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EXHIBIT (10)(b)
H&R Block, Inc. Richard H. Brown
4410 Main Street President and
Kansas City, Missouri 64111 Chief Executive Officer
(816) 932-7577
Fax (816) 753-8628
December 20, 1995
BY FAX (610-525-7947) AND BY OVERNIGHT DELIVERY
Mr. George T. Robson
300 Caversham Road
Bryn Mawr, Pennsylvania 19010
Dear George:
I am delighted you have accepted my offer of employment as Chief Financial
Officer of H&R Block, Inc. and I offer my sincere congratulations. I am
looking forward to working with you.
As is the case with other officers of the parent holding company, your actual
employer will be HRB Management, Inc. ("HRB"), an indirect wholly owned
subsidiary of H&R Block, Inc. ("Block"). We have agreed that your employment
with HRB will commence on January 15, 1995, or on such earlier date as you are
able to leave your current employment and assume your responsibilities at
Block. This letter will confirm the various matters that we have discussed
relating to your compensation.
1. You will receive a base annual salary of $400,000, with a review of
your salary by the Compensation Committee of the Board of Directors in June
1996 and any resulting adjustment effective in September 1996.
2. You will participate in the H&R Block Management Incentive Plan for
fiscal year 1996 (the year ended April 30, 1996), with a target bonus amount
for such year of $230,000. You will be paid $100,000 of such bonus on the
effective date of your employment by HRB and the $100,000 is nonforfeitable.
Any remaining bonus earned will be paid following the close of Block's books
for the fiscal year (usually on or about June 30). Under the Plan, the actual
award can range from zero to 150% of the target bonus amount, depending upon
the attainment of certain financial goals by Block. For purposes of the
Management Incentive Plan for fiscal year 1996, you will be considered to have
been employed since May 1, 1995, and your actual award will not be prorated.
3. You will be eligible to participate in the H&R Block Deferred
Compensation Plan for Executives in accordance with the provisions of such
Plan. The Plan allows you to defer up to 35% of your base salary each year and
up to 100% of bonus compensation, subject to
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Letter to Mr. George T. Robson
December 20, 1995
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aggregate maximum deferrals for all years under the Plan of 280% of base
salary. The Plan provides for a Company match of $.50 for each dollar
deferred.
4. On the effective date of your employment, you will be granted an
option to purchase 150,000 shares of Block Common Stock with an option price
equal to the closing price for such stock on the New York Stock Exchange on the
date of grant. The options will vest in one-third annual increments,
commencing one year after the date of grant.
5. You will be eligible to participate in the H&R Block Executive
Survivor Plan. The ESP provides for basic term life insurance coverage at
Company expense in an amount equal to three times your base salary. You also
have the opportunity to obtain supplemental coverage equal to two times your
base salary, at reasonable premiums, and to prepay post-retirement premiums.
6. You will be protected against an involuntary "Change of Control" of
Block, should such a Change of Control occur during the five-year period
following the commencement of your employment with HRB. If at any time during
the one-year period following such involuntary Change of Control, your
employment is terminated without "cause" under Block's or HRB's policies in
existence immediately prior to the Change of Control, or if you terminate your
employment for any reason (or no reason) during the 60-day period following
such involuntary Change of Control of Block, certain elements of your
compensation will continue.
HRB will continue to pay your base salary for a two-year period following such
termination, HRB will pay to you bonus compensation for the fiscal year in
which the termination occurs and for the fiscal year following the year of
termination, such bonus compensation to be equal to the target award amount
for the year in which the termination occurs, vesting of nonvested stock
options will accelerate and all stock options may be exercisable for three
months following termination, and HRB will continue health, life and disability
insurance benefits for up to two years following the termination to the extent
that you do not obtain similar benefits from another party.
An involuntary Change of Control means (i) acquisition of beneficial ownership
of 50% or more of Block's voting securities by an individual, entity or group
other than Block or any of its affiliates without the prior approval of the
Board of Directors of Block, or (ii) turnover of more than a majority of the
directors on the Board of Directors of Block as a result of a proxy contest or
series of proxy contests under the Securities and Exchange Commission proxy
rules.
On the fifth anniversary of your employment by HRB, Block will consider and
discuss with you the possible extension of the Change of Control provisions.
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Letter to Mr. George T. Robson
December 20, 1995
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7. HRB provides to the officers of Block an income tax return preparation
benefit pursuant to which HRB will reimburse you for fees that you pay for
income tax return preparation services. You may select H&R Block, its
Executive Tax Service, or another firm as the preparer of your returns. HRB
will also "gross up" the amount of the reimbursement to cover any additional
taxes that you will pay by virtue of the reimbursement of tax preparation fees.
8. HRB will provide to you at its expense a personal computer and a
facsimile machine for use by you at your home during the term of your
employment.
9. As an HRB employee, you will be eligible for a full range of employee
benefits as per HRB's normal executive benefit program.
10. HRB will assist in your move to the Kansas City area in accordance
with its normal relocation program, a copy of which is attached hereto. In
addition, you will be paid a $10,000 allowance for incidental expenses related
to your move to Kansas City.
If the foregoing reflects your understanding of the your compensation and
benefits, please sign the acknowledgement below.
I am confident that your contribution to H&R Block's growth will be
significant. We look forward to your joining our management team.
Sincerely,
/s/ Richard H. Brown
Acknowledgement:
/s/George T. Robson
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George T. Robson