Document:

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                                                                   EXHIBIT 10.22

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the
15th day of May, 1998, by and between DMJK BUSINESS SERVICES, INC., a Missouri
Corporation ("Old DMJK"), and TERRENCE E. PUTNEY (the "Employee").

                                    RECITALS

                  WHEREAS, Old DMJK is a wholly owned subsidiary of HRB BUSINESS
SERVICES, INC. ("HRB Business Services"), which is in turn a wholly owned
subsidiary of H&R BLOCK GROUP, INC. ("Group"); and Old DMJK is engaged in the
provision of business services to the general public;

                  WHEREAS, Employee is a Certified Public Accountant ("CPA") who
desires employment by Old DMJK to provide certain business services to clients
or customers of Old DMJK;

                  WHEREAS, Employee is also employed by and is a shareholder of
Donnelly Meiners Jordan Kline, P.C. (Employee and such other shareholders of
Donnelly Meiners Jordan Kline, P.C. who are also employees of Old DMJK being
sometimes herein referred to as "Shareholder CPAs") an accounting firm licensed
as a CPA firm by the Board of Accountancy of the State of Missouri ("New DMJK");
and

                  WHEREAS, Old DMJK and Employee desire to evidence the terms
and conditions of their relationship.

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as follows:

                  1. EMPLOYMENT. Old DMJK and Employee confirm that Employee is
an Employee of Old DMJK pursuant to all the terms and conditions of this
Agreement.

                  2. TERM. The term of the Employee's employment and of this
Agreement shall commence on the date hereof and, if not sooner terminated
pursuant to the terms hereof, shall expire on that date which is five years
after the date hereof (the "Initial Term"). Thereafter, such employment and this
Agreement shall continue pursuant to the terms hereof from year to year, subject
to termination, with or without cause, upon ninety (90) days prior written
notice by either party or as otherwise set forth in Section 9 herein. The term
of this Agreement, including references to the Initial Term, will be hereafter
referred to as the "Term."

                  3. DUTIES.

                     3.1 DUTIES OF EMPLOYEE. Employee shall render such lawful
services for Old DMJK and its customers or clients as are from time to time
reasonably requested of Employee and assigned to Employee by Old DMJK (the
"Services"). The duties of the

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Employee may be changed from time to time by Old DMJK after consultation
with Employee. Old DMJK and Employee intend that Employee shall perform for Old
DMJK only those Services which do not constitute the performance of attestations
and services related thereto or any other services for which a Certified Public
Accountant ("CPA") certificate and license (for either Employee or Old DMJK) are
required by either the laws of the State of Missouri or Kansas, whichever
state's law is applicable ("Public Accounting Services"). Also, Old DMJK and
Employee intend that Employee shall only be required to perform for Old DMJK
services of a type reasonably consistent with those traditionally performed by
CPAs (other than those services required to be performed by New DMJK pursuant to
law or rules of the State Board of Accounting) generally, including, without
limitation, accounting, bookkeeping, write up, tax preparation, administration,
supervision, marketing, promotion and training. Old DMJK shall not require
Employee to relocate outside the Kansas City metropolitan area. All fees for
provision of the Services by Employee pursuant to this Agreement shall belong
and be payable to Old DMJK; provided, however, that if Employee provides
services to or is employed by New DMJK whether or not pursuant to a management
or similar agreement between Old DMJK and New DMJK, fees earned from providing
services as an employee of New DMJK shall be retained by New DMJK or forwarded
to Old DMJK as the management or other agreement may provide. However, no fees
paid for Public Accounting Services shall be paid directly to Old DMJK. Old DMJK
specifically approves employment of Employee by New DMJK provided that the only
services which Employee provides for New DMJK shall be those services which both
Employee and New DMJK must have licenses from the State of Missouri Board of
Accountancy to provide. Employee shall, in addition to the duties described
above:

                           (a) Keep or cause to be kept, appropriate records,
               reports, claims and correspondence ("Records") necessary and
               appropriate in connection with the Services provided by Employee
               hereunder. All such Records shall belong to Old DMJK;

                           (b) Promote, to the extent permitted by law, the
               business of Old DMJK;

                           (c) Perform all acts necessary to maintain all of
               Employee's skills at an appropriate level; and

                           (d) Maintain all licenses or certifications
               necessary for Employee to hold Employee out as a CPA and to
               perform attestations in Missouri and/or Kansas.

                    3.2    PERFORMANCE IN GOOD FAITH. The Employee will, to the
best of the Employee's abilities, competently, with diligence, in good faith and
with integrity, devote Employee's business time, attention, energy and skill
necessary to the fulfillment of Employee's duties hereunder.

                    3.3    POLICIES AND PROCEDURES. The Employee will be subject
to such policies and procedures as are from time to time established by Old DMJK
or its direct or indirect parent companies for employees of Old DMJK generally.

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                    3.4   CHARITABLE AND COMMUNITY ACTIVITIES. It is hereby
acknowledged that, subject to Section 7 hereof, the Employee may either
presently, or in the future, be involved in charitable or community activities
so long as such other activities do not interfere with the performance by the
Employee of Employee's duties hereunder and such involvement is in conformity
with the Code of Business Ethics and Conduct of H&R Block, Inc., as the same may
be amended from time to time.

               4. EMPLOYEE COMPENSATION. Employee shall receive that portion
of the consideration identified in this Article 4 as is allocated to Employee
pursuant to subsections 4.1.(b), 4.2(e), 4.3(d) and 4.4(e) below.

                  4.1     ANNUAL AGGREGATE COMPENSATION. Old DMJK shall annually
pay an aggregate amount to the Shareholder CPAs identified in Schedule 4.1
(which may be amended from time to time by New DMJK subject to prior approval by
Old DMJK) (the "Annual Aggregate Compensation"), as set forth in Schedule
4.1(a):

                  4.1(a)  PAYMENT OF ANNUAL AGGREGATE COMPENSATION. The Annual
         Aggregate Compensation payable under subsection 4.1(a) for each fiscal
         year in question shall be paid in equal semi-monthly installments with
         each such installment equal to 1/24 of the amount set forth in Section
         1 of Schedule 4.1(a) and subsection (ii) of Sections 2-5 of Schedule
         4.1(a). The Annual Aggregate Compensation payable for the fiscal year
         ended April 30, 1999 shall be prorated so that the amount of Annual
         Aggregate Compensation payable under Section 1 of Schedule 4.1(a) shall
         be the percentage of fiscal year 1999 (in days) that this Agreement is
         in effect multiplied by One Million Two Hundred Twenty-Seven Thousand
         Four Hundred Thirty-Two Dollars ($1,227,432), and the payment thereof
         shall be made in semi-monthly payments over the remaining term of such
         year. Promptly after the conclusion of each of the fiscal years set
         forth on the attached Schedule 4.1(a), an annual reconciliation shall
         be performed, and if the amount payable to the Employee, together with
         the amounts payable to all other Shareholder CPAs (the "Actual
         Compensation Paid"), exceeds the amount which should have been paid
         pursuant to Schedule 4.1(a) (as reduced, if at all, by the provisions
         of subsection 4.1(c) below), then the Shareholder CPAs, including
         Employee, shall pay the excess to Old DMJK within 30 days after demand
         or the Annual Aggregate Compensation for the next year shall be reduced
         accordingly, at the option of Old DMJK. Alternatively, if the Actual
         Compensation paid is less than the amount which should have been paid
         pursuant to Schedule 4.1(a) (as reduced, if at all, by the provisions
         of subsection 4.1(c)) then Old DMJK shall pay the Shareholder CPAs,
         including Employee, such deficit within thirty (30) days after the
         reconciliation is completed.

                  4.1(b)  ALLOCATION OF ANNUAL AGGREGATE COMPENSATION. The
         amounts payable pursuant to this subsection 4.1 shall be paid and
         allocated by Old DMJK to Employee in such amount as may be established
         by the Old DMJK Compensation Committee (the "Compensation Committee"),
         the members of which for the fiscal year ended April 30, 1999, are
         identified on Schedule 4.1(b) attached hereto. The Annual Aggregate
         Compensation for the fiscal year ended April 30, 1999 shall be
         allocated in the amount agreed upon and set forth on Schedule 4.1(b)
         hereto (the "Allocated Amount"). Other than for the fiscal year ended
         April 30, 1999, such allocation is subject to approval

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         by the Old DMJK Board of Directors, such approval not to be
         unreasonably withheld. The Shareholder CPAs shall select the members of
         such Compensation Committee on May 1 to serve for the fiscal year
         beginning on that date and shall notify Old DMJK of the identity of the
         Compensation Committee on such May 1. The Compensation Committee so
         identified shall establish that percentage of the Annual Aggregate
         Compensation to be received by each Employee for the succeeding fiscal
         year, and such base compensation shall not change without the prior
         written consent of Old DMJK, which consent shall not unreasonably be
         withheld.

                    4.1(c)  REDUCTION OF ANNUAL AGGREGATE COMPENSATION. The
         Annual Aggregate Compensation payable as set forth in this subsection
         4.1 shall be reduced, if at all, as follows: (i) if the operations of
         Old DMJK and New DMJK (treated for this purpose as if such operations
         were consolidated for purposes of financial statements and reporting)
         result in a net loss (as determined in accordance with generally
         accepted accounting principles ("GAAP") and including Annual Aggregate
         Compensation prior to any adjustment pursuant to this subsection
         4.1(c)) in any year during the Term, then the Annual Aggregate
         Compensation for that year shall be reduced by the amount of such net
         loss. In determining whether there is a net loss for any year for
         purposes of this subsection 4.1(c), (x) Old DMJK and New DMJK will be
         charged a cost of capital (for funds advanced to Old DMJK by HRB
         Business Services or any affiliate or to New DMJK by HRB Business
         Services or any affiliate or by Old DMJK for purposes other than
         acquiring accounting practices) at a variable rate of interest equal to
         the prime rate announced by Commerce Bank, N.A. of Kansas City plus one
         percent (1%), adjusted monthly on the first day of each month (the
         "Intercompany Interest") and (y) goodwill shall not be included in
         determining net loss; and (ii) the Annual Aggregate Compensation shall
         be reduced, dollar for dollar by the amounts, if any, payable to the
         Shareholder CPAs by New DMJK, which are in excess of $135,000. In the
         event of reduction under either subsection 4.1(c)(i) or 4.1(c)(ii)
         above, the amount of the reduction shall be paid to Old DMJK by the
         Shareholder CPA's within 30 days from written notice to such effect, or
         shall be deducted from the Annual Aggregate Compensation payable for
         the next succeeding fiscal year, at the option of Old DMJK.

                    4.2   REGIONAL AND MARKET BONUSES. For the Initial Term, New
DMJK shall be designated the "Market Firm" and the "Regional Firm" in a market
or region encompassing Old DMJK's Kansas City office, which determination of
such market (the "Market") or region (the "Region") is in the reasonable
discretion of HRB Business Services and may be amended during each of the fiscal
years ended April 30, 1999 through 2003. Pursuant to such designation as a
Market Firm and a Regional Firm, Old DMJK shall pay the Shareholder CPAs, the
following amounts, if any are earned, as set forth herein.

                    4.2(a) REGIONAL BONUS. An aggregate amount equal to five
         percent (5%) of the aggregate Earnings (defined below) (after Market
         Bonuses similar to the Market Bonus described in subsection 4.2(b)
         below paid or payable to "market level" firms within the designated
         region and after Local Incentive Bonuses paid or payable as described
         in subsection 4.4 below) of any accounting firm operations of those
         subsidiaries or affiliates of HRB Business Services in the Region (the
         "Regional Bonus").

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                    4.2(b) MARKET BONUS. An aggregate amount equal to five
         percent (5%) of the aggregate Earnings (after Local Incentive Bonuses
         paid or payable as described in subsection 4.4 below) of the accounting
         firm operations of those subsidiaries or affiliates of HRB Business
         Services in the Market (the "Market Bonus").

                    4.2(c) LIMITATION ON REGIONAL BONUS. The Regional Bonus
         payable for any particular fiscal year shall only be payable if the
         aggregate Earnings of the Region (after bonuses otherwise payable under
         subsections 4.2(a) and 4.2(b) and after "market level" bonuses paid or
         payable to other firms within such Region for the applicable fiscal
         year) exceed ten percent (10%) of the Gross Revenues (defined below) of
         the Region for such fiscal year. The maximum aggregate Regional Bonus
         payable to all firms in any region shall not exceed five percent (5%)
         of the aggregate Earnings of the region determined as set forth in this
         subsection 4.2.

                    4.2(d) LIMITATION ON MARKET BONUS. The Market Bonus payable
         for any particular fiscal year shall only be payable if the aggregate
         Earnings of the Market after the Market Bonus otherwise payable under
         subsection 4.2(b)) exceeds ten percent (10%) of the Gross Revenues of
         the Market for such fiscal year. The maximum aggregate Market Bonus
         payable to all firms in any market shall not exceed five percent (5%)
         of the aggregate Earnings of the market determined as set forth in this
         subsection 4.2.

