H&R BLOCK, INC. 2003 LONG-TERM EXECUTIVE COMPENSATION PLAN GRANT AGREEMENT
Exhibit 10.5
This Grant Agreement is entered into by and between H&R Block, Inc., a Missouri corporation
(the “Company”), and Xxxxxxx X. Xxxx (“Participant”).
WHEREAS, the Company provides certain incentive awards to key employees of subsidiaries of the
Company under the H&R Block, Inc. 2003 Long-Term Executive Compensation Plan (the “Plan”); and
WHEREAS, receipt of such Awards under the Plan are conditioned upon a Participant’s execution
of a Grant Agreement within 180 days of May 2, 2011, wherein Participant agrees to abide by certain
terms and conditions authorized by the Compensation Committee of the Board of Directors.
NOW THEREFORE, in consideration of the parties promises and agreements set forth in this Grant
Agreement, the sufficiency of which the parties hereby acknowledge,
IT IS AGREED AS FOLLOWS:
1. Definitions. Whenever a term is used in this Grant Agreement (“Agreement”), the
following words and phrases shall have the meanings set forth below unless the context plainly
requires a different meaning, and when a defined meaning is intended, the term is capitalized.
1.1 Code. Code means the Internal Revenue Code of 1986, as amended.
1.2 Committee. Committee means the Compensation Committee of the Board of Directors
for H&R Block, Inc.
1.3 Common Stock. Common Stock means the common stock, without par value, of the
Company.
1.4 Company. Company means H&R Block, Inc., a Missouri corporation, and, unless the
context otherwise requires, includes its “subsidiary corporations” (as defined in Section
424(f) of the Internal Revenue Code) and their respective divisions, departments and
subsidiaries and the respective divisions, departments and subsidiaries of such
subsidiaries.
1.5 Closing Price. Closing Price shall mean the last reported market price for one
share of Common Stock, regular way, on the New York Stock Exchange (or any successor
exchange or stock market on which such last reported market price is reported) on the day in
question. In the event the exchange is closed on the day on which Closing
Price is to be determined or if there were no sales reported on such date, Closing Price
shall be computed as of the last date preceding such date on which the exchange was open and
a sale was reported.
1.6 Fair Market Value. Fair Market Value (“FMV”) means the Closing Price for one
share of H&R Block, Inc. Stock.
1.7 Stock Option. Stock Option means the right to purchase, upon exercise of a stock
option granted under the Plan, shares of the Company’s Common Stock. A Stock Option may be
an Incentive Stock Option which meets the requirements of Code Section 422(b) or a
Nonqualified Stock Option. The right and option to purchase shares of Common Stock
identified as subject to Nonqualified Stock Option shall not constitute and shall not be
treated for any purpose as an “incentive stock option,” as such term is defined in the Code.
2. Stock Option.
2.1 Grant of Stock Option. As of May 2, 2011 (the “Grant Date”), the Company grants
the Participant the right and option to purchase 606,470 shares of Common Stock (this “Stock
Option”) identified as non-qualified stock options.
2.2 Option Price. The Price per share of Common Stock subject to this Stock Option
is $17.48, which is the Closing Price on the Grant Date.
2.3 Vesting. This Stock Option shall vest and become exercisable in installments
with regard to the percentage of the number of shares of Common Stock subject to this Stock
Option indicated next to each vesting date set forth in the table below provided that the
Participant remains continuously employed by the Company through such date:
| Percent of Shares Subject to this | ||||
| Stock Option Vesting on Such | ||||
| Vesting Date | Vesting Date | |||
December 24, 2011 |
33 | % | ||
December 24, 2012 |
33 | % | ||
December 24, 2013 |
34 | % | ||
(Note: If the percentage of the aggregate number of shares of Common Stock subject to this Stock
Option scheduled to vest on a vesting date is not a whole number of shares, then the amount vesting
shall be rounded down to the nearest whole number of shares for each vesting date, except that the
amount vesting on the final vesting date shall be such that 100% of the aggregate number of shares
of Common Stock subject to this Stock Option shall be cumulatively vested as of the final vesting
date.)
2.4 Acceleration of Vesting. Notwithstanding anything herein to the contrary, the
acceleration of the vesting of this Stock Option shall occur in accordance with the terms
and conditions of that certain Employment Agreement dated April 27, 2011, between
Participant and H&R Block Management, LLC (the “Employment Agreement”).
