employment (or, if earlier, the date of death of the
Participant).
	 
	7.4	 	Delay of Payment. Notwithstanding any other provision in the Plan, the payment of
amounts deferred under the Plan shall will be delayed as follows:

	 	(a)	 	Application of Code section 162(m). If the Company reasonably
anticipates that any portion of the benefit payable under the Plan to any Participant
could be nondeductible under Code section 162(m) (or cause other amounts payable by the
Company to be nondeductible under Code section 162(m)), then the payment of such
portion of the benefit to such Participant shall be delayed until the earliest date on
which the Company reasonably anticipates that the deduction will not be limited or
eliminated by application of Code section 162(m), provided that where any scheduled
payment to the Participant in the Company’s taxable year is delayed in accordance with
this paragraph, the delay in payment will be treated as a subsequent deferral election
unless all scheduled payments to that Participant that could be delayed in accordance
with this paragraph are also delayed. Where the payment is delayed to a date on or
after the Participant’s Termination of Employment, the payment will be considered a
Termination Benefit payable at the time provided in Section 7.4. No election may be
provided to a Participant with respect to the timing of the payment under this Section
7.5(a).
	 
	 	(b)	 	Other Event Permitted by Section 409A. If the Committee so determines,
payment of amounts under the Plan may be delayed as permitted under Code section 409A,
as if stated in the Plan, for example, if the Company reasonably anticipates that
making a payment will violate a term of any Company loan agreement, jeopardize the
ability of the Company to continue as a going concern if paid as scheduled or the
payment may violate securities laws (or other applicable law).

	7.5	 	Acceleration of Payment. Notwithstanding any other provision in the Plan, the
payment of amounts deferred under the Plan will be accelerated as follows:

	 	(a)	 	De Minimis Payments. Notwithstanding the foregoing, if at the time of
the Participant’s Termination of Employment, the Participant’s vested Account Balance,
and the Participant’s entire interest under all other arrangements required to be
aggregated with this Plan pursuant to Treasury Regulation section 1.409A-1(c)(2), is
less than the applicable dollar amount under Code Section 402(g)(1)(B) ($15,500 for
2008), then the Participant’s Account Balance shall be paid in a lump sum on the
Payment Date of the seventh month after such Termination of Employment (or, if earlier,
the date of death).

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	 	(b)	 	Other Events Permitted by Section 409A. If the Committee so
determines, in its sole discretion (without any direct or indirect election on the part
of any Participant), the Committee may accelerate the date of distribution or
commencement of distributions hereunder, or accelerate installment payments by paying
the vested Account Balance in a lump sum or pursuant to a Installment Method using
fewer years, to the extent permitted under Code section 409A (such as, for example, as
provided in Section 1.409A-3(j)(4) of the Treasury regulations, to comply with domestic
relations orders or certain conflict of interest rules, to pay employment taxes, to
make a lump sum cashout of certain de minimis amounts that are less than the applicable
dollar amount under Code section 402(g)(1)(B), or to make payments upon income
inclusion under Code section 409A).

ARTICLE 8

Disability Waiver and Benefit

	8.1	 	Disability Waiver.

	 	(a)	 	Cancellation of Deferral. Subject to Section 409A, if it is determined
that a Participant is suffering from a Disability, such Participant’s deferrals shall
thereupon be cancelled by the later of the end of the Plan Year or the fifteenth day of
the third month following the date the Participant incurs a Disability.
	 
	 	(b)	 	Return to Work. If a Participant returns to employment with the
Employer after a Disability ceases, the Participant may elect to defer an Annual
Deferral Amount for the Plan Year following his or her return to employment and for
every Plan Year thereafter while a Participant in the Plan, provided such deferral
elections are otherwise allowed and an Election Form is delivered to and accepted by
the Committee for each such election in accordance with Section 3.1 above.

	8.2	 	Disability Benefit. Upon a determination that a Participant is Disabled, Participant
shall receive payments according to the Participant’s election for Disability Benefit under
Section 7.2. Unless otherwise delayed according to Section 7.5, a Disability Benefit shall
commence on the first regular payment date following a forty-five (45) day period following
the date the Participant incurred a Disability.