                    4.2(e) ALLOCATION OF REGIONAL AND MARKET BONUSES. Any
         amounts payable pursuant to this subsection 4.2 shall be allocated
         among the Shareholder CPAs by the Compensation Committee, subject to
         approval by Old DMJK, which approval shall not be unreasonably
         withheld. Employee has no right to receive a portion of the Market
         Bonus or Regional Bonus, and Employee may be allocated a portion of the
         Regional Bonus and Market Bonus only if the Compensation Committee,
         subject to Old DMJK's approval as described in this subsection 4.2(e),
         so determines. Employee shall have no claim against Old DMJK for any
         such allocation (or the failure to allocate any such amount to
         Employee). Employee shall forfeit any amount allocated to Employee for
         a Regional Bonus or a Market Bonus in the event that Employee is not
         employed by Old DMJK (other than due to retirement from practice,
         disability or death) on the date of payment of such allocated amounts.
         Amounts payable under this subsection 4.2 shall be paid within sixty
         (60) days following the end of each fiscal year for which such Market
         Bonuses and Regional Bonuses are payable.

                   4.3     NATIONAL BONUS. Subject to the conditions set forth
herein, Old DMJK shall pay to the Shareholder CPAs the following aggregate
amounts, if any are earned, as set forth herein (the "National Bonus").

                    4.3(a) FISCAL YEAR ENDED APRIL 30, 2000. Five Hundred
         Thousand Dollars ($500,000) if the aggregate Earnings of all United
         States accounting firm operations affiliated with HRB Business Services
         (the "HRB Business Services Accounting Operations") equal or exceed
         Eight Million Dollars ($8,000,000) for the fiscal year ended April 30,
         2000.

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                    4.3(b) FISCAL YEAR ENDED APRIL 30, 2001. Five Hundred
         Thousand Dollars ($500,000) if the aggregate Earnings of the HRB
         Business Services Accounting Operations equal or exceed Sixteen Million
         Dollars ($16,000,000) for the fiscal year ended April 30, 2001.

                    4.3(c) FISCAL YEAR ENDED APRIL 30, 2002. Five Hundred
         Thousand Dollars ($500,000) if the aggregate Earnings of the HRB
         Business Services Accounting Operations affiliated with HRB Business
         Services equal or exceed twenty-four Million Dollars ($24,000,000) for
         the fiscal year ended April 30, 2002.

                    4.3(d) ALLOCATION OF NATIONAL BONUS. Any amounts payable for
         any fiscal year pursuant to this subsection 4.3 shall be allocated
         among the Shareholder CPAs by the Compensation Committee, subject to
         approval by Old DMJK, which approval shall not be unreasonably
         withheld. Employee has no right to receive a portion of the National
         Bonus, and Employee will be allocated a portion of the National Bonus
         only if the Compensation Committee, subject to Old DMJK's approval as
         described in this subsection 4.3(d), so determines. Employee shall have
         no claim against Old DMJK for any such allocation (or the failure to
         allocate any such amount to Employee). Employee shall forfeit any
         amount allocated to Employee in the event that Employee is not employed
         by Old DMJK (other than due to retirement from practice, disability or
         death) on the date of payments of any amounts allocated to Employee.
         Amounts payable under this subsection 4.3 shall be paid within sixty
         (60) days following the end of each fiscal year for which such National
         Bonus is payable.

                   4.4 LOCAL INCENTIVE BONUS. Subject to the conditions set
forth herein, Old DMJK shall pay the Shareholder CPAs the amounts, if any,
determined as follows.

                    4.4(a) ELIGIBILITY FOR LOCAL INCENTIVE BONUS. Each fiscal
         year (May-April) during the Term and for the fiscal year ended April
         30, 2004 in the event the Term is extended through such year (a "Plan
         Year"), the Shareholder CPAs who are employed by Old DMJK or New DMJK
         shall be entitled to receive a bonus, if earned, determined in the
         aggregate as follows in this subsection 4.4 (the "Local Incentive
         Bonus").

                    4.4(b) DEFINITIONS. For purposes of this subsection 4.4
         only, the following terms shall have the meanings set forth. "Excess
         Profit" means the amount by which the Net Margin for the applicable
         fiscal year exceeds the Profit Threshold for the Plan Year. "Net
         Margin" means the amount by which Adjusted Earnings Before Shareholder
         Compensation for the applicable Plan Year exceeds Shareholder
         Compensation for such Plan Year. "Profit Threshold" means the following
         amounts for the Plan Years shown:

<TABLE>
<S>                        <C>
         1999              $1,295,000
         2000              $1,372,700
         2001              $1,455,062
         2002              $1,542,366
         2003              $1,634,908
         2004              $1,733,002
</TABLE>

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         If Old DMJK or New DMJK acquires accounting practice(s), firms or fees
         which are consolidated with such office's operations and financial
         statements, the Profit Threshold shall be adjusted as is necessary so
         that same reflects an internal rate of return on the additional capital
         outlays for such acquisitions equal to fifteen percent (15%). The
         calculation of such rate of return shall be the same method as was used
         for the calculation of the above Profit Threshold(s). "Adjusted
         Earnings Before Shareholder Compensation" means the consolidated net
         income of New DMJK and Old DMJK determined in accordance with GAAP,
         provided that such consolidated net income shall be before (i) income
         taxes (ii) amortization of goodwill, (iii) Shareholder Compensation
         (whether such compensation is Annual Aggregate Compensation, Regional
         Bonus, Market Bonus, National Bonus or Local Incentive Bonus) and the
         national director's compensation. "Shareholder Compensation" means
         compensation payable pursuant to subsections 4.1, 4.2 and 4.3 of this
         Agreement.

                    4.4(c) CALCULATION OF LOCAL INCENTIVE BONUS. Each Plan Year
         during the Term, the Shareholder CPAs shall be entitled to a bonus, if
         earned, equal in the aggregate to fifty percent of the Excess Profit.

                    4.4(d) PAYMENT OF LOCAL INCENTIVE BONUS. Any Local Incentive
         Bonus earned by the Shareholder CPAs shall be payable, if at all, on
         the first June 15 which is at least one year following the conclusion
         of the Plan Year for which the Local Incentive Bonus was earned;
         provided, however, that the Local Incentive Bonus shall only be payable
         on such June 15 if the aggregate Net Margin for all Plan Years ending
         before such June 15 equal or exceed the sum of the Profit Thresholds
         for such Plan Years.

                    4.4(e) ALLOCATION OF LOCAL INCENTIVE BONUS. Any amounts
         payable pursuant to this subsection 4.4 shall be allocated among the
         Shareholder CPAs by the Compensation Committee, subject to approval by
         Old DMJK, which approval shall not be unreasonably withheld. Employee
         has no right to receive a portion of the Local Incentive Bonus, and
         Employee will be allocated a portion of the Local Incentive Bonus only
         if the Compensation Committee, subject to Old DMJK's approval as
         described in this subsection 4.4(e), so determines. Employee shall have
         no claim against Old DMJK for any such allocation (or the failure to
         allocate any such amount to Employee). Employee shall forfeit any
         amount allocated to Employee in the event that Employee is not employed
         by Old DMJK (other than due to retirement from practice, disability or
         death) on the date of the payment of such allocated amount.

                   4.5 DEFINITION OF EARNINGS. For purposes of subsections 4.2
and 4.3 above, except as otherwise set forth, the aggregate "Earnings" of HRB
Business Services accounting firm operations shall be net income as determined
for the applicable market, region or nationality in accordance with GAAP;
provided that such net income shall not include (a) Intercompany Interest; (b)
provision for income taxes; or (c) indirect overhead costs not directly incurred
by Old DMJK or New DMJK. Goodwill shall be amortized over a fifteen (15) year
period and shall reduce net income for the purposes of computing Earnings under
subsection 4.2, but shall not be deducted from net income for purposes of
computing Earnings under subsection 4.3.

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                   4.6 DEFINITION OF "LOCAL" OR "GROSS" REVENUES. As used
herein, the term "Local Revenues" or "Gross Revenues" shall mean the total gross
revenues of Old DMJK from the provision of accounting and other services to
clients plus the total gross revenues of New DMJK from provision of accounting
and other services each as determined in accordance with GAAP (less intercompany
revenues payable by Old DMJK or New DMJK to the other which would be eliminated
if Old DMJK and New DMJK were consolidated) and less returns, credits and
allowances).

                   4.7 AUTOMOBILE ALLOWANCE. Employee shall receive on the first
day of each month during the Term hereof, an automobile allowance in the amount
set forth on Schedule 4.7 hereto.

                5. VACATION. The Employee shall be entitled to four (4) weeks
of paid vacation during each year of the Term hereunder in conformance with the
H&R Block, Inc. Company Paid Time Off Policy. Vacation shall be taken at times
mutually agreed upon by the Employee and Old DMJK.

                6. BENEFITS.

                   6.1 BENEFITS. During the Term, the Employee shall be eligible
to participate in those pension, profit-sharing, stock option or similar plan(s)
or program(s) of Old DMJK, if any, established hereafter for the benefit of
employees of Old DMJK, subject to all eligibility requirements applicable to
employees covered thereby. The Employee shall be entitled to participate in any
group insurance, hospitalization, medical, health and accident, disability or
similar or non-similar plan or program of Old DMJK established hereafter for the
benefit of employees of Old DMJK, subject to all eligibility requirements
applicable to employees covered thereby. Set forth on Schedule 6.1 to this
Agreement are the benefits which Old DMJK shall provide to Employee.

                   6.2 PROFESSIONAL LIABILITY INSURANCE. During the Term, Old
DMJK shall maintain, at its expense, professional liability insurance of at
least One Million Dollars ($1,000,000) per occurrence and One Million Dollars
($1,000,000) annual aggregate, covering Employee for Employee's acts and
omissions in the performance of Employee's duties hereunder. Old DMJK may
provide all or any portion of the insurance required hereby under a program of
self-insurance.

                7. NON-COMPETITION.

                   7.1 SCOPE. Until the later to occur of April 30, 2003 or that
date which is (3) years after the expiration or termination of this Agreement,
for any reason or for no reason, Employee shall not directly or indirectly:

                    7.1(a) Own, have any interest in or be, serve or act as an
         individual proprietor, employee, agent, stockholder, officer, employee,
         consultant, director, joint-venturer, investor, lender, or in any other
         capacity whatsoever (other than as the holder of not more than five
         percent (5%) of the total outstanding stock of Old DMJK if Old DMJK
         becomes a publicly-held entity) of or with, or assist in any way, any
         corporation, employee, firm or business enterprise (other than New
         DMJK) which does business

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         anywhere in the United States and which is engaged or to Employee's
         knowledge after due inquiry intends to engage in the provision of
         financial or accounting services or tax return preparation services of
         a type which are provided by H&R Block, Inc. or any of its affiliates
         (or which H&R Block, Inc. or any of its affiliates are planning to
         offer, but as to planned activities only if Employee is or was engaged
         in such planning) at the time of such expiration or termination.

                    7.1(b) Solicit or induce, or attempt to solicit or induce,
         any Employee or independent contractor of Old DMJK, their respective
         parents or affiliates or any other person who shall otherwise be in the
         service of Old DMJK, their respective parents or affiliates to
         terminate his or her employment with or otherwise cease his or her
         relationship with Old DMJK, their respective parents or affiliates; or

                    7.1(c) Solicit, divert or take away, or attempt to solicit,
         divert or take away, the business or patronage of any of the clients,
         customers (whether any such customer has done business with Old DMJK
         once or more than once), suppliers or accounts, or prospective clients,
         customers, suppliers or accounts, of Old DMJK, their respective parents
         or affiliates.

Notwithstanding the foregoing, any Employee may own less than two percent (2%)
of the outstanding voting stock of a corporation coming within the restrictions
of this Section 7, the securities of which are listed on a national securities
exchange or are traded in the national over-the-counter market as quoted by the
National Association of Securities Dealers to The Wall Street Journal, if the
Employee does not participate in the management of, perform services for, or
have any other beneficial interest in, such corporation.

                   7.2 LIMITATIONS ON ENFORCEMENT. If any restriction set forth
in this Section 7 is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time, over too great a
range of activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which such court shall consider enforceable.

                   7.3 EXTENSION OF PERIOD OF NON-COMPETITION. If Employee
violates any of the provisions of this Section 7 after the date hereof, the
computation of the time period provided in subsection 7.1 shall be extended for
a period equal to the period of any such violation.

                8. CONFIDENTIALITY.

                   8.1 CONFIDENTIAL INFORMATION. Employee agrees that Employee
shall not use, or disclose to any person, either during the Term or after the
termination of this Agreement for any reason, any confidential or proprietary
information (herein collectively referred to as "Confidential Information")
furnished or provided by Old DMJK or HRB Business Services, its parents or
affiliates to Employee hereunder or otherwise, whether such information is
conveyed directly or on Old DMJK's behalf, except for purposes consistent with
the administration and performance of Employee's obligations hereunder, or as
required by law, provided that written notice of any legally required disclosure
shall be given to Old DMJK promptly prior to any such

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disclosure and the Employee shall reasonably cooperate with Old DMJK to protect
the confidentiality thereof pursuant to applicable law or regulation. For
purposes of this Agreement, the term "Confidential Information" includes
(without limitation) information in any format, including without limitation,
written, graphic or electromagnetic information and including but not limited
to, technical, financial and business information and models, designs,
manufacturing and test processes, procedures, names of customers or suppliers,
plans, data, specifications or any other confidential and proprietary
information. The term "Confidential Information," as used herein, does not
include information (a) which was already in the public domain, or (b) which was
in the rightful possession of Employee, at the time of its disclosure, or (c)
which is disclosed as a matter of right by a third party source after the
execution of this Agreement provided such third party source is not bound by a
confidentiality agreement with Old DMJK or (d) which passes into the public
domain by acts other than the unauthorized acts of the Employee.

