HR Block 2006 Annual Report Download - page 40

was granted an option on June 30, 1999, is for one share of the Seasonal Plan (adjusted to reflect the two-for-one split of the
Common Stock for each $100 of compensation earned Company’s Common Stock on August 22, 2005):
during the preceding 12 months, provided that such Shares Subject Number of
compensation is $4,000 or more; and Date of Grant to Options Optionees Price
(3) Each option granted on June 30 of each year that the June 30, 2004 5,018,590 40,042 $ 23.84
Seasonal Plan is in effect after 1999 to a participant who June 30, 2005 4,385,358 35,696 $ 29.175
was not granted an option on June 30, 1999, is for one
June 30, 2006 2,275,656 37,884 $ 23.86
share of Common Stock for each $200 of compensation
earned during the preceding 12 months, provided that such If shareholders approve the amendment, stock options will
compensation is $4,000 or more. automatically be awarded under the Seasonal Plan on June 30,
If the Eligible Seasonal Employee does not earn the specified 2007 to Eligible Seasonal Employees in accordance with the
minimum compensation ($500 or $4,000, as the case may be), no criteria set forth above under ‘‘Participation in and Awards under
option will be awarded. In all cases, the maximum annual grant is the Seasonal Plan.’’ It is not possible to state the number of
an option to purchase 100 shares of Common Stock. The options to be granted to any person or group or the number of
purchase price per share of Common Stock under each stock shares to be subject to any such options. No options under the
option is equal to the last reported sales price for the Common Seasonal Plan have been granted or will be granted to any
Stock on the New York Stock Exchange on the date of the grant. executive officer, director or nominee for director of
If the date of grant falls on a non-business day, the stock option the Company.
price will be equal to the last reported sales price on the next SHARES OF COMMON STOCK ISSUABLE UNDER THE
preceding business day on which the stock is quoted. Each option SEASONAL PLAN –The aggregate number of shares of
is exercisable only between the dates of September 1 through Common Stock that may be issued under the Seasonal Plan may
November 30 of either of the two calendar years immediately not exceed 46,000,000 shares, provided that such aggregate
following the calendar year in which the option is granted, and number may be adjusted for any stock split, stock dividend,
then only if the optionee is an Eligible Seasonal Employee or a recapitalization or similar transaction. Shares subject to options
full-time employee of the Company or any of its subsidiaries, and
that expire or otherwise terminate unexercised may again be
if the compensation earned during the year of exercise is at least
optioned by the Company during the life of the Seasonal Plan.
50% of that earned during the year of the grant. An option may be
NON-ALIENATION –Stock options granted pursuant to the
exercised for less than the total number of shares covered
thereby and, upon any exercise as to less than all shares covered Seasonal Plan are not assignable or transferable by the recipient,
by an option, the option terminates as to the balance of and terminate upon the recipient’s death.
such shares. ANTI-DILUTION PROTECTION –In the event a merger,
ADMINISTRATION OF THE SEASONAL PLAN –The Seasonal consolidation, reorganization, recapitalization, stock dividend,
Plan is administered by the Compensation Committee of the stock split, or other change in the corporate structure or
Company’s Board of Directors. The Compensation Committee capitalization affecting the Company’s capital stock shall occur,
has the full power and authority to administer the Seasonal Plan, an appropriate adjustment shall be made in (a) the number of
to interpret the provisions of the Seasonal Plan and to adopt rules shares of stock available for options under the Seasonal Plan and
and regulations for carrying out the Seasonal Plan and written subject to outstanding options, (b) the purchase price per share
policies for implementing the Seasonal Plan. A majority of the for each outstanding option, and (c) the method of participation
Compensation Committee members constitutes a quorum and the as outlined under ‘‘Participation in and Awards under the
acts of a majority of the members present at any meeting at Seasonal Plan,’’ provided that no adjustment shall be made to the
which a quorum is present, or acts approved in writing by all methods of participation in the event of a stock dividend or stock
members of the Committee, are valid acts of the split. Any adjustment to the Seasonal Plan shall be made by the
Compensation Committee. Board of Directors and, when so made, shall be effective and
OPTIONS GRANTED OR TO BE GRANTED UNDER THE binding for all purposes of the Seasonal Plan and of all options
SEASONAL PLAN –The following table reports the options then outstanding.
granted on June 30, 2004, June 30, 2005 and June 30, 2006 under TERMINATION OR AMENDMENT OF THE SEASONAL PLAN –
The Board of Directors of the Company has the right to amend,
H&R BLOCK 2006 Proxy Statement
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