Document:

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                                                                    EXHIBIT 10.2

                                    H&R BLOCK

                           DEFERRED COMPENSATION PLAN

                                  FOR DIRECTORS

                       (As Amended Through March 9, 1994)

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                                TABLE OF CONTENTS

                                    H&R BLOCK
                           DEFERRED COMPENSATION PLAN
                                  FOR DIRECTORS

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ARTICLE 1           DEFERRED COMPENSATION ACCOUNT..............................1

         Section 1.1       Establishment of Account............................1

         Section 1.2       Property of Company.................................1

ARTICLE 2           DEFINITIONS, GENDER AND NUMBER.............................1

         Section 2.1       Definitions.........................................1

         Section 2.2       Gender and Number...................................4

ARTICLE 3           PARTICIPATION..............................................4

         Section 3.1       Who May Participate.................................4

         Section 3.2       Time and Conditions of Participation................4

         Section 3.3       Termination of Participation........................4

         Section 3.4       Missing Persons.....................................4

         Section 3.5       Relationship to Other Plans.........................5

ARTICLE 4           ENTRIES TO THE ACCOUNT.....................................5

         Section 4.1       Deferrals...........................................5

         Section 4.2       Crediting Rate......................................5

ARTICLE 5           VESTING....................................................7

ARTICLE 6           DISTRIBUTION OF BENEFITS...................................7

         Section 6.1       Time of Payment.....................................7

         Section 6.2       Form of Benefits Upon Retirement or
                             Attainment of Age 75..............................7

         Section 6.3       Deferral of Payment.................................8

         Section 6.4       Death Benefits......................................8

         Section 6.5       Claims Procedure...................................10

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         Section 6.6       Alternate Forms of Benefit Distribution............11

         Section 6.7       Distributions on Plan Termination..................11

ARTICLE 7          FUNDING....................................................11

         Section 7.1       Source of Benefits.................................11

         Section 7.2       No Claim on Specific Assets........................11

ARTICLE 8          ADMINISTRATION AND FINANCES................................11

         Section 8.1       Administration.....................................11

         Section 8.2       Powers of the Committee............................11

         Section 8.3       Actions of the Committee...........................12

         Section 8.4       Delegation.........................................12

         Section 8.5       Reports and Records................................12

ARTICLE 9          AMENDMENTS AND TERMINATION.................................12

         Section 9.1       Amendments.........................................12

         Section 9.2       Termination........................................13

ARTICLE 10         MISCELLANEOUS..............................................13

         Section 10.1      No Guarantee of Membership.........................13

         Section 10.2      Individual Account Plan............................13

         Section 10.3      Release............................................13

         Section 10.4      Notices............................................14

         Section 10.5      Non-Alienation.....................................14

         Section 10.6      Tax Liability......................................14

         Section 10.7      Captions...........................................14

         Section 10.8      Applicable Law.....................................14

SCHEDULE A - ANNUAL ADMINISTRATIVE CHARGES....................................15

</TABLE>

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                                    H&R BLOCK

                           DEFERRED COMPENSATION PLAN

                                  FOR DIRECTORS

         H&R Block, Inc. (the "Company") hereby establishes, effective September
1, 1987, a nonqualified deferred compensation plan for the benefit of specified
Directors of the Company, and of the following affiliates of the Company:
CompuServe Incorporated, Personnel Pool of America, Inc., Path Management
Industries, Inc. and such other entities as may be designated by the Company
from time to time. This plan shall be known as the H&R Block Deferred
Compensation Plan for Directors (the "Plan"). The Plan is intended to be an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees as
described in Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement
Income Security Act of 1974 ("ERISA").

         ARTICLE 1.  DEFERRED COMPENSATION ACCOUNT.

         Section 1.1. Establishment of Account. The Company shall establish an
account ("Account") for each Participant which shall be utilized solely as a
device to measure and determine the amount of deferred director's fees to be
paid under the Plan.

         Section 1.2. Property of Company and Participating Affiliates. Any
amounts so set aside for benefits payable under the Plan are the property of the
Company and its participating affiliates ("Participating Affiliates"), except,
and to the extent, of any assignment of such assets to an irrevocable trust.

         ARTICLE 2.  DEFINITIONS, GENDER, AND NUMBER.

         Section 2.1. Definitions. Whenever used in the Plan, the following
words and phrases shall have the meanings set forth below unless the context
plainly requires a different meaning, and when a defined meaning is intended,
the term is capitalized.

                  2.1.1. "Account" means the device used to measure and
         determine the amount of deferred director's fees to be paid to a
         Participant or Beneficiary under the Plan, and may refer to the
         separate Accounts that represent amounts deferred by a Participant
         under separate Permissible Deferral elections.

