H&R BLOCK, INC. 2003 LONG-TERM EXECUTIVE COMPENSATION PLAN PERFORMANCE SHARE UNITS GRANT AGREEMENT
Exhibit 10.3
H&R BLOCK, INC.
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
PERFORMANCE SHARE UNITS
GRANT AGREEMENT
2003 LONG-TERM EXECUTIVE COMPENSATION PLAN
PERFORMANCE SHARE UNITS
GRANT AGREEMENT
This Grant Agreement is entered into by and between H&R Block, Inc., a Missouri corporation
(the “Company”), and [Participant Name] (“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”);
WHEREAS, receipt of such Awards under the Plan are conditioned upon a Participant’s execution
of a Grant Agreement within 180 days of [Grant Date], wherein Participant agrees to abide by
certain terms and conditions authorized by the Compensation Committee of the Board of Directors;
WHEREAS, the Participant has been selected by the Compensation Committee or the Chief
Executive Officer of the Company as a key employee of one of the subsidiaries of the Company and is
eligible to receive Awards under the Plan.
NOW THEREFORE, in consideration of the parties’ promises and agreements set forth in this
Grant Agreement, the sufficiency of which the parties hereby acknowledge,
IT IS AGREED AS FOLLOWS:
1. Definitions. Whenever a term is used in this Agreement or an Award Certificate issued
under the Plan, the following words and phrases shall have the meanings set forth below unless the
context plainly requires a different meaning, and when a defined meaning is intended, the term is
capitalized.
1.1 Amount of Gain Realized. The Amount of Gain Realized shall be equal to the number
of Earned Units or Restricted Shares delivered to the Participant multiplied by the Fair Market
Value (FMV) of one Share of the Company’s Common Stock on the date the Earned Units or Restricted
Shares became vested in or paid to the Participant.
1.2 Change of Control. Change of Control means the occurrence of one or more of the
following events:
(a) Any one person, or more than one person acting as a group, acquires ownership of stock of
the Company that, together with stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of the Company. If any
one person, or more than one person acting as a group, is considered to own more than 50 percent of
the total fair market value or total voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons shall not be considered to cause a change in the
ownership of the corporation. An
increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock for purposes of this Section
1.2(a).
(b) Any one person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such person or
persons) ownership of stock of the Company possessing 35 percent or more of the total voting power
of the stock of the Company. If any one person, or more than one person acting as a group, is
considered to effectively control a corporation within the meaning of Treasury Regulation
§1.409A-3(i)(5)(vi), the acquisition of additional control of the corporation by the same person or
persons is not considered to cause a change in the effective control of the corporation.
(c) A majority of members of the Company’s Board of Directors (the “Board”) is replaced during
any 12-month period by directors whose appointment or election is not endorsed by two-thirds (2/3)
of the members of the Board before the date of such appointment or election.
(d) Any one person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal to or more than 50
percent of the total gross fair market value of all of the assets of the Company immediately before
such acquisition or acquisitions. For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined without regard to
any liabilities associated with such assets. Notwithstanding the foregoing, there is no Change of
Control event under this Section 1.2(d) when there is a transfer to an entity that is controlled by
the shareholders of the Company immediately after the transfer. A transfer of assets by the Company
is not treated as a change in the ownership of such assets if the assets are transferred to: (i) a
shareholder of the Company (immediately before the asset transfer) in exchange for or with respect
to its stock; (ii) an entity, 50 percent or more of the total value or voting power of which is
owned, directly or indirectly, by the Company; (iii) a person, or more than one person acting as a
group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of
all the outstanding stock of the Company; or (iv) an entity, at least 50 percent of the total value
or voting power of which is owned, directly or indirectly, by a person described in (iii) above.
For purposes of the foregoing, persons will be considered acting as a group in accordance with
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, and Section 409A
of the Code.
1.3 Code. Code means the Internal Revenue Code of 1986, as amended.
1.4 Committee. Committee means the Compensation Committee of the Board of Directors
for H&R Block, Inc.
