Agreement of Settlement - H&R Block and Ronnie and Nancy Haese
AGREEMENT OF SETTLEMENT - HAESE
This Agreement of Settlement (the "Agreement") is entered into
this 31st day of March, 2003, by and between H&R Block, Inc., H&R Block and
Associates, L.P., H&R Block Tax Services, Inc., HRBO, Limited (erroneously named
as HRBO, Ltd.), H&R Block of South Texas, Inc., HRB-Delaware, Inc., H&R Block,
Ltd., HRBOI, Ltd., HRBO III, Ltd., HRBOII, Inc. (erroneously named as HRBOII,
Ltd.), H&R Block of Dallas, Inc., H&R Block of Houston, Ltd., Houston Block,
L.C., Block Management, Ltd., and STI-Block, L.C. (collectively "H&R Block"),
and Ronnie and Nancy Haese (the "Haeses" or "Plaintiffs") on behalf of
themselves individually and on behalf of the Class as defined below.
I. DEFINITIONS
1. The "Class" and "Class Members" means all persons who
(1) obtained at any time a tax refund anticipation loan ("RAL") through
an office operating under the trade name of H&R Block (including
franchisee or sub franchisee offices of H&R Block or any H&R Block
offices located in Sears stores) in the State of Texas during the
period from 1992 through 1996 and (2) did not previously request
exclusion from the litigation styled Ronnie and Nancy Haese v. H&R
Block, Inc., et al., Cause No. 96-423, in the 105th District Court of
Kleberg County, Texas (hereinafter referred to as the "Action.")
2. "Settlement Administrator" means the entity
designated by H&R Block to administer the settlement.
3. "Preliminary Approval Order" means the order to be
entered by the Court in the event that the Court grants preliminary
approval to this Agreement.
4. "Class Counsel" means Robert C. Hilliard and Hilliard
& Munoz, LLP,
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Darrell L. Barger and Hartline, Dacus, Barger, Dreyer & Kern, LLP,
Edward Carstarphen and Ellis, Carstarphen, Dougherty & Goldenthal,
P.C., and Craig Sico and Sico, White & Braugh, who are the attorneys
and law firms representing the Haeses and Class Members.
5. "Class Notice" means the notice that attached hereto
as Exhibit A.
6. "Class Representatives" means the Haeses.
7. "Court" means the 105th District Court of Kleberg
County.
8. "Settled Claims" means any and all actual and
potential claims, actions, lawsuits, and causes of action, known or
unknown, that Plaintiffs and/or the Class asserted, may assert or could
have asserted in the Action, including all claims and potential claims
under the laws of Texas or under federal law or any other law arising
out of or in any way relating to the tax refund anticipation loans
("RALs") (sometimes erroneously referred to as "Rapid Refunds")
obtained by the Class at any time up to and through November 18, 2002,
and/or participations in such RALs and/or arising out of or in any way
relating to H&R Block's use of the term "Rapid Refund," and/or any
sanctions or contempt penalties that have been sought, or could have
been sought, against the Released Parties for any acts or omissions,
known or unknown, that may have been committed by the Released Parties
that might in any way be related to the Action, the Cause 99-314
Action, or the Martinez Action.
9. "Cause 99-314 Action" means the lawsuit defined in
Section II, paragraph 1 of the Recitals set forth below.
10. "Martinez Action" means the lawsuit defined in
Section II, paragraph 2 of the Recitals set forth below.
11. "Released Parties" means H&R Block, Block Financial
Corporation, HRB
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Texas Enterprises, Inc., H&R Block Texas Tax Company, LP, and H&R Block
Texas Support Services, LP, and the respective parents, affiliates,
subsidiaries, franchisees or sub-franchisees of any of them, all
divisions, predecessors, successors, representatives and assignees of
any of them, and the present and former officers, directors, employees,
shareholders, insurers, underwriters, attorneys and agents of any of
them.
12. "Zawikowski Action" means the lawsuit defined in
Section II, paragraph 4 of the Recitals set forth below.
13. "Zawikowski Settlement" means the settlement defined
in Section II, paragraph 4 of the Recitals set forth below.
