Document:

exv10w17

Exhibit 10.17

SEPARATION AND RELEASE AGREEMENT

     This SEPARATION AND RELEASE AGREEMENT (the “Agreement”) is entered into as of the 4th day of
May, 2010, by and between, H&R Block Management, LLC, a Delaware Limited Liability Company
(“Block”), and Becky Shulman (“Executive”).

     WHEREAS, Executive and Block agree to terminate Executive’s employment,

     WHEREAS, Executive and Block intend the terms and conditions of this Agreement to govern all
issues related to Executive’s employment and separation,

     NOW, THEREFORE, in consideration of the covenants and mutual promises contained in this
Agreement, Executive and Block agree as follows:

     1. Termination of Employment. The parties agree that Executive’s employment with
Block will terminate on April 30, 2010 (“Termination Date”). Until the Termination Date, Executive
will remain on active payroll and be paid her current salary in accordance with Block’s regular
payroll practices. Until the Termination Date, Executive agrees that she will continue to perform
her role and other transition work as specifically agreed by Block Chief Executive Officer (“CEO”)
Russ Smyth. Executive further agrees that she will timely respond to questions and provide
guidance as requested by Mr. Smyth. On or after the Termination Date, Executive acknowledges and
agrees that she will not represent herself as being an employee, officer, director, trustee,
member, partner, agent, or representative of Block for any purpose, and will not make any public
statements on behalf of Block.

     2. Resignation. Executive agrees that as of the Termination Date, she resigns from
all offices, directorships, trusteeships, committee memberships, and fiduciary capacities held
with, or on behalf of, Block or its parents, subsidiaries, or affiliates (collectively as
“Affiliates”), or any benefit plans of Block or its Affiliates. Executive will execute the
resignations attached as Exhibit A on minute book paper contemporaneously with her execution of
this Agreement.

     3. Severance Benefits. The parties agree to treat Executive’s termination of
employment as a termination without “cause” and a “Qualifying Termination” under the H&R Block
Severance Plan (“Severance Plan”) for purposes of Executive’s eligibility for severance
compensation and benefits as set forth in this Section. Subject to the terms and conditions of
this Agreement, including Executive’s executing this Agreement and the Supplemental General
Release, Executive acknowledges and agrees that she will not be eligible for any compensation or
benefits after the Termination Date except for the following:

     a. Severance Pay. Subject to the terms of the Severance Plan, Block will pay
to Executive $610,560.00, less required tax withholdings, in a lump sum payment within 30
days from the later of the Termination Date or the Effective Date of this Agreement.

     b. Employee Benefits. Executive will remain eligible to participate in the
various health and welfare benefit plans maintained by Block until the Termination Date.
After the Termination Date, Block will pay Executive a lump sum payment of $10,219.00, less
applicable tax withholdings, which represents Executive’s monthly post-employment

 

 

premium for health and welfare benefits under COBRA for 12 months less the amount
Executive paid for such benefits as an active employee. To be eligible for the payment
described in this subsection, Executive must be enrolled in Block’s health and welfare plans
on the Terminate Date. If Executive qualifies for this payment, Block will pay Executive
this payment within 30 days from the later of the Termination Date or the Effective Date of
this Agreement. Conversion privileges may also be available for other benefit plans.

     c. Stock Options. Those portions of any outstanding incentive stock options
(“ISO Stock Options”) and nonqualified stock options (“NQ Stock Options”) to purchase shares
of Block’s common stock Block granted to Executive that are scheduled to vest between the
Termination Date and 18 months thereafter (based solely on the time-specific vesting
schedule included in the applicable stock option agreement) shall vest and become
exercisable as of the Termination Date. A list of the stock options vested as of the date
of this Agreement and to become vested pursuant to this Section is attached as Exhibit B.
Any stock options unaffected by the operation of this Section shall be forfeited to Block on
the Termination Date. No later than the Termination Date, Executive will complete an
election form on which she will elect the time period during which she may exercise her ISO
and NQ Stock Options. Executive acknowledges and agrees that she is solely responsible for
the income tax treatment of her ISO and NQ Stock Options election, and that Block has not
provided her any personal tax advice about this election. Block encourages Executive to
seek independent tax advice regarding this election.

     d. Restricted Shares. All restrictions on any shares of Block’s common stock
Block awarded to Executive (“Restricted Shares”) that would have lapsed absent a termination
of employment in accordance with their terms by reason of time between the Termination Date
and six (6) months thereafter shall terminate (and shall be fully vested) as of the
Termination Date. Executive shall forfeit on the Termination Date any shares unaffected by
the operation of this Section. A list of the Restricted Shares outstanding as of the date
of this Agreement and to become vested pursuant to this Section is attached as Exhibit C.

