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<SEC-DOCUMENT>0000950137-07-010827.txt : 20070731
<SEC-HEADER>0000950137-07-010827.hdr.sgml : 20070731
<ACCEPTANCE-DATETIME>20070731082423
ACCESSION NUMBER:		0000950137-07-010827
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20070731
DATE AS OF CHANGE:		20070731
EFFECTIVENESS DATE:		20070731

FILER:

	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:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06089
		FILM NUMBER:		071011165

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFA14A
<SEQUENCE>1
<FILENAME>c16547dedefa14a.htm
<DESCRIPTION>DEFINITIVE ADDITIONAL MATERIALS
<TEXT>
<HTML>
<HEAD>
<TITLE>defa14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<CENTER>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="70%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="13%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="15%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="3" nowrap align="center">OMB APPROVAL</TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="3" nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">
OMB Number:
</TD>
        <TD>&nbsp;</TD>
        <TD align="right" valign="top">3235-0059</TD>
</TR>

<TR valign="bottom">
        <TD valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">
Expires:
</TD>
        <TD>&nbsp;</TD>

<TD nowrap align="right" valign="top">January&nbsp;31, 2008</TD>
</TR>

<TR valign="bottom">
        <TD valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="2" nowrap align="left" valign="top">Estimated average burden<br>hours per

response</TD>

        <TD align="right" valign="bottom">14</TD>
</TR>

</TABLE>
</CENTER>

<P style="font-size: 10pt" align="center"><B>UNITED STATES<BR>SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</B>


<P style="font-size: 10pt" align="center"><B>SCHEDULE 14A</B>



<P style="font-size: 10pt" align="center">Proxy Statement Pursuant to Section 14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)


<P>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Filed by the Registrant
&nbsp;&nbsp;<FONT face="wingdings">&#254;</FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Filed by a Party other than the Registrant
&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Check the appropriate box:</TD>
</TR>
</TABLE>
<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT face="wingdings">&#111;</font>&nbsp;&nbsp; Preliminary Proxy Statement</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT face="wingdings">&#111;</font>&nbsp;&nbsp;
<B>Confidential, for Use of the Commission Only (as permitted by
Rule&nbsp;14a-6(e)(2))</B></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT face="wingdings">&#111;</font>&nbsp;&nbsp; Definitive Proxy Statement</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT face="wingdings">&#254;</font>&nbsp;&nbsp; Definitive Additional Materials</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT face="wingdings">&#111;</font>&nbsp;&nbsp;
Soliciting Material Pursuant to &#167;240.14a-12</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 18pt"><B>H&amp;R BLOCK, INC.</B>
<DIV align="center" style="font-size: 10pt"></DIV><HR size="1" noshade><DIV align="center" style="font-size: 10pt">(Name
of Registrant as Specified In Its Charter)</DIV>
<P align="center" style="font-size: 10pt"><HR size="1" noshade><DIV align="center" style="font-size: 10pt">(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)</DIV>

<P style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of Filing Fee (Check the appropriate box):


<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp; No fee required.</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;
Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and
0-11.</TD>
</TR>
</TABLE>
<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1)&nbsp;Title of each class of securities to which transaction applies:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2)&nbsp;Aggregate number of securities to which transaction applies:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3)&nbsp;Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4)&nbsp;Proposed maximum aggregate value of transaction:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5)&nbsp;Total fee paid:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp; Fee paid previously with preliminary materials.</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp; Check box if any part of the fee is offset as provided by Exchange Act
Rule&nbsp;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.</TD>
</TR>
</TABLE>
<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1)&nbsp;Amount Previously Paid:</TD>
</TR>
</TABLE>
<HR size="1" noshade>


<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2)&nbsp;Form, Schedule or Registration Statement No.:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3)&nbsp;Filing Party:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4)&nbsp;Date Filed:</TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P style="font-size: 10pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
        <TD width="20%"></TD>
        <TD width="80%"></TD>
</TR>
<TR valign="top">
        <TD valign="bottom">SEC 1913 (02-02)</TD>
        <TD><b>Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number.</b></TD>
</TR>
</TABLE>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="c16547dec1654706.gif" alt="(H&#038;R BLOCK LOGO)">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>News Release<BR>
For Further Information<BR>
Media Contacts: </B>Adam Miller or Michael Pascale, Abernathy MacGregor Group, 212-371-5999