                   8.2 USE OF CONFIDENTIAL INFORMATION. It is hereby agreed that
Employee will not use the Confidential Information in any way detrimental to Old
DMJK or HRB Business Services, and that the Confidential Information will be
kept confidential by Employee; provided, however, that any disclosure of such
Confidential Information may be made to any party to which Old DMJK or HRB
Business Services consent in writing prior to such disclosure.

                   8.3 PROTECTION OF CONFIDENTIAL INFORMATION. For the purpose
of complying with the confidentiality obligations set forth herein, the Employee
shall, at a minimum, use efforts commensurate with those that Employee uses for
protecting the confidentiality of corresponding information of Employee.

                   8.4 PRIOR CONFIDENTIAL INFORMATION. Any Confidential
Information supplied to Employee by Old DMJK or HRB Business Services prior to
the execution of this Agreement shall be considered in the same manner and be
subject to the same treatment as the Confidential Information made available
after the execution of this Agreement, and it is understood that this Agreement
is not intended to, and does not, obligate either Employee or Old DMJK to enter
into any further agreements or to proceed with any possible relationship or
other transaction.

                9. TERMINATION. In addition to termination pursuant to the
provisions of Section 2, the Employment of the Employee may be terminated (the
"Termination Date") as follows:

                   9.1 BY OLD DMJK FOR CAUSE. During the Term, effective upon
notice of termination given to the Employee by Old DMJK if Old DMJK determines
that "cause" for such termination exists. "Cause" shall be deemed to exist if
the Employee:

                       (a) engages in unethical or unprofessional conduct or
                commits an act of dishonesty, including, but not limited to,
                misappropriation of funds or any property of Old DMJK, its
                parent or affiliates;

                       (b) engages in activities or conduct injurious to the
                reputation of Old DMJK, its parent or affiliates;

                                       10

<PAGE>   11

                       (c) demonstrates gross insubordination in connection
                with Employee's services to Old DMJK under this Agreement;

                       (d) commits a felony;

                       (e) fails to maintain in good standing
                (without any limitations or restrictions) Employee's
                certification and license as a CPA in all states where
                Employee's activities require such certification and license;

                       (f) ceases to be a Shareholder CPA;

                       (g) enters into an arrangement and/or agreement or
                becomes a member, shareholder, employee, officer or director of
                any entity that provides services substantially similar to those
                provided by New DMJK or Old DMJK in violation of Section 7 of
                this Agreement;

                       (h) otherwise breaches Section 7 or 8 hereof; or

                       (i) violates any term or condition of this Agreement not
                covered by items (a) - (h) above and does not cure such
                violation within fifteen (15) days after notice of same by Old
                DMJK;

                   9.2 DEATH OR DISABILITY. In addition to termination for the
reasons otherwise set forth herein, this Agreement and Employee's employment
shall also terminate upon the Employee's death or "Disability." "Disability"
means the inability of the Employee to perform Employee's duties or services as
provided in this Agreement because of mental, physical or other illness, disease
or injury, where such disability (a) shall have existed for an aggregate of
twelve months in any 24-month period and Old DMJK shall have so notified the
Employee thereof, or (b) has prevented Employee from performing substantially
all of his or her duties hereunder for a period of twelve (12) consecutive
months.

                   9.3 BY OLD DMJK WITHOUT CAUSE. After the Initial Term, Old
DMJK may terminate this Agreement and Employee's employment, without cause, upon
not less than ninety (90) days prior written notice to the Employee as set forth
in Section 2 above.

                   9.4 BY EMPLOYEE. During the Term, Employee may terminate this
Agreement for "cause" which shall mean breach of any material provision hereof
by Old DMJK if Old DMJK does not either commence cure thereof within 15 days
after written notice from Employee, or, having commenced cure, does not
thereafter promptly and diligently prosecute cure to completion. In addition to
termination for the reasons otherwise stated herein, this Agreement and
Employee's employment with Old DMJK may be terminated during the Initial Term by
Employee on not less than 30 days prior written notice, without cause. After the
Initial Term, Employee may terminate this Agreement and Employee's Employment
upon ninety (90) days prior written notice to Old DMJK as set forth in Section 2
herein, with or without cause.

                   9.5 TERMINATION BY OLD DMJK. In addition to the termination
for the reasons otherwise stated herein, this Agreement and Employee's
employment with Old

                                       11

<PAGE>   12

DMJK shall be terminated automatically, without any action by Old DMJK, upon the
effective date of any termination of Employee's employment by New DMJK, for
whatever reason.

                   9.6 TERMINATION OF MANAGEMENT SERVICES AGREEMENT. In addition
to the termination for the reasons otherwise stated herein, this Agreement and
Employee's employment with Old DMJK shall be terminated at Old DMJK's option
upon termination of the Management Services Agreement. Such termination shall be
effective on the date of any termination of the Management Services Agreement.

                   9.7 EFFECT OF TERMINATION. Upon any termination of the
Employee's employment and this Agreement, Old DMJK and the Employee shall have
no further obligations under this Agreement to the other except:

                       (a) If the termination is pursuant to subsections 9.1,
         9.2 if Employee is suffering a Disability, or subsection 9.4 if
         termination is without cause, Employee's obligations under Section 7
         shall continue for the period set forth therein, and the Employee's
         obligations under Section 8 shall continue in full force and effect
         indefinitely;

                       (b) If the termination is pursuant to subsection 9.3
         without cause or subsection 9.4 with cause, Employee's obligations
         under subsection 7.1(a) shall cease on the Termination Date, but
         Employee's obligations under Section 8 and subsections 7.1(b) and
         7.1(c) shall continue in full force and effect indefinitely;

                       (c) If the Management Services Agreement is terminated by
         Old DMJK because HRB Business Services determines to cease providing
         accounting services, and if Employee's employment hereunder is
         terminated as a result thereof, then Employee's obligations under
         subsection 7.1(a) shall cease on the Termination Date and Employee's
         obligations under Section 8 and subsections 7.1(b) and 7.1(c) shall
         continue in full force and effect indefinitely;

                       (d) If the Management Services Agreement is terminated by
         Old DMJK because (1) New DMJK loses or has suspended any license or
         certification to practice public accounting and/or to hold itself out
         as a firm engaged in public accounting; (2) New DMJK is dissolved or
         liquidated or files a voluntary petition in bankruptcy or other action
         is taken voluntarily or involuntarily under any statute for the
         protection of creditors; or (3) New DMJK beaches a material provision
         of the Management Services Agreement and fails either to commence a
         cure of the breach within fifteen (15) days after the delivery of
         notice of such breach by Old DMJK or having so commenced cure, fails
         thereafter to prosecute cure promptly to completion within thirty (30)
         days after receipt of such initial notices, and if Employee's
         employment hereunder is terminated as a result thereof, then Employee's
         obligations under Section 7 shall continue for the term set forth
         therein, and Employee's obligations under Section 8 shall continue
         indefinitely.

                                       12

<PAGE>   13

                    (e) If the Management Services Agreement is terminated by
         New DMJK because Old DMJK breaches a material provision of the
         Management Services Agreement and fails either to commence cure of the
         breach within fifteen (15) days after the receipt of notice of such
         breach by New DMJK, or having so commenced cure, fails thereafter to
         prosecute cure promptly to completion within thirty (30) days after
         receipt of such written notice, and if Employee's employment hereunder
         is terminated as a result thereof, then Employee's obligations under
         subsection 7.1(a) shall cease on the Termination Date, and Employee's
         obligations under Section 8 and subsections 7.1(b) and 7.1(c) shall
         continue indefinitely.

                    (f) In the event this Agreement is terminated after a change
         in any applicable statutes, regulations or interpretations thereof, the
         adoption of any new regulations or legislation (collectively, the
         "Laws"), or an enforcement of Laws that would materially affect the
         operation or compensation under the Management Services Agreement, or
         which would make the Management Services Agreement unlawful, and the
         parties fail to negotiate a new Management Services Agreement, and if
         Employee's employment hereunder is terminated as a result thereof,
         Employee's obligations shall continue under Section 7 as set forth
         therein and Employee's obligations under Section 8 shall continue
         indefinitely. However, this Agreement shall remain in effect during any
         negotiation period described in the preceding sentence.

                    (g) Old DMJK's obligation to pay Employee compensation shall
         continue for any periods up and through the Termination Date worked by
         the Employee for which Employee has not been paid; however, Employee
         will be paid for any Market Bonus, Regional Bonus, or National Bonus
         unless Employee is not employed by Old DMJK (other than due to
         retirement from practice, disability or death) on the date that such
         Market Bonus, Regional Bonus or National Bonus is paid.

                9.8 AVAILABILITY OF INJUNCTIVE RELIEF. In the event of a
breach or threatened breach by Employee of any provision of Sections 7 or 8
hereof, Old DMJK shall be entitled to seek an injunction restraining such
breach, but nothing herein shall be construed as prohibiting Old DMJK from
pursuing any additional remedy available to Old DMJK for such breach or
threatened breach.

                                       13

<PAGE>   14

               10. MISCELLANEOUS.

                   10.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding among Old DMJK and the Employee concerning the
subject matter hereof. No modification, amendment, termination or waiver of this
Agreement shall be binding unless in writing and signed by the Employee and a
duly authorized officer of Old DMJK. Failure of Old DMJK or the Employee to
insist upon strict compliance with any of the terms, covenants or conditions
hereof shall not be deemed a waiver of such terms, covenants and conditions.

                   10.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Employee and the heirs, executors and administrators of the Employee or
of his or her estate and property, and shall inure to the benefit of Old DMJK
and its successors and assigns. Being a contract for personal services, the
Employee may not assign or transfer to others (a) the right to receive payments
hereunder or (b) the obligation to perform his duties and services hereunder.
Old DMJK may assign or transfer this Agreement (provided the Employee is given
notice thereof) to any subsidiary, parent or affiliate of Old DMJK.

                   10.3 TAXES. From any payments due hereunder to the Employee
from Old DMJK, there shall be withheld amounts reasonably believed by Old DMJK
to be sufficient to satisfy liabilities for federal, state and local income and
related taxes and other charges.

                   10.4 NOTICES. Any notices required or permitted by this
Agreement must be in writing to be effective, and shall be deemed made or given,
if by mail, three days after depositing such notice in the United States mails,
postage prepaid, addressed to the parties, or by facsimile (if receipt is
confirmed) as follows:

         If to the Employee:

                      To:   Terrence E. Putney
                            ________________________
                            ________________________

         If to Old DMJK:

                  To:      HRB Business Services, Inc.
                           4400 Main Street
                           Kansas City, Missouri 64111
                  Attn:    Bret G. Wilson

                  with a copy to John R. Cox at the same address.

or, if by delivery, when delivered personally to the Employee or to the
above-named representative of Old DMJK, as the case may be. A copy of each
notice forwarded by Employee to Old DMJK or by Old DMJK to Employee shall be
forwarded at the time of first mailing or delivery, to Old DMJK.

                                       14

<PAGE>   15

                   10.5 RIGHT TO OFFSET. Subject to subsection 10.6, Old DMJK
shall have the right but not the obligation to offset any amounts due Old DMJK
by Shareholder CPAs or New DMJK against amounts that Old DMJK owes to the
Shareholder CPAs or New DMJK under this Agreement, the Management Services
Agreement (but only with respect to amounts payable by New DMJK to any
Shareholder CPA) or that certain Agreement for Purchase and Sale of Stock of
Donnelly Meiners Jordan Kline P.C or any agreement referred to therein. Offsets
for damages incurred by Old DMJK resulting from a breach of Sections 7 or 8
herein shall be applied only against amounts due the breaching Shareholder CPAs.
Otherwise, all offsets involving amounts owed to the Shareholder CPAs shall be
taken against amounts due all Shareholder CPAs.

                   10.6 ARBITRATION. The parties hereto agree that any such
dispute relating to or in respect of this Agreement, its negotiation, execution,
performance, subject matter, or any course of conduct or dealing or actions
under or in respect of this agreement, shall be submitted to, and resolved
exclusively pursuant to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association. Such arbitration
shall take place in Kansas City, Missouri, and decisions pursuant to such
arbitration shall be final, conclusive and binding on the parties. Upon the
conclusion of arbitration, the parties may apply to any court of competent
jurisdiction to enforce the decision pursuant to such arbitration. The
arbitration proceeding shall be subject to the laws of the State of Missouri.
Each party will bear its own costs. The parties hereto hereby waive and shall
not seek a jury trial in any lawsuit, proceeding, claim, counterclaim, defense
or other litigation or dispute under or in respect of this Agreement. The
parties will use their best efforts to complete any arbitration within ninety
(90) days from the date the arbitration is initiated by a party.