     e. Performance Shares. The number of performance shares Executive will
receive at the end of each applicable performance period will be determined based upon (1)
Executive’s pro-rata length of service during the performance period, and (2) the
achievement of the performance goals at the end of the performance period. Block will pay
any performance shares due Executive to her at the time payments are generally made to other
individuals who received a similar award of performance shares. On the Termination Date,
Executive shall forfeit to Block any Performance Shares Block awarded her pursuant to a
cycle which is less than one year old. A list of the Performance Shares eligible to become
payable pursuant to this subsection is attached as Exhibit D.

     f. Outplacement Services. Block will pay directly to Right Management Services
for standard executive outplacement services to be provided to Executive. Executive must
elect these outplacement services on or before April 30, 2010 in writing to the

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Block Senior Vice-President, Human Resources. Executive waives these outplacement
services if she fails to provide such written notification on or before April 30, 2010.

     g. Deferred Compensation. Executive will receive her vested account balance
and payment in accordance with Executive’s payment elections under the H&R Block Deferred
Compensation Plan for Executives, as amended.

     h. Forfeiture. Executive agrees that the compensation and benefits described
in this Section will cease, and no further compensation and benefits will be provided to her
if she violates any of the post-employment obligations under Section 7 of this Agreement.

     4. Vacation. Block will pay Executive for her accrued, unused paid time off which
includes vacation, floating holidays, and personal days (but excludes sick leave as set forth in
the Company’s policies) within 30 days of the Termination Date. Executive will not
receive any other payment for vacation or holidays.

     5. Executive’s Representations. Executive represents and acknowledges to Block that
(a) Block has advised her to consult with an attorney of her choosing; (b) she has had twenty-one
(21) days to consider the waiver of her rights under the Age Discrimination in Employment Act of
1967, as amended (“ADEA”) prior to signing this Agreement; (c) she has disclosed to Block any
information in her possession concerning any conduct involving Block or its Affiliates that she has
any reason to believe involves any false claims to any governmental agency, or is or may be
unlawful, or violates Block policy in any respect; (d) the consideration provided her under this
Agreement is sufficient to support the releases provided by her under this Agreement; and (e) she
has not filed any charges, claims, or lawsuits against Block involving any aspect of her employment
which have not been terminated as of the date of this Agreement. Executive understands that Block
regards the representations made by her as material and that Block is relying on these
representations in entering into this Agreement.

     6. Effective Date of this Agreement. Executive shall have seven (7) days from the
date she signs this Agreement to revoke her consent to the waiver of her rights under the ADEA in
writing addressed and delivered to Block SVP, HR Tammy Serati which action shall revoke this
Agreement. If Executive revokes this Agreement, all of its provisions shall be void and
unenforceable. If Executive does not revoke her consent, this Agreement will take effect on the
day after the end of this revocation period (the “Effective Date”).

     7. Post-Employment Obligations. Executive agrees to the following post-employment
covenants and restrictions:

     a. Covenant Against Hiring. Executive acknowledges and agrees that she will
not directly or indirectly recruit, solicit, or hire any Block employee or otherwise induce
any such employee to leave Block’s employment during the period of Executive’s employment
and for one (1) year after the Termination Date. The running of the one (1) year period
will be suspended during any period of violation and/or any period of time required to
enforce this covenant by litigation or threat of litigation.

     b. Covenant Against Solicitation. During the period of Executive’s employment
and for two (2) years after the Termination Date, Executive acknowledges and

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agrees that she will not directly or indirectly solicit or enter into any business
transaction of the nature performed by Block with any Block client for which Executive
personally performed services or acquired material information. The running of the two (2)
year period will be suspended during any period of violation and/or any period of time
required to enforce this covenant by litigation or threat of litigation.

     c. Covenant Against Competition. During the period of Executive’s employment
and for two (2) years after the Termination Date, Executive acknowledges and agrees she will
not engage in, or own or control any interest in, or act as an officer, director or employee
of, or consultant, advisor or lender to, any entity that engages in any business that is
competitive with the primary business activity of Block’s Tax Services business which is tax
preparation. The running of the two (2) year period will be suspended during any period of
violation and/or any period of time required to enforce this covenant by litigation or
threat of litigation.

     d. Reasonableness of Covenants. Executive acknowledges and agrees that the
covenants contained in this Agreement are reasonable and enforceable. However, should a
court determine that any provision of this Agreement is invalid or otherwise unenforceable,
the court shall amend such provision so that it is enforceable and so enforce it.

     e. Waiver. Block may agree to waive any of Executive’s surviving
post-employment obligations. Any such waiver must be in writing and signed by Executive and
the Block Chief Executive Officer. Unless otherwise agreed by the parties in writing, any
payments made to and/or benefits received by Executive under this Agreement will immediately
cease upon any such waiver.