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>H&#038;R BLOCK MAILS PROXY MATERIALS AND LETTER TO ALL SHAREHOLDERS</B><BR>
<B><I>Says Company Is On Track To Grow Shareholder Value<BR>
Urges Shareholders To Protect Their Investment By Voting For Company&#146;s Nominees</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>FOR IMMEDIATE RELEASE July&nbsp;31, 2007</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KANSAS CITY, Mo. &#151; H&#038;R Block Inc. (NYSE: HRB) announced today that it has filed with the
Securities and Exchange Commission and has begun mailing its definitive proxy materials to all H&#038;R
Block shareholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the proxy materials and accompanying shareholder letter, H&#038;R Block urges shareholders to
vote &#147;FOR&#148; the re-election of the company&#146;s director nominees Donna R. Ecton, Louis W. Smith and
Rayford Wilkins, Jr., at the Annual Meeting of Shareholders scheduled for September&nbsp;6, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The letter, from Chairman, President and CEO, Mark Ernst, says in part:

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;&#091;We&#093; are implementing the right strategy to further enhance our brand and to
bolster our strong industry leadership position.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;We expect another year of strong growth in Tax Services, fueled by H&#038;R Block
Bank. Expected profits from these and other core businesses will allow H&#038;R
Block to rebuild capital and enable share repurchases and further dividend
increases. &#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the letter the Company also says:

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;It is unfortunate that a dissident hedge fund, Breeden Partners, has chosen
to launch a costly and distracting proxy contest.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The full text of the letter follows:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Fellow Shareholder:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your company&#146;s Annual Meeting of Shareholders is scheduled for September&nbsp;6, 2007. At the
meeting, three of our independent directors are standing for re-election &#150; Donna R. Ecton, Louis W.
Smith and Rayford Wilkins, Jr. We urge you to vote <B>FOR </B>these highly qualified, dedicated
individuals <B>TODAY </B>&#150; by telephone, Internet or by signing, dating and returning the <B>WHITE </B>proxy card
<B>TODAY </B>in the postage-paid envelope.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">- more &#150;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>H&#038;R Block Mails Proxy Materials and Letter to All Shareholders/page 2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>We Have An Outstanding Brand and Industry Leadership Position. </U><BR>
<U>We Are On Track To Grow Shareholder Value.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is an important time in H&#038;R Block&#146;s history. Your Board and management team are
implementing the right strategy to further enhance our brand and to bolster our strong industry
leadership position. We have taken important steps to focus on our core tax, accounting and
related financial services businesses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Tax Services business experienced strong growth in new clients and revenues this year,
significantly aided by the successful debut of H&#038;R Block Bank. We believe the Bank will continue
to complement our tax business and in particular allow us to retain and attract early season filers
who are critical to our overall success and value creation. (A thorough discussion
of the Bank and its important contribution to our growth is presented in the enclosed Annual
Report.)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Important Steps Have Been Taken To Create Value.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H&#038;R Block&#146;s Board and management team are intensely focused on continuing the growth and
momentum in our core businesses. In addition to the very successful launch of our Bank, we have
taken other key actions in the past year:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><FONT style="font-family: Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We agreed to sell Option One Mortgage Corp. and have closed H&#038;R Block Mortgage Corp.
because these operations were not aligned with our strategic focus or return expectations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><FONT style="font-family: Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We exited selected operations within our core accounting business, RSM McGladrey, that
didn&#146;t support its profitability or competitive advantage.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><FONT style="font-family: Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We continue to examine the strategic importance of all of our businesses and their
contribution to overall value.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>We Expect Improved Financial Results And </U><BR>
<U>Increased Shareholder Value In Fiscal Year 2008. </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect another year of strong growth in Tax Services, fueled by H&#038;R Block Bank. Expected
profits from these and other core businesses will allow H&#038;R Block to rebuild capital and enable
share repurchases and further dividend increases.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Don&#146;t Let Breeden Partners Disrupt Our Momentum.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is unfortunate that a dissident hedge fund, Breeden Partners, has chosen to launch a
distracting proxy contest. Breeden Partners owns less than 2% of our shares and has been a
shareholder for less than a year yet seeks to replace more than 25% of your Board with its own
handpicked slate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our view, Breeden Partners has put forth no new ideas to improve shareholder value. In
fact, many of Breeden Partners&#146; proposed &#147;changes&#148; are identical to actions that your company
announced and began implementing before Breeden Partners acquired a
single share. We believe that Breeden Partners is advocating a sale or disposition of the
Bank. Such an action
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">- more -
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>H&#038;R Block Mails Proxy Materials and Letter to All Shareholders/page 3</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">would deprive H&#038;R Block&#146;s shareholders of the Bank&#146;s significant potential and would threaten the
enhancement of shareholder value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Ask yourself whether Breeden Partners&#146; nominees &#150; who have no new ideas other than the
ill-advised sale of the Bank &#150; are the right individuals to represent your best interests.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Protect Your Investment &#150; Vote The <B>WHITE </B>Proxy Card Today. </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your Board is committed to protecting and enhancing the value of your investment in H&#038;R Block.
We are confident that the continued implementation of our strategic plan is the best approach to
creating value for all H&#038;R Block shareholders. Please use the enclosed <B>WHITE </B>proxy card to vote
<B>FOR </B>your Board&#146;s nominees <B>TODAY </B>&#151; by telephone, by Internet, or by signing, dating and returning
the <B>WHITE </B>proxy card.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thank you for your continued support.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On Behalf of the Board of Directors,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mark Ernst<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman, President and CEO
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"># # #
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>About H&#038;R Block</B>