II. RECITALS
14. WHEREAS, (i) in July, 1996, the Haeses filed the
Action which was certified as a class action and (ii) in November,
1999, certain claims in the Action were severed into a class action
lawsuit pending in the same Court captioned Ronnie and Nancy Haese, et
al. v. H&R Block, Inc., et al., No. CV-99-314-D (hereafter referred to
as the "Cause 99-314 Action");
15. WHEREAS, in July, 2002, Veronica I. Martinez filed a
class action lawsuit in the 148th Judicial District Court of Nueces
County, Texas, captioned Veronica I. Martinez, et al. v. H&R Block,
Inc., et al., No. 02-3269-E (hereinafter the "Martinez Action");
16. WHEREAS, all claims in all three cases arise out of
the same set of operative facts;
17. WHEREAS, in addition to the aforementioned cases, H&R
Block is a defendant in other pending lawsuits in other jurisdictions
arising out of the RAL program,
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including an action pending in the United States District Court for the
Northern District of Illinois captioned Zawikowski, et al. v.
Beneficial National Bank, et al., No. 98-C-2178 ("Zawikowski Action")
in which a nationwide settlement is currently pending approval
("Zawikowski Settlement"); but in which H&R Block has moved that the
Texas Class Members be excluded.
18. WHEREAS, H&R Block has at all times denied, and
continues to deny, that it has committed any wrongful acts or
violations of law of any nature whatsoever or that it has any liability
to Plaintiffs or the persons they represent;
19. WHEREAS, uncertainty exists as to the potential
liability of H&R Block in the Action and as to the nature and amount of
relief, if any, to which the Plaintiffs and Class Members may be
entitled if liability is imposed on H&R Block;
20. WHEREAS, after extensive arms' length negotiations,
the parties hereto now wish to settle the Action, subject to the
approval of the Court;
21. WHEREAS, the parties hereto have entered into a
Memorandum of Understanding on November 18, 2002;
22. WHEREAS, the Plaintiffs represent the Class and H&R
Block agrees not to contest certification of a Class for purposes of
effectuating this settlement;
23. WHEREAS, while denying any fault, wrongdoing or
liability, H&R Block has agreed that a settlement of the Action on the
terms and conditions set forth in this Agreement is desirable solely in
order to avoid the further significant burden, expense and
inconvenience of protracted litigation, and the distraction and
diversion of personnel and resources, and thereby to put to rest this
controversy;
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24. WHEREAS, Class Counsel have conducted a thorough
study and investigation of the facts and the law relating to the claims
asserted in the Action, the Cause 99-314 Action, and the Martinez
Action through extensive discovery and independent investigation and
have concluded that, taking into account the substantial benefits that
Class Members will receive as a result of this settlement and the
considerable risks and delays of further litigation, the settlement
provided herein is fair, adequate and reasonable and in the best
interests of the Class.
THEREFORE, the parties hereto agree to the following terms and
conditions:
III. TERMS AND CONDITIONS
1. The Class Representatives (for themselves and on
behalf of the Class), by their attorneys and subject to the approval of
the Court pursuant to Texas Rule of Civil Procedure 42(e), hereby
settle, release, discharge and dismiss all Settled Claims as against
all the Released Parties with prejudice, upon and subject to the terms
and conditions specified herein. Each Class Member who has not timely
opted out shall covenant and agree that (s)he shall not hereafter
assert or continue to assert any claim, suit, demand or cause of
action, whether individually or on behalf of a class, based in whole or
in part upon any of the Settled Claims against the Released Parties.
Such release shall also extend to any sanctions or contempt penalties
that have been sought, or could have been sought, against the Released
Parties for any acts or omissions, known or unknown, that may have been
committed by the Released Parties in the Action, the Cause 99-314
Action, or the Martinez Action.
2. The parties hereto and their counsel agree to take
whatever reasonable
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procedural steps may be required to permit the Court to obtain and
retain jurisdiction over this settlement.
