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Published: 2008-03-26

Stock Plan for Non-Employee Directors - H&R Block Inc.



                              H&R BLOCK STOCK PLAN
                           FOR NON-EMPLOYEE DIRECTORS
                       (As Amended Through August 1, 2001)

ARTICLE I - PURPOSE OF THE PLAN

1.1 Purpose of Plan. H&R Block, Inc. (the "Company") adopts the H&R Block Stock
Plan for Non-Employee Directors (the "Plan") to provide for payment in shares of
the Company's Common Stock, without par value ("Stock"), of the retainers and
meeting fees of members of the Board of Directors of the Company who are not
employees of the Company or any of its affiliates or subsidiaries ("Non-Employee
Directors"), on a deferred basis. The Plan also provides for an optional award
of Stock Units (as defined in Section 3.1) to directors participating in the H&R
Block, Inc. Retirement Plan for Non-Employee Directors ("Retirement Plan") upon
the termination of the Retirement Plan and in lieu of benefits under such
Retirement Plan. The Plan is intended to provide Non-Employee Directors with a
larger equity interest in the Company, to enhance the identity of interests
between Non-Employee Directors and the shareholders of the Company, and to
assist the Company in attracting and retaining well-qualified individuals to
serve as Non-Employee Directors.

ARTICLE II -  ELIGIBILITY AND PARTICIPATION

2.1 Eligibility and Participation. Only Non-Employee Directors shall be eligible
to participate in the Plan, provided that, if a Non-Employee Director becomes an
employee of the Company or one or more of its affiliates or subsidiaries after
he or she commences participation in the Plan, he or she shall remain eligible
and shall continue to participate in the Plan until his or her service as a
director of the Company terminates and all benefits under the Plan are paid. An
eligible Plan participant may be referred to herein as "Participant."

ARTICLE III - STOCK UNITS AND DIRECTOR COMPENSATION DEFERRAL ELECTIONS

3.1 Retainers Payable in Stock Units. Each Non-Employee Director may elect to
have his or her director retainer fee that is payable in quarterly installments,
or in any other manner (determined without regard to the Plan)(the "Retainer")
paid in units ("Stock Units"), with each Stock Unit equivalent to one share of
Stock, and deferred in accordance with the Non-Employee Director's deferral
election.

3.2 Meeting Fees Payable in Stock Units. Each Non-Employee Director may elect to
have fees for attendance at meetings of the Company's Board of Directors and/or
committees thereof (determined without regard to the Plan) ("Meeting Fees") paid
in Stock Units and deferred in accordance with the Non-Employee


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Director's deferral election.

3.3 Deferral Elections. An election under either Section 3.1 or 3.2 to have
Retainer or Meeting Fees, as the case may be, paid in Stock Units and deferred
must be made in writing and delivered to the Company prior to the start of the
calendar year in which the Retainer or Meeting Fees would otherwise be paid (but
for the deferral election) and such election will be irrevocable for the
affected calendar year. To participate in the Plan during the calendar year in
which the Plan becomes effective, the Non-Employee Director must make an
election to defer Retainer and/or Meeting Fees for services to be performed
subsequent to the election within 30 days after the Effective Date (as defined
in Section 13.1) and such election will be irrevocable for the remainder of the
affected calendar year. To participate in the Plan during the first calendar
year in which a Non-Employee Director becomes eligible to participate in the
Plan, the new Non-Employee Director must make an election to defer Retainer
and/or Meeting Fees for services to be performed subsequent to the election
within 30 days after the date he or she becomes eligible and such election will
be irrevocable for the remainder of the affected calendar year. Each election
shall remain in effect until revoked in writing, and any such revocation shall
become effective no earlier than the first day of the first calendar year
commencing after such revocation is received by the Company.

