HR Block 2006 Annual Report Download - page 37

Following is a summary of director compensation for non- The Guidelines also provide that a non-employee director may
employee directors for fiscal year 2006. be appointed as the ‘‘Presiding Director’’ of the Board. The
Presiding Director (Roger W. Hale) leads executive sessions of
Fees Earned or Option All Other the non-employee directors at meetings that are held prior to
Paid in Cash Awards Compensation each regular meeting of the Board, reviews with the Chief
($)(1) (#)(2) ($)(3)
Executive Officer the Board’s annual Chief Executive Officer
G. Kenneth Baum (4) 40,200 8,000 5,000 performance evaluation and performs other duties as may be
Thomas M. Bloch 79,600 8,000 6,834 designated by the Board. In addition, the Presiding Director may
Jerry D. Choate (5) —— —
call executive sessions as deemed necessary.
Donna R. Ecton 93,200 8,000 1,000 As further described in the Guidelines, the Board believes that
a substantial majority of the Board should consist of directors
Henry F. Frigon 92,400 8,000 5,000
who are independent under the New York Stock Exchange listing
Roger W. Hale 94,400 8,000 5,000
standards. As described below, nine of the Board’s 11 directors
Len J. Lauer 22,100 — — are independent directors within the meaning of the Board’s
David B. Lewis 89,200 8,000 5,000 Director Independence Standards and the New York Stock
Tom D. Seip 84,400 8,000 4,000 Exchange listing standards.
Louis W. Smith 110,700 8,000 5,000 The New York Stock Exchange listing standards provide that a
Rayford Wilkins, Jr 93,200 8,000 5,000 director does not qualify as independent unless the Board
NOTES: affirmatively determines that the director has no material
(1) This column includes, as applicable, the annual director’s fee, meeting fees for relationship with the Company. The listing standards permit the
each Board and committee meeting attended and committee chairman fees for Board to adopt and disclose standards to assist the Board in
fiscal year 2006. making determinations of independence. Accordingly, the Board
(2) This column includes the number of nonqualified stock options granted to each has adopted Director Independence Standards (attached as
Director during fiscal year 2006 pursuant to the 1989 Stock Option Plan for Appendix A to this proxy statement) to assist the Board in
Outside Directors.
determining whether a director has a material relationship with
(3) This column includes, as applicable, the value of income tax return preparation services
at an H&R Block office, the value of the 50% discount on tax preparation services from the Company.
RSM McGladrey, Inc., the cost of business travel insurance and the H&R Block In June 2006, the Board conducted an evaluation of director
Foundation matching amount on contributions to 501(c)(3) organizations. independence, based on the Director Independence Standards
(4) Mr. Baum retired from the Board in September 2005. and the New York Stock Exchange listing standards. In
(5) Mr. Choate was elected to the Board on April 24, 2006. Mr. Choate did not attend connection with this review, the Board evaluated commercial,
any Board meetings on or before April 30, 2006 and was not eligible to receive any charitable, consulting, familial and other relationships with each
portion of the annual director’s fee in fiscal year 2006.
director or immediate family members and their related interest
CORPORATE GOVERNANCE –Our Board of Directors
to the Company and its subsidiaries. As a result of this evaluation,
operates under Corporate Governance Guidelines (the
the Board affirmatively determined that Ms. Ecton and
‘‘Guidelines’’) to assist the Board in exercising its responsibilities.
Messrs. Choate, Frigon, Hale, Lauer, Lewis, Seip, Smith and
The Guidelines reflect the Board’s commitment to monitor the
Wilkins are independent directors.
effectiveness of policy and decision-making both at the Board
Finally, all directors, officers and employees of the Company
level and management level, with a view to enhancing
must act ethically and in accordance with the policies comprising
shareholder value over the long term. The Guidelines also assure
the H&R Block Code of Business Ethics and Conduct (the
that the Board will have the necessary authority and practices in
‘‘Code’’). The Code includes guidelines relating to the ethical
place to review and evaluate the Company’s business operations
handling of actual or potential conflicts of interest, compliance
as needed and to make decisions that are independent of the
with laws, accurate financial reporting and procedures for
Company’s management. The Guidelines are not intended to be a
promoting compliance with, and reporting violations of, the
static statement of the Company’s policies, principles and
Code. The Company intends to post any amendments to or
guidelines, but are subject to continual assessment and
waivers of the Code (to the extent applicable to the Company’s
refinement as the Board may determine advisable or necessary in
Chief Executive Officer, Chief Financial Officer or Principal
the view of the best interests of the Company and
Accounting Officer) on our website.
its shareholders.
H&R BLOCK 2006 Proxy Statement
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