Exhibit 10.14
H&R BLOCK SEVERANCE PLAN
JANUARY 2008
1.
Purpose. The H&R Block Severance Plan is a welfare
benefit plan established by H&R Block Management, LLC, an
indirect subsidiary of H&R Block, Inc., for the benefit of
certain subsidiaries of H&R Block, Inc. in order to provide
severance compensation and benefits to certain employees of such
subsidiaries whose employment is involuntarily terminated under the
conditions set forth herein. This document constitutes both the
plan document and the summary plan description required by the
Employee Retirement Income Security Act of 1974.
2.
Definitions.
(a)
“Average Commission Amount” means an average of the
Participant’s prior three calendar year commission earnings
(calculated each year beginning January 1). For
Participant’s, employed as a Sales Assistant, with less than
three years of commission history, “Average Commission
Amount” means the average of total commissions earned.
(b)
“Cause” means one or more of the following grounds of
an Employee’s
termination of employment with a Participating Employer:
(i) misconduct that interferes with or prejudices the proper
conduct of the Company, the Employee’s Participating
Employer, or any other affiliate of the Company, or which may
reasonably result in harm to the reputation of the Company, the
Employee’s Participating Employer, or any other affiliate of
the Company;
(ii) commission of an act of dishonesty or breach of trust
resulting or intending to result in material personal gain or
enrichment of the Employee at the expense of the Company, the
Employee’s Participating Employer, or any other affiliate of
the Company;
(iii) commission of an act materially and demonstrably
detrimental to the good will of the Company, the Employee’s
Participating Employer, or any other affiliate of the Company,
which act constitutes gross negligence or willful misconduct by the
Employee in the performance of the Employee’s material
duties;
(iv) material violations of the policies or procedures of the
Employee’s Participating Employer, including, but not limited
to, the H&R Block Code of Business Ethics & Conduct, except
those policies or procedures with respect to which an exception has
been granted under authority exercised or delegated by the
Participating Employer;
(v) disobedience, insubordination or failure to discharge
employment duties;
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(vi) conviction of, or entrance of a plea of guilty or no
contest, to a misdemeanor (involving an act of moral turpitude) or
a felony;
(vii) inability of the Employee, the Company, the
Employee’s Participating Employer, and/or any other affiliate
of the Company to participate, in whole or in part, in any activity
subject to governmental regulation as the result of any action or
inaction on the part of the Employee;
(viii) the
Employee’s death or total and permanent disability. The term
“total and permanent disability” will have the meaning
ascribed thereto under any long-term disability plan maintained by
the Employee’s Participating Employer;
(ix) any
grounds described as a discharge or other similar term on the
Participating Employer’s separation review form or other
similar document stating the reason for the Employee’s
termination of employment, including poor performance; or
(x) any
other grounds of termination of employment that the Participating
Employer deems for cause.
Notwithstanding
the definition of Cause above, if an Employee’s employment
with a Participating Employer is subject to an employment agreement
that contains a definition of “cause” for purposes of
termination of employment, such definition of “cause”
in such employment agreement shall replace the definition of Cause
herein for the purpose of determining whether the Employee has
incurred a Qualifying Termination, but only with respect to such
Employee.
(c)
“Company” means H&R Block, Inc.
(d)
“Employee” means a regular full-time or part-time,
active employee of a Participating Employer whose employment with a
Participating Employer is not subject to an employment contract
that contains a provision that includes severance benefits. This
definition expressly excludes employees of a Participating Employer
classified as seasonal, temporary and/or inactive and employees who
are customarily employed by a Participating Employer less than 20
hours per week.
(e)
“ERISA” means the Employee Retirement Income Security
Act of 1974, as
amended.
(f) “Hour
of Service” means each hour for which an individual was
entitled to compensation as a regular full-time or part-time
employee from a subsidiary of the Company.
(g) “Line
of Business of the Company” with respect to a Participant
means any line of business of the Participating Employer by which
the Participant was employed as of the Termination Date, as well as
any one or more lines of business of any other subsidiary of the
Company by which the Participant was employed during the two- year
period preceding the Termination Date, provided that, if
Participant’s
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employment was,
as of the Termination Date or during the two-year period
immediately prior to the Termination Date, with H&R Block
Management, LLC or any successor entity thereto, “Line of
Business of the Company” shall mean any lines of business of
the Company and all of its subsidiaries.
(h)
“Monthly Compensation” means -
(i) with
respect to a Participant paid on a salary basis, the
Participant’s current annual salary divided by 12;
(ii) with
respect to a Participant paid on an hourly basis, the
Participant’s current hourly rate times the number of hours
he or she is regularly scheduled to work per week multiplied by 52
and then divided by 12;
(iii) with
respect to a Participant, employed more than three years with a
Participating Employer, who is paid, in whole or in part, on
commission, the Participant’s current base wages or salary
plus the Participant’s Average Commission Amount divided by
12;
(iv) with
respect to a Participant, employed less than three years with a
Participating Employer as a Financial Advisor, Monthly Compensation
shall be established by the Compensation Schedule outlined in
Schedule “C”; or
(v) with
respect to a Participant, employed less than three years with a
Participating Employer as a Sales Assistant, who is paid, in whole
or in part, on commission, the Participant’s base wages or
salary plus the Participant’s Average Commission Amount
divided by 12.
(i)
“Participant” means an Employee who has incurred a
Qualifying Termination and has signed a Release that has not been
revoked during any revocation period provided under the
Release.
(j)
“Participating Employer” means a direct or indirect
subsidiary of the Company (i) listed on Schedule A,
attached hereto, which may change from time to time to reflect new
Participating Employers or withdrawing Participating Employers, and
(ii) approved by the Plan Sponsor for participation in the
Plan.