     8. Business Expenses and Commitments. As of the Termination Date, Executive agrees
that she will have submitted required documentation for all outstanding expenses on her corporate
credit card and she will have fully cleared all such outstanding expenses. As of the Effective
Date, Executive further agrees that she will not initiate, make, renew, confirm, or ratify any
contracts or commitments for or on behalf of Block or any Affiliate, nor will she incur any
expenses on behalf of Block or any Affiliate without Block’s prior written consent.

     9. Release. Executive and her heirs, assigns, and agents forever release, waive, and
discharge Block, Affiliates, and Released Parties as defined below from each and every claim,
action, or right of any sort, known or unknown, arising on or before the Effective Date.

     a. The foregoing release includes, but is not limited to, (1) any claim of retaliation
or discrimination on the basis of race, sex, pregnancy, religion, marital status, sexual
orientation, national origin, handicap or disability, age, veteran status, special disabled
veteran status, or citizenship status or any other category protected by law; (2) any other
claim based on a statutory prohibition or requirement such as the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act, the Americans With Disabilities Act, the
Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, the Missouri
Human Rights Act, the Missouri Service Letter Statute, and the Civil Rights Ordinance of
Kansas City, Missouri; (3) any claim arising out of or related to an express or implied
employment contract, any other contract affecting terms and conditions of employment, or a
covenant of good faith and fair dealing; (4) any tort claims such as

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wrongful discharge, detrimental reliance, defamation, emotional distress, or
compensatory or punitive damages; (5) any personal gain with respect to any claim arising
under the qui tam provisions of the False Claims Act, 31 U.S.C. 3730, and (6) any claims to
attorney fees, expenses, costs, disbursements, and the like.

     b. Executive represents that she understands the foregoing release, that rights and
claims under the Age Discrimination in Employment Act of 1967, as amended, are among the
rights and claims against the Released Parties she is releasing, and that she understands
that she is not releasing any rights or claims arising after the Effective Date.

     c. Executive further agrees never to sue the Released Parties or cause the Released
Parties to be sued regarding any matter within the scope of the above release. If Executive
violates this release by suing the Released Parties or causing the Released Parties to be
sued, Executive agrees to pay all costs and expenses of defending against the suit incurred
by the Released Parties, including reasonable attorneys’ fees except to the extent that
paying such costs and expenses is prohibited by law or would result in the invalidation of
the foregoing release.

     d. “Released Parties” for purposes of this Agreement are Block, all current and former
parents, subsidiaries, related companies, partnerships or joint ventures, and, with respect
to each of them, their predecessors and successors; and, with respect to each such entity,
all of its past, present, and future employees, officers, directors, stockholders, owners,
representatives, assigns, attorneys, agents, insurers, employee benefit programs (and the
trustees, administrators, fiduciaries and insurers of such programs), and any other person
acting by, through, under or in concert with any of the persons or entities listed in this
paragraph, and their successors.

     10. Breach by Executive. Block’s obligations to Executive after the
Effective Date are contingent on her obligations under this Agreement. Any material breach of this
Agreement by Executive will result in the immediate cancellation of Block’s obligations under this
Agreement and of any benefits that have been granted to Executive by the terms of this Agreement
except to the extent that such cancellation is prohibited by law or would result in the
invalidation of the foregoing release.

     11. Executive Availability. Executive agrees to make herself reasonably available to
Block and/or Affiliates to respond to requests for information pertaining to or relating to Block
and/or its Affiliates, agents, officers, directors, or employees. Executive will cooperate fully
with Block and/or Affiliates in connection with any and all existing or future litigation or
investigations brought by or against Block or any of its Affiliates, agents, officers, directors or
employees, whether administrative, civil or criminal in nature, in which and to the extent Block
and/or Affiliates deem Executive’s cooperation necessary. Block will reimburse Executive for
reasonable out-of pocket expenses incurred as a result of such cooperation. Block and Executive
further agree that if Block requires Executive’s cooperation for more than five (5) days during any
calendar year, Block will pay Executive a per diem of $1500 per day for each day of Executive’s
cooperation which exceeds five (5) days during such calendar year. Nothing herein shall prevent
Executive from communicating with or participating in any government investigation.

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     12. Non-Disparagement. Executive agrees, subject to any obligations she may have
under applicable law, that she will not make or cause to be made any statements that disparage, are
inimical to, or damage the reputation of Block or any of its Affiliates, agents, officers,
directors, or employees. In the event such a communication is made to anyone, including but not
limited to the media, public interest groups, and publishing companies, it will be considered a
material breach of the terms of this Agreement and Executive will be required to reimburse Block
for any and all compensation and benefits (other than those already vested) paid under the terms of
this Agreement and all commitments to make additional payments to Executive will be null and void.