3.4 Crediting Stock Units to Accounts. Amounts deferred by a Non-Employee
Director pursuant to Section 3.3 shall be credited in Stock Units as of the date
that payment would otherwise have been made in cash to a bookkeeping account
maintained by the Company for such Participant ("Account"). The number of Stock
Units credited to an Account with respect to any Non-Employee Director shall
equal the amount deferred divided by the Fair Market Value of one share of Stock
on the date on which such cash amount would have been paid but for the deferral
election pursuant to Section 3.3. For purposes of the Plan, the "Fair Market
Value" of Stock on any business day shall be the average of the high and low
sales prices quoted for such Stock on the New York Stock Exchange Composite
Listing on the day in question, or if there was no quotation on such date, on
the next preceding business day on which there was such a quotation. To the
extent that the application of any formula described in this Section 3.4 does
not result in a whole number of shares of Stock, the result shall be rounded
upwards to the next whole number such that no fractional shares of Stock shall
be issued under the Plan.

3.5 Fully Vested Stock Units. All Stock Units credited to a Participant's
Account pursuant to this Article III shall be at all times fully vested and
nonforfeitable.

3.6 Payment of Stock Units. A deferral election made in accordance with Section
3.3 shall specify the date (the "Deferred Payment Date") on which the
Participant elects to receive payment for the Stock Units credited to such
Participant's Account pursuant to this Article III. Such Stock Units shall be
paid in an equal




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number of shares of Stock in a single distribution made on the Deferred Payment
Date specified by the Participant in the applicable deferral election, provided
that the Deferred Payment Date with respect to any election must be at least two
years after the first day of the calendar year during which the Stock Unit was
credited to the Participant's Account.

ARTICLE IV - AWARD OF STOCK UNITS IN LIEU OF BENEFITS UNDER THE H&R BLOCK, INC.
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS

4.1 Award of Stock Units. Each Non-Employee Director serving as such as of June
18, 1997 (the "Retirement Plan Termination Date") may, at his or her option,
have credited to his or her Account as of the Effective Date a number of Stock
Units equal to the quotient obtained by dividing (a) the present value on the
Retirement Plan Termination Date of his or her accrued benefits under the
Retirement Plan, as determined by an independent actuarial consultant without
regard to any service requirements under such Retirement Plan and utilizing an
annual director retainer rate equal to the annual retainer for Non-Employee
Directors in effect on the Retirement Plan Termination Date, divided by (b) the
Fair Market Value of one share of Stock on the Retirement Plan Termination Date,
provided, however that notwithstanding this formula, no such Non-Employee
Director shall be credited with less than 1,000 Stock Units pursuant to the
provisions of this Section 4.1. To the extent that the application of the
formula described in this Section 4.1 results in a number of Stock Units other
than an even 100-lot number of Stock Units, the result shall be rounded up
upwards to the next 100-lot whole number of Stock Units. For example, if the
application of the formula results in an award of 1,055.625 Stock Units, the
actual award shall be rounded up to 1,100 Stock Units. A Non-Employee Director
who elects to defer under the H&R Block Deferred Compensation Plan for
Directors, as amended, the present value of accrued benefits under the
Retirement Plan (determined as of the Retirement Plan Termination Date) shall
not be eligible for an award of Stock Units under this Section 4.1 of the Plan.

4.2 Fully Vested Stock Units. All Stock Units credited to a Participant's
Account pursuant to this Article IV shall be at all times fully vested and
nonforfeitable.

4.3 Payment of Stock Units. Upon termination of service as a director of the
Company for any reason, the total number of Stock Units credited to the
Participant's Account pursuant to this Article IV shall be paid to the
Participant in equal number of shares of Stock in a single distribution,
provided that no payment pursuant to this Section 4.3 shall be made less than
one year after the Effective Date.

4.4 Award in lieu of Benefits. The Stock Units credited to the Participant's
Account pursuant to this Article IV are so credited in consideration of the
termination of the Retirement Plan and in lieu of any benefits under the
Retirement Plan. The Non-Employee Directors shall not be entitled to any other
benefits under the Retirement Plan.


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ARTICLE V - DIVIDEND EQUIVALENT PAYMENTS

5.1 Dividend Equivalent Payments. As of each cash dividend payment date with
respect to Stock, each Participant shall have credited to his or her Account the
number of Stock Units equal to the quotient obtained by dividing (a) the product
of (i) the cash dividend payable with respect to each share of Stock on such
date and (ii) the total number of Stock Units credited to his or her Account as
of the close of business on the record date applicable to such dividend payment
date, by (b) the Fair Market Value of one share of Stock on such dividend
payment date. To the extent that the application of the formula described in
this Section 5.1 does not result in a whole number of Stock Units, the result
shall be rounded upwards to the next whole number.