                  2.1.2. "Affiliates" or "Affiliate" means a group of entities,
         including the Company, which constitutes a controlled group of
         corporations (as defined in section 414(b) of the Code), a group of
         trades or businesses

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         (whether or not incorporated) under common control (as defined in
         section 414(c) of the Code), and members of an affiliated service group
         (within the meaning of section 414(m) of the Code.)

                  2.1.3. "Age" of a Participant means the number of whole
         calendar years that have elapsed since the date of the Participant's
         birth.

                  2.1.4. "Beneficiary" or "Beneficiaries" means the persons or
         trusts designated by a Participant in writing pursuant to Section 6.4.4
         of the Plan as being entitled to receive any benefit payable under the
         Plan by reason of the death of a Participant, or, in the absence of
         such designation, the persons specified in Section 6.4.5 of the Plan.

                  2.1.5. "Board" means the Board of Directors of the Company as
         constituted at the relevant time.

                  2.1.5a. "Closing Price" means the closing price of the
         Company's Common Stock on the New York Stock Exchange as of the
         applicable date; provided, however, that if no closing price is
         available for such date, "Closing Price" means the closing price of the
         Company's Common Stock as of the next most recent date for which a
         price is available.

                  2.1.6.  "Code" means the Internal Revenue Code of 1986, as
         amended from time to time and any successor statute. References to a
         Code section shall be deemed to be to that section or to any successor
         to that section.

                  2.1.7.  "Committee" means the Compensation Committee of the
         Company's Board.

                  2.1.7a.  "Common Stock" means the common stock of the Company.

                  2.1.8.  "Company" means H&R Block, Inc.

                  2.1.8a. "Deferred Compensation Unit" means a unit equal in
         value to one share of Common Stock and posted to a Participant's
         Account for the purpose of measuring the benefits payable under the
         Plan.

                  2.1.9.  "Director"  or  "Directors"  means a  Non-Employee
         serving as a member on the Board of Directors of a Participating
         Affiliate.

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                  2.1.10. "Director's Fees" of a Director for any Plan Year
         means that individual's total Retainer and Meeting Fees for that Plan
         Year.

                  2.1.11.  "Effective Date" means the date on which this Plan
         became effective, i.e., September 1, 1987.

                  2.1.12.  "Enrollment Period" means the period of February 15
         through April 15 prior to the Plan Year to which a Permissible Deferral
         election first applies. However, for the first Plan Year, the
         Enrollment Period shall be August 1, 1987 through August 31, 1987.

                  2.1.13.  "Non-Employee"  means any person who is not  employed
         as a common-law employee by an Affiliate.

                  2.1.14.  "Participant"  means a  Non-Employee  Director who
         elects to participate in the Plan and who is eligible to participate in
         the Plan.

                  2.1.15.  "Participating  Affiliate"  or  "Participating
         Affiliates" means the Company and the following indirect subsidiaries
         of the Company: HRB Management, Inc., H&R Block Tax Services, Inc.,
         CompuServe Incorporated, Block Financial Corporation, and MECA
         Software, Inc., and the U.S. subsidiaries of such indirect
         subsidiaries; and such other entities as may be designated as such by
         the Company from time to time.

                  2.1.16. "Permissible Deferral" means a deferral in each of the
         next four (4) consecutive Plan Years of an amount or percentage of
         Director's Fees that is not less nor more than one hundred percent
         (100%) of Director's Fees.

                  Director's Fees deferrals shall be made in single sum
         deferrals at the time that the Director's Fees would otherwise be paid
         to the Director. All deferrals must be completed by the later of (a)
         the Plan Year in which the Participant attains Age 68 or (b) April 30,
         1991.

                  2.1.17. "Plan" means the "H&R Block Deferred Compensation Plan
         for Directors" as set forth herein and as amended or restated from time
         to time.

                  2.1.18. "Plan Year" means May 1 through April 30, except that
         the first Plan Year shall be from September 1, 1987 through April 30,
         1988.

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                  2.1.19. "Smoker" or "Smokers" with respect to any Permissible
         Deferral election means any individual who has smoked at least one
         cigarette with a twelve (12) month period ending on the date on which
         such individual makes the Permissible Deferral election.

                  2.1.20.  "Standard  Form of Benefit" as to any  Participant
         means monthly payments for a ten (10) year period.

                  2.1.21.  "Trust" means the H&R Block Inc., Deferred
         Compensation Trust Agreement.

         Section 2.2.      Gender and Number. Except as otherwise indicated by
context, masculine terminology used herein also includes the feminine and
neuter, and terms used in the singular may also include the plural.

         ARTICLE 3.  PARTICIPATION.

         Section 3.1. Who May Participate.  Participation in the Plan is
 limited to Directors.