3. For the benefits and consideration set forth herein
and discussed below, the parties hereto will jointly request that the
Court's rulings in the Action as to fiduciary duty, breach or the
nature of the breach thereof, and for forfeiture of fees reflected in
the Court's November 6, 2002, letter be withdrawn. In addition, H&R
Block will seek the following orders from the Court: (1) an order
granting H&R Block's Motion to Compel Arbitration, which would dismiss
the claims of those persons who were a part of the class as defined in
the August 28, 1997, class certification order, who a obtained a RAL
for the first time in 1997 or thereafter; (2) an order granting summary
judgment as to HRBO, Limited and HRBO III, Ltd.; and (3) an order
granting summary judgment as to the claims of those persons who were
part of the class as defined in the August 28, 1997, class
certification order, who obtained RALs between 1988 and 1991, based
upon the expiration of the applicable statutes of limitation, the
non-receipt of license fees paid by H&R Block during that time period,
or such other grounds as H&R Block may assert. Such orders being
entered and actions taken by the Court shall be conditions subsequent
for this settlement, each of which must occur before H&R Block shall
have any obligation to make any payment of any of the benefits and/or
consideration required herein to the Class or payment of attorneys'
fees or expenses to Class Counsel.
4. The parties hereto agree that after Court approval
and exhaustion of all appeals, the parties hereto will jointly move for
the following: (1) the Cause 99-314 Action shall be decertified and
non-suited by the Court, with each party bearing its own costs,
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expenses and attorneys' fees with respect thereto; (2) the Martinez
Action shall also be non-suited by the court in the Martinez Action,
with each party bearing its own costs, expenses and attorneys' fees
with respect thereto; and (3) the mandamus proceeding pending before
the Texas Supreme Court under Cause No. 02-1043 shall be dismissed.
Such orders being entered and actions taken by the parties hereto, the
Court and the court in the Martinez Action shall be conditions
subsequent for this settlement, each of which must occur before H&R
Block shall have any obligation to make any payment of any of the
benefits and/or consideration required herein to the Class or payment
of attorneys' fees or expenses to Class Counsel.
5. While final approval of the settlement is pending and
while awaiting approval and final exhaustion of all appeals, the
parties hereto agree to jointly seek the abatement of all the
proceedings identified in the previous paragraph. Such orders being
entered and actions taken by the applicable courts shall be conditions
subsequent to this settlement, each of which must occur before H&R
Block shall have any obligation to make any payment of any of the
benefits and/or consideration required herein to the Class or payment
of any attorneys' fees or expenses to Class Counsel.
6. In consideration for the release and dismissal of all
Settled Claims, each Class Member shall be entitled to receive -
irrespective of how many RALs he or she may have obtained - the
following benefits and consideration:
a. For each tax season over a five-consecutive-year
period, a fully transferable and alienable coupon
that, upon mailing to the Settlement
Administrator, shall entitle the person redeeming
such coupons to receive
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a TaxCut(R) Platinum Federal Filing Edition tax
preparation software package that currently has a
suggested retail price of $39.95, or an
equivalent product of equal value selected by H&R
Block. Such redemption shall occur between
January 5 and April 15 of the calendar year of
the tax season to which the software package
applies.
b. For each tax season over a five-consecutive-year
period, a non-transferable and non-alienable
coupon that, upon mailing to the Settlement
Administrator, along with a receipt evidencing
payment, between January 5 and May 15 of the
calendar year in which the applicable tax season
occurs, shall entitle the Class Member to a $20
rebate on tax preparation or electronic filing
services provided in an H&R Block branded office
in the State of Texas; and
c. For each tax season over a five-consecutive-year
period, a fully transferable and alienable coupon
that, upon mailing to the Settlement
Administrator, shall entitle the person redeeming
such coupon to receive a copy of Tax Planning
Advisor (of the H&R Block just plain smart
Advisor Series of books) that currently has a
suggested retail price of $14.95, or an
equivalent product of equal value selected by H&R
Block. Such redemption shall occur between
January 5 and April 15 of the tax season to which
the tax planning book applies.
