HR Block 2007 Annual Report Download - page 47

RSM EquiCo, Inc., a subsidiary of RSM, is a party to a putative class and other investment products and RSM EquiCo, Inc. business valuation
action filed on July 11, 2006 and entitled Do Right’s Plant Growers v. services. We believe we have meritorious defenses to each of these
RSM EquiCo, Inc., RSM McGladrey, Inc., H&R Block, Inc. and Does 1- claims, and we are defending or intend to defend them vigorously,
100, inclusive, Case No. 06 CC00137, in the California Superior Court, although there is no assurance as to their outcome. In the event of an
Orange County. The complaint contains allegations regarding business unfavorable outcome, the amounts we may be required to pay in the
valuation services provided by RSM EquiCo, Inc. including fraud, discharge of liabilities or settlements could have a material adverse
negligent misrepresentation, breach of contract, breach of implied effect on our consolidated financial statements.
covenant of good faith and fair dealing, breach of fiduciary duty and In addition to the aforementioned types of cases, we are parties to
unfair competition and seeks unspecified damages, restitution and claims and lawsuits that we consider to be ordinary, routine litigation
equitable relief. There can be no assurance regarding the outcome and incidental to our business, including claims and lawsuits (Other Claims)
resolution of this matter. concerning investment products, the preparation of customers’ income
We have from time to time been party to investigations, claims and tax returns, the fees charged customers for various products and
lawsuits not discussed herein arising out of our business operations. services, losses incurred by customers with respect to their investment
These investigations, claims and lawsuits include actions by state accounts, relationships with franchisees, denials of mortgage loans,
attorneys general, other state regulators, individual plaintiffs, and cases contested mortgage foreclosures, other aspects of the mortgage
in which plaintiffs seek to represent a class of similarly situated business, intellectual property disputes, employment matters and
customers. The amounts claimed in these claims and lawsuits are contract disputes. We believe we have meritorious defenses to each of
substantial in some instances, and the ultimate liability with respect to the Other Claims, and we are defending them vigorously. While we
such litigation and claims is difficult to predict. Some of these cannot provide assurance that we will ultimately prevail in each
investigations, claims and lawsuits pertain to RALs, the origination and instance, we believe the amount, if any, we are required to pay in the
servicing of mortgage loans, the electronic filing of customers’ income discharge of liabilities or settlements in these Other Claims will not
tax returns, the POM guarantee program, and our Express IRA program have a material adverse effect on our consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2007.
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
H&R Block’s common stock is traded on the NYSE. The information called for by this item with respect to H&R Block’s common stock appears in
Item 8, note 22 to our consolidated financial statements. On June 15, 2007, there were 29,455 shareholders of record and the closing stock price on
the NYSE was $23.11 per share. During the fiscal year ended April 30, 2007, we issued approximately 21,000 shares of our common stock as
purchase price consideration for acquisitions. These issuances were private offerings exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933.
A summary of our securities authorized for issuance under equity compensation plans as of April 30, 2007 is as follows:
(shares in 000s)
Number of securities Weight-average Number of securities remaining
to be issued upon exercise price of available for future issuance under
exercise of options outstanding options equity compensation plans (excluding
warrants and rights warrants and rights securities reflected in the first column)
Equity compensation plans approved by
security holders 23,405 $21.61 25,796
Equity compensation plans not approved
by security holders –$– –
Total 23,405 $21.61 25,796
H&R BLOCK 2007 Form 10K