         Section 3.2. Time and Conditions of Participation. An eligible Director
shall become a Participant only upon (a) the individual's completion of a
Permissible Deferral election for the succeeding Plan Years during an Enrollment
Period, in accordance with a form established by the Company from time to time,
and (b) compliance with such terms and conditions as the Committee may from time
to time establish for the implementation of the Plan, including, but not limited
to, any condition the Committee may deem necessary or appropriate for the
Company to meet its obligations under the Plan.

         Section 3.3. Termination of Participation. Once a Director has become a
Participant in the Plan, participation shall continue until the first to occur
of (a) payment in full of all benefits to which the Participant or Beneficiary
is entitled under the Plan, or (b) the occurrence of an event specified in
Section 3.4 which results in loss of benefits. Except as otherwise specified in
the Plan, the Company may not terminate an individual's participation in the
Plan.

         Section 3.4. Missing Persons. If the Company is unable to locate the
Participant or his Beneficiary for purposes of making a distribution, the amount
of a Participant's benefits under this Plan that would otherwise be considered
as non-forfeitable shall be forfeited effective four (4) years after (a) the
last date a payment of said benefit was made, if at least one such payment was
made, or (b) the first date a payment of said benefit was directed to be made by
the Company pursuant to the terms of the Plan, if no

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payments had been made. If such person is located after the date of such
forfeiture, the benefits for such Participant or Beneficiary shall not be
reinstated hereunder.

         Section 3.5. Relationship to Other Plans. Participation in the Plan
shall not preclude participation of the Participant in any other fringe benefit
program or plan sponsored by an Affiliate for which such Participant would
otherwise be eligible.

         ARTICLE 4.  ENTRIES TO THE ACCOUNT.

         Section 4.1. Deferrals. if the Participant elects the fixed or variable
crediting rate option for measuring the performance of the Account under Section
4.2, the Company shall post to the Account of each Participant on the date the
Director's Fees would otherwise be paid the amount of Director's Fees to be
deferred as designated by the Participant's Permissible Deferral election in
effect for that Plan Year. If the Participant elects the Common Stock crediting
rate option for measuring the performance of the Account under Section 4.2, (a)
the Company shall post to the Account of such Participant a number of Deferred
Compensation Units equivalent to the amount of Director's Fees to be deferred as
designated by the Participant's Permissible Deferral election in effect for than
Plan Year; (b) deferrals of Director's Fees (and the corresponding number of
Deferred Compensation Units) shall be posted as of the date the Director's Fees
would otherwise be paid the amount of Director's Fees to be deferred; and (c)
the number of Deferred Compensation Units posted for each calendar month in
which Director's Fees would otherwise be paid the amount of Director's Fees to
be deferred shall be calculated by dividing: (i) the dollar amount deferred
during that month; by (ii) the Closing Price on the first business day of the
following calendar month.

         Section 4.2. Crediting Rate. Gains or losses shall be posted to the
Account in accordance with the Participant's irrevocable election of an
investment option which will be a reference for measuring the performance of the
Account. The Company intends to measure the performance of the Account in
accordance with the Participant's election but reserves the right to do
otherwise. The election shall be made concurrently with the Permissible Deferral
election. The Participant shall elect one of the following investment options:
(i) a fixed rate as described in 4.2.1, (ii) a variable rate as described in
4.2.2, or (iii) a Common Stock crediting rate as described in 4.2.3. A separate
irrevocable election shall be made for each Permissible Deferral election.

                  Section 4.2.1. Fixed Rate. Except as specified in Section
         4.2.4, if a Participant elects a fixed rate, the interest will be
         compounded on a daily basis and

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         posted to the Participant's Account per each pay period at an effective
         annual yield equal to the rate of ten-year United States Treasury
         notes. The rate will be determined once each Plan Year and will be the
         rate in effect as of April 30 of the year prior to the Plan Year to
         which it applies, as published by Salomon Brothers Inc., or any
         successor thereto, or as determined by the Chief Financial Officer of
         the Company.

                  Section 4.2.2. Variable Rate. Except as specified in Section
         4.2.4, if a Participant elects a variable rate, the Participant's
         Account will be credited or debited as if the Account balance were
         invested in one or more funds selected by the Company in the
         proportions elected by the Participant. Statements will be provided on
         a quarterly basis. Initially the funds will be from the Pruco Variable
         Appreciable Life Insurance Contracts and include the Common Stock
         Portfolio, the Aggressively Managed Flexible Portfolio, the
         Conservatively Managed Flexible Portfolio, the Money Market Portfolio,
         the Bond Portfolio, the High Yield Bond Portfolio and the Real Property
         Account. Participants may elect to have their Accounts treated as if
         they were invested in one or more of the funds selected, provided the
         election is in at least ten percent (10%) increments of the Account.
         Participants may change their measuring fund elections up to four (4)
         times in any calendar year by giving the Committee written notice of
         such change on a form provided by the Company for that purpose. Upon
         receipt of such notice, the Committee will effect the change within two
         (2) business weeks. The Participant's Account will be reduced by the
         annual administrative charge set forth on Schedule A attached hereto,
         which may be amended from time to time by the Committee.

