Severance and Release Agreement - HRB Management Inc. and James Ingraham
SEVERANCE AND RELEASE AGREEMENT
James Ingraham ("EMPLOYEE") and HRB Management, Inc. enter into this
Separation and Release Agreement ("Release Agreement") under the terms and
conditions recited below:
I. RECITATIONS
A. Due to changing business needs EMPLOYEE has been notified that his
employment with HRB Management, Inc. will end on February 10, 2004
(the "Separation Date") due to elimination of his position.
B. EMPLOYEE and HRB Management, Inc. want to enter into a full and
final settlement of all issues and matters between them, occurring
on or before the later of the Separation Date or the date EMPLOYEE
signs this Release Agreement. These include, but are not limited to,
any issues and matters that may have arisen out of EMPLOYEE's
employment with or separation from HRB Management, Inc..
C. For that reason and in exchange for the mutual promises of EMPLOYEE
and HRB Management, Inc. set forth in this Release Agreement (which
both parties agree are sufficient and valuable consideration),
EMPLOYEE and HRB Management, Inc. have agreed to the terms and
conditions set out below.
II. BASIC TERMS OF THE RELEASE AGREEMENT
A. HRB MANAGEMENT, INC. AGREES TO THE FOLLOWING:
1. Upon receipt of a fully executed copy of this Release
Agreement and after the expiration of the period defined in
paragraph
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III(B) below, HRB Management, Inc. agrees to provide EMPLOYEE
with the payments and benefits to which EMPLOYEE would be
entitled under the H&R Block Severance Plan (the "Plan"). A
copy of the Plan is attached to this Release Agreement as
Exhibit A. To be fully executed, EMPLOYEE's signature must be
notarized. EMPLOYEE is not entitled to any payments or
benefits under the Plan unless EMPLOYEE signs and returns this
Release Agreement within twenty-one (21) calendar days of
being presented with it. EMPLOYEE may, at his option, elect to
waive the twenty-one (21) calendar day consideration period,
through signature of this Release Agreement, at any time prior
to the conclusion of the twenty-one (21) day period. Assuming
EMPLOYEE chooses to sign this Release Agreement and that such
signature becomes binding because EMPLOYEE has not revoked his
signature within seven (7) calendar days after signing, the
terms of the Plan govern the payments and benefits to which
EMPLOYEE is entitled. EMPLOYEE is not entitled to any payments
or benefits under the Plan unless EMPLOYEE fully executes and
returns this Release Agreement to: Connie Greenfield,
Compensation Department, H&R Block, 4400 Main Street, Kansas
City, MO 64111.
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2. As set forth in the Plan (in the event of any discrepancy, the
terms of the Plan control), the payments available to the
EMPLOYEE under the Plan are:
NONDISCRETIONARY AMOUNT: $441,000.00 (to be paid in
semi-monthly or bi-weekly installments as determined by HRB
Management, Inc. during the Severance period).
SEVERANCE PERIOD: 12.00 months (unless earlier terminated in
accordance with the Plan).
Any change to the consideration given for this Release
Agreement, whether material or immaterial, shall not cause the
21-day period to start over.
B. EMPLOYEE AGREES TO THE FOLLOWING:
1. Release of Claims. EMPLOYEE agrees to release and discharge
HRB Management, Inc., and any of its related companies,
present and former officers, agents, successors, assigns,
other employees and attorneys from any and all claims arising
before the later of the Separation Date or the date EMPLOYEE
signs the Release and Agreement including, without limitation,
any claims that may have arisen from EMPLOYEE's employment
with or separation from HRB Management, Inc., all as more
fully set forth in paragraphs IV(A) through (E) below.
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2. Confidential Information. EMPLOYEE agrees, during and after
the term of this Release Agreement he will not, without the
prior written consent of HRB Management, Inc., directly or
indirectly use for the benefit of any person or entity other
than HRB Management, Inc., or make known, divulge or
communicate to any person, firm, corporation or other entity,
any confidential or proprietary information, knowledge or
trade secrets acquired, developed or learned of by EMPLOYEE
during his employment with HRB Management, Inc.. EMPLOYEE
shall not retain after the Separation Date, any document,
record, paper, disk, tape or compilation of information
relating to any such confidential information.
3. Return of HRB Management, Inc.'s Property. EMPLOYEE shall
return to HRB Management, Inc. by the Separation Date, any and
all things in his possession or control relating to HRB
Management, Inc. and its related entities, including but not
limited to any equipment issued to EMPLOYEE, all
correspondence, reports, contracts, financial or budget
information, personnel or labor relations files, office keys,
manuals, and all similar materials not specifically listed
here.
4. Non-solicitation of HRB Management, Inc.'s Employees. EMPLOYEE
shall not solicit any HRB Management, Inc. employee or any
employee of HRB Management, Inc.'s parent,
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subsidiary or affiliate companies, for any purpose whatsoever
for a one-year period after the Termination Date.
5. Non-disparagement. EMPLOYEE agrees he will not disparage HRB
Management, Inc. or make or solicit any comments to the media
or others that may be considered derogatory or detrimental to
the good business name or reputation of HRB Management, Inc..