H&R Block Inc., 2003 Long-Term Executive Compensation Plan
Grant Agreement - Performance Units
Grant Agreement - Performance Units
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1.5 Common Stock. Common Stock means the common stock, without par value, of the
Company.
1.6 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.
1.7 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.
1.8 Disability. “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
Company, and shall be deemed to first occur on the date as of which such income replacement
benefits commence.
1.9 EBITDA. EBITDA means the Company’s net earnings before the deduction of interest
expenses, taxes, depreciation, and amortization, reduced by the portion of such amount that is
attributable to the ownership or operation of RSM McGladrey, Inc. and its subsidiaries.
1.10 Early Retirement. Early Retirement means the Participant’s voluntary Termination
of Employment with the Company and each of its subsidiaries at or after the date the Participant
has both reached age 55 but has not yet reached age 65, and completed at least ten (10) years of
service with the Company or its subsidiaries.
1.11 Earned Units. Earned Units for the Performance Period mean the portion of the
Performance Units awarded for such period determined in accordance with the applicable provisions
of Section 2.5 or 2.8.
1.12 Fair Market Value. Fair Market Value (“FMV”) means the Closing Price for one
share of H&R Block, Inc. Stock.
1.13 Fiscal Year. Fiscal Year means the Company’s fiscal year ended April 30.
1.14 Good Reason Termination. Good Reason Termination shall mean Participant’s
Termination of Employment which meets the definition of a “Good Reason Termination” under a written
severance plan sponsored by the Company or a subsidiary of the Company. In the event that no
written severance plan exists for the Participant’s
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subsidiary, the definition of “Good Reason
Termination” contained in any applicable severance plan for the Company will govern.
1.15 Last Day of Employment. Last Day of Employment means the date of a Participant’s
Termination of Employment.
1.16 Maximum Performance. Maximum Performance means the level of Revenue or EBITDA,
as the case may be, for each Fiscal Year during the Performance Period set by the Committee by the
162(m) Deadline for the applicable Fiscal Year that results in a 200% factor in the Payment Formula
set forth in Section 2.5.
1.17 Minimum Performance. Minimum Performance means the level of Revenue or EBITDA,
as the case may be, for each Fiscal Year during the Performance Period set by the Committee by the
162(m) Deadline for the applicable Fiscal Year that results in a 0% factor in the Payment Formula
set forth in Section 2.5.
1.18 162(m) Deadline. 162(m) Deadline means the 90th day of the Fiscal Year for which
the Targets are set.
1.19 Peer Companies. Peer Companies are the companies in the S&P 500 as of the first
day of the relevant period other than the Company. If a Peer Company ceases to be a member of the
S&P 500 during the relevant period, then such company will be excluded from the calculation.
1.20 Performance Period. Performance Period means the period commencing May 1, 2011
and ending April 30, 2014.
1.21 Performance Units. Performance Units means the number of units awarded pursuant
to this Agreement that may become Earned Units in accordance with Section 2.5 or 2.8.
1.22 Qualifying Termination. Qualifying Termination shall mean Participant’s
Termination of Employment which meets the definition of a “Qualifying Termination” under a written
severance plan sponsored by the Company or a subsidiary of the Company. In the event that no
written severance plan exists for the Participant’s subsidiary, the definition of “Qualifying
Termination” contained in any applicable severance plan for the Company will govern.
1.23 Relative TSR. Relative TSR means the percentile placement of the Company’s Total
Shareholder Return relative to the Total Shareholder Return of the Peer Companies. Relative Total
Shareholder Return will be determined by ranking the Company and the Peer Companies from highest to
lowest according to their respective Total Shareholder Returns. Based on this ranking, the
percentile performance of the Company relative to the Peer Companies will be determined as follows:
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P |
= | 1 | – | R – 1 | ||||||||
| N | ||||||||||||
“P” represents the Company’s percentile performance which will be rounded, if necessary, to the
nearest whole percentile (with 5 being rounded up). “N” represents the number of Peer Companies.
“R” represents Company’s ranking among the Peer Companies.