                  Section 4.2.3. Common Stock Crediting Rate. If a Participant
         elects the Common Stock crediting rate, the Participant's Account will
         be valued as if his or her Account were invested in shares of Common
         Stock equal to the number of Deferred Compensation Units posted to his
         or her Account. The value of a Participant's Account will vary with the
         value of the Company's Common Stock. The Participant's Account will be
         credited, as of the applicable dividend payment date, with additional
         Deferred Compensation Units equal in value to any dividends declared on
         the Company's Common Stock based on the number of Deferred Compensation
         Units posted to the Participant's Account as of the

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         record date with respect to the declaration of such dividend. As of
         any date of valuation, the value of a Participant's Account will be
         equal to the value (at the Closing Price on such date) of the number of
         shares of Common Stock represented by the Deferred Compensation Units
         credited to the Account as of that date.

                  Section 4.2.4. Crediting for Smokers. The crediting rate under
         Sections 4.2.1 and 4.2.2 for Smokers shall be reduced by four tenths of
         one percent (.4%) annually. The Committee may, in its discretion, waive
         the reduction required by this Section 4.2.4 for an individual
         classified as a Smoker with respect to a Permissible Deferral election
         if the Committee receives a request for such a waiver, on a form
         provided by the Company for that purpose, from such individual which
         certifies that he or she has not smoked a cigarette within a twelve
         (12) month period ending on the date such request is submitted. Such a
         request may be submitted no sooner than twelve (12) months following
         the date on which the Permissible Deferral was made.

         ARTICLE 5.  VESTING.

         Participant deferrals are fully vested immediately.

         ARTICLE 6.  DISTRIBUTION OF BENEFITS.

         Section  6.1.  Time of Payment.  Payments of benefits  shall be made by
the Company upon the earliest to occur of the following:

                  (a) the termination, voluntary or involuntary, of the
         Participant as a Director;

                  (b) the Participant's death; or

                  (c) for Participants Age sixty-eight (68) or older on the date
         on which they first become eligible to participate in the Plan, Age 75.

Except as otherwise provided, benefit payments shall begin no later that six (6)
months after the occurrence of the event described in the preceding sentence
which results in benefit distribution.

         Section 6.2. Form of Benefits Upon Retirement or Attainment of Age 75.
For distributions made for reasons other than the death of the Participant,
payments from the Account shall be made in accordance with the Standard Form of
Benefit. However, the Participant in the Plan Year prior to payment of benefits
may

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petition the Committee for, and the Committee may approve at such time, one of
the following forms of benefit:

                  (a) monthly payment over a five (5) year period; or

                  (b) a single distribution.

Except for single distributions, benefit payments shall be a level amount for
each twelve (12) month period calculated using the balance in the Account at the
beginning of the twelve (12) month period and dividing it by the total periods
remaining in the entire payment period. The benefit payment shall be adjusted
each subsequent twelve (12) month period to reflect the Account as of that time.
The Account shall continue to be credited during the payment period with gains
and losses as provided in Section 4.2.

         Section 6.3. Deferral of Payment. A Participant may elect at the time
of each Permissible Deferral election to defer commencement of the payment of
benefits with respect to each such Permissible Deferral election as follows:

                  (a) for Participants Age 65 or older on the date on which they
         first become eligible to participate in the Plan, commencement of
         benefits may be deferred until the earlier of (i) five (5) years from
         the date on which they retire or (ii) Age 75;

                  (b) for all other Participants, commencement of benefits may
         be deferred until the earlier of (i) five (5) years from the date on
         which they retire or (ii) Age 70.

Notwithstanding the preceding sentence, if a Participant elects to defer
commencement of benefits pursuant to this Section 6.3, but dies prior to the
date on which benefits would commence under such election, benefits shall begin
no later than six (6) months after the Participant's death.

         Section 6.4.  Death Benefits.

                  6.4.1. Death After Benefit Commencement. In the event a
         Participant dies after commencement of benefits, the remaining benefit
         payments, if any, shall be paid to the Participant's Beneficiary in the
         same manner such benefits would have been paid to the Participant had
         the Participant survived. A Beneficiary may petition the Committee for
         an alternative method of payment. The Account shall be credited from
         the date of the Participant's death at an interest rate set by the
         Chief Financial Officer of the

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         Company in his discretion, which shall not be less than the rate then
         payable on Investment Savings Accounts of $1,000 or less at Commerce
         Bank of Kansas City, Missouri, N.A., or any successor thereto.