This clause has no application to any communications with the
Equal Employment Opportunity Commission or any state or local
agency responsible for investigation and enforcement of
discrimination laws.
III. ACKNOWLEDGMENTS AND ADDITIONAL TERMS
A. Revocation Period. EMPLOYEE acknowledges that if he accepts the
terms of this Release Agreement he will have seven (7) calendar days
after the date he signs this Release Agreement to revoke her/his
acceptance of its terms. Such revocation, to be effective, must be
delivered by written notice, in a manner so the notice is received
on or before the seventh day by: Connie Greenfield, Compensation
Department, H&R Block, 4400 Main Street, Kansas City, MO 64111.
B. Opportunity to Consult Attorney. EMPLOYEE acknowledges he has
consulted or has had the opportunity to consult with her/his
attorney prior to executing the Release Agreement.
C. No Admission of Liability. EMPLOYEE and HRB Management, Inc. agree
nothing in this Release Agreement is an admission by either of
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any wrongdoing, either in violation of an applicable law or
otherwise, and that nothing in this Release Agreement is to be
construed as such by anyone.
D. Additional Consideration. EMPLOYEE agrees provision of the payments
and benefits set forth in paragraph II(A)(1) is valuable
consideration to which EMPLOYEE would not otherwise be entitled.
E. Choice of Law. All disputes which arise out of the interpretation
and enforcement of this Release Agreement shall be governed by the
laws of the State of Missouri without giving effect to its choice of
law provisions.
F. Entire Agreement. This Release Agreement, including the terms of the
Plan attached as Exhibit A, is the entire agreement between the
parties. The parties acknowledge the terms of the Plan can be
terminated or changed according to the terms set forth in the Plan.
The parties acknowledge the terms of this Release Agreement can only
be changed by a written amendment to the Release Agreement signed by
both parties.
G. No Reliance. The parties have not relied on any representations,
promises, or agreements of any kind made to them in connection with
this Release and Agreement, except for those set forth in writing in
this Release Agreement or in the Plan.
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H. Separate Signatures. Separate copies of this Release Agreement shall
constitute originals which may be signed separately but which
together will constitute one single agreement.
I. Effective Date. This Release Agreement becomes effective and binding
on the eighth calendar day following EMPLOYEE's execution of the
Release Agreement.
J. Severability. If any provision of this Release Agreement, including
the Plan, is held to be invalid, the remaining provisions shall
remain in full force and effect.
K. Continuing Obligations. Any continuing obligations EMPLOYEE has
after separation of employment pursuant to any employment agreement
with HRB Management, Inc., the Plan, or by operation of law survive
this Release Agreement. The terms of this Release Agreement add to
any such obligations and are not intended to otherwise modify them
in any way.
L. Paragraph Headings. Paragraph headings contained in this Release
Agreement are for convenience only and shall not in any manner be
construed as a part of this Release Agreement.
M. Waive Notice Period. By this Severance and Release Agreement, the
parties agree to waive any notice of termination required by either
Section 1.06(b) of the Employment Agreement dated as of September
12, 2001 between HRB Management, Inc. and EMPLOYEE (the "Employment
Agreement") or any HRB Management, Inc. policy,
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without such waiver affecting any of HRB Management, Inc.'s or
EMPLOYEE's rights or benefits dependent on such notice.
IV. RELEASE
A. In consideration of the recitations and agreements listed above,
EMPLOYEE releases, and forever discharges HRB Management, Inc., and
each and every one of its parent, affiliate, subsidiary, component,
predecessor, and successor companies, and their respective past and
present agents, officers, executives, employees, attorneys,
directors, and assigns (collectively the "Releasees"), from any and
all matters, claims, charges, demands, damages, causes of action,
debts, liabilities, controversies, claims for attorneys' fees,
judgments, and suits of every kind and nature whatsoever, foreseen
or unforeseen, known or unknown, which have arisen between EMPLOYEE
and the Releasees up to the later of the Separation Date or the date
EMPLOYEE signs this Release Agreement.
B. This release of claims includes, but is not limited to: (1) any
claims he may have relating to any aspect of her/his employment with
the Releasees and/or the separation of that employment, (2) any
breach of an actual or implied contract of employment between
EMPLOYEE and the Releasees, (3) any claim of unjust or tortious
discharge, (4) any common-law claim (including but not limited to
fraud, negligence, intentional or negligent infliction of emotional
distress, negligent hiring/retention/supervision, or defamation),
and (5)(i) any claims of
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violations arising under the Civil Rights Act of 1866, 42 U.S.C.