ARTICLE 9

Survivor Benefit

	9.1	 	Survivor Benefit. A Participant’s Beneficiary(ies) shall receive a benefit upon the
Participant’s death which will be equal to (i) the Participant’s vested Account Balance,
determined as of the date before the applicable Payment Date, if the Participant dies prior to
his or her Termination of Employment or Disability, or (ii) the Participant’s unpaid
Termination Benefit or Disability Benefit, determined as of the date before the applicable
Payment Date, if the Participant dies before his or her Termination Benefit or Disability
Benefit is paid in full (the “Survivor Benefit”).
	 
	9.2	 	Payment of Survivor Benefit. The Survivor Benefit shall be paid to the Participant’s
Beneficiary(ies) in a lump sum payment on the first Payment Date after a 45-day period
following the date on which the Company is provided with proof that the satisfactory to the
Committee of the Participant’s death.

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ARTICLE 10

Beneficiary Designation

	10.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive benefits payable under
the Plan upon the death of such a Participant. The Beneficiary designated under this Plan may
be the same as or different from the Beneficiary designated under any other plan of an
Employer in which the Participant participates.
	 
	10.2	 	Beneficiary Designation; Change of Beneficiary Designation. A Participant shall
designate his or her Beneficiary by completing and delivering the Beneficiary Designation Form
to the Committee or its designated agent. A Participant shall have the right to change a
Beneficiary by completing and delivering a new Beneficiary Designation Form to the Committee.
Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and accepted by the Committee
prior to his or her death. No designation or change in designation of a Beneficiary shall be
effective until received by the Committee or its designated agent. In the event a Participant
becomes divorced or legally separated from his or her spouse, any Beneficiary Designation Form
designating such spouse as a beneficiary shall automatically be null and void as of the date
of such divorce or legal separation; provided, however, that the Participant may designate
such spouse (or former spouse) as a beneficiary under a new Beneficiary Designation Form.
	 
	10.3	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 10.1 and 10.2 above or, if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant’s benefits, then the
Participant’s Beneficiary shall be his or her surviving spouse. If the Participant has no
surviving spouse, the Participant’s Survivor Benefit shall be payable to the executor or
personal representative of the Participant’s estate.
	 
	10.4	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
with respect to a Participant, the Committee shall have the right, exercisable in its
discretion, to withhold payments until this matter is resolved to the Committee’s
satisfaction.

ARTICLE 11

Leave of Absence

	11.1	 	Paid Leave of Absence. If a Participant is on a paid leave of absence authorized by
the Participant’s Employer, (i) the Participant shall continue to be considered eligible for
the benefits provided in Articles 6, 7 or 8 in accordance with the provisions of those
Articles, and (ii) the Annual Deferral Amount subject to a deferral election shall continue to
be withheld during such paid leave of absence in accordance with Section 3.1.
	 
	11.2	 	Unpaid Leave of Absence. If a Participant is authorized by the Participant’s
Employer to take an unpaid leave of absence from the employment of the Employer for any
reason, such Participant shall continue to be eligible for the benefits provided in Articles
6, 7 or 8 in accordance with the provisions of those Articles. However, the Participant shall
be excused from fulfilling the Annual Deferral Amount commitment that would otherwise have
been withheld during the remainder of the Plan Year in which the unpaid leave of absence is
taken. During the unpaid leave of absence, the Participant shall not be allowed to make any
additional deferral elections. However, if the Participant returns to active employment, the
Participant may make deferral elections during the next Open Enrollment provided the
Participant is selected by the Committee as eligible to make a deferral election and an
Election Form is delivered to and accepted by the Committee for each such election in
accordance with Section 3.1 above.

13

 

ARTICLE 12

Termination, Amendment or Modification

	12.1	 	Termination. Although the Company anticipates that it will continue the Plan for an
indefinite period of time, there is no guarantee that the Company will continue the Plan or
will not terminate the Plan at any time in the future. Accordingly, the Company reserves the
right to terminate and liquidate the Plan in the event of a corporate dissolution, change in
control, or other event in accordance with Treas. Reg. §1.409A-3(j)(4)(ix).
	 