                   10.7 HEADINGS. All headings in this Agreement are for
convenience only and are not intended to affect the meaning of any provision
hereof.

                   10.8 COUNTERPARTS. This Agreement may be executed in two or
more counterparts with the same effect as if the signatures to all such
counterparts were upon the same instrument, and all such counterparts shall
constitute but one instrument.

                                       15

<PAGE>   16

                   IN WITNESS WHEREOF, the Employee has executed this Agreement
and Old DMJK has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.

                                   DONNELLY MEINERS JORDAN KLINE,
                                   INC.

                                   By:      /s/ Bret G. Wilson
                                            ------------------------------------
                                   Name:    Bret G. Wilson
                                            ------------------------------------
                                   Title:   Vice President
                                            ------------------------------------

                                   /s/ Terrence E. Putney
                                   ---------------------------------------------
                                   Terrence E. Putney

                                       16

<PAGE>   17

                                  SCHEDULE 4.1

                                SHAREHOLDER CPAS

1.       David E. Enenbach

2.       Daniel J. Haake

3.       Edwin C. Hoguland

4.       Terrence E. Putney

5.       Harry E. Jordan

6.       James R. Kline Jr.

7.       Gerard J. Meiners

8.       Robert A. Thomas, Jr.

<PAGE>   18

                                 SCHEDULE 4.1(a)

                         ANNUAL AGGREGATE CONSIDERATION

1. FISCAL YEAR ENDED APRIL 30, 1999. For the fiscal year ended April 30, 1999,
the Shareholder CPAs shall receive Annual Aggregate Compensation equal to One
Million Two Hundred Twenty-Seven Thousand Four Hundred Thirty-Two Dollars
($1,227,432). Such Aggregate Annual Compensation shall be prorated and only paid
for the portion of the fiscal year ended April 30, 1999 in which this Agreement
is in effect.

2. FISCAL YEAR ENDED APRIL 30, 2000. For the fiscal year ended April 30, 2000,
the Shareholder CPAs shall receive Annual Aggregate Compensation equal to (i)
Twenty-Three and 49/100 percent (23.49%) of Local Revenues for fiscal year (as
defined below) of Old DMJK or (ii) One Million Two Hundred Ninety-Five Thousand
Five Hundred Fifty-Four Dollars ($1,295,554), whichever is less.

3. FISCAL YEAR ENDED APRIL 30, 2001. For the fiscal year ended April 30, 2001,
the Shareholder CPAs shall receive Annual Aggregate Compensation equal to the
lesser of (i) Twenty-Three and 49/100 percent (23.49%) of Local Revenues for
such year, or (ii) One Million Three Hundred Sixty-Seven Thousand Eighty-One
Dollars ($1,367,081).

4. FISCAL YEAR ENDED APRIL 30, 2002. For the fiscal year ended April 30, 2002,
the Shareholder CPAs shall receive Annual Aggregate Compensation equal to the
lesser of (i) Twenty-Three and 49/100 (23.49%) of Local Revenues for such year
or (ii) One Million Four Hundred Forty-Two, One Hundred Eighty-Five Dollars
($1,442,185).

5. FISCAL YEAR ENDED APRIL 30, 2003. For the fiscal year ended April 30, 2003,
the Shareholder CPAs shall receive Annual Aggregate Compensation equal to the
lesser of (i) Twenty-Three and 49/100 percent (23.49%) of Local Revenues for
such year or (ii) One Million Five Hundred Twenty-One and Forty-Four Dollars
($1,521,044).

6. DEFINITION OF "LOCAL" OR "GROSS" REVENUES. As used herein, the term "Local
Revenues" or "Gross Revenues" shall mean the total gross revenues of Old DMJK
from the provision of accounting and other services to clients plus the total
gross revenues of New DMJK from provision of accounting and other services each
as determined in accordance with GAAP (less intercompany revenues payable by Old
DMJK or New DMJK to the other which would be eliminated if Old DMJK and New DMJK
were consolidated) and less returns, credits and allowances).

<PAGE>   19

                                 SCHEDULE 4.1(b)

           COMPENSATION COMMITTEE FOR FISCAL YEAR ENDED APRIL 30, 1999

                                David E. Enenbach

                                Gerard J. Meiners

                                James R. Kline, Jr.

              ALLOCATED AMOUNT FOR FISCAL YEAR ENDED APRIL 30, 1999

<TABLE>
<S>                                                              <C>
               Enenbach, David E.                                  176,066

               Haake, Daniel J.                                    120,731

               Hogueland, Edwin C.                                 120,731

               Jordan, Harry E.                                    181,097

               Kline, James R., Jr.                                125,761

               Meiners, Gerard J.                                  186,127

               Putney, Terrence E.                                 191,157

               Thomas, Robert, Jr.                                 125,761
                                                                 ---------
                                                                 1,227,432
</TABLE>

<PAGE>   20

                                  SCHEDULE 4.7

                              AUTOMOBILE ALLOWANCE

                     $500 per month for each Shareholder CPA

<PAGE>   21

                                  SCHEDULE 6.1

                         COMPENSATION PLANS AND BENEFITS

DEFERRED COMPENSATION

STOCK OPTIONS

401(k) PLAN

HEALTH INSURANCE

CONTINUING PROFESSIONAL EDUCATION<PAGE>   1
                                                                   EXHIBIT 10.23

                  SENIOR MANAGING DIRECTOR EMPLOYMENT AGREEMENT
                              (THOMAS G. ROTHERHAM)

                  THIS SENIOR MANAGING DIRECTOR EMPLOYMENT AGREEMENT (the
"Agreement") is made effective as of the 2nd day of August, 1999 (the "Effective
Date"), by and between RSM McGladrey, Inc. and assigns ("RSM McGladrey") and
Thomas G. Rotherham (the "Senior Managing Director"). All terms not otherwise
defined herein shall have the meaning set forth in that certain asset purchase
agreement by and among RSM McGladrey, McGladrey & Pullen, LLP ("McGladrey"), H&R
Block, Inc. ("Block") and others dated June 28, 1999.

                                    RECITALS

                  WHEREAS, RSM McGladrey is a wholly owned, indirect subsidiary
Block and RSM McGladrey is engaged in providing business services to the general
public;

                  WHEREAS, Senior Managing Director desires employment with RSM
McGladrey, and RSM McGladrey desires to employ Senior Managing Director to
provide business services to clients of RSM McGladrey, on the terms and
conditions set forth herein.

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

                  1.       EMPLOYMENT; POSITION; RESPONSIBILITIES.

                           1.1. EMPLOYMENT. RSM McGladrey hereby employs Senior
Managing Director, and Senior Managing Director hereby accepts and undertakes
such employment, pursuant to the terms and conditions of this Agreement.

                           1.2. POSITION; RESPONSIBILITIES. Senior Managing
Director shall hold the position of Chief Operating Officer and shall report to
the Chief Executive Officer or Chief Operating Officer of Block. Senior Managing
Director shall have the duties and responsibilities usually held by a Chief
Operating Officer of a Block subsidiary corporation which duties and
responsibilities shall include the integration of Block's national accounting
firm operations with McGladrey's operations.

                  2.       TERM. The term of the Senior Managing Director's
employment hereunder and of this Agreement shall be at will. This Agreement
shall commence on the date hereof. Thereafter, this Agreement may be terminated
pursuant to the provisions of Section 9 hereof. The term of this Agreement is
hereafter referred to as the "Term".

                  3.       CLASS OF SENIOR MANAGING DIRECTOR. Senior Managing
Director shall be in the Class of Senior Managing Directors.

<PAGE>   2

                  4.       PROFESSIONAL RESPONSIBILITIES AND DUTIES.

                           4.1. CERTAIN DUTIES OF SENIOR MANAGING DIRECTOR.
Senior Managing Director shall render such lawful services for RSM McGladrey and
its customers or clients as are from time to time reasonably requested of Senior
Managing Director and assigned to Senior Managing Director by RSM McGladrey (the
"Services"). RSM McGladrey and Senior Managing Director intend that Senior
Managing Director shall perform for RSM McGladrey only those Services which do
not constitute the performance of any services for which a CPA certificate,
permit and/or license (for either Senior Managing Director or RSM McGladrey) are
required by the laws of the applicable jurisdiction ("Public Accountancy").
Senior Managing Director shall, in addition to the duties described above:

                                (a) Keep or cause to be kept, appropriate
                  records, reports, claims and correspondence ("Records")
                  necessary and appropriate in connection with the Services
                  provided by Senior Managing Director hereunder.

                                (b) Promote, to the extent permitted by
                  applicable law and regulations, the business of RSM McGladrey;

                                (c) Perform all acts necessary to maintain all
                  of Senior Managing Director's skills at an appropriate level;
                  and

                                (d) Participate, at RSM McGladrey's request, in
                  activities designed to enhance and develop the national
                  accounting practice of RSM McGladrey and its affiliates.

                                (e) Promptly remedy any non-compliance with any
                  policies or procedures of RSM McGladrey.

                                (f) Promptly furnish to RSM McGladrey all
                  relevant information requested by RSM McGladrey related
                  directly or indirectly to Senior Managing Director's
                  performance of services for RSM McGladrey or any customer or
                  client of RSM McGladrey.

                           4.2. PERFORMANCE IN GOOD FAITH. Senior Managing
Director shall devote such of his productive time, attention, and energies to
RSM McGladrey's business, to the best of the Senior Managing Director's
abilities, competently, with diligence, in good faith and with integrity, as is
required for performance of his duties set forth under Section 4.2 above. Senior
Managing Director shall not, during the Term, engage in any other business
activity whether or not such business activity is pursued for gain, profit, or
other pecuniary advantage.

                           4.3. POLICIES AND PROCEDURES. The Senior Managing
Director will be subject to, and shall at all times comply with, the policies
and procedures which are from time to time established by RSM McGladrey or its
direct or indirect parent companies for Senior Managing Directors specifically
and for employees of RSM McGladrey generally. Senior Managing Director shall
also, at all times, conduct Senior Managing Director's activities hereunder and
otherwise in manner compliance with all applicable laws and rules promulgated

                                       2
<PAGE>   3

thereunder, and with all policies, procedures and standards of any applicable
organization, for example, the AICPA.

                           4.4. CHARITABLE AND COMMUNITY ACTIVITIES. It is
hereby acknowledged that, Senior Managing Director may either presently, or in
the future, be involved in charitable or community activities so long as such
other activities do not interfere with the performance by Senior Managing
Director of Senior Managing Director's duties hereunder and such involvement is
in conformity with all laws applicable to Senior Managing Director.

                           4.5. PERFORMANCE OF PROFESSIONAL RESPONSIBILITY.
Senior Managing Director shall discharge Senior Managing Director's professional
responsibility with integrity, objectivity and due professional care.

                  5.       COMPENSATION.

                           5.1. SENIOR MANAGING DIRECTOR COMPENSATION. Pursuant
to this Agreement, Senior Managing Director shall receive that amount of
compensation as is set forth on Schedule 5.1 hereto. The compensation payable to
Senior Managing Director hereunder is intended to be the fair value for the
services actually performed by the Senior Managing Director on behalf of RSM
McGladrey and its customers or clients.

                           5.2. VACATION. Senior Managing Director shall be
entitled to vacation in amount and subject to such conditions as are set forth
in the RSM McGladrey personnel policy manual. Vacation shall be taken at times
mutually agreed upon by the Senior Managing Director and RSM McGladrey. Vacation
will accrue on a monthly basis and unused vacation cannot be carried over at the
end of each year of the Term.

                           5.3. BENEFITS. During the Term, the Senior Managing
Director shall be eligible to participate in those pension, profit-sharing,
stock option or similar plan(s) or program(s) made available to Senior Managing
Directors or executive officers of RSM McGladrey from time to time, including
but not limited to those benefits set forth on Schedule 5.3 of this Agreement.

