Edgar Filing: H&R BLOCK INC

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 11-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD SEPTEMBER 13, 2000 (DATE OF INCEPTION) TO JUNE 30, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION FILE NUMBER 1-6089

H&R BLOCK, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
(FULL TITLE OF THE PLAN)

H&R BLOCK, INC.
4400 MAIN STREET
KANSAS CITY, MISSOURI 64111
(NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND
THE ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE)

TABLE OF CONTENTS

Report of Independent Accountants ........................................................... 2

Financial Statements

Statement of Financial Condition as of June 30, 2001 ................................... 3

Statement of Operations and Changes in Plan Equity for the
period September 13, 2000 (date of inception) to June 30, 2001 ...................... 4

Notes to Financial Statements .......................................................... 5

Signatures .................................................................................. 8

Consent of Independent Accountants (Exhibit 23) ............................................. 9

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REPORT OF INDEPENDENT ACCOUNTANTS

To the Compensation Committee of the Board of Directors of H&R Block, Inc. and
the Participants of the H&R Block, Inc. 2000 Employee Stock Purchase Plan:

In our opinion, the accompanying statement of financial condition and the
related statement of operations and changes in plan equity present fairly, in
all material respects, the financial condition of the H&R Block, Inc. 2000
Employee Stock Purchase Plan (the "Plan") at June 30, 2001, and the results of
its operations and changes in plan equity for the period from September 13, 2000
(date of inception) to June 30, 2001 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Kansas City, Missouri
September 26, 2001

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H&R BLOCK, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF FINANCIAL CONDITION

JUNE 30,
2001
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Assets $ -
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Liabilities $ -
Plan equity -
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Total Liabilities & Plan equity $ -
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See Notes to Financial Statements

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H&R BLOCK, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF OPERATIONS AND CHANGES IN PLAN EQUITY

PERIOD FROM
SEPTEMBER 13, 2000
(DATE OF INCEPTION) TO
JUNE 30, 2001
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Participant contributions $ 1,955,462

Participant withdrawals (114,520)

Purchases of H&R Block, Inc. common stock (1,840,942)
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Net additions -

Plan equity at beginning of period -
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Plan equity at end of period $ -
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See Notes to Financial Statements

H&R BLOCK, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001

1. DESCRIPTION OF PLAN

The following is a brief description of the H&R Block, Inc. 2000 Employee
Stock Purchase Plan (the "Plan"). The Plan is designed to encourage and
assist employees of the subsidiaries of H&R Block, Inc. (the "Company") to
acquire an equity interest in the Company through the purchase of shares of
the Company's common stock. Participants should refer to the Plan document
for a more complete description of the Plan.

The Plan was adopted by the Board of Directors of the Company on June 28,
2000 and by the shareholders at its Annual Meeting on September 13, 2000.

The Plan year-end is June 30. The Plan's fiscal year ended June 30, 2001
includes only the period September 13, 2000 (date of inception) to June 30,
2001.

Common stock for the Plan is issued directly from the Company's authorized
but unissued shares or treasury shares. The aggregate number of shares that
may be issued under the Plan can not exceed 3,000,000 (prior to a
two-for-one stock split of the Company's common stock effective August 1,
2001), and 6,000,000 (effective August 1, 2001, the effective date of the
two-for-one stock split of the Company's common stock).

Eligibility. An employee of a participating subsidiary of the Company is
eligible to participate in the Plan if the employee has been continuously
employed by a participating subsidiary for at least twelve months. In
addition, employees must be customarily employed at least 20 hours per week
and at least five months in any calendar year.

Each eligible employee may enroll in the Plan as of the first day of an
Option Period during open enrollment, which ends at least 15 days prior to
the commencement of such Option Period. The Option Periods are six-month
periods beginning on July 1 and January 1 of each year and ending on
December 31 and June 30 of each year, respectively. In the initial year of
the Plan, the first Option Period began on September 13, 2000 (date of
inception) and ended on December 31, 2000.

Contributions. A Plan participant can contribute from 1% to 10% of the
participant's "compensation", as such term is defined in the Plan, through
after-tax payroll deductions during the Option Period. Participants can
increase or decrease their withholding percentage during an Option Period.
In addition to these limits, a participant cannot accrue at a rate that
exceeds $25,000 for the calendar year, as measured by the fair market value
of shares (as determined in the case of each such share as of the first day
of an Option Period). The Company holds contributions until

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the end of the Option Period at which point the Company issues shares for
the contributions received. No interest is paid or accrued on the
participants' payroll deductions. Contributions from participant payroll
deductions are held by the Company and are used for general corporate
purposes.

Participant withdrawals: A participant may choose to withdraw from the Plan
at any time during an Option Period. Participants who terminate their
employment with the Company are not eligible to continue participation in
the Plan. Upon withdrawal, termination from employment or death, any
accumulated contributions during an Option Period are distributed to the
employee or beneficiary, without interest, by the Company.

Stock Purchase Provisions. On the first day of the Option Period ("Grant
Date"), eligible employees are granted the option to purchase shares of the
Company's common stock. On the last day of the Option Period ("Purchase
Date"), the Company issues common stock to the participants. The purchase
price per share of common stock issued by the Company is 90% of the lower
of either the fair market value of the Company's common stock on the Grant
Date or the Purchase Date. Fair market value is determined using the
closing price of the Company's common stock as listed on the New York Stock
Exchange. All shares issued under the Plan may not be sold, transferred or
assigned for a period of six months after the Purchase Date.

Shares purchased pursuant to the Plan during the two Option Periods in the
period from September 13, 2000 to June 30, 2001 were 27,673 shares and
26,985 shares, respectively. The purchase price per share for the common
stock was $31.22 and $36.23 for the two Option Periods, respectively. The
foregoing numbers of shares and purchase prices per share are not adjusted
for the two-for-one stock split of the Company's common stock effected
August 1, 2001.

Plan Administration. The Plan is administered by the Compensation Committee
of the Company's Board of Directors. The Company pays all expenses of the
Plan.

Plan Termination. Although the Board of Directors of the Company has not
expressed any intent to do so, it has the right to terminate the Plan at
any time. In the event the Plan is terminated, the Board of Directors may
elect to restrict purchase of shares under the Plan during the Option
Period in which the Plan was terminated. If such right is exercised, all
funds contributed to the Plan that have not been used to purchase shares
will be returned without interest to the participants.

2. ACCOUNTING POLICY

The accompanying financial statements have been prepared on the accrual
basis of accounting. The preparation of financial statements in conformity
with generally accepted accounting principles requires the Plan's
management to use estimates and assumptions that affect the accompanying
financial statements and disclosures. Actual results could differ from
these estimates.

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3. FEDERAL INCOME TAXES

The Plan is intended to constitute an employee stock purchase plan within
the meaning of Section 423 of the Internal Revenue Code (the "Code").
Issuance of shares under this Plan is not intended to result in taxable
income to participants in the Plan based on provisions of the Code.
Accordingly, the Plan is designed to be exempt from income taxes. The
Plan's management believes that the Plan has been operated in accordance
with the Code and therefore no provision for income taxes has been
reflected in the accompanying financial statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed by the undersigned hereunto duly
authorized.

H&R Block, Inc. 2000 Employee
Stock Purchase Plan

Date 9/28/01 By: /s/ Mark A. Ernst
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Mark A. Ernst
President and Chief Executive Officer
H&R Block, Inc.