	12.2	 	Amendment. The Company may, at any time, amend or modify the Plan in whole or in
part by the action of the Board; provided, however, that: (i) no amendment or modification
shall be effective to decrease or restrict the value of a Participant’s vested Account Balance
in existence at the time the amendment or modification is made, calculated as if the
Participant had experienced a Termination of Employment as of the effective date of the
amendment or modification; and (ii) no amendment or modification of this Section 12.2 shall be
effective. The amendment or modification of the Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under the Plan as of the date
of the amendment or modification.
	 
	12.3	 	Release. Any payment of benefits to or for the benefit of a Participant or
Beneficiaries that is made in good faith by the Company in accordance with the Company’s
interpretation of its obligations hereunder shall be in full satisfaction of all claims
against the Company for benefits under this Plan to the extent of such payment.
	 
	12.4	 	Amendment to Ensure Proper Characterization of the Plan. Notwithstanding the
previous Sections of this Article 12, the Plan may be amended at any time, retroactively if
determined by the Committee to be necessary, in order to conform the Plan to the provisions of
Code Section 409A and to ensure that amounts under the Plan are not considered to be taxed to
a Participant under the Federal income tax laws prior to the Participant’s receipt of the
amounts or to conform the Plan and the Trust to the provisions and requirements of any
applicable law (including ERISA and the Code).

ARTICLE 13

Administration

	13.1	 	Administration. Except as otherwise provided herein, the Plan shall be administered
by the Committee.
	 
	13.2	 	Powers of the Committee. In addition to the other powers granted under the Plan, the
Committee shall have all powers necessary to administer the plan, including without
limitation, powers:

	 	(a)	 	to interpret the provisions of this Plan;
	 
	 	(b)	 	to establish and revise the method of accounting for the Plan and to maintain
the Accounts; and
	 
	 	(c)	 	to establish rules for the administration of the Plan and to prescribe any
forms required to administer the Plan.

	 	 	Not in limitation, but in amplification of the foregoing and of the authority conferred upon
the Committee in Section 13.1, the Company specifically intends that the Committee have the

14

 

	 	 	greatest permissible discretion to construe the terms of the Plan and to determine all
questions concerning eligibility, participation and benefits. Any such decision made by the
Committee is intended to be subject to the most deferential standard of judicial review.
Such standard of review is not to be affected by any real or alleged conflict of interest on
the part of the Company or any member of the Committee. The Committee may, in its sole
discretion, discontinue, substitute or add a Measurement Fund. Each such action will take
effect as of the first day of the first calendar quarter that begins at least thirty (30)
days after the day on which the Committee gives Participants advance written notice of such
change.
	 
	13.3	 	Delegation. The Committee, or any officer of the Company designated by the
Committee, shall have the power to delegate specific duties and responsibilities to officers
or other employees of the Company or other individuals or entities. Any delegation may be
rescinded by the Committee at any time. Each person or entity to whom a duty or
responsibility has been delegated shall be responsible for the exercise of such duty or
responsibility and shall not be responsible for any act or failure to act of any other person
or entity.
	 
	13.4	 	Binding Effect of Decisions. The decision or action of the Committee with respect to
any question arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder shall be final,
conclusive and binding upon all persons having or claiming to have any interest or right in
the Plan.
	 
	13.5	 	Indemnity of Committee. The Company shall indemnify and hold harmless the members of
the Committee and any employee of an Affiliate or entity to whom the duties of the Committee
may be delegated against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such employee or entity.
	 
	13.6	 	Employer Information. To enable the Committee to perform its functions, the Company
and each Employer shall supply full and timely information to the Committee on all matters
relating to the compensation of its Participants, the date and circumstances of the
Disability, death or Termination of Employment of its Participants, and such other pertinent
information as the Committee may reasonably require.
	 
	13.7	 	Reports and Records. The Committee and those to whom the Committee has delegated
duties under the Plan, shall keep records of all of their proceedings and actions, and shall
maintain books of account, records, and other data as shall be necessary for the proper
administration of the Plan and for compliance with applicable law.

ARTICLE 14

Claims Procedures

	14.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts the Claimant
believes are distributable to him or her from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within sixty (60) days
after such notice was received by the Claimant. All other claims must be made within 180 days
of the date on which the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the Claimant.