Section 1981, (ii) the Civil Rights Act of 1964, 42 U.S.C. Sections
2000e, et seq., as amended by the Civil Rights Act of 1991, (iii)
the Age Discrimination in Employment Act, 29 U.S.C. Sections 621, et
seq. (including but not limited to the Older Worker Benefit
Protection Act), (iv) the Employee Retirement Income Security Act,
29 U.S.C. Sections 1001, et seq., (v) the Fair Labor Standards Act
of 1938, 29 U.S.C. Sections 201, et seq., (vi) the Rehabilitation
Act of 1973, 29 U.S.C. Sections 701, et seq., (vii) the American
with Disabilities Act, 42 U.S.C. Sections 12101, et seq., (viii) the
Family and Medical Leave Act, 29 U.S.C.Section 2601, et seq., (ix)
the Occupational Safety and Health Act, 29 U.S.C. Sections 651, et.
seq., (x) the National Labor Relations Act, 29 U.S.C. Sections 151,
et. seq., (xi) the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. Sections 2101, et seq., (6) any applicable state
employment discrimination statute, (7) any applicable state worker's
compensation statute, and (8) any other federal, state, or local
statutes or ordinances.
C. EMPLOYEE further agrees in the event any person or entity should
bring such a charge, claim, complaint, or action on her/his behalf,
he hereby waives and forfeits any right to recovery under said claim
and will exercise every good faith effort to have such claim
dismissed. This Release Agreement does not affect, however, the
Equal Employment
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Opportunity Commission's ("EEOC's") rights and responsibilities to
investigate or enforce applicable employment discrimination
statutes.
D. For purposes of the Age Discrimination in Employment Act ("ADEA")
only, this Release Agreement does not affect the EEOC's rights and
responsibilities to enforce the ADEA, nor does this Agreement
prohibit EMPLOYEE from filing a charge under the ADEA (including a
challenge to the validity of the waiver of claims in this Release
Agreement) with the EEOC, or participating in any investigation or
proceeding conducted by the EEOC. Nevertheless, EMPLOYEE agrees that
the Releasees will be shielded against any recovery by EMPLOYEE,
provided this Release Agreement is valid under applicable law.
E. EMPLOYEE agrees he waives any right to participate in any
settlement, verdict or judgment in any class action against the
Releasees arising from conduct occurring on or before the date
EMPLOYEE signs this Release Agreement, and that he waives any right
to accept anything of value or any injunctive relief associated with
any such pending or threatened class action against the Releasees.
F. Notwithstanding the foregoing, the termination of EMPLOYEE's
employment and the foregoing release will not affect or terminate
any of the obligations of HRB Management, Inc. under this Severance
and Release Agreement; any provisions of the Employment Agreement
which,
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by their express terms as set forth therein, impose continuing
obligations on HRB Management, Inc. or its affiliates following
termination of the Employee Agreement, including, but not limited
to, the indemnification provisions under Section 4.06 of the
Employment Agreement; or any post-termination obligations under any
employee benefit plan in which EMPLOYEE participated during his
employment.
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THIS IS A RELEASE OF CLAIMS - READ CAREFULLY BEFORE SIGNING
I HAVE READ THIS SEVERANCE AND RELEASE AGREEMENT. I HAVE HAD THE OPPORTUNITY TO
OBTAIN THE ADVICE OF LEGAL COUNSEL CONCERNING THE MEANING AND EFFECT OF THIS
RELEASE AGREEMENT. HRB MANAGEMENT, INC. ADVISED ME TO SEEK THE ADVICE OF COUNSEL
ON THIS ISSUE. I FULLY UNDERSTAND THE TERMS OF THIS RELEASE AGREEMENT AND I
UNDERSTAND IT IS A COMPLETE AND FINAL RELEASE OF ANY OF MY CLAIMS AGAINST HRB
MANAGEMENT, INC.. I SIGN THE RELEASE AGREEMENT AS MY OWN FREE ACT AND DEED.
2/10/04 /s/ James H. Ingraham
----------- ---------------------------
Date EMPLOYEE
Subscribed and sworn to before me, a Notary Public, this 10th day of
February, 2004.
/s/ Paula Panarisi
---------------------------
NOTARY PUBLIC
My Commission expires:
12/25/04
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HRB Management, Inc.
Date February 11, 2004 By: /s/ Mark A. Ernst
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EXHIBIT A
H&R BLOCK SEVERANCE PLAN
AMENDED AND RESTATED AUGUST 11, 2003
1. Purpose. The H&R Block Severance Plan is a welfare benefit plan
established by HRB Management, Inc., an indirect subsidiary of H&R Block, Inc.,
for the benefit of certain subsidiaries of H&R Block, Inc. in order to provide
severance compensation and benefits to certain employees of such subsidiaries
whose employment is involuntarily terminated under the conditions set forth
herein. This document constitutes both the plan document and the summary plan
description required by the Employee Retirement Income Security Act of 1974.