1.24 Retirement. Retirement means the Participant’s voluntary Termination of
Employment with the Company and each of its subsidiaries at or after attaining age 65.
1.25 Revenue. Revenue means the Company’s total revenue, reduced by the portion
thereof that consists of revenue attributable to the ownership or operation of RSM McGladrey, Inc.
and its subsidiaries.
1.26 S&P 500. S&P 500 means the 500 US Companies listed by the Standard and Poor’s.
1.27 Target Performance. Target Performance means the level of Revenue or EBITDA, as
the case may be, for each Fiscal Year during the Performance Period set by the Committee by the
162(m) Deadline for the applicable Fiscal Year that results in a 100% factor in the Payment Formula
set forth in Section 2.5.
1.28 Targets. Targets for a Fiscal Year mean the Minimum Performance, Target
Performance and Maximum Performance for Revenue and EBITDA for such Fiscal Year.
1.29 Termination of Employment. Termination of Employment, termination of employment
and similar references mean 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 Company. A termination of employment
occurs if the facts and circumstances indicate that the Participant and the Company 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 Company 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). For purposes of this
Section 1.30, “Company” includes any entity that would be aggregated with the Company under
Treasury Regulation 1.409A-1(h)(3).
1.30 Total Shareholder Return. Total Shareholder Return for the Performance Period
(or such shorter period provided in Section 2.8) for the Company and each Peer Company means the
percentage for that entity for that period that is the quotient of: (i) the sum of the average
fair market value per share of the entity’s common stock for the last thirty (30) trading days of
such period (the “Ending Value”), minus the average fair market value per share of the entity’s
common stock for the most recent thirty (30) trading days
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preceding the beginning of such period
(the “Beginning Value”), plus dividends (other than stock dividends) with respect to which the
record date occurs during such period; divided by (ii) the Beginning Value. In the event of a
stock split, reverse stock split or stock dividend having a record date during such year (whether
of the Company or a Peer Company), the Committee shall adjust the Beginning Value by multiplying it
by the ratio of the number of shares outstanding at the beginning of the period to the number of
shares outstanding at the end of the period.
2. Performance Shares.
2.1 Grant of Performance Shares. As of [Grant Date] (the “Award Date”), the Company
shall award [Number of Shares Granted] Performance Units (the “Performance Shares”).
2.2 Performance Period. Performance Units shall become Earned Units that shall be
certified by the Committee in accordance with Section 2.5 or 2.8, as applicable, based on the
Company’s satisfaction of the Targets during the Performance Period.
2.3 Performance Goals. The Compensation Committee of the Board shall specify by the
162(m) Deadline the Targets to be met during the Performance Period or any sub-periods as a
condition of payment pursuant to this Agreement.
2.4 Dividends and Voting Rights. During the time that Performance Units are
outstanding and subject to substantial risk of forfeiture, the Participant shall not receive
dividend payments, rather dividends will accumulate as if each Performance Unit represented one
Share and the accumulated dividends (without any interest) will be paid to the Participant within
sixty (60) days after the end of the Performance Period to the extent of dividends that are
attributable to Earned Units that are paid to the Participant. Participant shall not have voting
rights with respect to Performance Units or Earned Units.
2.5 Payment Formula. Payments or conversions to Restricted Shares pursuant to this
Agreement shall be based on Earned Units, and the extent to which such Earned Units become vested
pursuant to this Agreement. The percentage of the Performance Units that will become Earned Units
(the “Earned Percentage”) shall be determined after the end of the Performance Period in accordance
with this section, except as otherwise provided in Section 2.8. The Earned Percentage is the
product of “Average Revenue/EBITDA Performance” multiplied by the “Relative TSR Factor,” which
amounts shall be determined as set forth below.