     13. Return of Company Property. Executive agrees that as of the Termination Date she
will have returned to Block any and all Block and/or Affiliates’ property or equipment in her
possession, including but not limited to, any computer, printer, fax, phone, credit card, badge,
and telephone card assigned to her.

     14. Severability of Provisions. In the event that any provision in this Agreement is
determined to be legally invalid or unenforceable by any court of competent jurisdiction, and
cannot be modified to be enforceable, the affected provision shall be stricken from the Agreement,
and the remaining terms of the Agreement and its enforceability shall remain unaffected.

     15. Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties and may be changed only with the written consent of both parties
and only if both parties make express reference to this Agreement. The parties have not relied on
any oral statements that are not included in this Agreement. This Agreement supersedes all prior
agreements and understandings concerning the subject matter of this Agreement. Any modifications
to this Agreement must be in writing and signed by Executive and the Block CEO. Failure of Block
to insist upon strict compliance with any of the terms, covenants, or conditions of this Agreement
will not be deemed a waiver of such terms, covenants, or conditions.

     16. Applicable Law. This Agreement shall be construed, interpreted, and applied in
accordance with the law of the State of Missouri.

     17. Successors and Assigns. This Agreement and each of its provisions will be binding
upon Executive and his executors, successors, and administrators, and will inure to the benefit of
Block and its successors and assigns. Executive may not assign or transfer to others the obligation
to perform his duties hereunder.

     18. Specific Performance by Executive. The parties acknowledge that money damages
alone will not adequately compensate Block for Executive breach of any of the covenants and
agreements herein and, therefore, in the event of the breach or threatened breach of any such
covenant or agreement by Executive, in addition to all other remedies available at law, in equity
or otherwise, Block will be entitled to injunctive relief compelling Executive’s specific
performance of (or other compliance with) the terms hereof.

     19. Indemnification. To the fullest extent permitted by law and Block’s Bylaws, Block
will indemnify Executive during and after the period of her employment from and against all loss,
costs, damages, and expenses including, without limitation, legal expenses of counsel selected by
Block to represent the interests of Executive (which expenses Block will, to the extent so
permitted,

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advance to executive as the same are incurred) arising out of or in connection with the fact
that Executive is or was a director, officer, employee, or agent of the Block or serving in such
capacity for another corporation at the request of Block.

     20. Counterparts. This Agreement may be signed in counterparts and delivered by
facsimile transmission confirmed promptly thereafter by actual delivery of executed counterparts.

     21. 409A Representations. Executive and Block agree that this Agreement shall be
interpreted to comply with Section 409A of the Internal Revenue Code and that Block has made a
good faith effort to comply with current guidance under Section 409A. Notwithstanding the
foregoing or any provision in this Agreement to the contrary, Block does not warrant or promise
compliance with Section 409A, and Executive understands and agrees that she shall not have any
claim against Block or any Affiliate for any good faith effort taken by them to comply with Section
409A.

     22. Confidentiality. Executive agrees to keep strictly confidential all terms and
conditions, including amounts, in this Agreement and shall not disclose them to any person other
than his immediate family, legal or financial advisor, or U.S. government officials who seek such
information in the course of their official duties, unless compelled to do so by law. If a person
not a party to this Agreement requests or demands, by subpoena or otherwise, that Executive
disclose or produce this Agreement or any terms or conditions of it, Executive shall immediately
notify Block and shall give Block an opportunity to respond to such notice before taking any action
or making any decision in connection with such request or subpoena.

EXECUTIVE:

	 	 	 	 	 

	 	 	 
	Becky Shulman	 	 
	 
	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 

Accepted and Agreed:

H&R Block Management, LLC

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Russell P. Smyth
	 	 
	 

	 	President	 	 
	 
	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 

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EXHIBIT A

RESIGNATION

To Whom It May Concern:

Effective April 30, 2010, I hereby resign from the following director and officer positions:

	 	 	 
	Business Entity	 	Title
	H&R Block, Inc.

	 	Senior Vice President and Chief Financial Officer
	BFC Transactions, Inc.

	 	Treasurer
	Block Financial LLC

	 	President and Chief Financial Officer
	Block Financial LLC

	 	Manager
	Cityfront, Inc.

	 	Treasurer
	Companion Insurance, Ltd.

	 	Director
	Companion Insurance, Ltd.

	 	Vice President
	Financial Marketing Services, Inc.

	 	Treasurer
	Financial Stop Inc.

	 	Treasurer
	FM Business Services, Inc.

	 	Treasurer
	Franchise Partner, Inc.

	 	Director
	Franchise Partner, Inc.