2. Definitions.
(a) "Cause" means one or more of the following grounds of an Employee's
termination of employment with a Participating Employer:
(i) misconduct that interferes with or prejudices the proper
conduct of the Company, the Employee's Participating Employer, or
any other affiliate of the Company, or which may reasonably result
in harm to the reputation of the Company, the Employee's
Participating Employer, or any other affiliate of the Company;
(ii) commission of an act of dishonesty or breach of trust
resulting or intending to result in material personal gain or
enrichment of the Employee at the expense of the Company, the
Employee's Participating Employer, or any other affiliate of the
Company;
(iii) commission of an act materially and demonstrably detrimental
to the good will of the Company, the Employee's Participating
Employer, or any other affiliate of the Company, which act
constitutes gross negligence or willful misconduct by the Employee
in the performance of the Employee's material duties;
(iv) material violations of the policies or procedures of the
Employee's Participating Employer, including, but not limited to,
the H&R Block Code of Business Ethics & Conduct, except those
policies or procedures with respect to which an exception has been
granted under authority exercised or delegated by the Participating
Employer;
(v) disobedience, insubordination or failure to discharge
employment duties;
(vi) conviction of, or entrance of a plea of guilty or no contest,
to a misdemeanor (involving an act of moral turpitude) or a felony;
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(vii) inability of the Employee, the Company, the Employee's
Participating Employer, and/or any other affiliate of the Company to
participate, in whole or in part, in any activity subject to
governmental regulation as the result of any action or inaction on
the part of the Employee;
(viii) the Employee's death or total and permanent disability. The
term "total and permanent disability" will have the meaning ascribed
thereto under any long-term disability plan maintained by the
Employee's Participating Employer;
(ix) any grounds described as a discharge or other similar term on
the Participating Employer's separation review form or other similar
document stating the reason for the Employee's termination of
employment, including poor performance; or
(x) any other grounds of termination of employment that the
Participating Employer deems for cause.
Notwithstanding the definition of Cause above, if an Employee's employment
with a Participating Employer is subject to an employment agreement that
contains a definition of "cause" for purposes of termination of
employment, such definition of "cause" in such employment agreement shall
replace the definition of Cause herein for the purpose of determining
whether the Employee has incurred a Qualifying Termination, but only with
respect to such Employee.
(b) "Company" means H&R Block, Inc.
(c) "Employee" means a regular full-time or part-time, active employee
of a Participating Employer whose employment with a Participating Employer
is not subject to an employment contract that contains a provision that
includes severance benefits. This definition expressly excludes employees
of a Participating Employer classified as seasonal, temporary and/or
inactive and employees who are customarily employed by a Participating
Employer less than 20 hours per week.
(d) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
(e) "Hour of Service" means each hour for which an individual was
entitled to compensation as a regular full-time or part-time employee from
a subsidiary of the Company.
(f) "Line of Business of the Company" with respect to a Participant
means any line of business of the Participating Employer by which the
Participant was employed as of the Termination Date, as well as any one or
more lines of business of any other subsidiary of the Company by which the
Participant was employed during the two-year period preceding the
Termination Date, provided that, if Participant's employment was, as of
the Termination Date or during the two-year period
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immediately prior to the Termination Date, with HRB Management, Inc. or
any successor entity thereto, "Line of Business of the Company" shall mean
any lines of business of the Company and all of its subsidiaries.
(g) "Monthly Salary" means -
(i) with respect to an Employee paid on a salary basis, the
Employee's current annual salary divided by 12; and
(ii) with respect to an Employee paid on an hourly basis, the
Employee's current hourly rate times the number of hours he or she
is regularly scheduled to work per week multiplied by 52 and then
divided by 12.
(h) "Participant" means an Employee who has incurred a Qualifying
Termination and has signed a Release that has not been revoked during any
revocation period provided under the Release.
(i) "Participating Employer" means a direct or indirect subsidiary of
the Company (i) listed on Schedule A, attached hereto, which may change
from time to time to reflect new Participating Employers or withdrawing
Participating Employers, and (ii) approved by the Plan Sponsor for
participation in the Plan.
(j) "Plan" means the "H&R Block Severance Plan," as stated herein, and
as may be amended from time to time.
(k) "Plan Administrator" and "Plan Sponsor" means HRB Management, Inc.
The address and telephone number of HRB Management, Inc. is 4400 Main
Street, Kansas City, Missouri 64111, (816) 753-6900. The Employer
Identification Number assigned to HRB Management, Inc. by the Internal
Revenue Service is 43-1632589.
(l) "Qualifying Termination" means the involuntary termination of an
Employee, but does not include a termination resulting from:
(i) the elimination of the Employee's position where the Employee
was offered another position with a subsidiary of the Company at a
comparable salary and benefit level, or where the termination
results from a sale of assets or other corporate acquisition or
disposition;
(ii) the redefinition of an Employee's position to a lower salary
rate or grade;
(iii) the termination of an Employee for Cause; or
(iv) the non-renewal of employment contracts.
(m) "Release" means that agreement signed by and between an Employee who
is eligible to participate in the Plan and the Employee's Participating
Employer under which the Employee releases all known and potential claims
against the Employee's
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Participating Employer and all of such employer's parents, subsidiaries,
and affiliates.
(n) "Release Date" means, with respect to a Release that includes a
revocation period, the date immediately following the expiration date of
the revocation period in the Release that has been fully executed by both
parties. "Release Date" means, with respect to a Release that does not
include a revocation period, the date the Release has been fully executed
by both parties.
