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EXHIBIT (10)(c)
AMENDMENT NO. 2
TO THE
H&R BLOCK
DEFERRED COMPENSATION PLAN FOR DIRECTORS
H&R BLOCK, INC. (the "Company"), adopted the H&R Block Deferred
Compensation Plan for Directors (the "Plan") effective as of September 1, 1987.
The Company amended said Plan by Amendment No. 1 effective May 1, 1995. 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. 2 is effective as of December 11, 1996.
AMENDMENT
1. Section 2.1.15 of the Plan, as previously amended, is further
amended by deleting the following phrases: "CompuServe Incorporated," and "and
MECA Software, Inc.,".
2. Section 2.1.20 of the Plan is amended by replacing the word
"monthly" with "semimonthly".
3. Section 4.2.1 of the Plan, as previously amended, is further
amended by replacing the phrase "April 30" in the second sentence of said
Section with "September 30".
4. Section 6.1 of the Plan is amended by replacing the phrase
"Participant as a Director" in subsection (a) thereof with "Participant's
membership on all Boards of Directors of all Participating Affiliates".
5. Section 6.2 of the Plan is replaced with the following new
Section 6.2:
"Section 6.2. Form of Benefits for Distributions
Made for Reasons Other Than Death.
6.2.1. For distributions made for reasons other than the
death of the Participant, payments from the Account shall be
made in accordance with the Standard Form of Benefit.
However, the Participant in the Plan Year prior to payment of
benefits may petition the Committee for, and the Committee may
approve at such time, one of the following forms of benefit:
(a) semimonthly payments over a five (5) year
period; or
(b) a single distribution.
6.2.2. Except for a single distribution, benefit payments
shall be in the
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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 calendar year of the
Overall Payment Period thereafter (a 'Calendar Year Payment
Period'), and during any remaining period of the Overall
Payment Period following the last Calendar Year Payment Period
(the 'Remainder Payment Period'), but will vary from one such
portion of the Overall Payment Period to the next.
6.2.3. If the Participant elected the fixed rate investment
option or the Common Stock crediting rate option, the amount
of each level benefit payment for the Initial Payment Period,
if any, each Calendar Year Payment Period, and 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 using the applicable interest rate, such that
the Account balance at the end of the Overall Payment Period
is zero. The applicable interest rate to be used for
amortization and reamortization purposes shall be (i) the
crediting rate determined in accordance with Section 4.2 if
the Participant elected the fixed rate investment option, and
(ii) an assumed interest rate of zero percent (0%) per annum
if the Participant elected the Common Stock crediting rate
option. If the Participant elected the Common Stock crediting
rate option, the balance in the Account as of the beginning of
each Calendar Year Payment Period and the Remainder Payment
Period, if any, shall be the value of such Account as of the
first business day of such Calendar Year Payment Period or the
Remainder Payment Period, as the case may be.
6.2.4. If the Participant elected the variable rate
investment option, (a) 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 of five
percent (5%) per annum; (b) the amount of each level payment
for each Calendar Year Payment Period shall be calculated
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 an assumed interest rate of five percent (5%) per
annum; and (c) 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
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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
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.
6.2.5. The Account shall continue to be credited during the
Overall Payment Period with gains and losses as provided in
Section 4.2.
6.2.6. Notwithstanding anything in this Plan to the contrary,
the Committee may, in its sole discretion, (i) increase or
reduce any assumed interest rate set forth in this Section 6.2
and any such assumed interest rate, as so adjusted, shall be
effective for calculating level semimonthly installments for
Participants whose benefit payments commence after the date of
such adjustment, and (ii) change the date set forth in Section
6.2.4 on which the balance in the Participant's Account is to
be determined for purposes of calculating the amount of each
level payment for each Calendar Year Payment Period and each
Remainder Payment Period, and any such revised date shall be
effective for calculating level semimonthly installments for
the Calendar Year Payment Period or the Remainder Payment
Period beginning on or after the effective date of such
revision."
6. Section 6.4.1 of the Plan is amended by replacing the third
sentence thereof with the following new sentence:
"The Account shall be credited from the date of the
Participant's death 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 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."
7. Section 6.4.2 of the Plan is amended by replacing the first
two sentences thereof with the following new sentences:
"In the event a Participant dies prior to the time benefits
commence, the Company shall pay a pre-retirement death benefit
to the Participant's Beneficiary equal to the Participant's
Account as of the date of the Participant's death, 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
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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. The pre-retirement death benefit shall be paid
semimonthly for a ten-year period."
8. Section 9.1 of the Plan is amended by adding the following
sentence to the end of said Section:
"Notwithstanding anything in this Section 9.1 to the contrary,
the Committee may, in its discretion, (i) amend the Plan to
increase or reduce any assumed interest rate set forth in
Section 6.2, in accordance with the provisions of Section
6.2.6, or (ii) amend the Plan to change the date set forth in
Section 6.2.4 on which the balance in the Participant's
Account is to be determined for purposes of calculating the
amount of each level payment for each Calendar Year Payment
Period and each Remainder Payment Period, in accordance with
the provisions of Section 6.2.6."
9. 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.
H&R BLOCK, INC.
By: /s/ Frank L. Salizzoni
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Its: President and Chief Executive Officer
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