7. With respect to the foregoing benefits and
consideration, the parties hereto
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further agree that:
a. Assuming final approval of the settlement by the
trial court, final exhaustion of all appeals and
satisfaction of all conditions subsequent
referred to above, the parties hereto anticipate
that the benefits and consideration set forth in
the preceding paragraph will pertain to the 2004,
2005, 2006, 2007 and 2008 tax seasons. If
approval, exhaustion of all appeals and
satisfaction of all conditions subsequent
referred to above occur within 90 days prior to
the beginning of a given tax season or during a
given tax season, H&R Block's obligation to
provide such benefits and consideration will not
arise until the tax season that immediately
follows such given tax season.
b. For RALs obtained jointly due to the filing of a
joint income tax return by a married couple or
through other circumstances, such couple or joint
interest shall be treated as one Class Member for
purposes of the benefits and consideration
described above. Such joint filers' rights with
respect to those benefits and consideration shall
be governed by the applicable property laws
pertaining to such marriage or other
relationship, and neither H&R Block nor the
Settlement Administrator shall have any
liability, obligation or responsibility with
respect to any disputes arising from any joint
interest or common ownership in the benefits
provided herein, irrespective of whether such
dispute arises from divorce, death or otherwise.
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c. All coupons provided pursuant to the terms of the
settlement and discussed above shall be mailed to
each Class Member for whom the parties hereto
possess a correct mailing address in one mailing
prior to the first applicable tax season in which
coupons may be redeemed, as described above. The
parties hereto shall be deemed to have a correct
mailing address for a Class Member if Class
Notice previously mailed was not returned as
undeliverable and/or if Class Notice mailed
subsequent to entry of a Preliminary Approval
Order is not returned as undeliverable and/or a
Class Member provides a correct mailing address
when requesting a copy of the Class Notice or in
response to the class notice. The cost of such
mailing of coupons, as well as any other expenses
associated with the creation, issuance and
redemption of the coupons shall be borne by H&R
Block. H&R Block shall have the right to control
the timing of such mailing of coupons, although
it must occur at some time after April 30 of the
year prior to the first applicable tax season,
but before December 31.
8. The Final Judgment which will be submitted to the
Court for approval of this settlement shall vacate the January 30, 1998
Order of the Court concerning arbitration clauses and contacts with the
Class. While the parties hereto are awaiting Court approval, the
parties hereto agree to jointly seek the abatement of the January 30,
1998 Order, with such abatement specifically providing that the January
30, 1998 Order shall have no force or effect while the abatement
remains in effect and therefore such will not be a basis for any
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sanctions against H&R Block for its conduct while the abatement is in
effect. However, any arbitration agreement signed or that may hereafter
be signed by Class Members in 1997 and subsequent years will not be
enforced against those Class Members with respect to the settled claims
applicable to any RAL obtained in calendar years 1992 through 1996,
inclusive. If the Court does not approve the settlement, the parties
shall jointly request that the Court vacate the abatement. After the
abatement has been vacated, the Court's January 30, 1998 Order shall
thereafter again become effective (to the extent it remains effective
in light of the Judgment and Opinion of the Corpus Christi Court of
Appeals and H&R Block v. Haese, 82 S.W.3d 331 (Tex.App. - Corpus
Christi, 2000, pet. denied) and subject to the limitation on the amount
of any said sanctions set forth in Paragraph 9.
9. If the settlement should ultimately fail due to
non-approval by the Court or appellate reversal, the Class and Class
Counsel agree that any sanctions sought or asserted against H&R Block
for any past conduct - known or unknown - pertaining to or in any way
connected with the Action, the Cause 99-314 Action, or the Martinez
Action, collectively shall not exceed $10,000,000 against H&R Block.
Should the settlement fail for some reason other than judicial
non-approval or reversal, and such failure is not caused by H&R Block,
the aforementioned sanctions collectively shall not exceed $20,000,000
against H&R Block in the Action, the Cause 99-314 Action, or the
Martinez Action. Nothing in this paragraph shall be construed as an
admission that H&R Block engaged in any sanctionable conduct, which is
expressly denied, nor construed as any agreement that any such sanction
in any amount should be imposed by any court. Consideration for this
provision consists of not only the benefits and consideration set forth
herein and discussed above, but also H&R
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Block's request for exclusion of Class Members from the proposed
settlement in the Zawikowski Action. Plaintiffs and Class Counsel agree
to withdraw their objections to Zawikowski Settlement and to make no
objections to such Zawikowski Settlement in the future, provided that
if either Plaintiffs and/or Class Counsel or H&R Block is enjoined or
otherwise prevented from complying with this settlement by order of any
Court or either is ordered by any Court to deposit any of the funds or
property to be paid pursuant to the Agreement to any Court, trust, or
other third party, then Plaintiffs and Class Counsel may object to the
Zawikowski settlement and contest any such injunction or order. This
provision shall survive termination or failure of this Agreement or
this settlement.
