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EXHIBIT 10(A)
AMENDMENT NO. 10
TO THE
H&R BLOCK DEFERRED COMPENSATION PLAN
FOR EXECUTIVES
H&R BLOCK, INC. (the "Company") adopted the H&R Block Deferred
Compensation Plan for Executives (the "Plan"), effective as of August 1, 1987.
The Company amended said Plan by Amendment No. 1, effective December 15, 1990;
by Amendment No. 2, effective January 1, 1990; by Amendment No. 3, effective
September 1, 1991; by Amendment No. 4, effective January 1, 1994; by Amendment
No. 5, effective May 1, 1994; by Amendment No. 6, effective August 1, 1995; by
Amendment No. 7, effective December 11, 1996; by Amendment No. 8, effective
January 1, 1998; and by Amendment No. 9 effective as of January 1, 1997. 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 No. 10 is effective as of March 1, 1998, except for those
provisions in Paragraphs 16, 17(ii) and 18, which are effective as of April 1,
1998.
AMENDMENT
1. The first sentence of the introductory paragraph of the Plan is
replaced with the following new sentence:
"H&R Block, Inc. (the "Company") hereby establishes,
effective August 1, 1987, a nonqualified deferred
compensation plan for the benefit of specified Executives of
the Company and such other entities as may be designated by
the Company from time to time."
2. The following new Section 2.1.1a is added to the Plan immediately
after Section 2.1.1 and before Section 2.1.2:
"2.1.1a 'Account Executive' means a person who has the
title of Account Executive, is employed on a full-time basis
by a Participating Affiliate, and is responsible for
managing, overseeing, directing or handling the accounts of
clients of the Participating Affiliate."
3. Section 2.1.4 of the Plan, as previously amended, is further
amended by replacing said Section 2.1.4 with the following new Section 2.1.4:
"2.1.4 'Annual Deferral Amount' means the amount of
Base Salary, and/or Bonus that a Participant elects to defer
each Plan Year under a Permissible Deferral. For those
individuals first eligible to participate in the Plan prior
to March 1, 1998, the amount of Base Salary included in the
Annual Deferral Amount shall be equal to a percentage of the
Participant's Base Salary that is not less than three
percent (3%) and not greater than thirty-five percent (35%),
and the amount of Bonus or Bonuses included in the Annual
Deferral Amount shall be equal to (i) a flat dollar amount,
expressed in one thousand dollar ($1,000) increments, or
(ii) a percentage of the Bonus or Bonuses paid during the
Plan Year that is not less than five percent (5%) and not
greater than one hundred percent (100%), expressed in
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five percent (5%) increments. For those individuals eligible to
participate in the Plan on or after March 1, 1998, the
amount of Base Salary included in the Annual Deferral Amount
shall be equal to a percentage within such parameters as are
established by the Committee in its sole and absolute
discretion, and the amount of Bonus or Bonuses included in
the Annual Deferral Amount shall be equal to a percentage or
flat dollar amount within such parameters as are established
by the Committee.
4. Section 2.1.5 of the Plan, as previously amended, is further
amended (i) by replacing the words "a Participant" in the first sentence with
the words "an Executive"; (ii) by inserting the following sentence after the
first sentence thereof:
"The 'Base Salary' of an Account Executive for any Plan Year
means the total earnings and wages, including any and all
commissions, incentives and bonuses, paid by all Affiliates
to such individual during that Plan Year, including any
amount which would be included in the definition of Base
Salary, but for the individual's election to defer some of
his or her earnings pursuant to this Plan or some other
deferred compensation plan established by an Affiliate; but
excluding any other remuneration paid by Affiliates, such as
overtime, stock options, distributions of compensation
previously deferred, restricted stock, allowances for
expenses (including moving, travel expenses, and automobile
allowances), and fringe benefits payable in a form other
than cash.";
and (iii) by inserting the phrase "or earnings" after the phrase "reduce his
salary" in the last sentence of such Section.
5. Section 2.1.8 of the Plan is amended (i) by replacing the words "a
Participant" in the first sentence with the words "an Executive"; and (ii) by
adding the following new sentence to the end of this Section:
"For the purposes of this Plan, the terms Bonus and Bonuses
specifically exclude any and all types of commissions,
incentives or bonuses paid by any Affiliate to an Account
Executive."
6. Section 2.1.17 of the Plan is replaced by the following new Section
2.1.17:
"2.1.17 'Enrollment Period for a Plan Year commencing
on January 1 means the immediate preceding period of October
1 through December 15. For the Plan Year for Group A
Participants and Group B Participants first participating in
the Plan on March 1, 1998, 'Enrollment Period' means the
immediately preceding period of January 1 through February
20, 1998. At its sole and absolute discretion, the
Committee may grant to a person eligible to participate in
the Plan as a Group A Participant or a Group B Participant
an 'Enrollment Period' consisting of the 30-day period
immediately following the date on which such person is
employed by an Affiliate."