	 	President and Treasurer
	H&R Block Bank

	 	Director
	H&R Block Canada, Inc.

	 	Senior Vice President and Treasurer
	H&R Block Management, LLC

	 	Senior Vice President and Chief Financial Officer
	HRB Digital LLC

	 	Senior Vice President and Treasurer
	OOMC Holdings LLC

	 	Senior Vice President and Treasurer
	RSM McGladrey Business Services, Inc.

	 	Senior Vice President and Treasurer
	RSM McGladrey Insurance Services, Inc.

	 	Treasurer
	TaxNet Inc.

	 	Senior Vice President and Treasurer

	 	 	 	 	 	 	 	 	 

	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Becky Shulman
	 	 

 

 

EXHIBIT B

STOCK OPTION SUMMARY

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant Date	 	Grant Price	 	 	Shares Granted	 	 	Vested	 	 	Accelerated	 
	 
	8/7/2001
	 	$	17.529	 	 	 	20,000	 	 	 	20,000	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6/30/2002
	 	$	23.075	 	 	 	20,000	 	 	 	20,000	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6/30/2003
	 	$	21.625	 	 	 	16,000	 	 	 	16,000	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6/30/2004
	 	$	23.84	 	 	 	16,000	 	 	 	16,000	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6/30/2005
	 	$	29.175	 	 	 	20,000	 	 	 	20,000	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6/30/2006
	 	$	23.86	 	 	 	31,405	 	 	 	31,405	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6/30/2007
	 	$	23.37	 	 	 	41,945	 	 	 	27,963	 	 	 	13,982	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7/3/2008
	 	$	21.81	 	 	 	96,401	 	 	 	32,133	 	 	 	64,268	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7/2/2009
	 	$	16.89	 	 	 	105,714	 	 	 	0	 	 	 	70,475	*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Total	 	 	183,501	 	 	 	148,725	 

 

			
	*	 	Executive forfeits 35,239 stock options from the July 2, 2009 grant.

 

 

EXHIBIT C

RESTRICTED SHARES SUMMARY

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant Date	 	Grant Price	 	 	Shares Granted	 	 	Vested	 	 	Accelerated	 
	 
	7/2/2007
	 	$	23.37	 	 	 	1,440	 	 	 	720	 	 	 	720	*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7/2/2009
	 	$	16.89	 	 	 	5,895	 	 	 	0	 	 	 	0	*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Total	 	 	720	 	 	 	720	 

 

			
	*	 	Executive forfeits 5,895 shares from the July 2, 2009 grant.

 

 

EXHIBIT D

PERFORMANCE SHARES SUMMARY

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant Date	 	Grant Price	 	 	Shares Granted	 	 	Vested	 	 	Accelerated	 
	 
	6/30/2007
	 	$	0.00	 	 	 	2,675	 	 	 	*	 	 	 	 	 
	7/3/2008
	 	$	0.00	 	 	 	5,463	 	 	 	 	 	 	 	*	 

 

			
	*	 	The number of shares actually awarded will be determined at the end of the applicable 3-year
performance cycle based upon actual performance results. Awards will also be prorated based upon
the number of days worked by Executive during the applicable three year performance cycleexv10w19

Exhibit 10.19

H&R BLOCK, INC.

2008 DEFERRED STOCK UNIT PLAN FOR OUTSIDE DIRECTORS

(as amended September 24, 2009)

1. Purposes. The purposes of this 2008 Deferred Stock Unit Plan for Outside Directors are to
attract, retain and reward experienced and qualified directors who are not employees of the Company
or any Subsidiary of the Company, and to secure for the Company and its shareholders the benefits
of stock ownership in the Company by those directors.

2. Definitions.

          (a) “Account” shall mean a recordkeeping account for each Recipient reflecting the number of
Deferred Stock Units credited to such a Recipient.

          (b) “Beneficiary” or “Beneficiaries” shall mean the persons or trusts designated by a
Recipient in writing pursuant to Section 10(a) of the Plan as being entitled to receive any benefit
payable under the Plan by reason of the death of a Recipient, or, in the absence of such
designation, the persons specified in Section 10(b) of the Plan.

          (c) “Board of Directors” shall mean the board of directors of the Company.

          (d) “Closing Price” shall mean the last reported market price for one share of Common Stock,
regular way, on the New York Stock Exchange (or any successor exchange or stock market on which
such last reported market price is reported) on the day in question. If such exchange or market is
closed on the day on which Closing Price is to be determined or if there were no sales reported on
such date, Closing Price shall be computed as of the last date preceding such date on which such
exchange or market was open and a sale was reported.

          (e) “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (f) “Common Stock” shall mean the common stock, without par value, of the Company.