2.5 Term of Option. No Stock Option granted under this Grant Agreement may be
exercised after May 2, 2021. Except as provided in the Employment Agreement, all Stock
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Options shall terminate when the Participant ceases, for whatever reason, to be an employee
of any of the subsidiaries of the Company.
2.6 Participant’s Death. In the event the Participant ceases to be an employee of
any of the subsidiaries of the Company because of death, the Participant’s rights under the
Stock Option shall pass by the Participant’s will or laws of descent and distribution.
2.7 Exercise of Stock Option. The Stock Option granted under the Plan shall be
exercisable from time to time by the Participant by giving notice of exercise to the
Company, in the manner specified by the Company, specifying the number of whole shares to be
purchased, and accompanied by full payment of the purchase price. The right to purchase
shall be cumulative, so that the full number of shares of Common Stock that become
purchasable at any time need not be purchased at such time, but may be purchased at any time
or from time to time thereafter (but prior to the termination of the Stock Option).
2.8 Payment of the Option Price. Full payment of the Option Price for shares
purchased shall be made at the time the Participant exercises the Stock Option. Payment of
the aggregate Option Price may be made in (a) cash, (b) by delivery of Common Stock (with a
value equal to the Closing Price of Common Stock on the last trading date preceding the date
on which the Stock Option is exercised), or (c) a combination thereof. Payment shall be made
only in cash unless at least six months have elapsed between the date of Participant’s
acquisition of each share of Common Stock delivered by Participant in full or partial
payment of the aggregate Option Price and the date on which the Stock Option is exercised.
2.9 No Shareholder Privileges. Neither the Participant nor any person claiming under
or through him or her shall be, or have any of the rights or privileges of, a shareholder of
the Company with respect to any of the Common Stock issuable upon the exercise of this Stock
Option, unless and until certificates evidencing such shares of Common Stock shall have been
duly issued and delivered.
3. [RESERVED]
4. Non-Transferability of Awards. Any Stock Option (including all rights, privileges and
benefits conferred under such Award) shall not be transferred, assigned, pledged, or hypothecated
in any way (whether by operation of law or otherwise) and shall not be subject to sale under
execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate, or otherwise dispose of any Stock Option, or of any right or privilege conferred
hereby, contrary to the provisions hereof, or upon any attempted sale under any execution,
attachment, or similar process upon the rights and privileges hereby granted, then and in any such
event such Award and the rights and privileges hereby granted shall immediately become null and
void.
5. Miscellaneous.
5.1 No Employment Contract. This Agreement does not confer on the Participant any
right to continued employment for any period of time, is not an employment contract, and
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shall not in any manner modify any effective contract of employment between the Participant
and any subsidiary of the Company.
5.2 [RESERVED]
5.3 Adjustment of Shares. If there shall be any change in the capital structure of
the Company, including but not limited to a change in the number or kind of the outstanding
shares of the Common Stock resulting from a stock dividend or split-up, or combination or
reclassification of such shares (or of any stock or other securities into which shares shall
have been changed, or for which they shall have been exchanged), then the Board of Directors
of the Company shall make such equitable adjustments with respect to the Stock Option, or
any other provisions of the Plan, as it deems necessary or appropriate to prevent dilution
or enlargement of the Stock Option rights hereunder or of the shares subject to this Stock
Option.
5.4 Merger, Consolidation, Reorganization, Liquidation, etc. If the Company shall
become a party to any corporate merger, consolidation, major acquisition of property for
stock, reorganization, or liquidation, the Board of Directors shall, acting in its absolute
and sole discretion, make such arrangements, which shall be binding upon the Participant of
outstanding Awards, including but not limited to, the substitution of new Awards or for any
Awards then outstanding, the assumption of any such Awards and the termination of or payment
for such Awards. Notwithstanding the foregoing, the Stock Option may be terminated unless
the Stock Option is fully vested as of such date and the Participant is either paid the
value thereof or given a reasonable opportunity to exercise the Stock Option in full.
5.5 Interpretation and Regulations. The Board of Directors of the Company shall have
the power to provide regulations for administration of the Plan by the Committee and to make
any changes in such guidelines as from time to time the Board may deem necessary. The
Committee shall have the sole power to determine, solely for purposes of the Plan and this
Agreement, the date of and circumstances which shall constitute a cessation or termination
of employment and whether such cessation or termination is the result of retirement, death,
disability or termination without cause or any other reason,
and further to determine, solely for purposes of the Plan and this Agreement, what
constitutes continuous employment with respect to the exercise of Stock Option or delivery
of Shares under the Plan (except that leaves of absence approved by the Committee or
transfers of employment among the subsidiaries of the Company shall not be considered an
interruption of continuous employment for any purpose under the Plan). Notwithstanding
anything herein or in the Plan to the contrary, any interpretation of terms used in the
Employment Agreement shall be resolved in accordance with the dispute mechanisms therein and
shall bind the Company and the Participant.