                           5.4. ADVERSELY AFFECTED PROVISION. If Senior Managing
Director's planned annual Base Salary (as defined in Schedule 5.1 hereto) (i) is
reduced by more than 25% from the greatest amount of such annual Base Salary
while employed by RSM McGladrey or (b) is reduced to less than 75% of his
greatest amount of actual annual Base Salary while employed by RSM McGladrey
then the Senior Managing Director has the right to claim to be "adversely
affected." If the Senior Managing Director elects to be adversely affected, then
such Senior Managing Director may elect one of the following:

                           (a) To terminate this Agreement and employment with
                  RSM McGladrey hereunder, and subject to compliance with all
                  applicable provisions hereof, to continue to perform services
                  as an accountant or consultant in competition with RSM
                  McGladrey. With respect to such competition, it is agreed that
                  considerable time, effort, and monies have been expended by
                  RSM McGladrey and its predecessors over the years to cultivate
                  and acquire the client group presently served by RSM
                  McGladrey, and it is that client group, among

                                       3
<PAGE>   4

                  other assets, that represents the intangible value of RSM
                  McGladrey. It is, therefore, agreed that the Senior Managing
                  Director will compensate RSM McGladrey without interest (1)
                  for any client, customer or account of RSM McGladrey that was
                  serviced by an office of RSM McGladrey or a predecessor
                  organization to which the withdrawing Senior Managing Director
                  was assigned during the two-year period prior to termination,
                  or (2) for any client, customer or account of RSM McGladrey or
                  predecessor organization served or counseled by such
                  withdrawing Senior Managing Director during the two-year
                  period prior to such Senior Managing Director's withdrawal, or
                  (3) any client, customer or account who was introduced to such
                  withdrawing Senior Managing Director during that two-year
                  period of time, which client(s) within the five years
                  subsequent to withdrawal, transfers all of its work formerly
                  performed by RSM McGladrey to such withdrawing Senior Managing
                  Director, or organization with which he or she associates. The
                  amount of compensation shall be an amount equal to 100% of the
                  dollar amount of net services performed by RSM McGladrey or
                  any predecessor organization for such client(s) during the
                  twelve-month period ending on the last date services were
                  performed by RSM McGladrey or predecessor organization for
                  such client(s). Net services shall be determined on a full
                  accrual basis in accordance with RSM McGladrey's then current
                  method of accounting. The payments shall be made in three
                  annual equal installments, payable without interest,
                  commencing thirty (30) days after RSM McGladrey notifies the
                  Senior Managing Director of the amount payable by the Senior
                  Managing Director pursuant to this Section, and the subsequent
                  payments due on each of the first and second anniversary dates
                  of the date the first installment is due, without interest. In
                  addition, if the withdrawing Senior Managing Director or any
                  person or organization with whom or which he or she is
                  employed, professionally associated on behalf of which Senior
                  Managing Director sets ("New Organization") earns or accepts
                  fees or compensation from a client, customer or account
                  identified in Subsections 5.4(a)(1)-(3) above, while not
                  displacing RSM McGladrey for all services, provided to such
                  client, customer or account Senior Managing Director shall pay
                  RSM McGladrey 100% of such fees or compensation earned and/or
                  accepted by the terminated Senior Managing Director or New
                  Organization during the five-year period following Senior
                  Managing Director's withdrawal date within 30 days of receipt
                  by the withdrawing Senior Managing Director, to a maximum
                  amount equal to 100% of the dollar amount of net services
                  performed by RSM McGladrey or any predecessor organization for
                  such client, customer or account during the twelve-months
                  immediately prior to the date of withdrawal. RSM McGladrey
                  further shall have the right to set off any amounts due it
                  from the withdrawing Senior Managing Director against any
                  other amounts or accounts due the Senior Managing Director by
                  RSM McGladrey; or

                           (b) To terminate this Agreement and employment with
                  RSM McGladrey hereunder, and to receive, subject to compliance
                  with all provisions of Sections 6 and 7, a severance payment
                  of Five Thousand Dollars ($5,000) per year as a Senior
                  Managing Director (including previous year's as a partner or
                  equivalent position in a predecessor organization) with a
                  maximum payment of

                                       4
<PAGE>   5

                  One Hundred Twenty-Five Thousand Dollars ($125,000) paid out
                  over a five-year period without interest.

                           (c) This Section 5.4 is not applicable if Senior
                  Managing Director is terminated for "cause" as defined in
                  Section 9.1(a) below.

                  6.       CERTAIN COVENANTS OF SENIOR MANAGING DIRECTOR.

                           6.1. CERTAIN ACKNOWLEDGMENTS. Senior Managing
Director acknowledges and agrees as follows in exchange for valuable
consideration which Senior Managing Director acknowledges:

                                 (a) RSM McGladrey and Block have obtained and
                  will maintain an advantage over their respective competitors
                  as a result of name, location and reputation developed at
                  great expense;

                                 (b) Senior Managing Director's relationship
                  with RSM McGladrey involves the understanding of and access to
                  certain trade secrets and confidential information pertaining
                  to the property, business and operations of RSM McGladrey and
                  its affiliates;

                                 (c) Senior Managing Director recognizes the
                  value of the special, unique and extraordinary knowledge and
                  skill required to accept, undertake and perform the type of
                  work normally undertaken and performed by Senior Managing
                  Director, RSM McGladrey and RSM McGladrey's other employees
                  and agents;

                                 (d) Senior Managing Director's competition with
                  RSM McGladrey and/or its affiliates following the termination
                  of his employment hereunder would impair the operation of RSM
                  McGladrey and/or such affiliates beyond that which would arise
                  from the competition of an unrelated third party with similar
                  skills;

                                 (e) All clients/customers of RSM McGladrey,
                  regardless of when or by whom acquired, are RSM McGladrey
                  assets and not assets of the individual Senior Managing
                  Director;

                                 (f) Senior Managing Director has carefully
                  considered the restrictions contained herein, and Senior
                  Managing Director specifically agrees that same are reasonable
                  and necessary and essential to the preservation of the
                  business of RSM McGladrey; and

                                 (g) Senior Managing Director's agreements and
                  covenants under this Section 6 are an essential part of the
                  inducement to RSM McGladrey to enter into this Agreement.

                                       5
<PAGE>   6

                  6.2.     CERTAIN RESTRICTIONS ON SUBSEQUENT PRACTICE AND
ACTIVITIES.

                           (a) PRACTICE OF ACCOUNTING (OTHER THAN PUBLIC
         ACCOUNTING) WITHIN THE TERRITORY. Senior Managing Director agrees that
         upon termination of his relationship with RSM McGladrey for whatever
         reason, with or without cause, he shall refrain from providing any
         services offered by, or planned to be offered by, RSM McGladrey or
         McGladrey, to their respective clients or prospective clients, for
         himself, or for others, either directly or indirectly, in his
         individual capacity or as an employee, independent contractor or agent
         of another, for a period of two years after his termination date in any
         city or area located within a 50 mile radius of the following:

                               (i) any RSM McGladrey office operated by this or
                  a predecessor organization to which the terminating Senior
                  Managing Director was assigned, or from which he had rendered
                  services or serviced clients, customers, or accounts during
                  any part of the two-year period immediately prior to his
                  termination; or

                               (ii) any principal residence maintained by the
                  terminating Senior Managing Director during any part of the
                  two-year period immediately prior to his termination.

                           (b) SOLICITATION OF PROTECTED CLIENTS. In addition,
         each Senior Managing Director covenants and agrees that upon
         termination of his employment by RSM McGladrey for whatever reason,
         with or without cause, that the Senior Managing Director shall not for
         himself, or for others, either directly or indirectly, in his
         individual capacity, or as a Senior Managing Director, employee,
         independent contractor or agent of another, for a period of five years
         after his termination date:

                               (i) solicit, or attempt to solicit, divert or
                  attempt to divert or take away or attempt to take away any
                  Protected Client as defined below, or

                               (ii) render any services to or sell any products
                  to any Protected Client.

For purposes hereof, the term "Protected Client" means:

                           (x) any client, customer, or account serviced by an
                  office of RSM McGladrey or of a predecessor organization to
                  which the Senior Managing Director was assigned during the
                  two-year period prior to the effective date of termination; or

                           (y) any client, customer, or account that was
                  serviced or counseled by the Senior Managing Director during
                  the two-year period prior to the effective date of
                  termination; or

                                       6
<PAGE>   7

                           (z) any client, customer or account serviced who was
                  introduced to the withdrawing Senior Managing Director during
                  the two-year period prior to withdrawal.

                           (c) CERTAIN MONETARY REMEDIES FOR VIOLATION OF
         SECTIONS 6.2(a) OR 6.2(b).

                               (i) Liquidated Damages. Notwithstanding the above
                  and the fact that money damages will be inadequate as a remedy
                  for any breach, threatened breach, or continuing breach of the
                  agreements and covenants contained in this Section, if a
                  Senior Managing Director violates any of the agreements and
                  covenants as contained in Section 6.2 (a) or (b) above, and if
                  RSM McGladrey for whatever reason elects not to pursue its
                  right to injunctive or other equitable relief as provided in
                  Section 7.1 or otherwise, or if upon submission to a court of
                  competent jurisdiction such injunctive or equitable relief is
                  not granted for any reason whatsoever, with respect to any
                  client which transfers all of the work formerly performed by
                  RSM McGladrey to the said withdrawing Senior Managing Director
                  or the organization with which he associates, the said
                  withdrawing Senior Managing Director shall pay to RSM
                  McGladrey without interest, as liquidated damages and not as
                  any for of penalty, in an amount equal to 100% of the dollar
                  amount of net services performed by RSM McGladrey or any
                  predecessor organization for such client(s) during the
                  twelve-month period ending on the last date services were
                  performed by RSM McGladrey or predecessor organization for
                  such clients. Net services shall be determined on a full
                  accrual basis in accordance with RSM McGladrey's then current
                  method of accounting. In fixing this formula for liquidated
                  damages, all Senior Managing Directors acknowledge that it is
                  difficult, if not impossible, to fix actual damages.
                  Nevertheless, all Senior Managing Directors agree that such
                  formula is fair and reasonable under the circumstances as a
                  method of partially compensating RSM McGladrey for the damage
                  it shall suffer as a result of such breach. Payment of this
                  amount shall be made in three equal annual installments with
                  the first installment due without interest within 30 days
                  after RSM McGladrey notifies the Senior Managing Director of
                  the amount payable by the Senior Managing Director pursuant to
                  this Section, and the subsequent installments are due without
                  interest on the first and second anniversary dates of the date
                  the first installment is due.

                               (ii) Payment of Fees. In addition, if a Senior
                  Managing Director violates the agreements and covenants as
                  contained in Section 6.2(a) and/or (b) above resulting in the
                  Senior Managing Director earning and/or accepting fees or
                  compensation from a client as defined above, while not
                  necessarily displacing RSM McGladrey for all services, 100% of
                  such fees or compensation earned and/or accepted by the
                  terminated Senior Managing Director or any person,
                  organization with whom he or she is employed, professionally
                  associated or in any manner acting for or

                                       7
<PAGE>   8

                  on behalf of during the five-year period after Senior Managing
                  Director's termination date will be paid to RSM McGladrey
                  without interest within 30 days of receipt by the Senior
                  Managing Director, to a maximum amount of 100% of the
                  displaced net services performed by RSM McGladrey or any
                  predecessor organization for such client during the twelve
                  months immediately prior to the date of termination.

                               (iii) Right of Offset. RSM McGladrey further
                  shall have the right (but not the obligation) to set off any
                  amount due from the withdrawing Senior Managing Director
                  against any other amounts or accounts due the Senior Managing
                  Director by RSM McGladrey.

                           (d) EMPLOYMENT OF PROTECTED PERSONNEL. Senior
         Managing Director covenants and agrees that in the event of the
         termination of his employment with RSM McGladrey for any reason
         whatsoever, or under any circumstance, with or without cause, that for
         a period of two (2) years following the effective date of such
         withdrawal (the "Prohibited Period"), the withdrawing Senior Managing
         Director shall not without the prior written consent of RSM McGladrey
         solicit, induce or in any manner encourage any employee of RSM
         McGladrey who is a professional employee with in excess of two years
         experience in work (the "Protected Personnel") to terminate Senior
         Managing Director's position at RSM McGladrey. Further, each Senior
         Managing Director covenants and agrees that upon termination, he will
         not during the Prohibited Period offer, or cause to be offered, a
         position of employment or of professional affiliation as a partner,
         member, owner, agent, representative or independent contractor to any
         member of the class of Protected Personnel who is employed by RSM
         McGladrey at the effective date of termination of employment of the
         Senior Managing Director, or was so employed at any time during the six
         (6) month period immediately prior to the effective date of withdrawal.

                           (e) CERTAIN MONETARY REMEDIES FOR VIOLATION OF
         SECTION 6.2(d).

                               (i) Liquidated Damages. Notwithstanding the fact
                  that money damages will be inadequate as a remedy for any
                  breach, threatened breach, or continuing breach of the
                  agreements and covenants contained in Section 6.2(d) and if
                  RSM McGladrey for whatever reason elects not to pursue its
                  right to injunctive or other equitable relief as provided in
                  Section 7.1 or otherwise or if upon submission to a court of
                  competent jurisdiction such injunctive or equitable relief is
                  not granted for any reason whatsoever, if Senior Managing
                  Director violates any of the agreements and covenants as
                  contained in Section 6.2(d), Senior Managing Director will pay
                  without interest the greater of Fifty Thousand Dollars
                  ($50,000) or one half of the base compensation of the
                  Protected Personnel for the 12 months prior to the termination
                  of Senior Managing Directors employment hereunder per person
                  to RSM McGladrey as liquidated damages for each Protected
                  Personnel induced or encouraged to terminate Senior Managing

                                       8
<PAGE>   9

                  Director's position or who was offered or caused to be offered
                  a position of employment by such Senior Managing Director. In
                  fixing this formula for liquidated damages, Senior Managing
                  Director acknowledges that it is difficult, if not impossible,
                  to fix actual damages. Nevertheless, Senior Managing Director
                  agrees that such formula is fair and reasonable under the
                  circumstances as a method of partially compensating RSM
                  McGladrey for the damage it shall suffer as a result of such
                  breach. Payment of the damages will be due within 30 days
                  after RSM McGladrey notifies the Senior Managing Director of
                  the amount payable pursuant to this Section.