7. Section 2.1.21 of the Plan is replaced with the following new
Section 2.1.21:
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"2.1.21 'Participant' means an Executive or an Account
Executive who is eligible to participate in the Plan and has
elected to participate in the Plan."
8. Section 2.1.22 of the Plan is replaced with the following new
Section 2.1.22:
"2.1.22 'Participating Affiliate' or 'Participating
Affiliates' means the Company and the following indirect
subsidiaries of the Company: HRB Management, Inc., H&R
Block Tax Services, Inc., Block Financial Corporation,
Option One Mortgage Corporation, and the U.S. subsidiaries
of such indirect subsidiaries; and such other entities as
may be designated as such by the Company from time to time."
9. Section 2.1.23 of the Plan, as previously amended, is further
amended by replacing the second and third sentences of the first paragraph
thereof with the following new sentences:
"For Executives, the aggregate of all deferrals may not
exceed two hundred eighty percent (280%) of the Executive's
total annual salary and wages paid by all Affiliates to such
individual, as determined as of the later of July 1, 1987 or
the date on which the Executive first became eligible to
participate in the Plan. For Account Executives, the
aggregate of all deferrals may not exceed two hundred eighty
percent (280%) of the Account Executive's aggregate earnings
and wages paid by all Affiliates to such individual during
the twelve-month period ending on September 30 of the
calendar year immediately preceding the Plan Year in which
the Account Executive first becomes eligible to participate
in the Plan. For purposes of the two immediately preceding
sentences, such annual salary and wages and such annual
earnings and wages shall include and exclude the same items
of remuneration as are included or excluded from annual
salary and wages and annual earnings and wages in the
definition of Base Salary."
10. Section 2.1.25 of the Plan is replaced with the following new
Section 2.1.25:
"2.1.25 'Plan Year' means the calendar year (i) for
all Permissible Deferrals elected by Group B Participants,
except for those Permissible Deferrals elected to commence
on March 1, 1998, (ii) for Permissible Deferrals of Group A
Participants elected to commence January 1, 1991 or later,
except for those Permissible Deferrals elected to commence
on March 1, 1998, and (iii) for all Permissible Deferrals
and for all purposes when used in Sections 4.3, 4.4, 6.2,
6.3, 6.4, 6.6 and 6.7. For Permissible Deferrals of Group A
Participants elected to commence on or before May 1, 1990,
'Plan Year' means the twelve month period ending each April
30, through April 30, 1997, the period between May 1, 1997
and December 31, 1997, inclusive, and the calendar year
thereafter. For Permissible Deferrals of Group A
Participants and Group B Participants elected to commence on
March 1, 1998, 'Plan Year' means the ten-month period
between March 1, 1998 and December 31, 1998, inclusive, and
the calendar year thereafter. If the Committee grants to a
person eligible to participate in the Plan as a Group A
Participant or a Group B Participant a discretionary
Enrollment Period in accordance with Section 2.1.17 and such
person submits to the
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Company a Permissible Deferral election, such Participant's
first 'Plan Year' shall be the period (i) beginning on the first
day of his or her first regular pay period commencing not less than
30 days after the Company's receipt of his or her Permissible
Deferral election, and (ii) ending on December 31 of the year in
which such pay period falls."
11. Section 3.1.2 of the Plan is amended by inserting the words "or
Account Executives" after the word "Executives" therein.
12. Section 3.2 of the Plan, as previously amended, is further amended
(i) by inserting the words "or Account Executive" after the word "Executive";
and (ii) by deleting the comma and phrase ", and subject to the provisions of
Sections 3.6 and 3.7" from the last sentence of said Section.
13. Section 3.3 of the Plan, as previously amended, is further amended
(i) by inserting the word "or" in between subsections (b) and (c) thereof; (ii)
by replacing the comma at the end of subsection (c) with a period; (iii) by
deleting the word "or" in between subsections (c) and (d) thereof; and (iv) by
deleting subsection (d) thereof.
14. Section 3.6 of the Plan is amended by replacing it with the
following new Section 3.6:
"Section 3.6 Changes in Employment Status. If a
Participant has a change in his or her employment
responsibilities, title and/or compensation, such that the
Participant would not qualify for initial participation in
the Plan as a Group A Participant or Group B Participant, as
determined by the Committee, (i) the Participant shall
continue to make deferrals in accordance with the
Participant's Permissible Deferral election for the Plan
Year during which the change in employment responsibilities,
title and/or compensation occurs, (ii) the Participant shall
not be eligible to make Permissible Deferrals in Plan Years
following the Plan Year during which the change in
employment responsibilities, title and/or compensation
occurs unless and until the Participant again qualifies for
initial participation as a Group A Participant or a Group B
Participant, as determined by the Committee, and (iii) the
Participant shall otherwise continue to participate in the
Plan.