The “Average Revenue/EBITDA Performance” is the average of the Average EBITDA Performance
(“Ave. EBITDA”) and the Average Revenue Performance (“Ave. Revenue”) determined as follows:
| (Average Revenue/EBITDA Performance) = | (Ave. EBITDA) + (Ave. Revenue) | |||
| 2 |
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Ave. EBITDA is the average of the “EBITDA Factors” for each of the three Fiscal Years during
the Performance Period determined as follows:
(Ave. EBITDA) =
| (EBITDA Factor 1) + (EBITDA Factor 2) + (EBITDA Factor 3) | ||
| 3 |
“EBITDA Factor 1, 2 and 3” refers to the percentage EBITDA Factor for each of the first,
second and third Fiscal Years during the Performance Period, respectively.
“EBITDA Factor” means the percentage for a Fiscal Year determined as follows: (i) EBITDA for
such Fiscal Year equal to Target Performance for such Fiscal Year results in an EBITDA Factor of
100%; (ii) EBITDA for such Fiscal Year equal to or less than Minimum Performance for such Fiscal
Year results in an EBITDA Factor of 0%; (iii) EBITDA for such Fiscal Year greater than Minimum
Performance for such Fiscal Year and less than Target Performance for such Fiscal Year results in
an EBITDA Factor between 0% and 100% based on straight line interpolation between Minimum and
Target Performance; (iv) EBITDA for such Fiscal Year equal to or greater than Maximum Performance
for such Fiscal Year results in an EBITDA Factor of 200%; and (v) EBITDA for such Fiscal Year
greater than Target Performance for such Fiscal Year and less than Maximum Performance for such
Fiscal Year results in an EBITDA Factor between 100% and 200%, based on straight line interpolation
between Target and Maximum Performance.
Ave. Revenue is the average of the “Revenue Factors” for each of the three Fiscal Years during
the Performance Period determined as follows:
(Ave. Revenue) =
|
||
| (Revenue Factor 1) + (Revenue Factor 2) + (Revenue Factor 3) | ||
| 3 | ||
“Revenue Factor 1, 2 and 3” refers to the percentage Revenue Factor for each of the first,
second and third Fiscal Years during the Performance Period, respectively.
“Revenue Factor” means the percentage for a Fiscal Year determined as follows: (i) Revenue
for such Fiscal Year equal to Target Performance for such Fiscal Year results in a Revenue Factor
of 100%; (ii) Revenue for such Fiscal Year equal to or less than Minimum Performance for such
Fiscal Year results in a Revenue Factor of 0%; (iii) Revenue for such Fiscal Year greater than
Minimum Performance for such Fiscal Year and less than Target Performance for such Fiscal Year
results in a Revenue Factor between 0% and 100% based on straight line interpolation between
Minimum and Target Performance; (iv) Revenue for such Fiscal Year equal to or greater than Maximum
Performance for such Fiscal Year results in a Revenue Factor of 200%; and (v) Revenue for such
Fiscal Year greater than Target Performance for such Fiscal Year and less than Maximum Performance
for such Fiscal Year results in a Revenue Factor between 100% and 200%, based on straight line
interpolation between Target and Maximum Performance.
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The Earned Percentage is the product of Average Revenue/EBITDA Performance and the Relative
TSR Factor. The Relative TSR Factor will be 75% if Relative TSR is at or below the 20th
percentile. The Relative TSR Factor will be 125% if the Relative TSR is at or above the 80th
percentile. Relative TSR between the 20th and 80th percentiles results in a Relative TSR Factor
between 75% and 125%, based on straight line interpolation between the 20th and 80th percentiles.
2.6 Vesting. Except as otherwise provided in this Grant Agreement, Participant shall
become vested in the Earned Units only if Participant remains continuously employed by the Company
throughout the Performance Period, and the Participant’s termination of employment before the end
of the Performance Period shall result in forfeiture of all rights in the Performance Units and
Participant shall not be entitled to a distribution.
2.7 Acceleration of Vesting. Notwithstanding Section 2.6, the Participant shall be
entitled to pro-rata vesting of the Earned Units under this Grant Agreement on the occurrence of
any of the following events; provided that receipt of the benefits set forth in this section 2.7
may be conditioned on the Participant executing and not revoking a release and separation agreement
within 60 days following the date of the applicable event. The pro-rata vesting of the Earned
Units shall be based on the period between the first day of the Performance Period and the
Participant’s Last Day of Employment. Such award shall be calculated and paid in accordance with
Section 2.10.