                               (ii) Right of Offset. RSM McGladrey further shall
                  have the right (but not the obligation) to set off any amount
                  due from the withdrawing Senior Managing Director against any
                  other amounts or accounts due the Senior Managing Director by
                  RSM McGladrey.

                  6.3. TOLLING OF COVENANT PERIOD. If Senior Managing Director
violates any of the provisions of Section 6.2 after the date hereof, the
Covenant Period shall be extended for a period of time equal to the period of
any such violation.

                  6.4. DUTY TO COOPERATE IN DEFENSE OF CLAIMS. Any retired or
terminated Senior Managing Director in consideration of this Agreement and the
mutual promises contained herein shall have a continuing obligation to RSM
McGladrey in connection with the defense of any claim involving RSM McGladrey
and/or its employees or agents in the event a claim is asserted against RSM
McGladrey and/or its employees or agents the Senior Managing Director (whether
or not then still employed by RSM McGladrey) shall assist and cooperate with RSM
McGladrey in good faith and in such manner as is reasonably possible in
developing the information, or providing the statements, documents or testimony
reasonably required to properly respond to or defend such claim. The Senior
Managing Director shall take no action at any time to initiate or voluntarily
assist the assertion or development of a claim.

                  6.5. NONDISCLOSURE. Senior Managing Director shall not at any
time or in any manner, directly or indirectly, during or after the Term, use or
disclose to any party other than RSM McGladrey any trade secrets or other
Confidential Information (defined herein) learned or obtained by Senior Managing
Director while a Senior Managing Director of RSM McGladrey. As used herein, the
term "Confidential Information" means information disclosed to or known by
Senior Managing Director (whether before or after the date of this Agreement) as
a consequence of Senior Managing Director's position with RSM McGladrey and not
generally known in the industry in which RSM McGladrey is engaged and that in
any way relates to the products, processes, services, inventions (whether
patentable or not), formulas, techniques or know-how, including, but not limited
to, information relating to distribution systems and methods, research,
development, manufacturing, purchasing, accounting, procedures, engineering,
marketing, customers, vendors, merchandising and selling, of RSM McGladrey, and
regardless of the format in which it is presented or embodied (written, graphic,
electromagnetic or otherwise). The term "Confidential Information," as used
herein, shall also include information regarding the clients of any person or
entity for which RSM McGladrey provides services pursuant to contract between
RSM McGladrey and such entity. The term "Confidential Information," as used
herein, does not include information: (a) which was already in the public

                                       9
<PAGE>   10

domain through authorized disclosures by RSM McGladrey or its affiliates or (b)
which is disclosed as a matter of right by a third party source after the
execution of this Agreement provided such third party source is not bound by
confidentiality obligations in favor of RSM McGladrey.

                  6.6. INVENTIONS. Senior Managing Director agrees that all
inventions, discoveries, written materials, brochures, training programs,
training materials, programs, seminars, estate planning products, financial
planning products and asset management products conceived of or developed by the
Senior Managing Director during the Term, whether alone or jointly with others
and whether during working hours or otherwise, which relate to the business of
RSM McGladrey or any affiliate of RSM McGladrey shall be RSM McGladrey's
exclusive property. Senior Managing Director shall: (i) promptly disclose in
writing to RSM McGladrey each invention, written material, brochure, training
program, training material, program, seminar, estate planning product, financial
planning product or asset management product conceived by or developed by Senior
Managing Director during the term of Senior Managing Director's employment with
RSM McGladrey, (ii) assign all rights to the same to RSM McGladrey, and (iii)
assist RSM McGladrey in every way to obtain and protect any patents, trademarks,
copyrights or service marks on the same.

                  6.7. LIMITATIONS ON ENFORCEMENT. If any restriction set forth
in this Section is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time, over too great a
range of activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which such court shall consider enforceable.

                  6.8. TERMINATION OF RESTRICTIVE COVENANTS. The restrictive
covenants set forth in Section 6.2(a) and 6.2(b) hereof shall expire if a
Payment Event of Default (defined below) occurs under the Guaranty dated August
____, 1999 by Block in favor of McGladrey (the "Guaranty"). For purposes of this
Section, a "Payment Event of Default" shall be deemed to occur if (i) any
undisputed Guaranteed Obligation (as defined in the Guaranty) is not timely paid
by RSM McGladrey when due and owing and (ii) Block fails to pay the amount of
any such Guaranteed Obligation (provided that RSM McGladery's nonpayment then
exists and is continuing) within thirty (30) days after delivery of written
notice thereof to Block pursuant to the notice provisions of the Guaranty. Any
expiration of such restrictive covenants pursuant to this Section shall not,
however, act or be deemed to work on or effect any expiration, termination,
waiver, forfeiture, or release of such restrictive covenants or in any way
affect their enforcement for any period prior to the occurrence of the
applicable Payment Event of Default.

         7.       CERTAIN REMEDIES.

                  7.1. SPECIFIC PERFORMANCE. If Senior Managing Director shall
at any time breach, violate or fail to comply fully with any of the terms,
provisions or conditions of this Agreement, the parties intend that RSM
McGladrey shall be entitled to equitable relief against Senior Managing Director
by way of injunction (in addition to, but not in substitution for, any and all
other relief to which RSM McGladrey may be entitled either at law or in equity,
or hereunder including, but not limited to, the payments provided in Section
6.2(c) and (e)) to restrain such breach or violation or to compel compliance
fully with the terms, provisions or

                                       10
<PAGE>   11

conditions per this Agreement. Liquidated damages and right of offset pursuant
to Section 6.2(c) and (e) shall be in addition to, and not in lieu of any other
remedy of RSM McGladrey.

                  7.2. NO PROOF OF BREACH; WAIVER. In any proceeding, whether in
equity or at law, Senior Managing Director specifically waives any requirement
that RSM McGladrey prove that any breach, violation or failure to comply fully
with the terms, provisions or conditions of this Agreement will cause
irreparable injury or that there is no adequate remedy at law(s); Senior
Managing Director also agrees not to raise as a defense in any such proceeding
any allegation; (i) that any of the provisions of Sections 6 and/or 7 are either
unnecessary, unreasonable or unenforceable, that any of them illegally restrain
trade, competition or any personal rights of Senior Managing Director; or (ii)
that payments made by RSM McGladrey subsequent to gaining knowledge of a
violation of this Agreement prejudices RSM McGladrey's rights to enforce the
Agreement or recover payments made, or (iii) that the non-enforcement of RSM
McGladrey's rights to enforce the Agreement or recover payments made or that the
non-enforcement of RSM McGladrey's rights with regard to one Senior Managing
Director or one act prejudices RSM McGladrey's rights and remedies of RSM
McGladrey under this Agreement, all of which are in addition to all rights and
remedies to which RSM McGladrey is or shall be otherwise entitled at law or in
equity. RSM McGladrey shall not be required to post bond in any proceeding to
enforce the provisions of Section 6 and/or 7 hereof.

         8.       EARLY RETIREMENT. [Reserved]

         9.       TERMINATION.

                  9.1.     METHODS OF TERMINATION. This Agreement and the
employment of the Senior Managing Director hereunder may be terminated as
follows:

                           (a) By RSM McGladrey for "cause," upon the delivery
         of written notice thereof to Senior Managing Director. For purposes of
         this Agreement, "cause" shall mean the occurrence of any one of the
         following on the part of the Senior Managing Director:

                                (i) Senior Managing Director's conviction of a
                  plea of guilty or nolo contendere to a crime involving moral
                  turpitude or a crime providing for a term of imprisonment.

                               (ii) Senior Managing Director's engagement in
                  willful misconduct (including but not limited to Senior
                  Managing Director discrimination or harassment or unethical or
                  unprofessional conduct) injurious to RSM McGladrey, its
                  affiliates or any of their respective reputations.

                               (iii) Senior Managing Director's breach of
                  his/her fiduciary duty to RSM McGladrey;

                               (iv) Senior Managing Director's engagement in
                  activities which constitute a material breach of this
                  Agreement or

                                       11
<PAGE>   12

                  any other material agreement or contract between Senior
                  Managing Director and RSM McGladrey;

                               (v) Senior Managing Director's gross negligence
                  in the execution of, or Senior Managing Director's willful
                  failure to carry out, his duties and responsibilities up to
                  the standards of performance which could reasonably be
                  expected from an Senior Managing Director in his position.

                               (vi) An act or acts of fraud, embezzlement or
                  dishonesty either (a) taken by the Senior Managing Director to
                  the detriment of RSM McGladrey or (b) by others in conspiracy
                  or affiliation with Senior Managing Director and intended to
                  result in enrichment or advantage to Senior Managing Director
                  at the expense of RSM McGladrey or with use of RSM McGladrey's
                  assets or information; or

                               (vii) Senior Managing Director's failure to
                  maintain a license as a certified public accountant in any
                  state where such license is required.

                               (viii) Senior Managing Director's material
                  violations of RSM McGladrey's policies or procedures except
                  those policies or procedures with respect to which an
                  exception has been granted under authority exercised or
                  delegated by the Advisory Board of RSM McGladrey.

                               (ix) Senior Managing Director's failure to pay
                  and file on a timely basis, including extensions, complete and
                  accurate Federal and state tax returns.

                               (x) Other gross misconduct which is detrimental
                  to the best interests of RSM McGladrey.

                  To prevent the inadvertent loss of rights as a result of
                  actions deemed to fall under (i) through (ix) above, the
                  Senior Managing Director shall first receive a written notice
                  from the Executive Management Committee of RSM McGladrey of
                  each item of misconduct and such Senior Managing Director
                  shall have not less than 30 days in which to cure any
                  misconduct by restoration, compensation and/or performance. If
                  the misconduct is so cured within the 30-day period, then the
                  Senior Managing Director shall not be terminated "for Cause".

                  (b) By RSM McGladrey without cause upon written notice to the
         Senior Managing Director.

                                       12
<PAGE>   13

                  (c) By Senior Managing Director on 180 days' written notice to
         RSM McGladrey (which notice period may be accelerated at RSM
         McGladrey's discretion);

                  (d) Upon the death or Disability (defined herein) of Senior
         Managing Director. For purposes of this Agreement, "Disability" means
         the inability of a Senior Managing Director to perform such Senior
         Managing Director's duties or services as provided in the RSM McGladrey
         Employment Agreement because of mental, physical or other illness,
         disease or injury, where such disability (a) shall have existed for an
         aggregate of six (6) months in any 12-month period and McGladrey and/or
         RSM McGladrey shall have so notified the Senior Managing Director
         thereof, or (b) has prevented Senior Managing Director from performing
         substantially all of his duties under the RSM McGladrey Employment
         Agreement for a period of six (6) consecutive months.

                  (e) By express mutual written agreement signed by Senior
         Managing Director and RSM McGladrey.

                  (f) Upon a "Change of Control" as defined in Section 9.2
         below.

         9.2. Termination of Employment Upon a Change of Control.

                  (a) If RSM McGladrey terminates Senior Managing Director's
         employment under this Agreement following a "Change of Control" (as
         defined herein) without "Cause" (as defined in Section 9.1), or if
         Senior Managing Director terminates his employment under this Agreement
         following both a Change of Control and a substantial reduction by RSM
         McGladrey (over the objection of Senior Managing Director) in Senior
         Managing Director's duties, authority or status, then, upon any such
         termination of Senior Managing Director's employment, (i) RSM McGladrey
         shall continue to pay to Senior Managing Director the base salary in
         effect upon such termination throughout the two-year period following
         such termination as the same would have been made had Senior Managing
         Director remained employed by RSM McGladrey hereunder; and (ii) any
         portion of any option to purchase shares of Block common stock granted
         pursuant to any stock option plan of Block and held by Senior Managing
         Director at the time of such termination of employment that is not yet
         vested in accordance with its terms shall vest upon the effective date
         of such termination of employment and shall be exercisable for a period
         of three months after such date of termination of employment.