(o) "Severance Period" means the period of time during which a
Participant may receive benefits under this Plan. The Severance Period
with respect to a Participant begins on the Termination Date. A
Participant's Severance Period will be the shorter of (i) 12 months or
(ii) a number of months equal to the whole number of Years of Service
determined under Section 2(q), unless earlier terminated in accordance
with Section 8 of the Plan.
(p) "Termination Date" means the date the Employee severs employment
with a Participating Employer.
(q) "Year of Service" means each period of 12 consecutive months ending
on the Employee's employment anniversary date during which the Employee
had at least 1,000 Hours of Service. In determining a Participant's Years
of Service, the Participant will be credited with a partial Year of
Service for his or her final period of employment commencing on his or her
most recent employment anniversary date equal to a fraction calculated in
accordance with the following formula:
I. NUMBER OF DAYS SINCE MOST RECENT EMPLOYMENT ANNIVERSARY DATE
365
Despite an Employee's Years of Service calculated in accordance with the
above, an Employee whose pay grade at his or her Participating Employer
fits in the following categories at the time of the Qualifying Termination
will be credited with no less than the specified Minimum Years of Service
and no more than the specified Maximum Years of Service listed in the
following table as applicable to such pay grade:
Pay Grade A. Minimum Years of Service Maximum Years of Service
-------------------- --------------------------- ------------------------
81-89 and 231-235 6 18
65-80, 140-145, 3 18
185-190, and 218-230
57-64, 115-135, 1 18
175-180, and 210-217
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48-56, 100-110, 1 18
170, and 200-209
Notwithstanding the above, if an Employee has received credit for Years of
Service under this Plan or under any previous plan, program, or agreement
for the purpose of receiving severance benefits before a Qualifying
Termination, such Years of Service will be disregarded when calculating
Years of Service for such Qualifying Termination under the Plan; provided,
however, that if such severance benefits were terminated prior to
completion because the Employee was rehired by any subsidiary of the
Company then the Employee will be re-credited with full Years of Service
for which severance benefits were not paid in full or in part because of
such termination.
3. Eligibility and Participation.
An Employee who incurs a Qualifying Termination and signs a Release that
has not been revoked during any revocation period under the Release is
eligible to participate in the Plan. An eligible Employee will become a
Participant in the Plan as of the Termination Date.
4. Severance Compensation.
(a) Amount. Subject to Section 8, each Participant will receive during
the Severance Period from the applicable Participating Employer aggregate
severance compensation equal to:
(i) the Participant's Monthly Salary multiplied by the
Participant's Years of Service; plus
(ii) one-twelfth of the Participant's target payout under the
Short-Term Incentive Program of the Participating Employer in effect
at the time of his or her Termination Date multiplied by the
Participant's Years of Service; plus
(iii) an amount to be determined by the Participating Employer at
its sole discretion, which amount may be zero.
(b) Timing of Payments. Except as stated in Section 4(c), and subject to
Section 8,
(i) the sum of any amounts determined under Sections 4(a)(i) and
4(a)(ii) of the Plan will be paid in semi-monthly or bi-weekly
installments (the timing and amount of each installment as
determined by the Participating Employer) during the Severance
Period beginning after the later of the Termination Date or the
Release Date; and
(ii) any amounts determined under Section 4(a)(iii) of the Plan
will be paid in one lump sum within 15 days after the later of the
Termination Date
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or the Release Date, unless otherwise agreed in writing by the
Participating Employer and Participant or otherwise required by law.
(c) Death. In the event of the Participant's death prior to receiving
all payments due under this Section 4, any unpaid severance compensation
will be paid (i) in the same manner as are death benefits under the
Participant's basic life insurance coverage provided by the Participant's
Participating Employer, and (ii) in accordance with the Participant's
beneficiary designation under such coverage. If no such coverage exists,
or if no beneficiary designation exists under such coverage as of the date
of death of the Participant, the severance compensation will be paid to
the Participant's estate in one-lump sum.
5. Health and Welfare Benefits.
(a) Benefits. In addition to the severance compensation provided
pursuant to Section 4 of the Plan, a Participant may continue to
participate in the following health and welfare benefits provided by his
or her Participating Employer during the Severance Period on the same
basis as employees of the Participating Employer:
(i) medical;
(ii) dental;
(iii) vision;
(iv) employee assistance;
(v) medical expense reimbursement and dependent care expense
reimbursement benefits provided under a cafeteria plan;
(vi) life insurance (basic and supplemental); and
(vii) accidental death and dismemberment insurance (basic and
supplemental).
For the purposes of any of the above-described benefits provided under a
Participating Employer's cafeteria plan, a Qualifying Termination
constitutes a "change in status" or "life event."