          (g) “Company” shall mean H&R Block, Inc., a Missouri corporation.

          (h) “Deferred Stock Unit” shall mean the unit of measurement of a Recipient’s interest in the
Plan.

          (i) “Director” shall mean a member of the Board of Directors of the Company or a member of the
Board of Directors of any Subsidiary of the Company, as the case may be. With respect only to
awards made within thirty (30) days after initial approval of this Plan by shareholders of the
Company, Director shall include an individual who was a Director in June, 2008 and whose term
expired at the 2008 annual meeting of shareholders at which this Plan was initially approved.

          (j) “Outside Director” shall mean a Director who is not an employee of the Company on the date
of grant of the Deferred Stock Unit. As used herein, “employee of the Company” means any full-time
employee of the Company, its subsidiaries and their respective

 

divisions, departments and subsidiaries and the respective divisions, departments and
subsidiaries of such subsidiaries who is employed at least thirty-five (35) hours a week; provided,
however, it is expressly understood that an employee of the Company does not include independent
contractors or other persons not otherwise employed by the Company or any Subsidiary of the Company
but who provide legal, accounting, investment banking or other professional services to the Company
or any Subsidiary of the Company.

          (k) “Plan” shall mean this 2008 Deferred Stock Unit Plan for Outside Directors, as the same
may be amended from time to time.

          (l) “Recipient” shall mean an Outside Director of the Company or any Subsidiary of the Company
who has been granted a Deferred Stock Unit under the Plan or any person who succeeds to the rights
of such Outside Director under this Plan by reason of the death of such Outside Director.

          (m) “Related Company” shall mean (i) any corporation that is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) that includes that Company; and (ii) any
trade or business (whether or not incorporated) that is under common control (as defined in Section
414(c) of the Code) with the Company (for purposes of applying Sections 414(b) and (c) of the Code,
twenty-five percent (25%) is substituted for the eighty percent (80%) ownership level).

          (n) “Separation from Service” shall mean that a Director ceases to be a Director and it is not
anticipated that the individual will thereafter perform services for the Company or a Related
Company. For this purpose, services provided as an employee are disregarded if this Plan is not
aggregated with any plan in which a Director participates as an employee pursuant to Treasury
Regulation section 1.409A-1(c)(2)(ii).

          (o) “Subsidiary of the Company” shall mean a subsidiary of the Company, its divisions,
departments, and subsidiaries and the respective divisions, departments and subsidiaries of such
subsidiaries.

3. Administration of the Plan. The Plan may be administered by the Board of Directors. A majority
of the Board of Directors shall constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing by all members of
the Board of Directors, shall be valid acts of the Board of Directors.

     The Board of Directors shall have full power and authority to construe, interpret and
administer the Plan and, subject to the other provisions of this Plan, to make determinations which
shall be final, conclusive and binding upon all persons, including, without limitation, the
Company, the shareholders of the Company, the Board of Directors, the Recipients and any persons
having any interest in any Deferred Stock Units which may be granted under this Plan. The Board of
Directors shall impose such additional conditions upon Deferred Stock Units granted under this Plan
and the exercise thereof as may from time to time be deemed necessary or advisable, in the opinion
of counsel to the Company, to comply with applicable laws and regulations. The Board of Directors
from time to time may adopt rules and regulations for carrying out the Plan and written policies
for implementation of the Plan. Such policies may

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include, but need not be limited to, the type, size and terms of Deferred Stock Units to be
granted to Outside Directors.

4. Awards. The Board of Directors may, in its sole and absolute discretion, from time to time
during the continuance of the Plan, (i) determine which Outside Directors shall be granted Deferred
Stock Units under the Plan, (ii) grant Deferred Stock Units to any Outside Directors so selected,
(iii) determine the date of grant, size and terms of Deferred Stock Units to be granted to Outside
Directors of any Subsidiary of the Company (subject to Sections 7, 13 and 14 hereof, as the same
may be hereafter amended), and (iv) do all other things necessary and proper to carry out the
intentions of this Plan.

5. Eligibility. Deferred Stock Units may be granted to any Outside Director; however, no Outside
Director or other person shall have any claim or right to be granted a Deferred Stock Unit under
the Plan.

6. Credits. The number of Deferred Stock Units credited to a Recipient’s Account pursuant to an
award shall equal the dollar amount of the award divided by the average Closing Price for the ten
consecutive trading dates ending on the date of award. If a cash dividend is paid on Common Stock,
a Recipient’s Account shall be credited with the number of Deferred Stock Units equal to the amount
of dividend that would have been paid with respect to the Deferred Stock Units if they were shares
of Common Stock, divided by the Closing Price on the date the dividends were paid. If a stock
dividend is paid on Common Stock, a Recipient’s Account shall be credited with the same number of
Deferred Stock Units as the number of shares of Common Stock the Recipient would have received as a
dividend if the Deferred Stock Units credited to his Account were shares of Common Stock.

