UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement pursuant to Section 14(a) of the Securities
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H&R Block, Inc.
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H&R BLOCK SAYS BREEDEN NOMINEES THREATEN AUDITOR INDEPENDENCE
Says Breeden Partners Offers No New Ideas and Only A Disruption of Momentum
KANSAS CITY, Mo. August, 2, 2007 -- H&R Block Inc. (NYSE: HRB)
announced today that it is urging all shareholders to protect their investment
by voting for the Company's director nominees. In a letter to shareholders, the
Company warns that "Breeden Partners' nominees, should they join our Board,
create a grave risk of impairing the independence of your Company's auditor."
The Company further points out that "If your Company is forced to change
auditors next month due to Mr. Breeden's outside activities, such a change would
be costly, disruptive and inconsistent with good practice." More information on
this matter is available under Item 2 of the proxy statement H&R Block filed on
July 30, 2007.
The full text of the letter follows:
Dear Fellow Shareholder:
Over the past year, we have strengthened our focus on our core tax,
accounting and related financial services businesses. In addition, we have
fueled the growth of our Tax Services business through the creation of H&R Block
Bank and are confident that the Bank will enhance our ability to attract and
retain early tax return filers, giving us a strong competitive advantage. We
believe our shareholders can look to a bright future for H&R Block as a result
of these steps taken under the leadership of your Board of Directors.
Given our positive momentum, it is unfortunate that Mr. Richard
Breeden, through his hedge fund Breeden Partners, is seeking to have himself and
two of his associates elected to our Company's Board of Directors without having
put forth any new or constructive ideas or a plan to improve value for
shareholders.
In fact, Breeden Partners' nominees pose a significant disruption to
our progress and our strategic plan. Consider the following: Mr. Breeden, a
former regulator turned hedge fund manager, is the government-appointed Monitor
for KPMG, your Company's independent auditor - a fact which he inexplicably
failed to disclose in his initial filing with the SEC. Breeden Partners'
nominees, should they join our Board, create a grave risk of impairing the
independence of your Company's auditor.
If your Company is forced to change auditors next month due to Mr.
Breeden's outside activities, such a change would be costly, disruptive and
inconsistent with good practice. Because the forced change would occur abruptly
with virtually no transition period, it would divert a significant amount of
management and Board time and attention away from executing the Company's
strategic plan and delivering shareholder value.
It is surprising that Mr. Breeden, with his SEC and corporate
governance background, would be so dismissive of the auditor independence issues
created by his actions and the disruption to the Company that would follow from
the loss of KPMG. ASK YOURSELF WHOSE INTERESTS MR. BREEDEN HAS IN MIND-- YOURS
OR HIS OWN?
By continuing to execute the Company's strategic plan, I believe that
we are on track to deliver superior value for all H&R Block shareholders. This
is not the time for costly distractions and disruption.
The annual meeting of shareholders is just four weeks away. I urge you
to vote FOR the Company's highly qualified, dedicated director nominees TODAY --
by telephone, by Internet, or by signing, dating and returning the WHITE proxy
card in the postage-paid envelope provided.
Thank you for your continued support,
Mark Ernst
Chairman, President and CEO
# # #
ABOUT H&R BLOCK
H&R Block Inc. (NYSE: HRB) is a leading provider of tax, financial, and
accounting and business consulting services and products. H&R Block is the
world's largest tax services provider, having prepared more than 400 million tax
returns since 1955. The company and its subsidiaries reported revenues of $4.0
billion and net income from continuing operations of $374.3 million in fiscal
year 2007. The company has continuing operations in three principal business
segments: Tax Services (income tax return preparation and related services and
products via in-office, online and software solutions); Business Services
(accounting, tax and business consulting services primarily for midsized
companies); and Consumer Financial Services (brokerage services, investment
planning and related financial advice along with full-service consumer banking).
Headquartered in Kansas City, Mo., H&R Block markets its continuing services and
products under two leading brands - H&R Block and RSM McGladrey. For more
information visit our Online Press Center at www.hrblock.com.
FORWARD LOOKING STATEMENTS
This release may contain forward-looking statements, which are any statements
that are not historical facts. These forward-looking statements are based upon
the current expectations of the company and there can be no assurance that such
expectations will prove to be correct. Because forward-looking statements
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involve risks and uncertainties and speak only as of the date on which they are
made, the company's actual results could differ materially from these
statements. These risks and uncertainties relate to, among other things, the
company's pending sale of Option One Mortgage Corp.; competitive factors;
regulatory capital requirements; the company's effective income tax rate;
litigation; and changes in market, economic, political or regulatory conditions.
Information concerning these risks and uncertainties is contained in Item 1A of
the company's 2007 annual report on Form 10-K and in other filings by the
company with the Securities and Exchange Commission.
IMPORTANT ADDITIONAL INFORMATION
On July 31, 2007, H&R Block began mailing to its shareholders a definitive proxy
statement in connection with H&R Block's 2007 Annual Meeting of Shareholders.
H&R Block urges its security holders to read the definitive proxy statement (as
well as any amendments or supplements to the proxy statement) and other
documents relating to the 2007 Annual Meeting when they become available,
because the definitive proxy statement contains, and other documents will
contain, important information. Security holders may obtain free copies of the
definitive proxy statement (as well as any amendments or supplements to the
proxy statement) and other relevant documents when available (including any
additional proxy solicitation materials filed with the Securities and Exchange
Commission (SEC)) at the SEC's website (www.sec.gov). In addition, copies of the
definitive proxy statement and other documents may be obtained for free by
directing a request to: H&R Block, Inc., Attn: Corporate Secretary, 1 H&R Block
Way, Kansas City, MO 64105, (816) 854-3000 or from our website
(www.hrblock.com). Copies of the proxy materials also may be requested by
contacting our proxy solicitor, Innisfree M&A Incorporated, at 877-456-3463
toll-free.
Media Contacts: Adam Miller or Michael Pascale, Abernathy MacGregor Group,
212-371-5999
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