10. While approval of this settlement is being sought,
H&R Block agrees to take no action to subject the Class or Class
Members to the jurisdiction of any other Federal or State Court. If
this settlement is finally approved and all appeals challenging same
are exhausted, H&R Block agrees to comply with same even if the Texas
Class is not carved out of the Zawikowski Action, provided that neither
Plaintiffs and Class Counsel nor H&R Block is enjoined or otherwise
prevented from doing so by order of any court, and further provided
that H&R Block is not ordered by any court to deposit any of the funds
or property to be paid pursuant to this Agreement to any court, trust
or other third party. If either Plaintiffs and/or Class Counsel or H&R
Block is enjoined or otherwise prevented from complying with this
settlement or ordered by any Court to deposit any of the funds or
property to be paid pursuant to the Agreement to any Court, trust, or
other third party, then Plaintiffs and Class Counsel may contest any
such injunction or order.
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11. Unless otherwise agreed by all parties hereto, this
Agreement shall be null and void unless finally approved by the Court,
and affirmed on appeal if necessary, and unless all conditions
subsequent are met. However, an award by the Court, as the same may be
affirmed or reduced by an appellate court, of the attorneys' fees and
expenses for an amount less than the maximum amounts specified and
agreed upon in Article V below, shall not affect any of the other
rights and obligations of the parties hereto under the Agreement.
12. It is expressly agreed and understood that the
Released Parties deny any fault, wrongdoing, or liability, and that
this Agreement does not constitute an admission by any party and may
not be admitted in evidence or appended to any pleadings, motions or
briefs except in an action brought to enforce the terms hereof or as a
defense to any causes of action barred or released by the terms hereof.
13. This Agreement may be executed in separate
counterparts.
14. Each of the parties hereto agree to take all steps
necessary, at their own costs, to effectuate the purposes and
requirements of this Agreement.
15. This Agreement shall be binding upon and inure to the
benefit of the Class, the Released Parties and their respective heirs,
administrators, successors and assigns.
16. In determining whether any person is a Class Member,
the Settlement Administrator shall be entitled to rely upon the list of
persons to whom previous notice was sent in the Action and upon the
computer records available to H&R Block from third parties. To the
extent that relevant information is not contained therein, the
determination may be based upon submission by a Class Member of
corroborating documentation such as the customer copy of the RAL
application. The Settlement Administrator may employ in its
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discretion reasonable procedures necessary to verify information
submitted by claiming Class Members.
17. In the event that the settlement does not become
final in accordance with the terms hereof, then this Agreement shall be
of no force or effect, except as elsewhere expressly provided herein,
and, in any event, the parties hereto agree that this Agreement,
whether or not it shall become final, and any and all negotiations,
documents and discussions associated with it, shall be without
prejudice to the rights of any party, shall not be deemed or construed
to be an admission or evidence of any violation of any statute, law or
regulation or of any liability or wrongdoing by any of the Released
Parties or of the truth of any of the claims or allegations made in the
Complaints and/or pleadings in the Action, the Cause 99-314 Action or
the Martinez Action or any other pleading, and evidence thereof shall
not be discoverable or used directly or indirectly, in any way, in any
action or proceeding. If the settlement does not become final in
accordance with the terms of this Agreement, H&R Block expressly
reserves all its rights, including but not limited to, its rights to
compel arbitration and contest class certification in the Action, the
Cause 99-314 Action and/or the Martinez Action. If the settlement does
not become final in accordance with the terms of this Agreement,
Plaintiffs and class members expressly reserve all their rights,
including but not limited to, any available sanctions subject to the
limitations set forth in paragraph 9, their rights to contest the
validity of any arbitration clauses, and their rights to pursue
approval of class certification in Cause No. 99-314-D and Cause No.
02-3269-E (Martinez action).