7. Stock Subject to the Plan. The total number of shares of Common Stock issuable under this Plan
may not at any time exceed three hundred thousand (300,000) shares, subject to adjustment as
provided in Sections 16 and 17 hereof. Shares of Common Stock not actually issued pursuant to
Deferred Stock Units shall be available for future awards of Deferred Stock Units. Shares of Common
Stock to be delivered under the Plan may be either authorized but unissued Common Stock or treasury
shares.

8. Vesting. All Deferred Stock Units credited to a Recipient’s Account shall be fully vested at all
times.

9. Payment.

          (a) Time and Form of Payment Upon Separation from Service. If a Recipient has a Separation
from Service for a reason other than death, payment of his Account shall be made in one lump sum on
the six month anniversary of the date the Recipient had a Separation from Service. If the New York
Stock Exchange (or any successor exchange or stock market on which shares of the Common Stock are
traded) is not open on such day, then payment shall be made on the next day the New York Stock
Exchange (or any successor exchange or stock market on which shares of the Common Stock are traded)
is open.

          (b) Payment Following Death. If a Recipient dies prior to the payment in full of all amounts
due him under the Plan, the balance of his Account shall be payable to his

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designated Beneficiary in a lump sum as soon as reasonably practical following death, but no
later than ninety (90) days following the Recipient’s death. The beneficiary designation shall be
revocable and must be made in writing in a manner approved by the Company.

          (c) Medium of Payment. Payment of a Director’s Account shall be made in shares of Common
Stock. The number of shares of Common Stock issued shall equal the number, rounded up to the next
whole number, of Deferred Stock Units credited to a Director’s Account.

10. Beneficiary.

          (a) Designation by Recipient. Each Recipient has the right to designate primary and contingent
Beneficiaries for death benefits payable under the Plan. Such Beneficiaries may be individuals or
trusts for the benefit of individuals. A beneficiary designation by a Recipient shall be in writing
on a form acceptable to the Company and shall only be effective upon delivery to the Company. In
the event a Recipient is married at the time he or she designates a beneficiary other than his or
her spouse, such designation will not be valid unless the Recipient’s spouse consents in writing to
such designation. A beneficiary designation may be revoked by a Recipient at any time by delivering
to the Company either written notice of revocation or a new beneficiary designation form. The
beneficiary designation form last delivered to the Company prior to the death of a Recipient shall
control.

          (b) Failure to Designate Beneficiary. In the event there is no beneficiary designation on file
with the Company, or all Beneficiaries designated by a Recipient have predeceased the Recipient,
the benefits payable by reason of the death of the Recipient shall be paid to the Recipient’s
spouse, if living; if the Recipient does not leave a surviving spouse, to the Recipient’s issue by
right of representation; or, if there are no such issue then living, to the Recipient’s estate. In
the event there are benefits remaining unpaid at the death of a sole Beneficiary and no successor
Beneficiary has been designated, either by the Recipient or the Recipient’s spouse pursuant to
Section 10(a), the remaining balance of such benefit shall be paid to the deceased Beneficiary’s
estate; or, if the deceased Beneficiary is one of multiple concurrent Beneficiaries, such remaining
benefits shall be paid proportionally to the surviving Beneficiaries.

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

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

13. Continuation as Director. The Board of Directors shall require that a Recipient be an Outside
Director at the time a Deferred Stock Unit is granted. The Board of Directors shall have the sole
power to determine the date of any circumstances which shall constitute cessation as a Director and
to determine whether such cessation is the result of death or any other reason.

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14. Registration of Stock. No shares of Common Stock may be issued at any time when its exercise or
the delivery of shares of Common Stock or other securities thereunder would, in the opinion of
counsel for the Company, be in violation of any state or federal law, rule or ordinance, including
any state or federal securities laws or any regulation or ruling of the Securities and Exchange
Commission.

15. Non-Assignability. No Deferred Stock Unit granted pursuant to the Plan shall be transferable or
assignable by the Recipient other than by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder; provided however, that
a Recipient may transfer or assign a Deferred Stock Unit to an entity that is or was a shareholder
of the Company at any time during which the Recipient served as a Director (a “Shareholder Entity”)
if (i) the Recipient is affiliated with the manager of the investments made by such Shareholder
Entity or otherwise serves as a Director at the Shareholder Entity’s discretion or request, and
(ii) pursuant to the Shareholder Entity’s governance documents or any regulatory, contractual or
other requirement, any consideration the Recipient may receive as compensation for serving as a
Director must be transferred, assigned, surrendered or otherwise paid to the Shareholder Entity.

