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EXHIBIT (10)(c)
AMENDMENT NO. 2
TO H&R BLOCK
SUPPLEMENTAL DEFERRED COMPENSATION PLAN FOR EXECUTIVES
H&R BLOCK, INC. (the "Company"), adopted the H&R Block Supplemental Deferred
Compensation Plan for Executives (the "Plan") effective as of May 1, 1994. The
Company amended the Plan by Amendment No. 1 effective September 7, 1994. The
Company continues to retain the right to amend the Plan, pursuant to action by
the Company's Board of Directors. The Company hereby exercises that right.
This amendment is effective as of August 1, 1995.
AMENDMENT
1. The Plan is amended by adding the following new Section 2.1.8a immediately
after Section 2.1.8 and immediately prior to Section 2.1.9:
"2.1.8a 'BUSINESS DAY' for purposes of the Plan means a day on
which the Common Stock is traded on the New York Stock Exchange."
2. Section 4.1.2 of the Plan is amended by adding the following new paragraph
at the end of said Section:
"The Company shall post to the Account of such Participant for
the calendar month in which any Plan Year contribution is made by the
Company pursuant to the first paragraph of this Section 4.1.2 a number of
Deferred Compensation Units equal to (i) the dollar amount of any such Plan
Year contribution made during such month; divided by (ii) the Closing Price
on the first Business Day of the following calendar month. Deferred
Compensation Units attributable to any contribution made by the Company
pursuant to the first paragraph of this Section 4.1.2 shall be posted as
of the same time as such corresponding contributions."
3. Section 4.1.3 of the Plan is amended by adding the words "and Company
Contributions (and the corresponding number of Deferred Compensation Units)"
after the word "deferrals" in the first sentence of said Section 4.1.3, and by
adding the word and numbers "and 4.1.2" after the numbers "4.1.1" in said first
sentence.
4. Section 4.3 of the Plan, as previously amended, is further amended by
replacing such Section 4.3 with the following new Section 4.3:
"Section 4.3 Valuation For Purposes of Computing Benefit Payments.
4.3.1 Valuation Upon Retirement, Death, Disability or
Termination of Employment with all Affiliates as a Result of a Change
in Control. If a Participant terminates employment with all
Affiliates (a) before Normal Retirement Date or Early Retirement Date
as a result of a Change of
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Control, or (b) at or after Normal Retirement Date or Early Retirement
Date, or if a Participant dies prior to the termination of
employment, his or her Account shall be valued for purposes of
determining benefit payments under Article 6 as of the first Business
Day of the calendar month which immediately follows the calendar
month in which the termination of employment or death occurs, as
described in Section 4.2. If a Participant is Disabled, his or her
Account shall be valued for purposes of determining benefit payments
under Article 6 as of the first Business Day of the first calendar
month that immediately follows the later of (i) the calendar month in
which his or her Early Retirement Date occurs, or (ii) the calendar
month in which the last day of the 90-day period referred to in
Section 4.1.3 occurs. Except for distributions in the form of a lump
sum and distributions pursuant to Section 6.6.2, a Participant's
Account shall be valued on the first Business Day of each calendar
year following the calendar year in which benefit payments commence,
as described in Section 6.4.2.
4.3.2 Valuation Upon Resignation or Discharge. If a
Participant terminates employment with all Affiliates before Normal
Retirement Date or Early Retirement Date for reasons other than death,
Disability, or a Change in Control, his or her Account shall be valued
for purposes of determining benefit payments under Article 6 as of
the first Business Day of the calendar month which immediately follows
the calendar month in which the termination of employment occurs, as
described in Section 4.2. Earnings after such valuation date shall be
credited at an annual interest rate equal to the rate of one-year
United States Treasury notes. The rate of one-year United States
Treasury notes will be determined once each Plan Year and will be the
rate in effect as of September 30 of the Plan Year immediately prior
to the Plan Year to which it applies, as published by Salomon
Brothers, Inc., or any successor thereto, or as determined by the
Chief Financial Officer of the Company."
5. Section 6.2 of the Plan is amended by replacing the fifth sentence of the
second paragraph thereof with the following new sentence:
"Interest compounded annually shall be paid by the Company to the
Participant (or the Participant's Beneficiary if the Participant is
deceased) on any such refund from the date of the Company's payment of the
lump sum at an annual rate equal to the rate of one-year United States
Treasury notes in effect as of September 30 of the Plan Year immediately
prior to the Plan Year in which such refund is paid, as published by Salomon
Brothers, Inc.,
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DEFERRED COMPENSATION PLAN FOR EXECUTIVES
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or any successor thereto, or as determined by the Chief Financial Officer of
the Company."
6. Section 6.3 of the Plan, as previously amended, is replaced with the
following new Section 6.3:
"Section 6.3 Form of Benefits Upon Resignation or Discharge, or
Termination of Employment with all Affiliates as a Result of Change of
Control.