18. This Agreement contains an entire, complete, and
integrated statement of each and every term and provision agreed to by
and among the parties hereto; it is not subject to
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any condition not provided for herein. This Agreement shall not be
modified in any respect except by a writing executed by all the parties
hereto. This Agreement supersedes all prior agreements between the
parties hereto, including the Memorandum of Understanding dated
November 18, 2002.
19. None of the parties hereto shall be considered to be
the drafter of this Agreement or any provision hereof for the purpose
of any statute, case law or rule of interpretation or construction that
would or might cause any provision to be construed against the drafter
hereof.
20. The Class and Class Counsel agree that all public
communication regarding the settlement and this Agreement shall be made
by H&R Block, except as may be required in court proceedings, or where
necessary to protect the integrity of Class Counsel; provided, however,
that public communication to protect the integrity of Class Counsel
shall not include press releases or any communications to financial
analysts or investment advisors. Any responses to media inquiries shall
not disparage H&R Block or their statements and shall only state that
the settlement is a compromise of disputed claims. Except as permitted
in the previous two sentences, the Class and Class Counsel shall refer
any media inquiries to the following representatives of H&R Block:
Linda M. McDougall, 816-932-7542, Cyd Slayton, 816-932-8470 or Bob
Schneider, 816-932-4835, or such other person(s) as H&R Block shall
designate to Class Counsel. Further Class Counsel agree not to provide
documents to or otherwise assist any party or anyone representing
parties or anyone contemplating such representation in any other
RAL-related case now existing or filed at any time in the future, with
respect to this settlement or any other aspect of this litigation. The
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Plaintiffs, Class, and Class Counsel shall, upon final and unappealable
approval of the settlement, return to H&R Block any and all documents,
discovery responses or other information produced or given to the Class
and Class Counsel during the course of this litigation.
21. Each of the undersigned attorneys hereby represents
and warrants that he or she is authorized to execute this Agreement on
behalf of his or her client(s).
IV. CLASS NOTICE AND SETTLEMENT FAIRNESS HEARING
1. Upon execution of this Agreement of Settlement,
Plaintiffs will file, and H&R Block will not oppose, a Motion for
Preliminary Approval of Settlement and for Approval of Class Notice
pursuant to Texas Rule of Civil Procedure 42. A copy of the proposed
Class Notice is attached hereto as EXHIBIT A.
2. H&R Block shall pay all costs associated with
dissemination of the Class Notice and the administration of the
settlement.
3. Class Members shall have the right to object to the
settlement or the request by Class Counsel for an award of attorneys'
fees and expenses by filing written objections with the Court not later
than twenty (20) days before the hearing on final approval of the
settlement, and serving copies of such papers on all counsel for the
parties hereto. Failure to file such timely written objections will
preclude a Class Member from objecting at the final approval hearing.
4. Subject to the approval of the Court, Class Notice
will also be disseminated to persons who obtained RALs in Texas prior
to 1992, by publication, and subsequent to 1996,
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by mail. Any opt-outs of the Action by such persons pursuant to the
Class Notice must be in a writing signed by the individual person and
not his or her counsel or other representative.
5. Class Counsel shall not solicit the representation
of persons who have opted out from the class with respect to any of the
Settled Claims that were or could have been raised in the Action, the
Cause 99-314 Action or the Martinez Action.
V. ATTORNEYS' FEES AND EXPENSES
1. Defendants agree to pay Class Counsel up to
$49,000,000 with respect to attorney's fees that may be awarded by the
Court in connection with this settlement, provided that Class Counsel
and/or their respective law firms shall not seek or accept an award of
more than $49,000,000 in attorneys fees. Further, in the event the
Court awards Class Counsel any recovery of expenses associated with the
litigation of the Action, H&R Block agrees to reimburse Class Counsel
up to $900,000 for such expenses incurred prior to execution of this
Agreement. Plaintiffs shall provide a reasonable description of such
expenses, but H&R Block shall not object to the reasonableness or
necessity of such expenditures. Such fees and expenses shall be subject
to Court approval, but in no event shall H&R Block be required to pay
more than the amounts stated herein. Such payment shall be made to
Class Counsel within 30 days after the Court's order approving the
settlement becomes final, and any appeals have been exhausted and all
conditions subsequent have been satisfied; provided, however, that any
payment by H&R Block shall be made in accordance with a final Court
order specifying the division of attorneys fees and expenses among
Class Counsel in this case, and shall not be payable by H&R Block until
such an
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order specifying divisions has been entered.