                  6.4.2. Death Prior to Benefit Commencement. In the event a
         Participant dies prior to the time benefits commence, the Company shall
         pay a pre-retirement death benefit to the Participant's Beneficiary
         equal to the Participant's Account as of the date of the Participant's
         death annuitized over a ten-year period at an interest rate set by the
         Chief Financial Officer of the Company in his discretion. The
         pre-retirement death benefit shall be paid monthly for a ten-year
         period. The Beneficiary may petition the Committee to make a single sum
         distribution as an alternative method of payment.

                  6.4.3. Marital Deduction. Any benefits which become payable
         under this Article 6 to the surviving spouse of a Participant shall be
         paid in a manner which will qualify such benefits for a marital
         deduction in the estate of a deceased Participant under the terms of
         Section 2056 of the Code, and unless specifically directed by a
         Participant to the contrary pursuant to an effective beneficiary
         designation, any portion of a Participant's death benefit payable to a
         surviving spouse which remains unpaid at the death of such spouse shall
         be paid to the spouse's estate.

                  6.4.4. Designation by Participant. Each Participant has the
         right to designate primary and contingent Beneficiaries for death
         benefits payable under the Plan. Such Beneficiaries may be individuals
         or trusts for the benefit of individuals. A beneficiary designation by
         a Participant shall be in writing on a form acceptable to the Committee
         and shall only be effective upon delivery to the Company. A beneficiary
         designation may be revoked by a Participant at any time by delivering
         to the Company either written notice of revocation or a new beneficiary
         designation form. The beneficiary designation form last delivered to
         the Company prior to the death of a Participant shall control.

                  6.4.5. Failure to Designate Beneficiary. In the event there is
         no beneficiary designation on file with the Company, or all
         Beneficiaries designated by a Participant have predeceased the
         Participant, the benefits payable by reason of the death of the

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         Participant shall be paid to the Participant's spouse, if living; if
         the Participant does not leave a surviving spouse, to the Participant's
         issue by right of representation; or, if there are no such issue then
         living, to the Participant's estate. In the event there are benefits
         remaining unpaid at the death of a sole Beneficiary and no successor
         Beneficiary has been designated, either by the Participant or the
         Participant's spouse pursuant to 6.4.3, the remaining balance of such
         benefit shall be paid to the deceased Beneficiary's estate; or, if the
         deceased Beneficiary is one of multiple concurrent Beneficiaries, such
         remaining benefits shall be paid proportionally to the surviving
         Beneficiaries.

         Section 6.5. Claims Procedure. The Committee shall notify a Participant
in writing within ninety (90) days of the Participant's written application for
benefits of his eligibility or noneligibility for benefits under the Plan. If
the Committee determines that a Participant is not eligible for benefits or full
benefits, the notice shall set forth (a) the specific reasons for such denial,
(b) a specific reference to the provision of the Plan on which the denial is
based, (c) a description of any additional information or material necessary for
the claimant to perfect his claim, and a description of why it is needed, and
(d) an explanation of the Plan's claims review procedure and other appropriate
information as to the steps to be taken if the Participant wishes to have his
claim reviewed. If the Committee determines that there are special circumstances
requiring additional time to make a decision, the Committee shall notify the
Participant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional 90-day
period. If a Participant is determined by the Committee to be not eligible for
benefits, or if the Participant believes that he is entitled to greater or
different benefits, he shall have the opportunity to have his claim reviewed by
the Committee by filing a petition for review with the Committee within sixty
(60) days after receipt by him of the notice issued by the Committee. Said
petition shall state the specific reasons the Participant believes he is
entitled to benefits or greater or difference benefits. Within sixty (60) days
after receipt by the Committee of said petition, the Committee shall afford the
Participant (and his counsel, if any) an opportunity to present his position t
the Committee orally or in writing, and said Participant (or his counsel) shall
have the right to review the pertinent documents, and the Committee shall notify
the Participant of its decision in writing within said sixty (60) day period,
stating specifically the basis of said decision written in a manner calculated
to be understood by the Participant and the specific provisions of the Plan on
which the decision is based. If, because of the need for a hearing, the sixty
(60) day period is not sufficient, the

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decision may be deferred for up to another sixty (60) day period at the election
of the Committee, but notice of this deferral shall be given to the Participant.

         Section 6.6. Alternate Forms of Benefit Distribution. Participants, in
the Plan Year prior to payment of benefits may petition the Committee to request
methods of benefit distribution other than those provided pursuant to this
Article 6.

