HR Block 2006 Annual Report Download - page 56

of the effective date, the Severance Plan provides maximum Steven Tait is subject to an Employment Agreement with HRB
compensation of 18 months of salary and one and one-half times Business Services, Inc. (now RSM McGladrey Business Services,
target payout under the STI Program, with the actual amount Inc.) (‘‘RSM’’), an indirect subsidiary of the Company, dated
based upon Mr. Dubrish’s salary and target payout, salary grade April 1, 2003, whereby effective April 1, 2003, he was employed as
and length of service with all subsidiaries of the Company at the President of RSM. The Agreement provides for an initial base
time of his termination, as well as a discretionary payment, which salary at an annual rate of $400,000; participation in the
may be zero. In addition, in such circumstances, Option One is Company’s Short-Term Incentive Plan with a target bonus for
obligated to provide health, life and disability insurance benefits fiscal year 2004 of $220,000; 7,500 restricted shares of the
for up to 12 months following such termination, and all Company’s Common Stock awarded on the effective date; a stock
outstanding stock options that would have vested in the 18-month option to purchase 50,000 shares of Common Stock granted on
period following termination become fully vested and are the effective date; and a stock option to purchase 40,000 shares of
exercisable for the three-month period following termination or Common Stock granted on the date in fiscal year 2004 on which
the severance period. options are granted to all or substantially all other senior
William L. Trubeck is subject to an Employment Agreement executives of the Company and its subsidiaries. Base salary is to
with HRB, an indirect subsidiary of the Company, dated be reviewed for adjustment no less than annually. The Agreement
October 4, 2004, whereby effective October 4, 2004, he was provides that it may be terminated by either party at any time for
employed as the Executive Vice President, Chief Financial Officer any reason upon 45 days’ prior written notice. RSM also has the
of the Company. The Agreement provides for an initial base right to terminate the Agreement without notice upon the
salary at an annual rate of $450,000; participation in the occurrence of certain stated events. If Mr. Tait incurs a
Company’s Short-Term Incentive Plan; a stock option to purchase ‘‘qualifying termination,’’ as defined in the Severance Plan, or if
50,000 shares of the Company’s Common Stock granted on the the Agreement is terminated by Mr. Tait within 180 days following
effective date; and 10,000 shares of Common Stock awarded a ‘‘change of control’’ (as defined in the Agreement) of the
promptly after the effective date. Base salary is to be reviewed for Company, RSM is obligated to pay to Mr. Tait his choice of the
adjustment no less often than annually. The Agreement provides level of severance compensation and benefits as would be
that it may be terminated by either party at any time for any provided under the Severance Plan as such plan exists either on
reason upon 45 days’ prior written notice. HRB also has the right the effective date of the Agreement or on Mr. Tait’s last day of
to terminate the Agreement without notice upon the occurrence employment. As of the effective date, the Severance Plan
of certain stated events. If Mr. Trubeck incurs a ‘‘qualifying provides maximum compensation of 18 months of salary and one
termination’’ as defined in the Severance Plan, or if the twelfth of the target payout under the STI Program multiplied by
Agreement is terminated by Mr. Trubeck within 180 days Mr. Tait’s years of service, as well as a discretionary payment,
following a ‘‘change in control’’ (as defined in the Agreement) of which may be zero. In addition, in such circumstances, RSM is
the Company, HRB is obligated to pay Mr. Trubeck his choice of obligated to provide medical, dental, vision, employee assistance,
the level of severance compensation and benefits as would be life insurance, cafeteria plan and accidental death and
provided under the Severance Plan as such plan exists either on dismemberment insurance benefits for up to 12 months following
the effective date of the Agreement or on Mr. Trubeck’s last day such termination, and all outstanding stock options that would
of employment. As of the effective date, the Severance Plan have vested in the 18-month period following termination become
provides maximum compensation of 18 months of salary and fully vested and are exercisable for the three-month period
one-twelfth of the target payout under the STI Program multiplied following termination or the severance period.
by Mr. Trubeck’s years of service (which shall in no event equal Nicholas J. Spaeth is subject to an Employment Agreement
less than 12 years) as well as a discretionary payment, which may with HRB, an indirect subsidiary of the Company, dated
be zero. In addition, all restrictions on Common Stock awarded to February 2, 2004, whereby effective February 2, 2004, he was
Mr. Trubeck which would have vested within 18 months after employed as the Senior Vice President, Chief Legal Officer of the
the date of termination, shall lapse and such stock becomes Company. The Agreement provides for an initial base salary at an
fully vested upon the date of termination, and all outstanding annual rate of $400,000; participation in the Company’s Short-
stock options that would have vested in the 18-month period Term Incentive Plan; a $300,000 bonus upon completion of Fiscal
following termination become fully vested and are exercisable Year 2004; 20,000 restricted shares of the Company’s Common
for the three-month period following termination or the Stock awarded on the effective date; and a stock option to
severance period. purchase 200,000 shares of Common Stock granted on the
H&R BLOCK 2006 Proxy Statement
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