EXHIBIT 10(c)
H&R BLOCK LONG-TERM PERFORMANCE PROGRAM
(As Amended Through 6/21/94)
1. SOURCE OF AWARDS. The Awards provided for under the H&R
Block Long-Term Performance Program (the "Program") shall be
granted pursuant to the terms of the H&R Block, Inc. 1984 Long-
Term Executive Compensation Plan, as amended (the "1984 Plan"),
or any successor long-term compensation plan adopted by the Board
of Directors of H&R Block, Inc., and approved by the Company's
shareholders. Any Award under the Program shall be subject to
the provisions of the plan pursuant to which it was granted. All
capitalized terms used herein shall have the same definitions as
are specified for such terms in the applicable plan.
2. OBJECTIVES. The objectives of the Program are to
provide a meaningful incentive to the senior executives of the
Company, to encourage their continued employment and to vary the
size of Awards made to such senior executives based upon total
shareholder return with respect to the Company's Common Stock.
3. AWARDS. The Awards to be granted under the Program are
Performance Units. The Compensation Committee shall have sole
and absolute power and discretion to determine (a) the senior
executives of the Company to whom Performance Units are to be
awarded under the Program on any date of grant, and (b) the
number of Performance Units to be awarded to each selected
Recipient on any such date of grant. Awards of Performance Units
shall be subject to such additional terms and conditions as the
Committee in its sole discretion deems appropriate.
4. GRANT OF AWARDS. Awards of Performance Units may be
granted by the Committee at any time between May 1 and September
15, inclusive, of any year during which the 1984 Plan or any
successor plan thereto (including, but not limited to, the 1993
Long-Term Executive Compensation Plan) remains in effect. The
Committee shall have the absolute power and discretion to award
no Performance Units in any year. The Program shall not affect
the authority and power of the Committee to grant Performance
Units or other Awards at any time under the 1984 Plan or any
successor plan thereto other than pursuant to the Program.
5. INITIAL VALUE OF PERFORMANCE UNITS. Each Performance
Unit shall have an initial value of one share of the Company's
Common Stock.
6. PERFORMANCE PERIOD. The Performance Period applicable
to each Performance Unit shall be a period of three (3) years.
Such Performance Period shall commence on the May 1 immediately
preceding the date of grant in any year (except that, if the date
of grant is May 1, such May 1 shall be the commencement date) and
shall end on the third April 30 following the date of grant.
7. PAYMENT AND AMOUNT. (a) If the criteria for payment of
a Performance Unit set forth below has been achieved, the
Recipient shall be entitled to receive whole shares of Common
Stock after the end of the applicable Performance Period equal to
the actual value of the Performance Unit at such time. The
Committee shall have authority to modify the criteria for payment
of a Performance Unit during the Performance Period. The target
value of each Performance Unit at the end of a Performance Period
shall be one share of Common Stock. At the end of a Performance
Period the actual value of a Performance Unit may be less than,
equal to or greater than the target value of the Performance
Unit, depending upon the degree to which the criteria for payment
of a Performance Unit has been achieved.
(b) The actual value of a Performance Unit at the end of a
Performance Period shall be determined by (i) dividing the
percentage change in the cumulative total shareholder return on
the Company's Common Stock during the Performance Period,
assuming reinvestment of dividends, by the percentage change in
the cumulative total return of the Standard & Poor's 500 Stock
Index during such Performance Period, assuming reinvestment of
dividends, with the quotient constituting the Performance Ratio,
and (ii) applying the Performance Ratio to the following
schedule:
Performance Actual Value of Each Performance Unit
Ratio As a % of One Share of Common Stock
------------- -------------------------------------
1.5 and above 150% (maximum)
1.0 (target) 100%
.85 (floor) 50%
Below .85 0%
The actual value of a Performance Unit will be computed by
interpolation for Performance Ratios between .85 and 1.0 and
between 1.0 and 1.5. Performance Ratios and actual values shall
be rounded to the third decimal point.
(c) Cumulative total shareholder return on the Company's
Common Stock during any Performance Period shall be measured by
dividing (i) the sum of (A) the cumulative amount of dividends
paid during the Performance Period, assuming dividend
reinvestment, and (B) the difference between the Company's share
price at the end and at the beginning of the Performance Period;
by (ii) the share price at the beginning of the Performance
Period.
(d) The Company's share price at the beginning of the
Performance Period shall be deemed to be the last-reported sale
price for a share of Common Stock on the New York Stock Exchange
as of the April 30 immediately preceding the date of grant and
the Company's share price at the end of the Performance Period
shall be deemed to be the last-reported sale price for a share of
Common Stock on the New York Stock Exchange as of the April 30
which is the last day of the Performance Period.
(e) Payment of Performance Units in whole shares of Common
Stock shall be made as soon as practicable following the
expiration of the applicable Performance Period and determination
by the Committee of the actual value of each Recipient's
Performance Units. No fractional shares shall be paid in
connection with the payment of Performance Units. If the
computation of the total number of shares to be paid to a
Recipient for all of such Recipient's Performance Units results
in a number of shares containing a fraction, such number of
shares shall be rounded up to the next highest whole number of
shares.
(f) Payment of Performance Units shall not be made at any
time when the delivery of shares of Common Stock would, in the
opinion of counsel for the Company, be in violation of any state
or federal securities laws or any regulation or ruling of the
Securities and Exchange Commission. If at any time counsel for
the Company shall determine that qualification or registration of
the Common Stock under any state or federal securities law, or
the consent or approval of any governmental regulatory authority,
is necessary or desirable as a condition of the payment of any
Performance Units under the Program, then such payment shall not
be made, in whole or in part, unless and until such
qualification, registration, consent or approval shall have been
effected or obtained free of any conditions such counsel deems
unacceptable.
8. TAX WITHHOLDING. The Company shall have the right to
require the payment (through withholding from the Recipient's
salary, through withholding of an appropriate number of shares at
the time of delivery of shares under the Program, through cash
payment from the Recipient or through another method) of any
federal, state, local or foreign taxes required by law to be
withheld with respect to the payment of Performance Units under
the Program or to take such other action as may be necessary in
the opinion of the Company to satisfy all obligations for
withholding of such taxes. If Common Stock is used to satisfy
tax withholdings, such Common Stock shall be valued based on the
fair market value of such Common Stock when the tax withholding
is required to be made.
9. FORFEITURES. Except as provided below, or except as
otherwise determined by the Committee in its sole and absolute
discretion, if a Recipient's employment with the Company is
terminated for any reason prior to the end of a Performance
Period, the Recipient shall forfeit all Performance Units
previously granted to the Recipient with respect to such
Performance Period. If, prior to the completion of a Performance
Period, a Recipient's employment with the Company is terminated
by reason of the Recipient's death, disability (as determined by
the Committee) or retirement, the Recipient, or in the event of
the Recipient's death, the person or persons to whom the
Recipient's rights pass by the Recipient's will or by the laws of
descent and distribution, shall receive a prorated payment for
such Performance Period based on the Recipient's actual number of
full months of employment with the Company during the Performance
Period. Any such prorated payment shall be made at the time of
payment of Performance Units to other Recipients who did not
terminate employment during the applicable Performance Period.
For purposes of the Program, unless the Committee in its sole and
absolute discretion otherwise determines, "retirement" shall
occur only after any time that the Recipient attains the age of
65 and voluntarily terminates his or her employment with the
Company.
10. TERMINATION OR AMENDMENT. The Program may be
terminated at any time by the Committee or the Company's Board of
Directors except as to Performance Units then outstanding
hereunder. The Program may be amended at any time by the
Committee or the Company's Board of Directors.