H&R BLOCK SEVERANCE PLAN SEPTEMBER 2008

Exhibit 10.1

H&R BLOCK SEVERANCE PLAN
SEPTEMBER 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 pay to certain employees to compensate for the involuntary loss of employment and a period of readjustment 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 Assistance, 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;

(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) “COBRA Subsidy” means an amount equal to the Participant’s monthly post-employment premium for health and welfare benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) less the amount the Participant paid for such benefits as an active employee. To be eligible for the COBRA Subsidy, the Participant must be enrolled in the Participating Employer’s health and welfare plans on the Termination Date.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Company” means H&R Block, Inc.

(f) “Comparable Position” means a position where:

(i) the primary work location is within 50 miles of the Employee’s primary work location prior to the Qualifying Termination, and

          (ii) the compensation rate (salary and target bonus) is not more than 10% below the Employee’s compensation rate at time of Qualifying Termination.

(g) “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.

(h) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(i) “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.

(j) “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 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.

(k) “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”;

(v) with respect to a Participant, employed less than three years with a Participating Employer as a Sales Assistance, 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; or

(vi) with respect to a Participant, employed as Branch Office Manager, Satellite Branch Office Manager or Registered Representative in Charge for H&R Block Financial Advisors, Inc., the Participant’s base annual salary and any management bonuses (override bonus, strategic bonus and recruiting bonus) divided by 12. Monthly Compensation shall not include any commissions or bonuses from personal production.

(l) “Participant” means an Employee who has incurred a Qualifying Termination and has signed a Separation Agreement that has not been revoked during any revocation period provided under the Separation Agreement.

(m) “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.

(n) “Plan” means the “H&R Block Severance Plan,” as stated herein, and as may be amended from time to time.

(o) “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.

(p) “Qualifying Termination” means the involuntary termination of an Employee, but does not include a termination resulting from:

(i) the elimination of the Employee’s position where the Employee was offered a Comparable Position with a subsidiary or affiliate of the Company;

(ii) a sale of assets, stock sale, or other corporate acquisition or disposition where the Employee is offered a Comparable Position with the acquiring entity;

(iii) the redefinition of an Employee’s position to a lower compensation rate or grade;

(iv) the termination of an Employee for Cause as defined in Section 2(b); or

(v) the non-renewal of employment contracts.

(q) “Release and Severance Agreement” 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 and a Covenant Not to Sue. The Release and Severance Agreement also includes certain post-employment restrictive covenants including non-competition, non-solicitation, confidentiality, and, employee non-hire/non-solicitation.

(r) “Release Date” means, (i) with respect to a Release and Severance Agreement that includes a revocation period, the date immediately following the expiration date of the revocation period in the Release and Severance Agreement that has been fully executed by both parties; or (ii) with respect to a Release and Severance Agreement that does not include a revocation period, the date the Release and Severance Agreement has been fully executed by both parties. A Participant will be presented with a Release Agreement on Participant’s Termination Date and will be required to execute such agreement within the timeframe set forth therein.

(s) “Severance Period” means the period of time following the Termination Date which 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(u).

(t) “Termination Date” means the date the Employee severs employment with a Participating Employer.

(u) “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 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 and Severance Agreement that has not been revoked during any revocation period under the Release and Severance Agreement is eligible to participate in the Plan. An eligible Employee will become a Participant in the Plan as of the later of the Termination Date or the Release Date.

4. Severance Compensation.

(a) Amount . Subject to Section 9, each Participant will receive 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) a severance enhancement (as determined by the Participating Employer based upon the Participant’s pay grade or band) multiplied by the Participant’s Year’s of Service; plus

(iii) an amount equal to the Participant’s COBRA Subsidy multiplied by the lesser of Participant’s Years of Service or 12; plus

(iv) an amount to be determined by the Participating Employer at its sole discretion, which amount may be zero.

(b) Timing of Payments . The sum of any amounts determined under Section 4(a) of the Plan will be paid in one lump sum within 30 days after the latest of the Termination Date or the Release Date, unless otherwise agreed in writing by the Participating Employer and Participant, or otherwise required by law.

5. Stock Options.

(a) Accelerated Vesting . Any portion of any outstanding incentive stock options and nonqualified stock options that would have vested during the 18-month period following the Termination Date had the Participant remained