(a) Retirement. Upon Retirement or Early Retirement, Participant shall be entitled to
pro-rata vesting of any Earned Units that relate to Performance Units that were awarded more than
one year prior to Retirement or Early Retirement based on the achievement of the Targets as of the
last day of the Performance Period.
(b) Qualifying Termination. If a Participant experiences a Qualifying Termination,
Participant shall be entitled to pro-rata vesting of any Earned Units that relate to Performance
Units that were awarded more than one year prior to the Qualifying Termination based on the
achievement of the Targets as of the last day of the Performance Period.
(c) Disability. In the event Participant terminates employment due to Disability, Participant
shall be entitled to pro-rata vesting of any Earned Units that relate to Performance Units that
were awarded more than one year prior to the Disability based on the achievement of the Targets as
of the last day of the Performance Period.
(d) Death. In the event Participant terminates employment due to Participant’s death,
Participant’s estate shall be entitled to pro-rata vesting of any Earned Units that relate to
Performance Units that were awarded more than one year prior to Participant’s death based on the
achievement of the Targets as of the last day of the Performance Period.
2.8 Change of Control. Notwithstanding Sections 2.5 and 2.6, upon the occurrence of a
Change of Control before the Participant has experienced Termination of Employment with the Company
other than a termination described in Section 2.7, the
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Performance Units shall be cancelled and a
number of Restricted Shares shall be issued that equal the portion of the number of cancelled
Performance Units that would become Earned Units under Section 2.5 based on: (i) actual Revenue
and EBITDA performance relative to the Targets for each completed Fiscal Year; (ii) the assumption
that performance would have been at Target Performance for Revenue and EBITDA for Fiscal Years that
have not been completed as of the date of the Change of Control; (iii) Relative TSR through the
date of the Change of Control; and (iv) if the Participant terminated employment in a manner
described in Section 2.7 prior to the Change of Control the number of Restricted Shares shall be
further adjusted for the pro-rata adjustment required by Section 2.7. Such Restricted Shares shall
be subject to the terms set forth in this Section 2.8. Unless the Participant terminated
employment before the Change of Control under a circumstance described in Section 2.7, such
Restricted Shares shall be subject to a “substantial risk of forfeiture” within the meaning of Code
Section 83 until the last day of the Performance Period that applied to the cancelled Performance
Shares. If a Participant Terminated Employment before a Change of Control under a circumstance
described in Section 2.7, the Participant shall, upon the occurrence of the Change of Control,
become 100% vested in all outstanding converted Restricted Shares awarded under this Grant
Agreement.
During the period the Restricted Shares are subject to substantial risk of forfeiture, the
Restricted Shares shall be held by the Company, or its transfer agent or other designee and shall
be subject to restrictions on transfer. Except as otherwise set forth in this Section 2.8, in
order to become vested in the Restricted Shares, the Participant must remain in continuous
employment of the Company during the period any Restricted Shares are subject to substantial risk
of forfeiture. Absent an agreement to the contrary, if Participant experiences a Termination of
Employment with the Company for any reason, other than Qualifying Termination, Good Reason
Termination, Retirement, Early Retirement, Death or Disability while the Restricted Shares are
subject to a substantial risk of forfeiture, all Restricted Shares then held by the Company or its
transfer agent or other designee, if any, shall be forfeited by the Participant and Participant
authorizes the Company and its stock transfer agent to cause delivery, transfer and conveyance of
the Restricted Shares to the Company. If a Participant has a Termination of Employment following a
Change of Control due to a Qualifying Termination, a Good Reason Termination, Retirement, Early
Retirement, Death, or Disability, the Participant shall, upon the occurrence of such termination,
become 100% vested in all outstanding converted Restricted Shares awarded under this Grant
Agreement.