2. The Court order awarding attorneys' fees and expenses
to Class Counsel shall be in an order which is separate from an order
approving the settlement, so that any appeal from the attorneys' fees
and expenses to Class Counsel shall not affect the finality of the
approval of the settlement.
3. Class Counsel may pay incentive awards to the
Plaintiffs out of the aforesaid amounts paid to Class Counsel, in
amounts to be approved by the Court.
VI. TERMINATION
H&R Block, at its sole discretion, shall have the right but
not the obligation to terminate this Agreement if:
1. The Court declines to preliminarily approve the
settlement and enter a Preliminary Approval Order except as expressly
provided elsewhere in the Agreement; or
2. The conditions subsequent discussed herein are not
satisfied; or
3. To the extent any Class Members have opted out of
this Class, or may hereafter have the right to opt out of the Class or
the Action, H&R Block shall have the option to withdraw from this
Settlement if more than one percent (1%) of the persons receiving Class
Notice opt out.
Plaintiffs and Class Members, at their sole discretion, shall
have the right but not the obligation to terminate this Agreement if
the Court declines to preliminarily approve the settlement and enter a
Preliminary Approval Order approving all aspects of this Agreement of
Settlement, or except as expressly provided in this Agreement.
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Termination by either H&R Block or by Plaintiffs and Class
Members pursuant to this Section VI shall mean that all obligations of
the parties hereto shall terminate, except as expressly provided
herein.
IN WITNESS WHEREOF, the undersigned parties hereto and their
attorneys have caused this Agreement to be duly executed on the date
first above written.
/s/ Nancy Haese
----------------------
Nancy Haese, Plaintiff
/s/ Ronnie Haese
-----------------------
Ronnie Haese, Plaintiff
HILLIARD & MUNOZ, LLP
By: /s/ Robert C. Hilliard
----------------------
Robert C. Hilliard
HARTLINE, DACUS, BARGER,
DREYER & KERN, L.L.P.
By: /s/ Darrell L. Barger by RCH
----------------------------
Darrell L. Barger
ELLIS, CARSTARPHEN, DOUGHERTY &
GOLDENTHAL, P.C.
By: /s/ Edward M. Carstarphen by RCH
--------------------------------
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Edward M. Carstarphen
SICO, WHITE & BRAUGH
By: /s/ Craig M. Sico by RCH
------------------------
Craig M. Sico
ATTORNEYS FOR PLAINTIFFS
H&R BLOCK, INC.
By: /s/ Jeffery W. Yabuki
---------------------
An Authorized Representative
H&R BLOCK TAX SERVICES, INC.
By: /s/ Jeffery W. Yabuki
---------------------------------
An Authorized Representative
H&R BLOCK AND ASSOCIATES, L.P.
By: /s/ Jeffery W. Yabuki
---------------------------------
An Authorized Representative
HRBO, LIMITED, ERRONEOUSLY NAMED AS
HRBO, LTD.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
HRB-DELAWARE, INC. AS SUCCESSOR IN INTEREST
TO H&R BLOCK OF SOUTH TEXAS, INC.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
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HRB-DELAWARE, INC.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
H&R BLOCK, LTD.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
HRBOI, LTD.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
HRBO III, LTD.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
HRBOII, INC., ERRONEOUSLY NAMED AS HRBOII, LTD.
By: /s/ Garnett Walker
--------------------------------
An Authorized Representative
H&R BLOCK OF DALLAS, INC.
By: /s/ Jeffery W. Yabuki
---------------------------------
An Authorized Representative
H&R BLOCK OF HOUSTON, LTD.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
HOUSTON BLOCK, L.C.
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<PAGE>
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
BLOCK MANAGEMENT, LTD.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
STI-BLOCK, L.C.
By: /s/ Garnett Walker
---------------------------------
An Authorized Representative
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<PAGE>
MEREDITH, DONNELL & ABERNETHY
By: ___________________________________
Ben A. Donnell
BRYAN CAVE, LLP.
By:____________________________________
N. Louise Ellingsworth
ATTORNEYS FOR DEFENDANTS
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