(b) Payment and Expiration. Payment of the Participant's portion of
contribution or premiums for such selected benefits will be withheld from
any severance compensation payments paid to the Participant under this
Plan. The Participating Employer's partial subsidization of such coverages
will remain in effect until the earlier of:
(i) the expiration or earlier termination of the Employee's
Severance Period, after which time the Participant may be eligible
to elect to continue coverage of those benefits listed above that
are provided under group health
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plans in accordance with his or her rights under Section 4980B of
the Internal Revenue Code; or
(ii) the Participant's attainment of or eligibility to attain
health and welfare benefits through another employer after which
time the Participant may be eligible to elect to continue coverage
of those benefits listed above that are provided under group health
plans in accordance with his or her rights under Section 4980B of
the Internal Revenue Code.
6. Stock Options.
(a) Accelerated Vesting. Any portion of any outstanding incentive
stock options and nonqualified stock options that would have vested
during the 18-month period following the Termination Date had the
Participant remained an employee with the Participating Employer
during such 18-month period will vest as of the Termination Date.
This Section 6(a) applies only to options (i) granted to the
Participant under the Company's 1993 Long-Term Executive
Compensation Plan, or any successor plan to its 1993 Long-Term
Executive Compensation Plan, not less than 6 months prior to his or
her Termination Date and (ii) outstanding at the close of business
on such Termination Date. The determination of accelerated vesting
under this Section 6(a) shall be made as of the Termination Date and
shall be based solely on any time-specific vesting schedule included
in the applicable stock option agreement without regard to any
accelerated vesting provision not related to the Plan in such
agreement.
(b) Post-Termination Exercise Period. Subject to the expiration
dates and other terms of the applicable stock option agreements, the
Participant may elect to have the right to exercise any outstanding
incentive stock options and nonqualified stock options granted prior
to the Termination Date to the Participant under the Company's 1984
Long-Term Executive Compensation Plan, its 1993 Long-Term Executive
Compensation Plan, or any successor plan to its 1993 Long-Term
Executive Compensation Plan that are vested as of the Termination
Date (or, if later, the Release Date), whether due to the operation
of Section 6(a), above, or otherwise, at any time during the
Severance Period and, except in the event that the Severance Period
terminates pursuant to Section 8(a), for a period up to 3 months
after the end of the Severance Period (notwithstanding Section 8).
Any such election shall apply to all outstanding incentive stock
options and nonqualified stock options, will be irrevocable and must
be made in writing and delivered to the Plan Administrator on or
before the later of the Termination Date or Release Date. If the
Participant fails to make an election, the Participant's right to
exercise such options will expire 3 months after the Termination
Date.
(c) Stock Option Agreement Amendment. The operation of Sections
6(a) and 6(b), above, are subject to the Participant's execution of
an amendment to any affected stock option agreements, if necessary.
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7. Outplacement Services. In addition to the benefits described above, career
transition counseling or outplacement services may be provided upon the
Participant's Qualifying Termination. Such outplacement service will be provided
at the Participating Employer's sole discretion. Outplacement services are
designed to assist employees in their search for new employment and to
facilitate a smooth transition between employment with the Participating
Employer and employment with another employer. Any outplacement services
provided under this Plan will be provided by an outplacement service chosen by
the Participating Employer. The Participant is not entitled to any monetary
payment in lieu of outplacement services.
8. Termination of Benefits. Any right of a Participant to severance
compensation and benefits under the Plan, and all obligations of his or her
Participating Employer to pay any unpaid severance compensation or provide
benefits under the Plan will terminate as of the day:
(a) The Participant has engaged in any conduct described in Sections
8(a)(i), 8(a)(ii), 8(a)(iii) or 8(a)(iv), below, as the same may be
limited pursuant to Section 8(a)(vi).
(i) During the Severance Period, the Participant's
engagement in, ownership of, or control of any interest in
(except as a passive investor in less than one percent of the
outstanding securities of publicly held companies), or acting as
an officer, director or employee of, or consultant, advisor or
lender to, any firm, corporation, partnership, limited liability
company, institution, business, government agency, or entity
that engages in any line of business that is competitive with
any Line of Business of the Company, provided that this Section
8(a)(i) shall not apply to the Participant if the Participant's
primary place of employment by a subsidiary of the Company as of
the Termination Date is in either the State of California or the
State of North Dakota.
(ii) During the Severance Period, the Participant employs or
solicits for employment by any employer other than a subsidiary
of the Company any employee of any subsidiary of the Company, or
recommends any such employee for employment to any employer
(other than a subsidiary of the Company) at which the
Participant is or intends to be (A) employed, (B) a member of
the Board of Directors, (C) a partner, or (D) providing
consulting services.
(iii) During the Severance Period, the Participant directly or
indirectly solicits or enters into any arrangement with any
person or entity which is, at the time of the solicitation, a
significant customer of a subsidiary of the Company for the
purpose of engaging in any business transaction of the nature
performed by such subsidiary, or contemplated to be performed by
such subsidiary, for such customer, provided that this Section
8(a)(iii) shall only apply to customers for whom the Participant
personally provided services while employed by a
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subsidiary of the Company or customers about whom or which the
Participant acquired material information while employed by a
subsidiary of the Company.
(iv) During the Severance Period, the Participant
misappropriates or improperly uses or discloses confidential
information of the Company and/or its subsidiaries.
