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<SEC-DOCUMENT>0000903423-07-000828.txt : 20070827
<SEC-HEADER>0000903423-07-000828.hdr.sgml : 20070827
<ACCEPTANCE-DATETIME>20070827125457
ACCESSION NUMBER:		0000903423-07-000828
CONFORMED SUBMISSION TYPE:	DFAN14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070827
DATE AS OF CHANGE:		20070827
EFFECTIVENESS DATE:		20070827

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			H&R BLOCK INC
		CENTRAL INDEX KEY:			0000012659
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PERSONAL SERVICES [7200]
		IRS NUMBER:				440607856
		STATE OF INCORPORATION:			MO
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		DFAN14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06089
		FILM NUMBER:		071080149

	BUSINESS ADDRESS:	
		STREET 1:		ONE H&R BLOCK WAY
		CITY:			KANSAS CITY
		STATE:			MO
		ZIP:			64105
		BUSINESS PHONE:		8168543000

	MAIL ADDRESS:	
		STREET 1:		ONE H&R BLOCK WAY
		CITY:			KANSAS CITY
		STATE:			MO
		ZIP:			64105

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Breeden Capital Management LLC
		CENTRAL INDEX KEY:			0001376259
		IRS NUMBER:				113765220
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DFAN14A

	BUSINESS ADDRESS:	
		STREET 1:		100 NORTHFIELD STREET
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
		BUSINESS PHONE:		203-618-0065

	MAIL ADDRESS:	
		STREET 1:		100 NORTHFIELD STREET
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
</SEC-HEADER>
<DOCUMENT>
<TYPE>DFAN14A
<SEQUENCE>1
<FILENAME>breeden-dfan14a_0827.htm
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNITED STATES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font size=2>Washington, D.C. 20549</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SCHEDULE 14A</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 </font></b></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:center;'><b><font size=2>(Amendment No. __)</font></b></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><font size=2>Filed by the Registrant  </font><font face=Wingdings>o</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><font size=2>Filed by a Party other than the Registrant </font><font face=Wingdings>x</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><font size=2>Check the appropriate box:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="3%" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Preliminary Proxy Statement</font></p> </td> </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Definitive Proxy Statement</font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>x</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Definitive Additional Materials</font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Soliciting Material Pursuant to Rule 14a-12 </font></p></td>
    </tr>
</table>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>H&amp;R BLOCK, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Name of Registrant as Specified in its Charter)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Breeden Capital Management LLC</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Breeden Partners L.P.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Breeden Partners (California) L.P.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Breeden Partners Holdco Ltd.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Richard C. Breeden</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Robert A. Gerard</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>L. Edward Shaw, Jr.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><font size=2>Payment of Filing Fee (Check the appropriate box):</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="3%" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>x</font></p> </td>
        <td colspan="2"  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>No fee required.</font></p> </td> </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p></td>
      <td colspan="2"  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.</font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td width="3%" valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p></td>
      <td width="94%"  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title of each class of securities to which transaction applies: </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Aggregate number of securities to which transaction applies: </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(3)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proposed maximum aggregate value of transaction: </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(5)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total fee paid: </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'><font face=Wingdings>o</font></td>
      <td colspan="2" valign=top style='padding:0in 0in 3.0pt 0in'><font size=2>Fee paid previously with preliminary materials:</font></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'><font face=Wingdings>o</font></td>
      <td colspan="2" valign=top style='padding:0in 0in 3.0pt 0in'><font size=2>Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.</font></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amount previously paid: </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form, Schedule or Registration Statement No.: </font></p></td>
    </tr>
    <tr>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p></td>
      <td valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(3)</font></p></td>
      <td  valign=top style='padding:0in 0in 3.0pt 0in'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Filing Party: </font></p></td>
    </tr>
    <tr>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4)</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date Filed:</font></p></td>
    </tr>
</table>





<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Contacts:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
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        <td  nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>For Media:</font></b></p> </td>
        <td colspan="2" valign=top  nowrap >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>For Investors</font></b><font face="Arial" size=2>:</font></p></td>
        </tr>
    <tr >
        <td width="65%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Kekst and Company</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Morrow &amp; Co.</font></p> </td>
        </tr>
    <tr>
        <td width="65%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Victoria Weld</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Eric Olson/Mike Verrechia</font></p> </td> </tr>
    <tr >
        <td  nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>212-521-4800</font></p> </td>
        <td colspan="2" valign=top  nowrap >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>203-658-9400</font></p></td>
        </tr>
    <tr>
        <td width="65%" ></td>

        <td width="35%" ></td>

        <td width="101" ></td>
        </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><U><I><B><font FACE="ARIAL" SIZE=2>FOR IMMEDIATE RELEASE</font></B></I></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font face="Arial" size=2>&nbsp;</font></p>
<br>


<p style=' margin-bottom:5pt; margin-top:5pt;text-align:center;'><u><B><font FACE="ARIAL" SIZE=2>FIVE INDEPENDENT ADVISORY FIRMS</font></B><font face="Arial" size=2>&nbsp;</font><b><font face="Arial" size=2>RECOMMEND H&amp;R BLOCK SHAREHOLDERS VOTE IN FAVOR OF BREEDEN PARTNERS&#146; NOMINEES</font></b></u></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:center;'><u><font face="Arial" size=2>&#151;Extraordinary Action Reflects Poor Performance and Inadequate Board Oversight&#151;</font></u></p>