6.3.1 Upon a Participant's termination of employment with all
Affiliates before Normal Retirement Date or Early Retirement Date, but
following a Change of Control, payments from the Account shall be paid
in a lump sum within ninety (90) days after the date of the
termination of employment.
6.3.2 If a Change of Control has not occurred, for
Participants who terminate employment with all Affiliates on or after
August 1, 1995, but before the Normal Retirement Date or the Early
Retirement Date, for reasons other than Disability or death,
payment(s) from the Account shall be in the form of (a) semimonthly
payments over a 10-year period (a "10-year payout"); (b) semimonthly
payments over a five-year period (a "5-year payout"); or (c) a lump
sum, as elected by the Participant at the time of said Participant's
first Permissible Deferral election, or, in the case of a Participant
who made one or more Permissible Deferral elections prior to August 1,
1995, as elected by the Participant in writing during a special
election period between August 15, 1995 and September 15, 1995,
inclusive (the "Special Election Period"). If a Participant has
actual knowledge of the forthcoming termination of his or her
employment with all Affiliates (the possession of such actual
knowledge to be determined by the Committee), no election may be made
by such Participant during the Special Election Period under this
Section 6.3.2 (and, if the Committee determines that an election was
made by a Participant with such actual knowledge, such election shall
be null and void).
6.3.3 If no election under Section 6.3.2 is made by the
Participant eligible to make such an election, payment from the
Account shall be in the form of a lump sum. An election made in
accordance with Section 6.3.2 shall apply to all Permissible Deferral
elections made by the Participant under the Plan and is irrevocable.
6.3.4 If an eligible Participant has elected a 10-year payout
or a 5-year payout pursuant to Section 6.3.2, and the amount of each
semimonthly
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DEFERRED COMPENSATION PLAN FOR EXECUTIVES
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installment, as initially calculated, is less than $500 (such
calculation to be accomplished by amortizing the value of the
Participant's Account over the payment period using a crediting rate
equal to the rate of one-year United States Treasury notes in effect
as of September 30 of the Plan Year prior to the Plan Year in which
the termination of employment occurs), the form of payment(s) for such
Participant shall be a 5-year payout in lieu of an elected 10-year
payout (unless the amount of each semimonthly installment under a
5-year payout, as so calculated, is also less than $500, in which case
the form of payment will be a single lump sum), or a lump sum in lieu
of an elected 5-year payout, as the case may be.
6.3.5 Notwithstanding any other provisions of the Plan, an
eligible Participant who (1) elects either a 10-year payout or a
5-year payout and either such payout is not automatically converted to
a lump sum pursuant to Section 6.3.4, and (2) terminates employment
before the Normal Retirement Date or the Early Retirement Date may, at
any time before or after a Change in Control, elect to receive an
immediate lump-sum payment of the value of said Participant's Account
reduced by a penalty, which shall be forfeited to the Company, in lieu
of payments in accordance with the 10-year payout or the 5-year
payout, whichever is applicable. The penalty shall be equal to ten
percent (10%) of the value of such Account if the election is made
before a Change in Control and shall be equal to five percent (5%) of
the value of such Account if the election is made after a Change in
Control. However, the penalty shall not apply if the Committee
determines, based on advice of counsel or a final determination or
ruling by the Internal Revenue Service or any court of competent
jurisdiction, that by reason of the provisions of this paragraph any
Participant has recognized or will recognize gross income for federal
income tax purposes under this Plan in advance of payment to the
Participant of Plan benefits. The Company shall notify all
Participants of any such determination by the Committee and shall
thereafter refund all penalties which were imposed hereunder in
connection with any lump-sum payments made at any time during or after
the first year to which the Committee's determination applies (i.e.,
the first year for which, by reasons of the provisions of this
paragraph, gross income under this Plan is recognized for federal
income tax purposes in advance of payment of benefits). Interest
compounded annually shall be paid by the Company to the Participant
(or the Participant's Beneficiary if the Participant is deceased) on
any such refund
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DEFERRED COMPENSATION PLAN FOR EXECUTIVES
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from the date of the Company's payment of the lump sum at an annual
rate equal to the rate of one-year United States Treasury notes in
effect as of September 30 of the Plan Year immediately prior to the
Plan Year in which such refund is paid, as published by Salomon
Brothers, Inc., or any successor thereto, or as determined by the
Chief Financial Officer of the Company. The Committee may also reduce
or eliminate the penalty if it determines that the right to elect an
immediate lump-sum payment under this paragraph, with the reduced
penalty or with no penalty, as the case may be, will not cause any
Participant to recognize gross income for federal income tax purposes
under this Plan in advance of payment to the Participant of Plan
benefits."
7. Section 6.4 of the Plan, as previously amended, is replaced with the
following new Section 6.4:
"Section 6.4. Amount of Benefit.