(v) If the Participant engaged in any of the conduct
described in Sections 8(a)(i), 8(a)(ii), 8(a)(iii) or 8(a)(iv)
during or after Participant's term of employment with a
Participating Employer, but prior to the commencement of the
Severance Period, and such engagement becomes known to the
Participating Employer during the Severance Period, such conduct
shall be deemed, for purposes of Sections 8(a)(i), 8(a)(ii),
8(a)(iii) or 8(a)(iv) to have occurred during the Severance
Period.
(vi) If the Participant is a party to an employment contract
with a Participating Employer that contains a covenant or
covenants relating to the Participant's engagement in conduct
that is the same as or substantially similar to the conduct
described in any of Sections 8(a)(i), 8(a)(ii), 8(a)(iii) or
8(a)(iv), and any specific conduct regulated in such covenant or
covenants in such employment contract is more limited in scope
geographically or otherwise than the corresponding specific
conduct described in any of such Sections 8(a)(i), 8(a)(ii),
8(a)(iii) or 8(a)(iv), then the corresponding specific conduct
addressed in the applicable Section 8(a)(i), 8(a)(ii), 8(a)(iii)
or 8(a)(iv) shall be limited to the same extent as such conduct
is limited in the employment contract and the Participating
Employer's rights and remedy with respect to such conduct under
this Section 8 shall apply only to such conduct as so limited.
(b) The Participant is rehired by his or her Participating Employer or
hired by any other subsidiary of the Company in any position other than a
position classified as seasonal by such employer.
9. Amendment and Termination. The Plan Sponsor reserves the right to amend
the Plan or to terminate the Plan and all benefits hereunder in their entirety
at any time.
10. Administration of Plan. The Plan Administrator has the power and
discretion to construe the provisions of the Plan and to determine all questions
relating to the eligibility of employees of Participating Employers to become
Participants in the Plan, and the amount of benefits to which any Participant
may be entitled thereunder in accordance with the Plan. Not in limitation, but
in amplification of the foregoing and of the authority conferred upon the Plan
Administrator, the Plan Sponsor specifically intends that the Plan Administrator
have the greatest permissible discretion to construe the terms of the Plan and
to determine all questions concerning eligibility, participation and benefits.
Any such decision made by the Plan Administrator will be binding on all
Employees, Participants, and beneficiaries, and is intended to be subject to the
most deferential standard of judicial
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review. Such standard of review is not to be affected by any real or alleged
conflict of interest on the part of the Plan Administrator. The decision of the
Plan Administrator upon all matters within the scope of its authority will be
final and binding.
11. Claims Procedures.
(a) Filing a Claim for Benefits. Participants are not required to submit
claim forms to initiate payment of benefits under this Plan. To make a
claim for benefits, individuals other than Participants who believe they
are entitled to receive benefits under this Plan and Participants who
believe they have been denied certain benefits under the Plan must write
to the Plan Administrator. These individuals and such Participants are
hereinafter referred to in this Section 11 as "Claimants." Claimants must
notify the Plan Administrator if they will be represented by a duly
authorized representative with respect to a claim under the Plan.
(b) Initial Review of Claims. The Plan Administrator will evaluate a
claim for benefits under the Plan. The Plan Administrator may solicit
additional information from the Claimant if necessary to evaluate the
claim. If the Plan Administrator denies all or any portion of the claim,
the Claimant will receive, within 90 days after the receipt of the written
claim, a written notice setting forth:
(i) the specific reason for the denial;
(ii) specific references to pertinent Plan provisions on which the
Plan Administrator based its denial;
(iii) a description of any additional material and information
needed for the Claimant to perfect his or her claim and an
explanation of why the material or information is needed; and
(iv) that any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Plan Administrator within 60
days after receipt of the notice of denial of benefits. The notice
must advise the Claimant that his or her failure to appeal the
action to the Plan Administrator in writing within the 60-day period
will render the Plan Administrator's determination final, binding
and conclusive. The notice must further advise the Claimant of his
or her right to bring a civil action under Section 502(a) of ERISA
following the exhaustion of the claims procedures described herein.
(c) Appeal of Denied Claim and Final Decision. If the Claimant should
appeal to the Plan Administrator, the Claimant, or his or her duly
authorized representative, must submit, in writing, whatever issues and
comments the Claimant or his or her duly authorized representative feels
are pertinent. The Claimant, or his or her duly authorized representative,
may review and request pertinent Plan documents. The Plan Administrator
will reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator will advise the Claimant
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in writing of its decision within 60 days of the Claimant's written
request for review, unless special circumstances (such as a hearing)
require an extension of time, in which case the Plan Administrator will
make a decision as soon as possible, but no later than 120 days after its
receipt of a request for review.
12. Plan Financing. The benefits to be provided under the Plan will be paid by
the applicable Participating Employer, as incurred, out of the general assets of
such Participating Employer.
13. General Information. The Plan's records are maintained on a calendar year
basis. The Plan Number is 509. The Plan is self-administered and is considered a
severance plan.