<p style=' margin-bottom:0pt; margin-top:5pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:5pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>Greenwich, CT., August 27, 2007.</font></b><font face="Arial" size=2> &nbsp;Breeden Capital Management LLC, a Greenwich, CT., based investment fund manager, today announced that Egan Jones, Proxy Governance and Taft-Hartley Advisory Services, three additional proxy advisory firms, have issued recommendations to vote to elect the three nominees of Breeden Partners to the board of H&amp;R Block at the Company&#146;s upcoming annual meeting.   As previously announced, Institutional Shareholder Services (&#147;ISS&#148;) and Glass Lewis &amp; Co. (&#147;Glass Lewis&#148;) recommended the election of the three Breeden Partners nominees earlier last week.  The latest recommendations make unanimous the recommendations of these five independent proxy advisory firms. (Taft-Hartley Advisory Services is a separately run division of ISS.)</font></p>

<p style=' text-align:left;'><font face="Arial" size=2>In its analysis, </font><b><font face="Arial" size=2>Egan Jones </font></b><font face="Arial" size=2>wrote: </font><b><font face="Arial" size=2>&#147;</font></b><font face="Arial" size=2>We believe that the&nbsp;effort by&nbsp;Breeden Partners to nominate three independent stockholder representatives to the eleven-member board is in the best interest of the Company and its shareholders and that election of their nominees would bring valuable additions to the board.&#148;</font></p>

<p style=' text-align:left;'><b><font face="Arial" size=2>Glass Lewis</font></b><font face="Arial" size=2> wrote:  &#147;[I]n our opinion, the extended underperformance of the Company&#146;s operations and share price warrants a change to the board of directors.&#148; </font></p>

<p style=' text-align:left;'><font face="Arial" size=2>Glass Lewis pointedly noted that: &#147;a majority of the current directors have been serving on the board for at least the last five years...&#148; and &#147;...the Company has failed to conduct what we would consider a major overhaul of the management team during that time.&#148; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>Proxy Governance</font></b><font face="Arial" size=2> stated: &#147;[I]t does not appear that the board has exercised its oversight responsibilities consistently over the past five years and has allowed management to continue down a poorly constructed diversification path that has led to very poor financial performance, especially for a company that had been the industry leader for such a long period of time.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&#147;We support Breeden Partners&#146; nominees (BLUE proxy card) at this year&#146;s annual meeting given the nominees&#146; extensive experience in the financial services industry and the expectation that they will help implement change that may help to improve the company&#146;s performance.&#148;</font></p>

<p style=' text-align:left;'><b><font face="Arial" size=2>Taft-Hartley Advisory Services</font></b><font face="Arial" size=2> stated: &#147;In sum, we conclude the company has underperformed over the long term, above and beyond the company&#146;s recent difficulties arising from its mortgage business.&#148;  &#147;Given Breeden&#146;s well-reasoned arguments and his nominees&#146; experience, we believe the dissidents will be able to add value to board deliberations.&#148;</font></p>

<p style=' text-align:left;'><font face="Arial" size=2>Richard C. Breeden, Chairman and CEO of Breeden Partners, said, &#147;We believe the fact that not one of these proxy advisors endorsed the incumbent board members shows how completely management has lost credibility in the market, and that independent observers view the board&#146;s oversight record as </font></p>

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<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font face="Arial" size=2>inadequate.  The independent proxy advisors have unanimously concluded that it is time for a change in membership of the H&amp;R Block Board. We hope that all shareholders will help provide a mandate for change and VOTE BLUE.&#148;   </font></p>

<p style='  text-indent:8.46%;text-align:left;border-bottom:solid 0.5pt;padding-bottom:1;border-left:solid 0.5pt;padding-left:4;border-right:solid 0.5pt;padding-right:4;border-top:solid 0.5pt;padding-top:1;'><b><font face="Arial" size=2>To follow the </font></b><font face="Arial" size=2>&nbsp;</font><b><font face="Arial" size=2>recommendation of these five independent advisory firms, H&amp;R Block shareholders should vote FOR the Breeden Partners&#146; director nominees on the BLUE proxy card and not sign or return H&amp;R Block&#146;s white proxy card.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><b><font face="Arial" size=2>About Breeden Capital Management LLC</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Breeden Capital Management is based in Greenwich, Connecticut. Both Breeden Partners and Breeden Capital Management were founded by Richard C. Breeden, former Chairman of the U.S. Securities and Exchange Commission.  The firm has more than 20 professionals, and, together with its affiliates, it has more than $1 billion in committed capital under management. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY BREEDEN CAPITAL MANAGEMENT, LLC, BREEDEN PARTNERS L.P., BREEDEN PARTNERS (CALIFORNIA) L.P., BREEDEN PARTNERS HOLDCO LTD., RICHARD C. BREEDEN, ROBERT A. GERARD AND L. EDWARD SHAW, JR. FOR USE AT THE 2007 ANNUAL MEETING OF SHAREHOLDERS OF H&amp;R BLOCK BECAUSE THEY CONTAIN (AND ANY SUBSEQUENT AMENDMENTS OR SUPPLEMENTS WILL CONTAIN) IMPORTANT INFORMATION. THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY HAS BEEN MAILED TO SHAREHOLDERS OF H&amp;R BLOCK AND IS AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION&#146;S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING MORROW &amp; CO., INC. BY TELEPHONE AT (203) 658-9400 OR BY E-MAIL AT BREEDENINFO@MORROWCO.COM. </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Breeden Partners has not sought or obtained consent from any third party to use any statements or information indicated herein as having been obtained or derived from statements made or published by third parties. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed herein.</font></p>

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