5.6 Reservation of Rights. If at any time counsel for the Company determines that
qualification of the Shares under any state or federal securities law, or the consent or
approval of any governmental regulatory authority, is necessary or desirable as a condition
of the executing an Award or benefit under the Plan, then such action may not be taken, in
whole or in part, unless and until such qualification, registration, consent or
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approval
shall have been effected or obtained free of any conditions such counsel deems unacceptable.
5.7 [RESERVED]
5.8 Withholding of Taxes. To the extent that the Company is required to withhold
taxes in compliance with any federal, state, local or foreign law in connection with any
payment made or benefit realized by a Participant or other person under this Award, it shall
be a condition to the receipt of such payment or the realization of such benefit that the
Participant or such other person make arrangements satisfactory to the Company for the
payment of all such taxes required to be withheld. Such arrangements shall include
relinquishment of a portion of such payment or benefit, and in the event the Participant has
not made any such arrangements, such relinquishment shall be automatic.
5.9 Waiver. The failure of the Company to enforce at any time any terms or
conditions of this Agreement shall not be construed to be a waiver of such terms or
conditions or of any other provision. Any waiver or modification of the terms or conditions
of this Agreement shall only be effective if reduced to writing and signed by both
Participant and an officer of the Company.
5.10 Incorporation. The terms and conditions of this Grant Agreement are authorized
by the Compensation Committee of the Board of Directors of H&R Block, Inc.
5.11 Notices. Any notice to be given to the Company or election to be made under the
terms of this Agreement shall be addressed to the Company (Attention: Long-Term Incentive
Department) at Xxx X&X Xxxxx Xxx, Xxxxxx Xxxx Xxxxxxxx 00000 or at such other address as the
Company may hereafter designate in writing to the Participant. Any notice to be given to the
Participant shall be addressed to the Participant at the last address of record with the
Company or at such other address as the Participant may hereafter designate in writing to
the Company. Any such notice shall be deemed to have been duly given when deposited in the
United States mail via regular or certified mail, addressed as aforesaid, postage prepaid.
5.12 Choice of Law. This Grant Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Missouri without reference to
principles of conflicts of laws.
5.13 Choice of Forum and Jurisdiction. Participant and Company agree that any
proceedings to enforce the obligations and rights under this Grant Agreement must be brought
in Missouri District Court located in Xxxxxxx County, Missouri, or in the United States
District Court for the Western District of Missouri in Kansas City, Missouri. Participant
and Company agree and submit to personal jurisdiction in either court. Participant and
Company further agree that this Choice of Forum and Jurisdiction is binding on all matters
related to Awards under the Plan and may not be altered or amended by any other arrangement
or agreement (including an employment agreement) without the express written consent of
Participant and H&R Block, Inc.
5.14 [RESERVED]
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5.15 Relationship of the Parties. Participant acknowledges that this Grant Agreement
is between H&R Block, Inc. and Participant. Participant further acknowledges that H&R Block,
Inc. is a holding company and that Participant is not an employee of H&R Block, Inc.
5.16 Headings. The section headings herein are for convenience only and shall not be
considered in construing this Agreement.
5.17 Amendment. No amendment, supplement, or waiver to this Agreement is valid or
binding unless in writing and signed by both parties.
5.18 Execution of Agreement. This Agreement shall not be enforceable by either
party, and Participant shall have no rights with respect to the Long Term Incentive Award,
unless and until it has been (1) signed by Participant and on behalf of the Company by an
officer of the Company, provided that the signature by such officer of the Company on behalf
of the Company may be a facsimile or stamped signature, and (2) returned to the Company.
5.19 Conflicts. To the extent there is any conflict between this Agreement and the
Employment Agreement, the Employment Agreement shall control.
In consideration of said Award and the mutual covenants contained herein, the parties agree to the
terms set forth above.
The parties hereto have executed this Grant Agreement.
Associate Name:
|
Xxxxxxx X. Xxxx | |
Date Signed: |
H&R BLOCK, INC.
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | Senior Vice President, Human Resources | |||
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