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APPENDIX A
H&R BLOCK, INC. BOARD OF DIRECTORS INDEPENDENCE STANDARDS
Pursuant to New York Stock Exchange listing standards, no director’s immediate family members, has been employed as
director qualifies as being an independent director unless the an executive officer of another company for which an
Board of Directors affirmatively determines that the director has executive officer of the Company serves on the
no material relationship with H&R Block, Inc. or any of its compensation (or equivalent) committee.
subsidiaries (collectively, the ‘‘Company’’), either directly or 쐍At any time during the three years immediately preceding the
indirectly as a partner, shareholder or officer of an organization date of determination, the Company made payments to, or
that has a relationship with the Company. received payments from, a company, firm or professional
The Board of Directors has established the categorical entity of which or in which (i) the director is currently is an
standards to assist it in determining the independence of executive officer, partner or employee, or owns in excess of
directors. Pursuant to these standards, a director will not be a 10% equity interest or (ii) the director’s immediate family
considered independent if: members currently is an executive officer or partner or owns
쐍At any time during the three years immediately preceding the in excess of a 10% equity interest; provided that such
date of determination, the director was an employee of the payments are in an amount exceeding the greater of
Company or any of the director’s immediate family was an $1 million or 2% of such other company’s consolidated gross
executive officer of the Company. revenues for such other company’s most recent full
쐍At any time during the three years immediately preceding the fiscal year.
date of determination, the director (or any of the director’s 쐍The director (or any of the director’s immediate family)
immediate family) received more than $100,000 per year in serves as an officer, director or trustee of a charitable
direct compensation from the Company other than organization to which the Company gives directly or
(i) director or committee fees (including fees for service on indirectly through its foundation, more than $200,000 or 5%
the board of directors of subsidiary or affiliated companies) of the organization’s total annual charitable receipts during
and (ii) pension or other forms of deferred compensation for its last full fiscal year (whichever is greater).
prior service (provided such compensation is not contingent An individual will be considered to be affiliated with a
in any way on continued service). corporation or other entity if that individual controls, is
쐍At any time during the three years immediately preceding the controlled by or is under common control with the corporation or
date of determination, the director has been employed by (or other entity. An ‘‘immediate family member’’ includes a person’s
affiliated with) a present or former internal or external spouse, parents, children, siblings, mothers in law, fathers in law
auditor of the Company that had an auditing relationship and any one (other than domestic employees) who shares such
with the Company during such three year period or any of person’s home.
the director’s immediate family members have been so The Board of Directors will determine the independence of any
affiliated or employed in a professional capacity. director with a relationship to the Company that is not covered
쐍At any time during the three years immediately preceding the by the above standards.
date of determination, either the director, or any of the
H&R BLOCK 2006 Proxy Statement
A-1