15. Section 3.7 of the Plan is deleted therefrom in its entirety.
16. Section 4.1.1 of the Plan, as previously amended, is further amended
by replacing the phrase "of the following calendar month" in the last sentence
of the second paragraph thereof with the phrase "that month".
17. Section 4.1.2 of the Plan, as previously amended, is further amended
(i) by replacing the second and third sentences of the first paragraph thereof
with the following new sentences:
"For each $1.00 of Base Salary or Bonus deferred pursuant to
Section 4.1.1, the Company shall post an additional .50 to
the Participant's Account,
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provided, however, that for Executives, the total of all
Matching Contributions made pursuant to this Section 4.1.2 shall
not exceed one hundred forty percent (140%) of the Executive's
total annual salary and wages paid by all Affiliates to such
individual, as determined as of the later of July 1, 1998 or the
date on which the Executive first became eligible to participate in
the Plan, and for Account Executives, the total of all Matching
Contributions shall not exceed one hundred forty percent (140%) of
the Account Executive's aggregate earnings and wages paid by all
Affiliates to such individual during the twelve-month period ending
on September 30 of the calendar year immediately preceding the Plan
Year in which the Account Executive first becomes eligible to
participate in the Plan. For purposes of the two immediately
preceding sentences, such annual salary and wages and such annual
earnings and wages shall include and exclude the same items of
remuneration as are included or excluded from annual salary and
wages and annual earnings and wages in the definition of Base
Salary.";
and (ii) by replacing the phrase "of the following calendar month" in the first
sentence of the second paragraph thereof with the phrase "that month".
18. Section 4.1.3 of the Plan, as previously amended, is further amended
by replacing the phrase "of the following calendar month" in the first sentence
of the second paragraph thereof with the phrase "that month".
19. Section 6.4.2 of the Plan is amended (i) by replacing the phrase
"Section 6.4.5" in the first sentence thereof with the phrase "Section 6.4.4";
and (ii) by replacing the phrase "either Section 6.4.3 or Section 6.4.4" in the
last sentence thereof with the phrase "Section 6.4.3".
20. Section 6.4.3 of the Plan is amended by replacing it with the
following new Section 6.4.3:
"6.4.3 The amount of each level payment for the Initial
Payment Period, if any, shall be calculated using the balance
in the Account as of the beginning of the Initial Payment Period
and amortizing such balance over the remaining Overall Payment
Period using an assumed 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 the September 30
immediately preceding the payment period to which it applies, as
published by Solomon Brothers, Inc., or any successor thereto, or
as determined by the Chief Financial Officer of the Company (the
"Assumed Interest Rate"). The amount of each level payment for
each Calendar Year Payment Period shall be calculated by taking the
balance in the Account as of November 30 of the calendar year
immediately prior to such Calendar Year Payment Period, subtracting
the benefit payments made during the portion of such calendar year
following November 30, and amortizing the difference over the
remaining Overall Payment Period using the Assumed Interest Rate.
The amount of each level payment for the Remainder Payment Period,
if any, shall be calculated by taking the balance in the Account as
of November 30 of the calendar year immediately prior to the
Remainder Payment Period, subtracting the benefit payments made
during the portion of such calendar year following November 30, and
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amortizing the difference over the Remainder Payment Period
using an assumed interest rate of zero percent (0%) per annum. If
the actual crediting rate for the Remainder Payment Period is more
than zero percent, the additional gain resulting from the
difference shall be paid to the Participant in a single payment
within six months after the last day of the Remainder Payment
Period."
21. Section 6.4.4 of the Plan is deleted, and Sections 6.4.5, 6.4.6 and
6.4.7 are redesignated as Sections 6.4.4, 6.4.5 and 6.4.6, respectively.
22. Section 6.4.6 (previously Section 6.4.7) of the Plan is amended by
replacing the reference to "Section 6.4.4" therein with the phrase "Section
6.4.3".
23. Section 9.1 of the Plan, as previously amended, is further amended
by replacing the references to "Section 6.4.4" and "Section 6.4.7" therein with
the phrases "Section 6.4.3" and "Section 6.4.6", respectively.
24. Except as modified in this Amendment No. 10, 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.
H&R BLOCK, INC.
By: /s/ Frank L. Salizzoni
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Its: President and Chief Executive Officer
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