HR Block 2005 Annual Report Download - page 49

EQUITY COMPENSATION PLANS ⬎⬎⬎
The following table provides information about the Company’s Common Stock that may be issued upon the exercise of options,
warrants and rights under all of the Company’s existing equity compensation plans as of April 30, 2005. The information provided does
not reflect the two-for-one stock split effective August 22, 2005. The Company currently has four stock-based compensation plans: the
2003 Long-Term Executive Compensation Plan, the 1989 Stock Option Plan for Outside Directors, the 1999 Stock Option Plan for
Seasonal Employees, and the 2000 Employee Stock Purchase Plan. The shareholders have approved all of the Company’s stock-based
compensation plans. The shareholders approved the 2003 Plan in September 2002 to replace the 1993 Long-Term Executive
Compensation Plan, effective July 1, 2003. The 1993 Plan terminated at that time, except with respect to outstanding awards thereunder.
The shareholders had approved the 1993 Plan in September 1993 to replace the 1984 Long-Term Executive Compensation Plan, which
terminated at that time except with respect to outstanding options thereunder.
Number of securities to Be Issued Weighted-average exercise price of Number of securities remaining available for
Upon Exercise of Outstanding outstanding options, warrants future issuance under equity compensation
Options, Warrants and Rights and rights plans excluding securities reflected in column (A)
Plan category (A) (B) (C)
Equity compensation plans approved by
security holders 13,552,000 $38.04 9,888,179
Equity compensation plans not approved
by security holders — — —
Total 13,522,000 $38.04 9,888,179
EMPLOYMENT AGREEMENTS, CHANGE-IN-CONTROL AND OTHER ARRANGEMENTS ⬎⬎⬎
Mark A. Ernst is subject to an Employment Agreement with HRB Robert E. Dubrish is subject to an Employment Agreement
Management, Inc. (‘‘HRB’’), an indirect subsidiary of the with Option One Mortgage Corporation (‘‘Option One’’), an
Company, dated July 16, 1998, whereby effective September 1, indirect subsidiary of the Company, dated February 9, 2002, and
1998, he was employed as the Executive Vice President and Chief effective June 30, 2001. Base salary and any incentive bonus
Operating Officer of the Company. Base salary and incentive compensation are to be reviewed annually by the Compensation
bonus compensation are to be reviewed annually by the Committee. The Agreement provides that it may be terminated by
Compensation Committee. The Agreement provides that it may either party at any time for any reason upon 45 days’ prior written
be terminated by either party at any time for any reason upon notice. Option One also has the right to terminate the Agreement
45 days’ prior written notice, by HRB for ‘‘cause,’’ and by without notice upon the occurrence of certain stated events. If
Mr. Ernst for ‘‘good reason,’’ in each case as defined in the Mr. Dubrish incurs a ‘‘qualifying termination,’’ as defined in the
Agreement. If the Agreement is terminated by HRB without H&R Block Severance Plan (the ‘‘Severance Plan’’), or if the
‘‘cause,’’ by Mr. Ernst for ‘‘good reason,’’ or by either party during Agreement is terminated by Mr. Dubrish within 180 days
the 180-day period following the date of a ‘‘change of control’’ (as following a ‘‘change of control’’ (as defined in the Agreement) of
defined in the Agreement) of the Company, HRB is obligated to the Company, Option One is obligated to pay to Mr. Dubrish his
continue to pay Mr. Ernst’s salary (determined as of the choice of the level of severance compensation and benefits as
termination date) and provide all other benefits for a period of would be provided under the Severance Plan as such plan exists
two years following such termination, as well as a pro rata either on the effective date of the Agreement or on Mr. Dubrish’s
portion of the incentive bonus compensation to which he would last day of employment. As of the effective date, the Severance
have been entitled had he remained employed through the end of Plan provides maximum compensation of 18 months of salary
the fiscal year in which such termination occurs. In addition, all and one and one-half times target payout under the STI Program,
outstanding stock options become fully vested and are with the actual amount based upon Mr. Dubrish’s salary and
exercisable for the three-month period following termination, and target payout, salary grade and length of service with all
any restrictions upon Common Stock awarded Mr. Ernst on the subsidiaries of the Company at the time of his termination, as
effective date lapse and such stock becomes fully vested upon the well as a discretionary payment, which may be zero. In addition,
date of termination. in such circumstances, Option One is obligated to provide health,
H&R BLOCK 2005 Proxy Statement
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