15

 

	14.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than ninety (90) days after receiving the claim. If the
Committee determines that special circumstances require an extension of time for processing
the claim, written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee shall notify the
Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or
	 
	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any part
of it;
	 
	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
	 
	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;
	 
	 	(iv)	 	an explanation of the claim review procedure set forth in
Section 14.4 below; and
	 
	 	(v)	 	a statement of the Claimant’s right to bring a civil action
under ERISA Section 502(a) following an adverse benefit determination on
review.

	14.3	 	Review of a Denied Claim. On or before sixty (60) days after receiving notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s
duly authorized representative) may file with the Committee a written request for review of
the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant to the claim for benefits;
	 
	 	(b)	 	may submit written comments or other documents; and/or
	 
	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may grant.

	14.4	 	Decision on Review. The Committee shall render its decision on review promptly, and
no later than sixty (60) days after the Committee receives the Claimant’s written request for
a review of the denial of the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the extension shall
be furnished to the Claimant prior to the termination of the initial sixty (60) day period.
In no event shall such extension exceed a period of sixty (60) days from the end of the
initial period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render the benefit
determination. In rendering its decision, the Committee shall take into account all comments,
documents, records and other information

16

 

	 	 	submitted by the Claimant relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination. The decision must be
written in a manner calculated to be understood by the Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;
	 
	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the decision
was based;
	 
	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and
	 
	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

	14.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this Article
14 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect
to any claim for benefits under this Plan. No legal action with respect to any claim for
benefits under this Plan may be commenced more than one year after a final decision on review
of the claim.

ARTICLE 15

Funding

	15.1	 	Source of Benefits. All benefits under the Plan shall be paid when due by the
Company out of its assets or by a trustee from a trust established by the Company for that
purpose. The Company may, but shall have no obligations to, make such advance provision for
the payment of such benefit as the Board may from time to time consider appropriate.
	 
	15.2	 	Trust.

	 	(a)	 	Establishment of the Trust. In order to provide assets from which to
fulfill the obligations to the Participants and their Beneficiaries under the Plan, the
Company may establish a Trust by a trust agreement with a third party trustee, to which
each Employer may, in its discretion, contribute cash or other property, including
securities issued by the Company, to provide for the benefit payments under the Plan.
	 
	 	(b)	 	Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Participant’s Election Forms shall govern the rights of a Participant to
receive distributions pursuant to the Plan. The provisions of a Trust shall govern the
rights of the Employers, Participants and the creditors of the Employers to the assets
transferred to the Trust. Each Employer shall at all times remain liable to carry out
its obligations under the Plan.
	 
	 	(c)	 	Distributions From the Trust. Each Employer’s obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the terms of a Trust,
and any such distribution shall reduce the Employer’s obligations under this Plan.

	15.3	 	No Claim on Specific Assets. No Participant shall be deemed to have, by virtue of
being a Participant in the Plan, any claim on any specific assets of the Company such that the
Participant would be subject to income taxation on his or her benefits under the Plan prior to
distribution, and the rights of Participants and Beneficiaries to benefits to which they are
otherwise entitled under the Plan shall be those of an unsecured creditor of the Company.

17

 

	15.4	 	Unfunded. This Plan is unfunded and payable solely from the general assets of the
Company. The Participants and Beneficiaries shall be unsecured creditors of the Company with
respect to their interests in the Plan.

ARTICLE 16

Miscellaneous

	16.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner
consistent with that intent.
	 
	16.2	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be
defined only by the Plan. An Employer shall have no obligation to a Participant under the
Plan except as expressly provided in the Plan.
	 
	16.3	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise, except as provided in Section 16.14.
	 
	16.4	 	Withholding. The Company may withhold from any payment of benefits under the Plan
such amounts as the Company determines are reasonably necessary to pay any taxes (and interest
thereon) required to be withheld or for which the Company may become liable under applicable
law. Any amounts withheld pursuant to this Section 16.4 in excess of the amount of taxes due
(and interest thereon) shall be paid to the Participant or Beneficiary upon final
determination, as determined by the Company, of such amount. No interest shall be payable by
the Company to any Participant or Beneficiary by reason of any amounts withheld pursuant to
this Section 16.4.
	 