6.4.1 Except for distributions in the form of a lump sum,
benefit payments shall be in the form of semimonthly cash installments
paid during the applicable payment period (the "Overall Payment
Period"). The amount of each installment payment shall be level
during the portion of the Overall Payment Period ending on December 31
of the Plan Year in which benefit payments commence (the "Initial
Payment Period"), during each complete Plan Year of the Overall
Payment Period thereafter (a "Plan Year Payment Period"), and during
any remaining period of the Overall Payment Period following the last
Plan Year Payment Period (the "Remainder Payment Period"), but will
vary from one such portion of the Overall Payment Period to the next.
6.4.2 Except for distributions pursuant to Section 6.3, the
amount of each level benefit payment for the Initial Payment Period,
if any, shall be calculated using the balance in the Account as of the
valuation date specified in Section 4.3.1 and dividing it by the total
number of semimonthly periods in the Overall Payment Period. For each
Plan Year Payment Period, and for the Remainder Payment Period, if
any, the amount of each level benefit payment shall be adjusted to
reflect the value of the Account as of the first Business Day of such
Plan Year Payment Period or Remainder Payment Period, as the case may
be, and shall be calculated by dividing the balance in the Account as
of such first Business Day by the total number of semimonthly periods
remaining in the entire payment period.
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DEFERRED COMPENSATION PLAN FOR EXECUTIVES
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6.4.3 For distributions pursuant to Section 6.3 (other than
pursuant to Section 6.3.1), the amount of each level benefit payment
for the Initial Payment Period, if any, for each Plan Year Payment
Period, and for the Remainder Payment Period, if any, shall be
calculated using the balance in the Account as of the beginning of the
applicable payment period and amortizing such balance over the
remaining Overall Payment Period at the crediting rate specified in
Section 4.3.2, such that the Account balance at the end of the Overall
Payment Period is zero.
6.4.4 Generally, the Account shall continue to be credited
during the Overall Payment Period with gains and losses as provided in
Section 4.3.1. However, if a Participant receives benefits pursuant to
Section 6.3 (other than pursuant to Section 6.3.1), the Account shall
be credited with gains and losses as provided in Section 4.3.2.
Except as provided otherwise, if a Participant dies, Section 6.6 shall
apply."
8. Section 6.6.1 of the Plan, as previously amended, is further amended by
replacing said Section 6.6.1 with the following new Section 6.6.1:
"6.6.1 Death After Benefit Commencement. In the event a
Participant dies after benefit payments have commenced (other than
payments made pursuant to Section 6.7), the remaining benefit
payments, if any, shall be paid to the Participant's Beneficiary in
the same manner such benefits would have been paid to the Participant
had the Participant survived. A Beneficiary may petition the
Committee for an alternative method of payment. If such benefits were
payable pursuant to Section 6.3, the Account shall continue to be
valued during the payout period as provided in Sections 4.2, 4.3.2,
and 6.4.3. If such benefits were payable pursuant to Section 6.2, the
Account shall continue to be valued during the payment period as
provided in Sections 4.2, 4.3.1 and 6.4.2. The Participant's
Beneficiary may make the election to receive an immediate lump-sum
payment of the balance of said Participant's Account in accordance
with the provisions of Section 6.2 or Section 6.3.5, whichever is
applicable, and all provisions therein relating to penalties shall
apply to such election."
9. Section 6.6.2 of the Plan, as previously amended, is further amended (1) by
replacing the second sentence of the first paragraph of such Section with the
following new sentence:
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DEFERRED COMPENSATION PLAN FOR EXECUTIVES
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"The amount of such pre-retirement death benefit is the Participant's
Account as of the first Business Day of the calendar month which
immediately follows the calendar month in which the Participant's
death occurs annuitized over a ten-year period at an interest rate
equal to the rate of one-year United States Treasury notes in effect
as of September 30 of the Plan Year immediately prior to the Plan Year
in which payment of the pre-retirement death benefit commences, as
published by Salomon Brothers, Inc., or any successor thereto, or as
determined by the Chief Financial Officer of the Company."
and (2) by replacing the third sentence of the second paragraph of said Section
with the following new sentence:
"Earnings on the Account shall continue to be credited during the
payment period at an interest rate equal to the rate of one-year
United States Treasury notes, said rate to be determined once each
Plan Year and to be the rate in effect as of September 30 of the Plan
Year immediately prior to the Plan Year to which it applies, as
published by Salomon Brothers, Inc., or any successor thereto, or as
determined by the Chief Financial Officer of the Company."
10. Section 9.1 of the Plan, as previously amended, is further amended by
replacing the fourth sentence of said Section with the following new sentence:
"Notwithstanding anything in this Section 9.1 to the contrary, the
Committee may, in its discretion, amend the Plan to reduce or
eliminate the penalty described in Section 6.2 and/or the penalty
described in Section 6.3.5, in accordance with the provisions of such
Section 6.2 and/or such Section 6.3.5."
11. Except as modified in this Amendment No. 2, the Plan, as previously
amended, shall remain in full force and effect, including the Company's right
to amend or terminate the Plan as set forth in Article 9 of the Plan, amended
as provided above.
H&R BLOCK, INC.
By______________________________
Its_____________________________
AMENDMENT NO. 2 TO SUPPLEMENTAL
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
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