5.2 Deferral, Vesting and Payment of Stock Units under Article V. Each Stock
Unit determined and credited to the Participant's Account in accordance with
Section 5.1 shall automatically be deferred and shall be fully vested at all
times. Upon termination of service as a director of the Company for any reason,
the total number of Stock Units credited to the Participant's Account pursuant
to this Article V shall be paid to the Participant in equal number of shares of
Stock in a single distribution, provided that no payment pursuant to this
Section 5.2 shall be made less than one year after the Effective Date.

ARTICLE VI - DELIVERY OF STOCK CERTIFICATES

6.1 Stock Unit Payments. The Company shall issue and deliver to the Participant
a Stock certificate for payment of Stock Units as soon as practicable following
the date on which Stock Units are payable.

ARTICLE VII - STOCK

7.1 Authorized Stock. The aggregate number of shares of Stock that may be issued
under the Plan shall not exceed three hundred thousand (600,000) shares, unless
such number of shares is adjusted as provided in Article VIII of the Plan. Such
shares of Stock may be authorized but unissued shares, treasury shares or shares
acquired in the open market for the account of the Participant.

7.2 Fractional Shares. No fractional shares of Stock shall be issued under the
Plan under any circumstances.

ARTICLE VIII - ADJUSTMENT UPON CHANGES IN CAPITALIZATION

8.1 Adjustment Upon Changes in Capitalization. In the event of a stock dividend,
stock split or combination, reclassification, recapitalization or other capital
adjustment of shares of Stock, the number of shares of Stock that may be issued
pursuant to Stock Units and the number of Stock Units credited to




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Accounts shall be appropriately adjusted by the Board of Directors of the
Company, whose determination shall be final, binding on the Company and the
Participants and conclusive.

8.2 No Effect on Rights of Company. The grant of Stock Units pursuant to the
Plan shall not affect in any way the right or power of the Company to issue
additional Stock or other securities, make adjustments, reclassifications,
reorganizations or other changes in its corporate, capital or business
structure, to participate in a merger, consolidation or share exchange or to
transfer its assets or dissolve or liquidate.

ARTICLE IX - TERMINATION OR AMENDMENT OF THE PLAN

9.1 In General. The Plan shall remain in effect until all shares of Stock
authorized for issuance under the Plan have been issued. The Board of Directors
of the Company may at any time terminate, suspend or amend the Plan. If the Plan
shall at any time be terminated pursuant to this Section 9.1, Stock Units
credited to a Participant's Account shall be paid in equal number of shares of
Stock in a single distribution as if the Participant had terminated his or her
service as a director of the Company, provided that no payment pursuant to this
Section 9.1 shall be made less than one year after the Effective Date.

9.2 Written Consents. No amendment may adversely affect the right of any
Participant to receive any Stock pursuant to an outstanding Stock Unit without
the written consent of such Participant.

ARTICLE X - GOVERNMENT REGULATIONS

10.1 Government Regulations.

         (a) The obligations of the Company to issue any Stock pursuant to the
         Plan shall be subject to all applicable laws, rules and regulations and
         the obtaining of all such approvals by governmental agencies as may be
         deemed necessary or appropriate by the Board of Directors of the
         Company.

         (b) The Board of Directors of the Company may make such changes to the
         Plan as may be necessary or appropriate to comply with the rules and
         regulations of any governmental authority.

ARTICLE XI - ADMINISTRATION

11.1 In General. The Plan shall be administered by the Compensation Committee
of the Board of Directors (the "Committee"), which shall have full power and
authority, subject to the provisions of the Plan, to supervise administration of
the Plan and to interpret the provisions of the Plan and of any




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award, issuance or payment of Stock Units hereunder. Any decision by the
Committee shall be final and binding on all parties. No member of the Committee
shall be liable for any determination made, or any decision or action taken with
respect to the Plan or any award, issuance or payment of Stock Units under the
Plan. The Committee may delegate any of its responsibilities to one or more
agents, including employees of the Company or one or more of its affiliates and
subsidiaries, and may retain advisors to provide advice to the Committee. No
Participant shall participate in the making of any decision with respect to any
question relating to any Stock Unit issued under the Plan exclusively to that
Participant.