                  (b) For the purpose of this subsection, a "Change of Control"
         shall mean:

                           (i) the acquisition by any individual, entity or
                  group (within the meaning of Section 13(d)(3) or 14(d)(2) of
                  the Securities Exchange Act of 1934, as amended (the "Exchange
                  Act")), of beneficial ownership (within the meaning of Rule
                  13d-3 promulgated under the Exchange Act) of 50% or more of
                  the then outstanding voting securities of RSM McGladrey or any

                                       13
<PAGE>   14

                  direct or indirect parent company of RSM McGladrey (the
                  "Acquired Block Entity") entitled to vote generally in the
                  election of directors, but excluding, for this purpose, any
                  such acquisition by any Block Entity, or any employee benefit
                  plan (or related trust) of any Block Entity, or any
                  corporation with respect to which, following such acquisition,
                  more than 50% of the then outstanding voting securities of
                  such corporation entitled to vote generally in the election of
                  directors is then beneficially owned, directly or indirectly,
                  by all or substantially all of the individuals and entities
                  who were the beneficial owners of the voting securities of the
                  Acquired Block Entity immediately prior to such acquisition in
                  substantially the same proportion as their ownership,
                  immediately prior to such acquisition, of the then outstanding
                  voting securities of the Acquired Block Entity entitled to
                  vote generally in the election of directors, as the case may
                  be; or

                           (ii) individuals who, as of the date hereof,
                  constitute the Board of Directors of Block (as of the date
                  hereof, the "Incumbent Board") cease for any reason to
                  constitute at least a majority of such Board, provided that
                  any individual or individuals becoming a director subsequent
                  to the date hereof, whose election, or nomination for election
                  by Block's shareholders, was approved by a vote of at least a
                  majority of the Board (or nominating committee of the Board)
                  shall be considered as though such individual were a member or
                  members of the Incumbent Board, but excluding, for this
                  purpose, any such individual whose initial assumption of
                  office is in connection with an actual or threatened election
                  contest relating to the election of the directors of Block (as
                  such terms are used in Rule 14a-11 of Regulation 14A
                  promulgated under the Exchange Act); or

                           (iii) approval by the shareholders of an Acquired
                  Block Entity of a reorganization, merger or consolidation of
                  such Acquired Block Entity, in each case, with respect to
                  which all or substantially all of the individuals and entities
                  who were the respective beneficial owners of the voting
                  securities of the Acquired Block Entity immediately prior to
                  such reorganization, merger or consolidation do not, following
                  such reorganization, merger or consolidation, beneficially
                  own, directly or indirectly, more than 50% of the then
                  outstanding voting securities entitled to vote generally in
                  the election of directors of the corporation or other entity
                  resulting from such reorganization, merger or consolidation,
                  or a complete liquidation or dissolution of an Acquired Block
                  Entity, or of the sale or other disposition of all or
                  substantially all of the assets of an Acquired Block Entity,
                  but excluding any such reorganization, merger, consolidation,
                  liquidation, dissolution or sale or other disposition of
                  assets after which a Block Entity continues to own more than
                  50% of the then outstanding voting securities entitled to vote
                  generally in the election of directors of the corporation or
                  other entity resulting from a reorganization, merger or
                  consolidation, or more than 50% of the assets of the
                  liquidated or dissolved Acquired Block Entity, or more than
                  50% of the assets of the Acquired Block Entity selling or
                  otherwise disposing of its assets.

                                       14
<PAGE>   15

                  9.3.     PAYMENTS UPON TERMINATION. Except as set forth in
Section 9.2, upon termination, any amount due RSM McGladrey or Senior Managing
Director under this Agreement shall be paid to RSM McGladrey or the Senior
Managing Director or Senior Managing Director's representative (as may be in
case in the event of death or disability), as set forth below:

                           (a) If this Agreement is terminated pursuant to
         Section 9.1(a) or by Senior Managing Director (pursuant to Section
         9.1(c)), RSM McGladrey shall pay to Senior Managing Director, if not
         already paid, any Base Compensation (as defined in Schedule 5) paid
         through the date of such termination but the Senior Managing Director
         shall not be eligible or entitled to receive any other compensation,
         whether bonus or other form thereof, for the year in which such
         termination occurred or any subsequent year, to the extent not
         theretofore paid;

                           (b) If this Agreement is terminated by RSM McGladrey
         without Cause pursuant to Section 9.1 (b) or because of the death or
         disability of the Senior Managing Director (pursuant to Section 9.1
         (d), RSM McGladrey shall pay to Senior Managing Director, if not
         already paid, any Base Salary paid through the date of such termination
         plus the portion of any bonus allocated to the Senior Managing Director
         by the Executive Committee of RSM McGladrey plus the remuneration
         provided for in Section 5.4(b) assuming the Senior Managing Director
         was eligible for but did not elect the provisions under Section 5.4(a).

                           (c) If this Agreement is terminated by mutual
         agreement of the Senior Managing Director and RSM McGladrey pursuant to
         Section 9.1(e), RSM McGladrey shall pay to Senior Managing Director
         such payments, if any, as may be so agreed.

                           (d) Except as otherwise provided herein, no other
         consideration of any type will be due and owing to Senior Managing
         Director by RSM McGladrey upon any termination of this Agreement.

                  9.4. RELEASE OF CLAIMS. Notwithstanding the foregoing, RSM
McGladrey shall not be obligated to pay the Senior Managing Director any of the
payments referred to in Section 9.3(b) or Section 9.3(c) unless and until RSM
McGladrey has received a Release of Claims executed by Senior Managing Director
in a form satisfactory to RSM McGladrey at its reasonable discretion.

                  9.5. EFFECT OF TERMINATION. Upon any termination of the Senior
Managing Director's employment and this Agreement pursuant to Section 9.1 or 9.2
hereof, RSM McGladrey and the Senior Managing Director shall have no further
obligations under this Agreement to the other except Senior Managing Director's
obligations under the provisions of Section 6.2 shall continue for the Covenant
Period, and the Senior Managing Director's obligations under and the provisions
of the remainder of Section 6 and Section 7 shall continue in full force and
effect indefinitely.

                                       15
<PAGE>   16

         10.      MISCELLANEOUS.

                  10.1. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding among RSM McGladrey and Senior Managing Director
concerning the subject matter hereof. No modification, amendment, termination or
waiver of this Agreement shall be binding unless in writing and signed by Senior
Managing Director. To insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such terms,
covenants and conditions.

                  10.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Senior Managing Director and the heirs, executors and administrators of
Senior Managing Director or Senior Managing Director's estate and property, and
shall inure to the benefit of RSM McGladrey and its successors and assigns.
Being a contract for personal services, RSM McGladrey may not assign or transfer
to others (a) the right to receive payments hereunder, or (b) the obligation to
perform Senior Managing Director's duties and services hereunder. RSM McGladrey
may assign this Agreement to any person or entity on notice to Senior Managing
Director.

                  10.3. TAXES. From any payments due hereunder to Senior
Managing Director from RSM McGladrey, there shall be withheld amounts reasonably
believed by Senior Managing Director to be sufficient to satisfy liabilities for
federal, state and local income and related taxes and other charges.

                  10.4. NOTICES. Any notice, request, consent or communication
(collectively, a "Notice") under this Agreement shall be effective only if it is
in writing and (a) personally delivered, (b) sent by certified or registered
mail, return receipt requested, postage prepaid, (c) sent by a nationally
recognized overnight delivery service, with delivery confirmed, or (d) faxed or
telecopied, with receipt confirmed, addressed as follows:

         If to Senior Managing Director:

                  McGladrey & Pullen, LLP
                    3600 West 80th Street
                    Suite 500
                    Bloomington, Minnesota 55431

         If to RSM McGladrey to:

                  c/o H&R Block
                  4400 Main Street
                  Kansas City, Missouri  64111
                  Attn:  Bret G. Wilson
                  with a copy to James H. Ingraham at the same address

         with a copy to:

                  Bryan Cave LLP
                  3500 One Kansas City Place
                  1200 Main Street

                                       16
<PAGE>   17

                  Kansas City, Missouri  64105
                  Attn:  Gregory G. Johnson

                  10.5.   ARBITRATION OF DISPUTES. Any controversy, claim, or
dispute arising out of or relating to this Agreement or any breach thereof,
including without limitation any dispute concerning the scope of the arbitration
clause set forth below, shall be resolved as set forth below. Any party may seek
injunctive relief pending the completion of mediation and arbitration under this
Agreement.

                           (a) In the event a dispute arises relating to this
         Agreement, any party may demand mediation by notifying the American
         Arbitration Association ("AAA") in the location where any arbitration
         would be conducted as set forth below, in writing with copies to all
         other parties involved in the dispute. The notification will state with
         specificity the nature of the dispute and the amount of any claims.
         Upon receipt of the mediation demand, the AAA will immediately convene
         a pre-mediation telephone conference of the parties hereto. The parties
         will make a representative, with full authority to settle, available
         for such a conference within five (5) business days of being contacted
         by the AAA or its designated mediator ("Mediator"). During the
         pre-mediation telephone conference, the parties will agree on mediation
         procedures or, in the event they cannot agree, Mediator will set the
         mediation procedures. The mediation procedures will provide for the
         mediation to be completed within thirty (30) business days of the date
         of the initial demand for mediation. The parties will participate in
         good faith in the mediation and will use their best efforts to reach a
         resolution within the thirty (30) day time period. Each party will make
         available in a timely fashion a representative with authority to
         resolve the dispute. In the event that the dispute has not been
         resolved within thirty (30) days, the mediation may continue if the
         parties so desire. If not, the Mediator will so notify the parties and
         declare the mediation terminated. In the event that the mediation
         continues beyond thirty (30) days, but is not resolved within what
         Mediator believes is a reasonable time thereafter, the Mediator will so
         notify the parties, and declare the mediation terminated. Fees of the
         mediator shall be split equally between the parties.

                           (b) After the mediation has been declared terminated,
         the matters in dispute shall be settled by binding arbitration in
         accordance with the Commercial Arbitration Rules (the "Rules") of the
         AAA as supplemented herein and judgment upon the award rendered by the
         arbitrators may be entered in any court having jurisdiction thereof.
         The governing law of this Agreement shall be the law used by the
         arbitrators in rendering their award, except that the Federal Rules of
         Evidence shall apply. There shall be three arbitrators. Each party
         shall choose one arbitrator, and the two chosen arbitrators shall
         choose the third arbitrator. Pending final award, the arbitrators'
         compensation and expenses shall be advanced equally by the parties. The
         AAA shall hold an administrative conference with counsel for the
         parties within twenty (20) days after the filing of the demand for
         arbitration by any one or more of the parties. The parties and the

                                       17
<PAGE>   18

         AAA shall thereafter cooperate in order to complete the appointment of
         three arbitrators as quickly as possible. Within 15 days after all
         three arbitrators have been appointed, an initial meeting (which, if
         the arbitrators so determine, may be by phone) among the arbitrators
         and counsel for the parties shall be held for the purpose of
         establishing a plan for administration of the arbitration, including:
         (1) definition of issues; (2) scope, timing, and types of discovery,
         which may at the discretion of the arbitrators include production of
         documents in the possession of the parties, but may not without consent
         of all parties include depositions; (3) exchange of documents and
         filing of detailed statements of claims, prehearing memoranda and
         dispositive motions; (4) schedule and place of hearings; and (5) any
         other matters that may promote the efficient, expeditious, and
         cost-effective conduct of the proceeding. Each party shall have the
         right to request the arbitrator to make specific findings of fact.

                           (c) The majority decision of the arbitrators shall
         contain findings of facts on which the decision is based, including any
         specific factual findings requested by either party, and shall further
         contain the reasons for the decision with reference to the legal
         principles on which the arbitrators relied. Such decision of the
         arbitrators shall be final and binding upon the parties. The
         arbitration shall take place in Chicago, Illinois. The final award
         shall award to the prevailing party its reasonable attorneys' fees and
         costs incurred in connection with the arbitration (but if the
         prevailing party is not awarded all of the damages sought, only to the
         extent, prorata, of its award compared to the damages sought) and may
         grant such other, further, and different relief as authorized by the
         Rules, including damages and out-of-pocket costs but which may not
         include exemplary, consequential or punitive damages.

                  10.6. RIGHT TO OFFSET. RSM McGladrey, for itself and as an
affiliate of Block, a subsidiary of Block, shall have the right but not the
obligation to offset against amounts due Senior Managing Director hereunder any
amounts due RSM McGladrey by Senior Managing Director which are not paid to RSM
McGladrey by the primary obligor within ten (10) days following demand,
regardless of the source of such obligation from Senior Managing Director to RSM
McGladrey.

                  10.7. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Missouri, without giving effect to its choice of law
provisions.

                  10.8. HEADINGS. All headings in this Agreement are for
convenience only and are not intended to affect the meaning of any provision
hereof.

                  10.9. COUNTERPARTS. This Agreement may be executed in two or
more counterparts with the same effect as if the signatures to all such
counterparts were upon the same instrument, and all such counterparts shall
constitute but one instrument.

                  10.10. AMENDMENT. This Agreement cannot be added to, altered,
changed, modified or amended in any respect except by a writing duly executed by
the parties hereto. Where an amendment is agreed to by the parties hereto, the
box indicating that an

                                       18
<PAGE>   19

addendum is attached to this Agreement must be checked on this page 18 of this
Agreement and the addendum must be attached to this Agreement.

                  THIS AGREEMENT IS SUBJECT TO AN ARBITRATION PROVISION WHICH IS
BINDING THE PARTIES.

                                       19
<PAGE>   20

                  IN WITNESS WHEREOF, the Senior Managing Director has executed
this Agreement and RSM McGladrey has caused this Agreement to be executed by its
duly authorized officer as of the day and year first above written.

                                     RSM MCGLADREY, INC.

                                     By:      /s/ Bret G. Wilson
                                              -------------------------------
                                              Bret G. Wilson, Vice President

                                     SENIOR MANAGING DIRECTOR

                                     By:      /s/Thomas G. Rotherham
                                              -------------------------------
                                              Thomas G. Rotherham

[ ] Indicate that an approved addendum/amendment to this agreement is attached.