The Restricted Shares shall cease to be subject to a substantial risk of forfeiture and an
equal number of Shares shall be transferred directly into a brokerage account established for the
Participant at a financial institution the Committee shall select at its sole discretion (the
“Financial Institution”) or delivered in certificate form free of restrictions, such method to be
selected by the Committee in its sole discretion upon: (i) if the Participant Terminated
Employment before a Change of Control under a circumstance described in Section 2.7 other than
death, the later of: (x) the date of the Change of Control, or (y) six months following the date of
Termination of Employment due to a Qualifying Termination, Retirement, Early Retirement or
Disability; (ii) if the Participant Terminated Employment before a Change of Control under a
circumstance described in Section 2.7 due to death, the
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date of the Change of Control; (iii) if the
Participant Terminated Employment after the date of the Change of Control due to a Qualifying
Termination, Good Reason Termination, Retirement, Early Retirement or Disability, the date that is
six months following the date of Termination of Employment; (iv) if the Participant Terminated
Employment after a Change of Control but prior to the vesting date due to death, the date of death;
or (v) if the Participant did not Terminate Employment prior to the vesting date, the vesting date.
The Participant agrees to complete any documentation with the Company or the financial institution
that is necessary to effect the transfer of Shares to the financial institution before the delivery
will occur.
2.9 Certification of a Performance Award. Upon completion of the Performance Period
or such earlier period set forth in Section 2.8, and prior to the payment of any Earned Units to a
Participant or conversion of Earned Units to Restricted Stock pursuant to Section 2.8, the
Committee shall certify in writing the extent to which the Targets have been satisfied.
2.10 Payment of Performance Awards. Except as provided in Section 2.8 or in this
Section 2.10, vested Earned Units shall be paid out, in Shares of the Common Stock or cash (as
determined by the Committee in its sole discretion), sixty (60) days following the end of the
Performance Period. Payment of any vested Earned Units pursuant to Section 2.7(a), (b) or (c)
shall be made in a single lump sum in Shares of the Common Stock equal to the number of vested
Earned Units, or in cash (as determined by the Committee in its sole discretion), upon the later of
sixty (60) days following the end of the Performance Period, or the date which is six (6) months
following the Participant’s Last Day of Employment. The amount of any cash paid shall be based
upon the Fair Market Value at the close of the Performance Period of shares of Common Stock covered
by such vested Earned Units.
3. Covenants.
3.1 Consideration for Award under the Plan. Participant acknowledges that
Participant’s agreement to this Section 3 is a key consideration for any Award under the Plan.
Participant hereby agrees to abide by the Covenants set forth in Sections 3.2, 3.3, and 3.4.
3.2 Covenant Against Competition. Until the later of: (i) the first day following
the Performance Period, or (2) the period of Participant’s employment and for two (2) years after
his/her Last Day of Employment, Participant acknowledges and agrees he/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 activities of the Company’s Tax Services business which are tax preparation, accounting,
and small business services.
3.3 Covenant Against Hiring. Participant acknowledges and agrees the he/she will not
directly or indirectly recruit, solicit, or hire any Company employee or otherwise
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induce any such
employee to leave the Company’s employment during the period of Participant’s employment and for
one (1) year after his/her Last Day of Employment.
3.4 Covenant Against Solicitation. During the period of Participant’s employment and
for two (2) years after his/her Last Day of Employment, Participant acknowledges and agrees that
he/she will not directly or indirectly solicit or enter into any business transaction of the nature
performed by the Company with any Company client for which Participant personally performed
services or acquired material information.
3.5 Forfeiture of Rights. Notwithstanding anything herein to the contrary, if
Participant violates any provisions of this Section 3, Participant shall forfeit all rights to
payments or benefits under the Plan. All Shares held by the Company and subject to forfeiture on
such date shall terminate.
3.6 Remedies. Notwithstanding anything herein to the contrary, if Participant
violates any provisions of this Section 3, whether prior to, on or after any Settlement of an Award
under the Plan, then Participant shall promptly pay to Company an amount equal to the aggregate
Amount of Gain Realized by the Participant on all Shares received after a date commencing one year
prior to Participant’s Last Day of Employment. The Participant shall pay Company within three (3)
business days after the date of any written demand by the Company to the Participant.