(k)
“Plan” means the “H&R Block Severance
Plan,” as stated herein, and as may be amended from time to
time.
(1) “Plan
Administrator” and “Plan Sponsor” means H&R
Block Management, LLC. The address and telephone number of H&R
Block Management, LLC is One H&R Block Way, Kansas City,
Missouri 64105, (816) 854-3000. The Employer Identification
Number assigned to H&R Block Management, LLC by the Internal
Revenue Service is 43-1632589.
(m)
“Qualifying Termination” means the involuntary
termination of an Employee, but does not include a
termination resulting from:
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(i) the
elimination of the Employee’s position where the Employee was
offered another position with a subsidiary of the Company at a
comparable compensation and benefit level, or where the termination
results from a sale of assets or other corporate acquisition or
disposition;
(ii) the
redefinition of an Employee’s position to a lower
compensation rate or grade;
(iii) the
termination of an Employee for Cause; or
(iv)the
non-renewal of employment contracts.
(n)
“Release” means that agreement signed by and between an
Employee who is eligible to participate in the Plan and the
Employee’s Participating Employer under which the Employee
releases all known and potential claims against the
Employee’s Participating Employer and all of such
employer’s parents, subsidiaries, and affiliates.
(o)
“Release Date” means, with respect to a Release that
includes a revocation period, the date immediately following the
expiration date of the revocation period in the Release that has
been fully executed by both parties. “Release Date”
means, with respect to a Release that does not include a revocation
period, the date the Release has been fully executed by both
parties.
(p)
“Severance Period” means the period of time during
which a Participant may receive benefits under this Plan. The
Severance Period with respect to a Participant begins on the
Termination Date. A Participant’s Severance Period will be
the shorter of (i) 12 months or (ii) a number of
months equal to the whole number of Years of Service determined
under Section 2(r), unless earlier terminated in accordance
with Section 8 of the Plan.
(q)
“Termination Date” means the date the Employee severs
employment with a Participating Employer.
(r) “Year
of Service” means each period of 12 consecutive months ending
on the Employee’s employment anniversary date during which
the Employee had at least 1,000 Hours of Service. In determining a
Participant’s Years of Service, the Participant will be
credited with a partial Year of Service for his or her final period
of employment commencing on his or her most recent employment
anniversary date equal to a fraction calculated in accordance with
the following formula:
Number of days since most recent employment anniversary
date
365
Despite an
Employee’s Years of Service calculated in accordance with the
above, an Employee will be credited with no less than the specified
minimum Years of Service
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as outlined in
Schedule “B”. Notwithstanding an Employee’s
actual service, the maximum number of creditable Years of Service
shall be 18.
Notwithstanding
the above, if an Employee has received credit for Years of Service
under this Plan or under any previous plan, program, or agreement
for the purpose of receiving severance benefits before a Qualifying
Termination, such Years of Service will be disregarded when
calculating Years of Service for such Qualifying Termination under
the Plan; provided, however, that if such severance benefits were
terminated prior to completion because the Employee was rehired by
any subsidiary of the Company then the Employee will be re-credited
with full Years of Service for which severance benefits were not
paid in full or in part because of such termination.
3.
Eligibility and Participation.
An Employee who
incurs a Qualifying Termination and signs a Release that has not
been revoked during any revocation period under the Release is
eligible to participate in the Plan. An eligible Employee will
become a Participant in the Plan as of the Termination Date.
4.
Severance Compensation.
(a)
Amount. Subject to Section 8, each Participant will
receive during the Severance Period from the applicable
Participating Employer aggregate severance compensation equal
to:
(i) the
Participant’s Monthly Compensation multiplied by the
Participant’s Years of Service; plus
(ii) one-twelfth of the Participant’s target payout
under the Short-Term Incentive Program of the Participating
Employer in effect at the time of his or her Termination Date
multiplied by the Participant’s Years of Service; plus
(iii) an
amount to be determined by the Participating Employer at its sole
discretion, which amount may be zero.
(b) Timing
of Payments. Except as stated in Section 4(c), and subject
to Section 8,
(i) the
sum of any amounts determined under Sections 4(a)(i) and
4(a)(ii) of the Plan will be paid in semi-monthly or bi-weekly
installments (the timing and amount of each installment as
determined by the Participating Employer) during the Severance
Period beginning after the later of the Termination Date or the
Release Date; and
(ii) any
amounts determined under Section 4(a)(iii) of the Plan will be
paid in one lump sum within 15 days after the later of the
Termination Date or the Release Date, unless otherwise agreed in
writing by the Participating Employer and Participant or otherwise
required by law.
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(c)
Death. In the event of the Participant’s death prior
to receiving all payments due under this Section 4, any unpaid
severance compensation will be paid (i) in the same manner as
are death benefits under the Participant’s basic life
insurance coverage provided by the Participant’s
Participating Employer, and (ii) in accordance with the
Participant’s beneficiary designation under such coverage. If
no such coverage exists, or if no beneficiary designation exists
under such coverage as of the date of death of the Participant, the
severance compensation will be paid to the Participant’s
estate in one-lump sum.
5.
Health and Welfare Benefits.
(a)
Benefits. In addition to the severance compensation provided
pursuant to Section 4 of the Plan, a Participant may continue
to participate in the following health and welfare benefits
provided by his or her Participating Employer during the Severance
Period on the same basis as employees of the Participating
Employer:
(i) medical;
(ii) dental;
(iii) vision.
(iv) employee assistance;
(v) medical expense reimbursement and
dependent care expense reimbursement benefits provided under a
cafeteria plan;
(
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