	16.5	 	Section 409A Compliance. To the extent provisions of this Plan do not comply with
409A of the Code, the non-compliant provisions shall be interpreted and applied in the manner
that complies with 409A of the Code and implements the intent of this Plan as closely as
possible.
	 
	16.6	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Such
employment is hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment agreement. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the service of any
Employer or to interfere with the right of any Employer to discipline or discharge the
Participant at any time.
	 
	16.7	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with
the Committee by furnishing any and all information requested by the Committee and take such
other actions as may be requested in order to facilitate the administration of the Plan and
the payments

18

 

	 	 	of benefits hereunder, including but not limited to taking such physical examinations as the
Committee may deem necessary.
	 
	16.8	 	Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.
	 
	16.9	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.
	 
	16.10	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Missouri without regard to its
conflicts of laws principles.
	 
	16.11	 	Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

H&R Block, Inc.

Attn: Corporate Secretary

One H&R Block Way

Kansas City, MO 64105

	 	 	Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.
	 
	 	 	Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.
	 
	16.12	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.
	 
	16.13	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse or former
spouse of a Participant who has predeceased the Participant shall automatically pass to the
Participant and shall not be transferable by such spouse in any manner, including but not
limited to such spouse’s will, nor shall such interest pass under the laws of intestate
succession.
	 
	16.14	 	Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein.
	 
	16.15	 	Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the Participant
and the Participant’s Beneficiary, as

19

 

	 	 	the case may be, and shall be a complete discharge of any liability under the Plan for such
payment amount.
	 
	16.16	 	Court Order. The Committee is authorized to make any payments directed by court
order in any action in which the Plan or the Committee has been named as a party. In
addition, if a court determines that a spouse or former spouse of a Participant has an
interest in the Participant’s benefits under the Plan in connection with a property settlement
or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any
election made by a Participant, to immediately distribute the spouse’s or former spouse’s
interest in the Participant’s benefits under the Plan to that spouse or former spouse.
	 
	16.17	 	Distribution in the Event of Taxation. If, for any reason, all or any portion of a
Participant’s benefits under this Plan becomes taxable to the Participant prior to receipt, a
Participant may petition the Committee for a distribution of that portion of his or her
benefit that has become taxable. Upon the grant of such a petition, which grant shall not be
unreasonably withheld, an Employer shall distribute, or shall cause the Trustee to distribute,
to the Participant immediately available funds in an amount equal to the taxable portion of
his or her benefit (which amount shall not exceed a Participant’s unpaid vested Account
Balance under the Plan). If the petition is granted, the distribution of that portion of his
or her benefit that has become taxable shall be made within 90 days of the date when the
Participant’s petition is granted. Such a distribution shall affect and reduce the benefits
to be paid under this Plan.
	 
	16.18	 	Insurance. An Employer, on its own behalf or on behalf of the trustee of a Trust,
and, in its sole discretion, may apply for and procure insurance on the life of the
Participant, in such amounts and in such forms as it may choose. An Employer or the trustee
of a Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance.
No Participant shall have any interest whatsoever in any such policy or policies, and at the
request of an Employer or trustee desiring to purchase such insurance a Participant shall
submit to medical examinations and supply such information and execute such documents as may
be required by the insurance company or companies to whom the Employer or trustee have applied
for insurance.
	 
	16.19	 	Aggregation of Employers. If the Company is a member of a controlled group of
corporations or a group of trades or business under common control (as described in Code
Section 414(b) or (c), but substituting a fifty percent (50%) ownership level for the eighty
percent (80%) level set forth in those Code Sections), all members of the group shall be
treated as a single Company for purposes of whether there has occurred a Termination of
Employment and for any other purposes under the Plan as Section 409A shall require.
	 
	16.20	 	Aggregation of Plans. If the Company offers other account balance deferred
compensation plans in addition to the Plan, those plans together with the Plan shall be
treated as a single plan to the extent required under Section 409A for purposes of determining
whether an Employee may make a deferral election pursuant to Section 3.3(a) within thirty (30)
days of becoming eligible to participate in the Plan and for any other purposes under the Plan
as Section 409A shall require.
	 
	16.21	 	USERRA. Notwithstanding anything herein to the contrary, any deferral or
distribution election provided to a Participant as necessary to satisfy the requirements of
the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended, shall be
permissible hereunder.

20

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