<DIV align="left" style="font-size: 6pt">&nbsp;</DIV>
H&#038;R Block Inc. (NYSE: HRB) is a leading provider of tax, financial, and accounting and business
consulting services and products. H&#038;R Block is the world&#146;s largest tax services provider, having
prepared more than 400&nbsp;million tax returns since 1955. The company and its subsidiaries reported
revenues of $4.0&nbsp;billion and net income from continuing operations of $374.3&nbsp;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&#038;R Block markets its continuing services and products under two leading brands &#150; H&#038;R Block
and RSM McGladrey. For more information visit our Online Press Center at www.hrblock.com.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Forward Looking Statements</B>
<DIV align="left" style="font-size: 6pt">&nbsp;</DIV>
This letter 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 involve risks and uncertainties and speak only as of the date on which
they are made, the company&#146;s actual results could differ materially from these statements. These
risks and uncertainties relate to, among other things, the company&#146;s pending sale of Option One
Mortgage Corp.; competitive factors; regulatory capital requirements; the company&#146;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&nbsp;1A of the company&#146;s 2007
annual report on Form 10-K and in other filings by the company with the Securities and Exchange
Commission.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">- more &#150;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>H&#038;R Block Mails Proxy Materials and Letter to All Shareholders/page 4</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Important Additional Information</B>
<DIV align="left" style="font-size: 6pt">&nbsp;</DIV>
On July&nbsp;31, 2007, H&#038;R Block began the process of mailing its definitive proxy statement (the &#147;Proxy
Statement&#148;), together with a WHITE proxy card, in connection with H&#038;R Block&#146;s 2007 Annual Meeting
of Shareholders. <B>The Proxy Statement contains important information about H&#038;R Block and the 2007
Annual Meeting. H&#038;R Block urges its shareholders to read the Proxy Statement carefully.</B>
Shareholders may obtain additional free copies of the Proxy Statement and other documents filed
with the Securities Exchange Commission (SEC)&nbsp;by H&#038;R Block through the website maintained by the
SEC at www.sec.gov. In addition, copies of the Proxy Statement and other documents may be obtained
free of charge by directing a request to: H&#038;R Block, Inc., Attn: Corporate Secretary, 1 H&#038;R Block
Way, Kansas City, MO 64105, (816)&nbsp;854-3000 or from our website (www.hrblock.com). Copies of the
Proxy Statement also may be requested by contacting our proxy solicitor, Innisfree M&#038;A
Incorporated, at 877-456-3463 toll-free.
</DIV>



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