HR Block 2006 Annual Report Download - page 43

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where applicable, determined either on a company-wide basis or The 2003 Plan limits the aggregate maximum number of
in respect of any one or more strategic business units; shares of the Company’s common stock that can be awarded in
(w) reduction of losses, loss ratios or expense ratios; any one calendar year to any individual recipient under the
(x) reduction in fixed costs; (y) operating cost management; 2003 Plan to 1,000,000 shares, whether such awards are in the
(z) cost of capital; (aa) debt reduction; or (bb) productivity form of common stock, restricted stock, stock options, incentive
improvements. These business criteria may be applied on a stock options, stock appreciation rights, performance rights,
pre-tax or post-tax basis, and may be based upon the Performance Shares, or other rights that may be granted under
performance of the Company or any of its subsidiaries, divisions the 2003 Plan.
or strategic business units. The Committee may at the time of THE BOARD OF DIRECTORS RECOMMENDS A VOTE
grant in the case of Performance Shares intended to be ‘‘qualified ‘‘FOR’’ THE APPROVAL OF THE MATERIAL TERMS OF
performance-based compensation,’’ and in the case of other PERFORMANCE GOALS FOR PERFORMANCE SHARES
grants at any time, provide that the performance goals for ISSUED PURSUANT TO THE 2003 LONG-TERM
Performance Shares include or exclude items to measure specific EXECUTIVE COMPENSATION PLAN, AND PROXIES
objectives, such as losses from discontinued operations, SOLICITED BY THE BOARD WILL BE SO VOTED IN THE
extraordinary gains or losses, the cumulative effect of accounting ABSENCE OF INSTRUCTIONS TO THE CONTRARY.
changes, acquisitions or divestitures, foreign exchange impacts
and any unusual nonrecurring gain or loss.
ITEM 4 ON FORM OF PROXY
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS –
The Board of Directors has appointed KPMG LLP as independent THE BOARD OF DIRECTORS RECOMMENDS A VOTE
accountants to audit the Company’s financial statements for the ‘‘FOR’’ THE RATIFICATION OF THE APPOINTMENT OF
fiscal year ended April 30, 2007. A representative of KPMG LLP is KPMG LLP, AND PROXIES SOLICITED BY THE BOARD OF
expected to attend the annual meeting to respond to appropriate DIRECTORS WILL BE SO VOTED IN THE ABSENCE OF
questions and will have an opportunity to make a statement if he INSTRUCTIONS TO THE CONTRARY.
or she so desires. For additional information regarding the
Company’s relationship with KPMG LLP, please refer to the
‘‘Audit Committee Report’’ below.
AUDIT COMMITTEE REPORT –
The Company’s management is responsible for preparing control over financial reporting and non-audit services provided
financial statements in accordance with generally accepted by the independent accountants.
accounting principles and the financial reporting process, The Audit Committee has reviewed and discussed with
including the Company’s disclosure controls and procedures and management and KPMG LLP (‘‘KPMG’’), the Company’s
internal control over financial reporting. The Company’s independent accountants, the Company’s audited financial
independent accountants are responsible for (i) auditing the statements for the fiscal year ended April 30, 2006. The Audit
Company’s financial statements and expressing an opinion as to Committee has also discussed with KPMG the matters required to
their conformity to accounting principles generally accepted in be discussed by Statement on Auditing Standards No. 61 relating
the United States and (ii) auditing management’s assessment of to communication with audit committees. In addition, the Audit
the Company’s internal control over financial reporting and Committee has received from KPMG the written disclosures and
expressing an opinion on such assessment. The Audit Committee the letter required by Independence Standards Board No. 1
of the Board of Directors, composed solely of independent relating to independence discussions with audit committees; has
directors, meets periodically with management, the independent discussed with KPMG their independence from the Company and
accountants and the internal auditor to review and oversee its management; and has considered whether KPMG’s provision
matters relating to the Company’s financial statements, internal of non-audit services to the Company is compatible with
audit activities, disclosure controls and procedures and internal maintaining the auditor’s independence.
H&R BLOCK 2006 Proxy Statement
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