         Section 6.7. Distributions on Plan Termination. Notwithstanding
anything in this Article 6 to the contrary, if the Plan is terminated,
distributions shall be made in accordance with Section 9.2.

         ARTICLE 7.  FUNDING

         Section 7.1. Sources of Benefits. All benefits under the Plan shall be
paid when due by the Company our of its assets of from an irrevocable trust
established by the Company for that purpose. The Company may, but shall have no
obligations to, make such advance provision for the payment of such benefit as
the Board may from time to time consider appropriate.

         Section 7.2. No Claim on Specific Assets. No Participant shall be
deemed to have, by virtue of being a Participant in the .Plan, any claim on any
specific assets of the Company such that the Participant would be subject to
income taxation on his benefits under the Plan prior to distribution and the
rights of Participants and Beneficiaries to benefits to which they are otherwise
entitled under the Plan shall be those of an unsecured general creditor of the
Company.

         ARTICLE 8.  ADMINISTRATION AND FINANCES

         Section  8.1.  Administration.  The Plan shall be  administered  by the
Committee. The Company shall bear all administrative costs of the Plan other
than those specifically charged to a Participant or Beneficiary.

         Section 8.2. Powers of Committee. In addition to the other powers
granted under the Plan, the Committee shall have all powers necessary to
administer the Plan, including, without limitation, powers:

                  (a) to interpret the provisions of the Plan;

                  (b) to  establish  and revise the method of  accounting  for
         the Plan and to maintain the Accounts; and

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<PAGE>   15

                  (c)  to  establish  rules for the  administration  of the Plan
         and to prescribe any forms required to administer the Plan.

Not in limitation, but in amplification of the foregoing and of the authority
conferred upon the Committee in Section 8.1, the Company specifically intends
that the Committee have the greatest permissible discretion to construe the
terms of the Plan and to determine all questions concerning eligibility,
participation and benefits. Any such decision made by the Committee is intended
to be subject to the most deferential standard of judicial review. Such standard
of review is not to be effected by any real or alleged conflict of interest on
the part of the Company or any member of the Committee.

         Section 8.3. Actions of the Committee. Except as modified by the
Company, all determinations, interpretations, rules, and decisions of the
Committee shall be conclusive and binding upon all persons having or claiming to
have any interest or right under the Plan.

         Section 8.4. Delegation. The Committee, or any officer designated by
the Committee, shall have the power to delegate specific duties and
responsibilities to officers or other employees of the Company or other
individuals or entities. Any delegation may be rescinded by the Committee at any
time. Each person or entity to whom a duty or responsibility has been delegated
shall be responsible for the exercise of such duty or responsibility and shall
not be responsible for any act or failure to act of any other person or entity.

         Section 8.5. Reports and Records. The Committee and those to whom the
Committee has delegated duties under the Plan shall keep records of all their
proceedings and actions and shall maintain books of account, records, and other
data as shall be necessary for the proper administration of the Plan and for
compliance with applicable law.

         ARTICLE 9.  AMENDMENTS AND TERMINATION

         Section 9.1. Amendments. The Company, by action of the Board, may amend
the Plan, in whole or in part, at any time and from time to time. Any such
amendment shall be filed with the Plan documents. No amendment, however, may be
effective to eliminate or reduce the benefits of any retired Participant or the
Beneficiary of any deceased Participant then eligible for benefits or the
benefits, if any, in any active Participant's Account immediately before the
effective date of such amendment, and each such Account will be credited to the
date of such amendment in accordance with Section 4.2. Notwithstanding anything
in this Section 9.1 to the contrary, the Committee may, in its discretion,

                                      -12-

<PAGE>   16

amend the Plan to reduce the rates set forth in Section 4.2 for crediting the
Accounts of active Participants effective for crediting from the date of any
such amendment.

         Section 9.2. Termination. The Company expects the Plan to be permanent,
but necessarily must, and hereby does, reserve the right to terminate the Plan
at any time by written action of the Board. In all events, the Plan will be
terminated if the existence of a trust causes a federal court to hold that the
Plan is "funded" for ERISA purposes, as defined in Section 2.02-4 of the Trust,
and appeals from that holding are no longer timely or have been exhausted, and
the trust is therefore terminated with respect to the Plan. Upon termination of
the Plan, all deferrals will cease and no future deferrals will be made.
Termination of the Plan shall not operate to eliminate or reduce benefits of any
retired Participant or the Beneficiary of any deceased Participant then eligible
for benefits or the benefits, if any, in any active Participant's Account
immediately before the effective date of such termination, and each such Account
will be credited, to the date of distribution of all benefits in such Account,
in accordance with Section 4.2, as it may be amended from time to time pursuant
to Section 9.1.