11.2 Rules and Interpretation. The Committee shall be vested with full authority
to make such rules and regulations as it deems necessary to administer the Plan
and to interpret and administer the provisions of the Plan in a uniform manner.
Any determination, decision or action of the Committee in connection with the
construction, interpretation, administration or application of the Plan shall be
final, conclusive and binding on all parties.

11.3 Expenses. The cost of issuing and paying Stock Units pursuant to the Plan
and the expenses of administering the Plan shall be borne by the Company.

ARTICLE XII - MISCELLANEOUS

12.1 Unfunded Plan. The Plan shall be unfunded with respect to the Company's
obligation to pay any Stock Units and a Participant's rights to receive any
payment of any Stock Unit shall not be greater than the rights of an unsecured
general creditor of the Company.

12.2 Assignment; Non-Alienation. Stock Units, the right to receive Stock Units
under the Plan and the right to receive payment with respect to a Stock Unit
under the Plan are not assignable or transferable and shall not be subject in
any manner to alienation, sale or any encumbrances, liens, levies, attachments,
pledges or charges of the Participant or his or her creditors. Any attempt to
assign, transfer or hypothecate any Stock Unit, any right to receive Stock Units
or the right to receive payment with respect to a Stock Unit shall be void and
of no force and effect.

12.3 Death Benefit; Designation of Beneficiaries. Upon the death of a
Participant, the Stock Units remaining in his or her Account as of the date of
death shall be paid to the beneficiary or beneficiaries of the Participant, or
to his or her estate, as described in this Section 12.3, in equal number of
shares of Stock in a single distribution. A Participant may designate a
beneficiary or beneficiaries to receive any payments under the Plan upon his or
her death. A beneficiary designation shall be in writing on a form acceptable to
the Company and shall be effective only upon delivery to the Company. A
beneficiary designation may be revoked by a Participant at any time by
delivering to the




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Company either written notice of revocation or a new written beneficiary
designation. The written beneficiary designation last delivered to the Secretary
of the Company prior to the death of the Participant shall control. If no
beneficiary has been designated, amounts due hereunder shall be paid to the
Participant's estate.

12.4 Release. Any payment of Stock Units to or for the benefit of a Participant
or his or her beneficiaries that is made in good faith by the Company in
accordance with the Company's good faith interpretation of its obligations
hereunder shall be in full satisfaction of all claims against the Company for
benefits under the Plan to the extent of such payment.

12.5 No Guarantee of Directorship. Neither the adoption and maintenance of the
Plan nor any election made hereunder by a Participant shall be deemed to be a
contract between the Company and the Participant to retain his or her position
as a director of the Company.

12.6 Applicable Law. The validity, interpretation and administration of the Plan
and any rules, regulations, determinations or decisions hereunder, and the
rights of any and all persons having or claiming to have any interest herein or
hereunder, shall be determined exclusively in accordance with the laws of the
State of Missouri (without regard to the choice of laws provisions thereof),
except to the extent such laws are preempted by the laws of the United States of
America.

12.7 Notices. All notices, elections or other communications made or given
pursuant to the Plan shall be in writing and shall be sufficiently made or given
if hand-delivered or mailed by certified mail, addressed (if from the Company to
the Participant) to any Participant at the address contained in the records of
the Company for such Participant, or addressed (if from the Participant to the
Company) to the Secretary of the Company at its principal office.

12.8 Headings. The headings in the Plan are for reference purposes only and
shall not affect the meaning or interpretation of the Plan.

ARTICLE XIII - EFFECTIVE DATE OF THE PLAN

13.1 Effective Date. The Plan shall be effective immediately upon the date of
its approval by the shareholders of the Company (the "Effective Date").


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