16. Dilution or Other Adjustments. In the event of any change in the capital structure of the
Company, including but not limited to a change resulting from a stock dividend or split, or
combination or reclassification of shares, the Board of Directors shall make such equitable
adjustments with respect to the Deferred Stock Units or any provisions of this Plan as it deems
necessary or appropriate, including, if necessary, any adjustment in the maximum number of shares
of Common Stock subject to an outstanding Deferred Stock Unit.

17. Merger, Consolidation, Reorganization, Liquidation, Etc. If the Company shall become a party to
any corporate merger, consolidation, major acquisition of property for stock, reorganization or
liquidation, the Board of Directors shall make such arrangements it deems advisable with respect to
outstanding Deferred Stock Units, which shall be binding upon the Recipients of outstanding
Deferred Stock Units, including, but not limited to, the substitution of new Deferred Stock Units
for any Deferred Stock Units then outstanding, the assumption of such Deferred Stock Units and the
termination of or payment for such Deferred Stock Units.

18. Costs and Expenses. The cost and expenses of administering the Plan shall be borne by the
Company and not charged to any Deferred Stock Unit nor to any Recipient.

19. Deferred Stock Unit Agreements. The Board of Directors shall have the power to specify the form
of Deferred Stock Unit agreements to be granted from time to time pursuant to and in accordance
with the provisions of the Plan and such agreements shall be final, conclusive and binding upon the
Company, the shareholders of the Company and the Recipients. No Recipient shall have or acquire any
rights under the Plan except such as are evidenced by a duly executed agreement in the form thus
specified.

20. No Shareholder Privileges. Neither the Recipient nor any person claiming under or through him
or her shall be or have any of the rights or privileges of a shareholder of the Company in respect
to any of the Common Stock issuable with respect to any Deferred Stock

5

 

Unit, unless and until certificates evidencing such shares of Common Stock shall have been duly
issued and delivered.

21. Guidelines. The Board of Directors shall have the power to provide guidelines for
administration of the Plan and to make any changes in such guidelines as from time to time the
Board deems necessary.

22. Amendment and Discontinuance. The Board of Directors shall have the right at any time during
the continuance of the Plan to amend, modify, supplement, suspend or terminate the Plan, provided
that (a) no amendment, supplement, modification, suspension or termination of the Plan shall in any
material manner affect any Deferred Stock Unit of any kind theretofore granted under the Plan
without the consent of the Recipient of the Deferred Stock Unit, unless such amendment, supplement,
modification, suspension or termination is by reason of any change in capital structure referred to
in Section 16 hereof or unless the same is by reason of the matters referred to in Section 17
hereof; (b) Section 409A of the Code is not violated thereby, and (c) if the Plan is duly approved
by the shareholders of the Company, no amendment, modification or supplement to the Plan shall
thereafter, in the absence of the approval of the holders of a majority of the shares of Common
Stock present in person or by proxy at a duly constituted meeting of shareholders of the Company,
(i) increase the aggregate number of shares which may be issued under the Plan, unless such
increase is by reason of any change in capital structure referred to in Section 16 hereof, or (ii)
change the termination date of the Plan provided in Section 23 hereof.

23. Termination. Deferred Stock Units may be granted in accordance with the terms of the Plan until
September 4, 2018, on which date this Plan will terminate except as to Deferred Stock Units then
outstanding hereunder, which Deferred Stock Units shall remain in effect until they have been paid
out according to their terms.

24. Notices. Any notice permitted or required under the Plan shall be in writing and shall be hand
delivered or sent, postage prepaid, by certified mail with return receipt requested, to the
principal office of the Company, if to the Company, or to the address last shown on the records of
the Company, if to a Recipient or Beneficiary. Any such notice shall be effective as of the date of
hand delivery or mailing.

25. No Guarantee of Membership. Neither the adoption and maintenance of the Plan nor the award of
Deferred Stock Units by the Company to any Director shall be deemed to be a contract between the
Company and any Recipient to retain his or her position as a Director.

26. 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 26 in excess of the amount of taxes due (and interest thereon)
shall be paid to the Recipient or Beneficiary upon final determination, as determined by the
Company, of such amount. No interest shall be payable by the Company to any Recipient or
Beneficiary by reason of any amounts withheld pursuant to this Section 26.

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27. 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.

28. Release. Any payment of benefits to or for the benefit of a Recipient 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.

29. Captions. Article and section headings and captions are provided for purposes of reference and
convenience only and shall not be relied upon in any way to construe, define, modify, limit, or
extend the scope of any provision of the Plan.

30. Approval. This Plan shall take effect upon due approval by the Board of Directors and the
shareholders of the Company.

7

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