         If the Plan shall at any time be terminated, payments from the Accounts
of all Participants and Beneficiaries shall be made as soon as administratively
convenient in the form of monthly payments over a five (5) year period; however,
the Committee in its sole discretion may pay the benefits in a lump sum.
Notwithstanding the preceding sentence, if the termination occurs because the
Plan is held to be "funded" as described in the first paragraph of this Section
9.2, the distribution will be paid in a lump sum not later than ninety (90) days
after such termination.

         ARTICLE 10.  MISCELLANEOUS

         Section 10.1 No Guarantee of Membership. Neither the adoption and
maintenance of the Plan nor the execution by the Company of a Permissible
Deferral agreement with any Director shall be deemed to be a contract between
the Company and any Participant to retain his or her position as a Director.

         Section 10.2. Individual Account Plan. If it is determined that the
Plan is not an unfunded plan maintained primarily for a select group of
management or highly compensated employees as described in Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, then the Plan is intended to be an individual
account plan (other than a money purchase plan) as described in Section
301(a)(8) of ERISA.

         Section 10.3. Release. Any payment of benefits to or for the benefit of
a Participant or a Participant's Beneficiaries that

                                      -13-

<PAGE>   17

is made in good faith by the Company in accordance with the Company's
interpretation of its obligations hereunder, shall be in full satisfaction of
all claims against the Company for benefits under this Plan to the extent of
such payment.

         Section 10.4. Notices. Any notice permitted or required under the Plan
shall be in writing and shall be hand delivered or sent, postage prepaid,
certified or registered mail with return receipt requested, to the principal
office of the Company, if to the Company, or to the address last shown on the
records of the Company, if to a Participant or Beneficiary. Any such notice
shall be effective as of the date of hand delivery or mailing.

         Section 10.5. Non-Alienation. No benefit payable at any time under this
Plan shall be subject in any manner to alienation, sale, transfer, assignment,
pledge, levy, attachment, or encumbrance of any kind.

         Section 10.6. Tax Liability. The Company may direct the trustee of the
Trust to withhold from any payment of benefits under the Plan such amounts as
the Company determines are reasonably necessary to pay any taxes (and interest
thereon) required to be withheld or for which the trustee of the Trust may
become liable under applicable law. The Company may also direct the trustee of
the Trust to forward to the appropriate taxing authority any amounts required to
be paid by the Company or the Trust under the preceding sentence. Any amounts
withheld pursuant to this Section 10.6 in excess of the amount of taxes due (and
interest thereon) shall be paid to the Participant or Beneficiary upon final
determination, as determined by the Company, of such amount. No interest shall
be payable by the Company to any Participant or Beneficiary by reason of any
amounts withheld pursuant to this Section 10.6.

         Section 10.7. Captions. Article and section headings and captions are
provided for purposes of reference and convenience only and shall not be relied
upon in any way to construe, define, modify, limit, or extend the scope of any
provision of the Plan.

         Section 10.8. Applicable Law. The Plan and all rights hereunder shall
be governed by and construed according to the laws of the State of Missouri,
except to the extent such laws are preempted by the laws of the United States of
America.

                                      -14-

<PAGE>   18

                   Schedule A - Annual Administrative Charges

<TABLE>
<CAPTION>
                                            Annual Administrative
Portfolio Gross Crediting Rate                      Charge
------------------------------              --------------------

<S>                                         <C>
         Up to 9.99%                                1.40%
         10.00% to 11.99%                           1.00%
         12.00% and above                           0.00%

</TABLE>

                                      -15-<PAGE>   1

                                                                   EXHIBIT 10.21
                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of
the 31st day of January, 2000, by and between BLOCK FINANCIAL CORPORATION, a
Delaware corporation ("BFC"), and David J. Kasper ("Executive").

                                   ARTICLE ONE

                                   EMPLOYMENT

                  1.01 - Agreement as to Employment. Effective February 14, 2000
or a later date as agreed upon by both parties (the "Employment Date"), BFC
hereby employs Executive as its President, Financial Services Group, and
Executive hereby accepts such employment by BFC, subject to the terms of this
Agreement. Subject to the terms of Section 1.06 of this Agreement, either party
may terminate this Agreement for any reason, or no reason, by providing not less
than 45 days' prior written notice of such termination to the other party, and,
if such notice is properly given, this Agreement and Executive's employment
hereunder shall terminate as of the close of business on the 45th day after such
notice is deemed to have been given or such later date as is specified in such
notice. Any termination of this Agreement shall not be effective as to those
portions of this Agreement which, by their express terms as set forth below,
require performance by either party following termination of this Agreement.

                  1.02 - Duties.