                                       20
<PAGE>   21
                                  SCHEDULE 5.1

                      SENIOR MANAGING DIRECTOR COMPENSATION

         1.      DEFINITIONS. For purposes of this Schedule 5, the following
terms shall have the following meanings:

                 1.1.     "Annual Compensation" shall mean sixty-four percent
(64%) of the Compensation Base for a specified annual period.

                 1.2.     "Collection Deficit" shall mean the excess of net
accounts receivable and net unbilled services over eighty-five percent (85%) of
net services and expenses charged to clients for the preceding three months. Net
services are defined as gross services plus or minus billing adjustments,
unbilled services reserve adjustments, provision for bad debts and accounts
receivable reserve adjustments. The Collection Deficit will be computed at
October 31, January 31, April 30 and July 31 to adjust the Quarterly Target
Payments and Quarterly IPU Bonus at December 1, March 1, June 1 and September 1,
respectively.

                 1.3.     "Compensation Base" shall mean an amount equal to the
aggregate net income earned by Contractor and McGladrey and all of its
wholly-owned subsidiaries (excluding TP Services, LLC) for a specified annual
period before (1) the aggregate compensation and distributions paid by McGladrey
or Contractor to those persons who are partners and principals of McGladrey at
the Closing and thereafter; (2) amortization of goodwill; (3) income taxes; (4)
interest expense incurred with respect to Post-Closing Development Expenditures
(as defined in the Asset Purchase Agreement); (5) interest expense imputed on
purchase price installments paid after the Closing Date (as defined in the Asset
Purchase Agreement); (6) interest incurred with respect to Retired Partner
Obligations (as defined in the Asset Purchase Agreement); (7) Post-Closing
Development Expenditures that are accounted for as expenses; (8) any expense for
incremental direct expenses incurred or paid by the operations group
attributable to the business, operations or management of Foundation Firms,
Foundation Firm Managers or Prior Add-On Firms (each as defined in the Asset
Purchase Agreement); (9) any income for any gain, or expense for any loss, of
Contractor or McGladrey or any income for funds received by McGladrey or
Contractor on the sale of the Mutual Fund Business (as defined in the Asset
Purchase Agreement); and (10) compensation expenses up to One Hundred Thousand
Dollars ($100,000) annually corresponding to the grant of Block stock options to
employees or equity owners of McGladrey and after Contractor's and McGladrey's
aggregate share of FICA, federal and state unemployment taxes, Medicare, and
workers' compensation payments all as determined in accordance with GAAP.

                 1.4.     "Executive Management Committee" shall have the
meaning set forth in that certain Operations Agreement among Contractor,
McGladrey and others dated even date hereto.

                 1.5.     "Fringe Benefits" shall mean the value of the fringe
benefits (including but not limited to those set forth on Schedule 5.4 to the
Managing Director Employment Agreement) granted to such Managing Director or
Senior Managing Director from time to time for a specified period.

<PAGE>   22

                 1.6.     "IPUs" shall mean income participation units. The
designated value of an IPU and the number granted to any Managing Director or
Senior Managing Director on an annual basis shall be determined by the
Management Executive Committee of Contractor.

                 1.7.     "Senior Managing Directors" shall mean certain of
those Managing Directors who are designated "Senior Managing Directors."

                 1.8.     "Managing Directors" shall mean certain of those
individuals who from time to time on or after Closing are parties to a Managing
Director Employment Agreement with Contractor and who are partners or principals
of McGladrey.

                 1.9.     "Partner Compensation System" shall mean a system
approved by the Executive Management Committee from time to time, subject to
approval by the Contractor which approval shall not be unreasonably withheld.

                 1.10.    "McGladrey" shall mean McGladrey & Pullen, LLP an Iowa
limited liability partnership.

                 1.11.    "Retired Partners" shall have the meaning set forth in
the Asset Purchase Agreement.

                 1.12.    "Rotherham and Scally Compensation" shall mean all
compensation amounts (not including Fringe Benefits) paid to Thomas Rotherham
and Mark Scally under their respective Managing Director Employment Agreements.

                 1.13.    Other terms not otherwise defined herein shall have
the meanings set forth in the Managing Director Employment Agreement.

         2.      AGGREGATE ANNUAL COMPENSATION. Each year during the Term, the
Managing Directors and Senior Managing Directors shall receive as compensation
from Contractor (in consideration of the provision of their services for the
year) an aggregate amount (the "Net Annual Aggregate Compensation") equal (i) to
the Annual Compensation, minus (ii) the net income of McGladrey for such year
(whether or not distributed to equity owners) determined in accordance with
generally accepted accounting principals ("Distributable McGladrey Earnings").
The Rotherham and Scally Compensation shall be included in the Net Annual
Aggregate Compensation.

         3.      SENIOR MANAGING DIRECTOR COMPENSATION.

                 3.1.      TARGET INCOME. Prior to the first Quarterly Target
each distribution year ending July 31, each Senior Managing Director will be
assigned a certain number of IPUs prior to the first quarterly target. Each
Senior Managing Director's annual estimated target income shall be calculated as
such number of IPUs multiplied by the designated value of the IPUs less the
Fringe Benefits elected by the Senior Managing Director during such year (the
"Target Income").

                                       2
<PAGE>   23

                 3.2.     DISTRIBUTION OF BASE INCOME. Each month, each Senior
Managing Director shall be an amount determined annually by the Executive
Management Committee (collectively the "Base Income Payments").

                 3.3.     QUARTERLY TARGET PAYMENT. Subject to Section 4, the
Target Income less the Base Income Payments shall be paid to the Senior Managing
Director on a quarterly basis in equal payments on the following dates: December
1, March 1, June 1 and September 1 (each a "Quarterly Target Payment").

         4.      RESTRICTIONS ON PAYMENT OF CERTAIN QUARTERLY PAYMENTS.

                 4.1.     Senior Managing Director must be employed by either
Contractor or McGladrey on the date the Quarterly Target Payment is paid to
receive the applicable Quarterly Target Payment.

                 4.2.     If the actual net actual aggregate compensation income
of RSM McGladrey is less than total IPUs times the designated value plus
Guaranteed income of RSM McGladrey, the fourth quarter distribution of the
Quarterly Target Payments to the Senior Managing Directors, payable on September
1 shall be reduced by the amount of such shortfall. The distribution will be
reduced pro rata among Senior Managing Directors in proportion to the value of
each Senior Managing Directors' IPUs to the total value of all Senior Managing
Directors' IPUs.

                 4.3.     The Quarterly Target Payments are subject to
adjustment for the Collection Deficit pursuant to the procedure set forth in
Section 5 of this Schedule 5.

                 4.4.     Notwithstanding anything to the contrary herein, the
total aggregate annual compensation for the applicable annual period (including
Fringe Benefits and bonuses) of the Senior Managing Directors and the Managing
Directors from Contractor paid by and/or due from and McGladrey (including
Distributable McGladrey Earnings), shall not exceed the Annual Compensation for
such period.

         5.      ALLOCATION OF THE COLLECTION DEFICIT. The Collection Deficit
will be allocated among the Managing Directors and Senior Managing Directors as
follows:

                 5.1.     A percentage of the Collection Deficit for RSM
McGladrey and McGladrey will be allocated to firmwide Managing Directors and
Senior Managing Directors. The percentage will approximately equal the
percentage that the base income of all firmwide Managing Directors and Senior
Managing Directors bears to the total of such compensation for all Managing
Directors and Senior Managing Directors who will share in the Collection
Deficit. It will be allocated to each firmwide Managing Director and Senior
Managing Director in the proportion that his or her Guaranteed Income or Target
Income, respectively, for the year bears to the total of such base income of all
firmwide Managing Directors and Senior Managing Directors.

                 5.2.     The Collection Deficit assigned to firmwide Managing
Directors and Senior Managing Directors will be deducted from the Collection
Deficits of economic units

                                       3
<PAGE>   24

in the proportion that the Collection Deficit of each economic unit bears to the
total Collection Deficit. Collection surpluses will be ignored in the
allocation.

                 5.3.     The remaining Collection Deficit for each economic
unit will be allocated among the economic unit's Managing Directors and Senior
Managing Directors in the proportion that each Senior Managing Director's and
Managing Director's Target Income or Guaranteed Income bears to the total of
such Target Income or Guaranteed Income, respectively, of all Senior Managing
Directors and Managing Directors in the economic unit.

         6.      ANNUAL PERFORMANCE AWARDS. Annual performance awards shall be
paid based on the Partner Compensation System approved by the Executive
Management Committee. The annual performance awards shall be distributed on
January 1 of each year.

                                       4
<PAGE>   25

                                  SCHEDULE 5.1
                        BASE SALARY AND PERFORMANCE BONUS

          1. BASE SALARY. During the first twelve (12) months of the Term, the
Managing Director shall be paid $360,000 per annum as base salary (the "Base
Salary"), which Base Salary shall be paid to the Managing Director in $30,000
monthly increments. For each twelve (12) month period during the Term,
thereafter, Managing Director's Base Salary shall be determined by the Chief
Executive Officer and Chief Operations Officer of H&R Block, Inc. ("Block")
subject to the approval of the Compensation Committee of the Board of Directors
of Block.

          2. PERFORMANCE BONUS. Each year during the Term, the Managing Director
shall be eligible for a bonus (the "Target Bonus") equal to 40% of the Base
Salary ($144,000). The actual bonus which the Managing Director is eligible for
(the "Performance Bonus") will be more or less than Target Bonus based on the
profit of RSM and McGladrey and its wholly-owned subsidiaries McGladrey (the
"Profit" as defined below). The performance targets and Performance Bonus are
set forth below: For purposes of this Schedule 5.1 "Profit" shall mean an amount
equal to the aggregate net income earned by Contractor and McGladrey and all of
its wholly-owned subsidiaries (excluding TP Services, LLC) for a specified
annual period before (1) the aggregate compensation and distributions paid by
McGladrey or Contractor to those persons who are partners and principals of
McGladrey at the Closing and thereafter; (2) amortization of goodwill; (3)
income taxes; (4) interest expense incurred with respect to Post-Closing
Development Expenditures (as defined in the Asset Purchase Agreement); (5)
interest expense imputed on purchase price installments paid after the Closing
Date (as defined in the Asset Purchase Agreement); (6) interest incurred with
respect to Retired Partner Obligations (as defined in the Asset Purchase
Agreement); (7) Post-Closing Development Expenditures that are accounted for as
expenses; (8) any expense for incremental direct expenses incurred or paid by
the operations group attributable to the business, operations or management of
Foundation Firms, Foundation Firm Managers or Prior Add-On Firms (each as
defined in the Asset Purchase Agreement); (9) any income for any gain, or
expense for any loss, of Contractor or McGladrey or any income for funds
received by McGladrey or Contractor on the sale of the Mutual Fund Business (as
defined in the Asset Purchase Agreement); and (10) up to One Hundred Thousand
Dollars ($100,000) per year compensation expenses corresponding to the grant of
Block stock options to employees or equity owners of McGladrey pursuant to the
Asset Purchase Agreement and after Contractor's and McGladrey's aggregate share
of FICA, federal and state unemployment taxes, Medicare, and workers'
compensation payments all as determined in accordance with GAAP.

<PAGE>   26

                                PERFORMANCE BONUS
<TABLE>
<CAPTION>

----------------------------- --------------------------- ----------------------

                                      Percentage                 Performance
                                          of                        Bonus
           Profit                    Target Bonus                  Amount
       (in millions)

----------------------------- --------------------------- ----------------------
<S>                                  <C>                         <C>
            $90                            0%                     $        0
             95                           33.3%                       48,000
            100                           66.7%                       96,000
            105                          100.0%                      144,000
            110                          133.3%                      192,000
            115                          166.7%                      240,000
            120                          200.0%                      288,000
----------------------------- --------------------------- ----------------------
</TABLE>

         During the Term, the Performance Bonus shall be calculated for the
period from August 1-July 31 (the "Bonus Calculation Period") and shall be
distributed to the Managing Director on or before September 15 following each
Bonus Calculation Period.

                                       2
<PAGE>   27

                                  SCHEDULE 5.3
                                    BENEFITS

          1. DEFERRED COMPENSATION PLAN. The Senior Managing Director will be
eligible to participate in the Deferred Compensation Plan developed by Block for
certain partners or principles of McGladrey.

          2. STOCK OPTIONS. On the Closing Date (as defined in the Asset
Purchase Agreement), the Senior Managing Director will be awarded stock options
for 21,000 shares of Block common stock, no par value (the "Block Common
Stock"), which options shall (a) have an option exercise price per share equal
to the closing price of the Block Common Stock on the New York Stock Exchange on
the Closing Date (the "Grant Date") (or, if the Closing Date is a date on which
such common stock is not traded on the New York Stock Exchange, on the last
trading day preceding the Grant Date); and (b) in all respects be granted and
governed by the terms of the H&R Block, Inc. 1993 Long Term Executive
Compensation Plan and (c) be evidenced by stock option agreements. Such option
shall vest as follows: 40% upon the third anniversary of the Grant Date; 30%
upon the fourth anniversary of the Grant Date; and 30% upon the fifth
anniversary of the Grant Date provided that such vesting shall be accelerated
upon retirement at or after age 55.

                                       3

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