3.7 Remedies payable in Company’s Common Stock or Cash. The Participant shall pay the
amounts described in Section 3.6 in the Company’s Common Stock or cash.
3.8 Remedies without Prejudice. The remedies provided in this Section 3 shall be
without prejudice to the rights of the Company and/or the rights of any one or more of its
subsidiaries to recover any losses resulting from the applicable conduct of the Participant and
shall be in addition to any other remedies the Company and/or any one or more subsidiaries may
have, at law or in equity, resulting from such conduct.
3.9 Survival. Participant’s obligations in this Section 3 shall survive and continue
beyond settlement of all Awards under the Plan and any termination or expiration of this Agreement
for any reason.
4. Transfer Restrictions.
4.1 Transfer Restrictions on Shares. Any Restricted Shares issued pursuant to this
Agreement, and the rights and privileges conferred hereby shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be
subject to sale under execution, attachment or similar process, prior to the lapse of all
restrictions. Upon any attempt, contrary to the terms hereof, to transfer, assign, pledge,
hypothecate, or otherwise so dispose of such Shares or any right or privilege conferred hereby, or
upon any attempted sale under any execution, attachment, or similar process upon such Shares or the
rights and privileges hereby granted, then and in any such event this Agreement and the rights and
privileges hereby granted shall immediately
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terminate. Immediately after such termination, such
Shares shall be forfeited by the Participant.
4.2 Non-Transferability of Awards Generally. Any Performance Unit, Earned Unit or
other Award (including all rights, privileges and benefits conferred under such Award) shall not be
transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon
any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of any Award, or of any
right or privilege conferred hereby, contrary to the provisions hereof, or upon any attempted sale
under any execution, attachment, or similar process upon the rights and privileges hereby granted,
then and in any such event such Award and the rights and privileges hereby granted shall
immediately become null and void.
5. Miscellaneous.
5.1 No Employment Contract. This Agreement does not confer on the Participant any
right to continued employment for any period of time, is not an employment contract, and shall not
in any manner modify any effective contract of employment between the Participant and any
subsidiary of the Company.
5.2 Clawback. In the event of a significant restatement of the Company’s financial
results and a resulting overpayment in compensation or Awards under this Plan, the Committee may
require reimbursement of any portion of the Amount of Gain Realized from such Awards where such
Awards were greater than the Awards would have been if calculated on the restated financial
results.
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 may make such
equitable adjustments with respect to the Performance Units, Earned Units and any Restricted Shares
(and Shares following lapse of the restrictions), or any other provisions of the Plan, as it deems
necessary or appropriate to prevent dilution or enlargement of the rights hereunder, of the
Performance Units, Earned Units or of any Restricted Shares subject to this Grant Agreement.
5.4 Merger, Consolidation, Reorganization, Liquidation, etc. If the Company shall
become a party to any corporate merger, consolidation, major acquisition of property for stock,
reorganization, or liquidation, the Board of Directors shall, acting in its absolute and sole
discretion, make such arrangements, which shall be binding upon the Participant of outstanding
Awards, including but not limited to, the substitution of new Awards or for any Awards then
outstanding, the assumption of any such Awards and the termination of or payment for such Awards.
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5.5 Interpretation and Regulations. The Board of Directors of the Company shall have
the power to provide regulations for administration of the Plan by the Committee and to make any
changes in such guidelines as from time to time the Board may deem necessary. The Committee shall
have the sole power to determine, solely for purposes of the Plan and this Agreement, the date of
and circumstances which shall constitute a cessation or termination of employment and whether such
cessation or termination is the result of retirement, death, disability or termination without
cause or any other reason, and further to determine, solely for purposes of the Plan and this
Agreement, what constitutes continuous employment with respect to the delivery of Shares under the
Grant Agreement (except that leaves of absence approved by the Committee or transfers of employment
among the subsidiaries of the Company shall not be considered an interruption of continuous
employment for any purpose under the Plan).