14. Governing Law. The Plan is established in the State of Missouri. To the
extent federal law does not apply, any questions arising under the Plan will be
determined under the laws of the State of Missouri.
15. Enforceability; Severability. If a court of competent jurisdiction
determines that any provision of the Plan is not enforceable, then such
provision shall be enforceable to the maximum extent possible under applicable
law, as determined by such court. The invalidity or unenforceability of any
provision of the Plan, as determined by a court of competent jurisdiction, will
not affect the validity or enforceability of any other provision of the Plan and
all other provisions will remain in full force and effect.
16. Withholding of Taxes. The applicable Participating Employer may withhold
from any benefit payable under the Plan all federal, state, city or other taxes
as may be required pursuant to any law, governmental regulation or ruling. The
Participant shall pay upon demand by the Company or the Participating Employer
any taxes required to be withheld or collected by the Company or the
Participating Employer upon the exercise by the Participant of a nonqualified
stock option granted under the Company's 1984 Long-Term Executive Compensation
Plan or its 1993 Long-Term Executive Compensation Plan. If the Participant fails
to pay any such taxes associated with such exercise upon demand, the
Participating Employer shall have the right, but not the obligation, to offset
such taxes against any unpaid severance compensation under this Plan.
17. Not an Employment Agreement. Nothing in the Plan gives an Employee any
rights (or imposes any obligations) to continued employment by his or her
Participating Employer or other subsidiary of the Company, nor does it give such
Participating Employer any rights (or impose any obligations) for the continued
performance of duties by the Employee for the Participating Employer or any
other subsidiary of the Company.
18. No Assignment. The Employee's right to receive payments of severance
compensation and benefits under the Plan are not assignable or transferable,
whether by pledge, creation of a security interest, or otherwise. In the event
of any attempted assignment or transfer contrary to this Section 18, the
applicable Participating Employer will have no liability to pay any amount so
attempted to be assigned or transferred.
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19. Service of Process. The Secretary of the Plan Administrator is designated
as agent for service of legal process. Service of legal process may be made upon
the Secretary of the Plan Administrator at:
HRB Management, Inc.
Attn: Secretary
4400 Main Street
Kansas City, Missouri 64111
20. Statement of Erisa Rights. As a participant in the Plan, you are entitled
to certain rights and protections under ERISA, which provides that all Plan
Participants are entitled to:
(a) examine without charge, at the Plan Administrator's office, all
documents governing the Plan and a copy of the latest annual report (Form
5500 Series) filed by the Plan with the U.S. Department of Labor and
available at the Public Disclosure Room of the Pension and Welfare Benefit
Administration;
(b) obtain, upon written request to the Plan Administrator, copies of
documents governing the operation of the Plan, copies of the latest annual
report (Form 5500 Series) and an updated summary plan description. The
Plan Administrator may make a reasonable charge for the copies; and
(c) receive a summary of the Plan's annual financial report if required
to be filed for the year. The Plan Administrator is required by law to
furnish each participant with a copy of this summary annual report if an
annual report is required to be filed for the year.
In addition to creating rights for Plan Participants, ERISA imposes duties
upon the people who are responsible for the operation of the Plan. The people
who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so
prudently and in the interest of you and other Plan Participants and
beneficiaries. No one, including your Participating Employer or any other
person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a welfare benefit or exercising your rights under ERISA.
If your claim for a welfare benefit is denied or ignored, in whole or in
part, you have the right to know why this was done, to obtain copies of
documents relating to the decision without charge, and to appeal any denial, all
within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require the Plan Administrator to
provide the materials to you and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the Plan Administrator. If you have a claim for benefits that is
denied or ignored, in whole or in part, you may file suit in a state or Federal
court. If it should happen that you are discriminated against for asserting your
rights, you may seek assistance from the U. S. Department of Labor, or you may
file suit in
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a Federal court. The court will decide who should pay court costs and legal
fees. If you are successful, the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these costs
and fees, for example, if it finds your claim is frivolous.
If you have any questions about the Plan, you should contact the Plan
Administrator. If you have questions about this statement or about your rights
under ERISA, or if you need assistance in obtaining documents from the Plan
Administrator, you should contact the nearest office of the Pension and Welfare
Benefits Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Pension and Welfare Benefits Administration.
IN WITNESS WHEREOF, HRB Management, Inc. adopts this Severance Plan, as amended
and restated, effective this 11th day of August, 2003.
HRB MANAGEMENT, INC.
/s/ Mark A, Ernst
-------------------------------------
Mark A. Ernst
President and Chief Executive Officer
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SCHEDULE A
Participating Employers
Block Financial Corporation
Financial Marketing Services, Inc.
Franchise Partner, Inc.
H&R Block Investments, Inc.
H&R Block Services, Inc. and its U.S.-based direct and indirect subsidiaries
HRB Business Services, Inc.
H&R Block Small Business Resources, Inc.
HRB Management, Inc.
HRB Retail Services, Inc.
OLDE Financial Corporation and its U.S.-based direct and indirect subsidiaries,
which subsidiaries include H&R Block Financial Advisors, Inc.
15