HR Block 2005 Annual Report Download - page 50

life and disability insurance benefits for up to 12 months Severance Plan provides maximum compensation of 18 months
following such termination, and all outstanding stock options that of salary and one twelfth of the target payout under the STI
would have vested in the 18-month period following termination Program multiplied by Mr. Tait’s years of service, as well as a
become fully vested and are exercisable for the three-month discretionary payment, which may be zero. In addition, in such
period following termination or the severance period. circumstances, RSM is obligated to provide medical, dental,
Jeffery W. Yabuki is subject to an Employment Agreement with vision, employee assistance, life insurance, cafeteria plan and
HRB dated September 7, 1999, whereby effective September 7, accidental death and dismemberment insurance benefits for up to
1999, he was employed as the President, H&R Block 12 months following such termination, and all outstanding stock
International. Base salary and incentive bonus compensation are options that would have vested in the 18-month period following
to be reviewed annually by the Compensation Committee. The termination become fully vested and are exercisable for the
Agreement provides that it may be terminated by either party at three-month period following termination or the severance
any time for any reason upon 45 days’ prior written notice, by period.
mutual written agreement, by HRB for ‘‘cause,’’ and by Mr. Yabuki Nicholas J. Spaeth is subject to an Employment Agreement
for ‘‘good reason,’’ in each case as defined in the Agreement. If with HRB dated February 2, 2004, whereby effective February 2,
the Agreement is terminated by HRB without ‘‘cause,’’ by 2004, he was employed as the Senior Vice President, Chief Legal
Mr. Yabuki for ‘‘good reason,’’ or by either party within 180 days Officer of the Company. The Agreement provides for an initial
following a ‘‘change of control’’ (as defined in the Agreement) of base salary at an annual rate of $400,000; participation in the
the Company, HRB is obligated to pay to Mr. Yabuki for the two- Company’s Short-Term Incentive Plan, a $300,000 bonus upon
year period following such termination compensation at an completion of Fiscal Year 2004; 20,000 restricted shares of the
annual rate equal to the sum of the annual rate of base salary in Company’s Common Stock awarded on the effective date; and a
effect on the date of termination and the aggregate short-term stock option to purchase 200,000 shares of Common Stock
incentive compensation paid by HRB to him for the last fiscal granted on the effective date. Base salary and incentive bonus
year completed prior to the year of termination, and provide compensation are to be reviewed annually by the Compensation
health, life and disability insurance benefits for a period of two Committee. The Agreement provides that it may be terminated by
years following such termination. In addition, all outstanding either party at any time for any reason upon 45 days’ prior written
stock options which would have vested during such two-year notice. HRB also has the right to terminate the Agreement
period following termination become fully vested and are without notice upon the occurrence of certain stated events. If
exercisable for the three-month period following termination, and Mr. Spaeth incurs a ‘‘qualifying termination,’’ as defined in the
any restrictions upon stock held by Mr. Yabuki lapse to the extent Severance Plan, or if the Agreement is terminated by Mr. Spaeth
such restrictions would have lapsed during the two-year period within 180 days following a ‘‘change of control’’ (as defined in the
following termination. Agreement) of the Company, HRB is obligated to pay to
Steven Tait is subject to an Employment Agreement with HRB Mr. Spaeth his choice of the level of severance compensation and
Business Services, Inc. (now RSM McGladrey Business Services, benefits as would be provided under the Severance Plan as such
Inc.) (‘‘RSM’’), an indirect subsidiary of the Company, dated plan exists either on the effective date of the Agreement or on
April 1, 2003, whereby effective April 1, 2003, he was employed as Mr. Spaeth’s last day of employment. As of the effective date, the
President of RSM. Base salary is to be reviewed for adjustment no Severance Plan provides maximum compensation of 18 months
less than annually. The Agreement provides that it may be of salary and one twelfth of the target payout under the STI
terminated by either party at any time for any reason upon Program multiplied by Mr. Spaeth’s years of service, as well as a
45 days’ prior written notice. RSM also has the right to terminate discretionary payment, which may be zero. In addition, in such
the Agreement without notice upon the occurrence of certain circumstances, HRB is obligated to provide medical, dental,
stated events. If Mr. Tait incurs a ‘‘qualifying termination,’’ as vision, employee assistance, life insurance, cafeteria plan and
defined in the Severance Plan, or if the Agreement is terminated accidental death and dismemberment insurance benefits for up to
by Mr. Tait within 180 days following a ‘‘change of control’’ (as 12 months following such termination, and all outstanding stock
defined in the Agreement) of the Company, RSM is obligated to options that would have vested in the 18-month period following
pay to Mr. Tait his choice of the level of severance compensation termination become fully vested and are exercisable for the
and benefits as would be provided under the Severance Plan as three-month period following termination or the severance
such plan exists either on the effective date of the Agreement or period.
on Mr. Tait’s last day of employment. As of the effective date, the
H&R BLOCK 2005 Proxy Statement
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