5.6 Reservation of Rights. If at any time counsel for the Company determines that
qualification of the Shares under any state or federal securities law, or the consent or approval
of any governmental regulatory authority, is necessary or desirable as a condition of the executing
an Award or benefit under the Plan, then such action may not be taken, in whole or in part, unless
and until such qualification, registration, consent or approval shall have been effected or
obtained free of any conditions such counsel deems unacceptable.
5.7 Reasonableness of Restrictions, Severability and Court Modification. Participant
and the Company agree that, the restrictions contained in this Agreement are reasonable, but,
should any provision of this Agreement be determined by a court of competent jurisdiction to be
invalid, illegal or otherwise unenforceable or unreasonable in scope, the validity, legality and
enforceability of the other provisions of this Agreement will not be affected thereby, and the
provision found invalid, illegal, or otherwise unenforceable or unreasonable will be considered by
the Company and Participant to be amended as to scope of protection, time or geographic area (or
any one of them, as the case may be) in whatever manner is considered reasonable by that court,
and, as so amended will be enforced.
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 Plan, 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. At the discretion of the Committee, such arrangements may include
relinquishment of a portion of such benefit. In the event the Participant has not made
arrangements, the Company shall withhold the amount of such tax obligations from such dividend
payment or instruct the Participant’s employer to withhold such amount from the Participant’s next
payment(s) of wages. The Participant authorizes the Company to so instruct the Participant’s
employer and authorizes the Participant’s employer to make such withholdings from payment(s) of
wages.
5.9 Waiver. The failure of the Company to enforce at any time any terms, covenants or
conditions of this Agreement shall not be construed to be a waiver of such
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terms, covenants or
conditions or of any other provision. Any waiver or modification of the terms, covenants 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 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 Onx X&X Xxxxx Xxx, Xxxxxx Xxxx Xxxxxxxx 00000 xr 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.
5.11 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.
5.12 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 agrees and submits 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.
5.13 Attorneys Fees. Participant and Company agree that in the event of litigation to
enforce the terms and obligations under this Grant Agreement, the party prevailing in any such
cause of action will be entitled to reimbursement of reasonable attorney fees.
5.14 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.
5.15 Headings. The section headings herein are for convenience only and shall not be
considered in construing this Agreement.
5.16 Amendment. No amendment, supplement, or waiver to this Agreement is valid or
binding unless in writing and signed by both parties.
5.17 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
14
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.
5.18 Section 409A Compliance. To the extent any provision of the Plan or action by
the Board or Committee would subject any Participant to liability for interest, penalties or
additional taxes under Section 409A of the Code, it will be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. It is intended that the Plan will comply
with or be exempt from Section 409A of the Code, and the Plan shall be interpreted consistent with
such intent. The Plan may be amended in any respect deemed necessary (including retroactively) by
the Committee in order to pursue compliance with or exemption from, as applicable, Section 409A of
the Code. The foregoing shall not be construed as a guarantee of any particular tax effect for
Plan benefits. A Participant or beneficiary as applicable is solely responsible and liable for the
satisfaction of all taxes and penalties that may be imposed on the Participant or beneficiary in
connection with any payments to such Participant or beneficiary under the Plan, including any
taxes, interest and penalties under Section 409A of the Code, and neither the Company nor any
Affiliate shall have any obligation to indemnify or otherwise hold a Participant or beneficiary
harmless from any and all of such taxes and penalties. Notwithstanding any provision of the Plan
that requires action or inaction to avoid the imposition of taxes, penalties or interest due to
Code Section 409A, neither the Company nor any Affiliate shall have any responsibility to so act or
fail to act, and under no circumstances shall the Company or any of its Affiliates have any
liability for any taxes, interest, penalties or other amount imposed due to Code Section 409A.
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:
|
[Participant Name] | |
Date Signed:
|
[Acceptance Date] |
H&R BLOCK, INC.
By:
By:
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