                  (a) Executive is employed by BFC to serve as its President,
Financial Services Group, subject to the authority and direction of the BFC's
Board of Directors, the Chief Executive Officer of H&R Block, Inc., a Missouri
corporation ("Block"), and the Chief Operating Officer of Block. Subject to the
foregoing, the Executive shall have such authority and responsibility and duties
as are normally associated with the position of President of an operating
subsidiary.

                  (b) So long as he is employed under this Agreement, Executive
agrees to devote his full business time and efforts exclusively on behalf of BFC
and to competently and diligently discharge his duties hereunder. Executive
shall not be prohibited from engaging in such personal, charitable, or other
nonemployment activities that do not interfere with his full-time employment
hereunder and that do not violate the other provisions of this Agreement.
Executive shall comply fully with all reasonable policies of BFC as are from
time to time in effect and applicable to his position.

                  1.03 - Compensation.

                  (a) Base Salary. BFC shall pay to Executive a gross salary at
an annual rate of $375,000 ("Base Salary"), payable semimonthly or at any other
pay periods as BFC may use for its other executive employees. The Base Salary
shall be reviewed for adjustment by the Board of Directors of Block (the Board")
or appropriate committee thereof no less often than annually during

<PAGE>   2

the term of Executive's employment hereunder and, if adjusted by the Board, such
adjusted amount shall become the "Base Salary" for purposes of this Agreement.

                  (b) Additional Annual Payments. On the first, second, third,
fourth, and fifth anniversary of the Employment Date, BFC shall pay to Executive
$63,500, plus an additional amount as is necessary to "gross up" such payment to
cover the anticipated income tax liability resulting from such taxable income.

                  (c) Short-Term Incentive Compensation. As approved by the
Compensation Committee of the Board, Executive shall participate in the H&R
Block Short-Term Incentive Plan and the discretionary short-term incentive
program. Under such Plan and program, the Executive shall have an aggregate
target bonus for fiscal year 2000 of $206,250 and an opportunity to earn 200% of
such target bonus. The payment of the actual award under the Plan (20% of
target) shall be based upon the actual consolidated pretax earnings of Block for
its fiscal year 2000 compared to the actual consolidated pretax earnings of
Block for its fiscal year 1999. The payment of the actual award under the
discretionary program (80%) shall be based upon the performance of the Financial
Service Group and Executive's individual performance, as determined by the Chief
Operating Officer and Chief Executive Officer of Block and approved by the
Compensation Committee. For purposes of Executive's participation in such Plan
for the fiscal year ending April 30, 2000, Executive's actual incentive
compensation shall be prorated based upon the number of months during such year
that he is actually employed by BFC. Executive must remain employed through
April 30, 2000 to receive payments under the Plan and program.

                  (d) Performance Grant. As approved by the Board and the Chief
Operating Officer of Block, Executive shall participate in the Performance Grant
Program, subject to the terms of that Program, and shall have a target cash
award of $500,000.

                  (e) Stock Options. As approved by the Compensation Committee
of the Board and the Board itself, Executive shall be granted (i) on the
Employment Date a stock option under Block's 1993 Long-Term Executive
Compensation Plan (the "1993 Plan") to purchase 20,000 shares of Block's common
stock at a price per share equal to its closing price on the New York Stock
Exchange on the date of grant, such option to expire on the tenth anniversary of
the date of grant; to vest and become exercisable as to 40% of the shares
covered thereby on the third anniversary of the date of grant, as to an
additional 30% of such shares on the fourth anniversary of the date of grant,
and as to the remaining 30% of the shares on the fifth anniversary of the date
of grant; to be an incentive stock option for the maximum number of shares
permitted by Internal Revenue Code Section 422 and the regulations promulgated
thereunder; and to otherwise be a nonqualified stock option; and (ii) a stock
option to purchase a minimum of 20,000 shares of Block's common stock at a price
per share equal to its closing price on the New York Stock Exchange on the date
in fiscal year 2001 on which options are granted under the 1993 Plan to all or
substantially all other senior executive officers of Block and its subsidiaries,
such stock option to have terms and conditions consistent with the terms and
conditions of options granted to such other

                                       2

<PAGE>   3

senior executive officers except as provided in Section 1.06(a).

                  (f) Restricted Stock. As approved by the Compensation
Committee of the Board and the Board itself, Executive shall be awarded promptly
after the Employment Date, 5,000 Restricted Shares of Block's common stock under
the 1993 Plan. One-third of the 5,000 shares shall vest, respectively, on each
of the first three anniversaries following such employment commencement date.
Prior to the time such Restricted Shares are so vested, (i) such Restricted
Shares shall be nontransferable, and (ii) Executive shall be entitled to receive
any cash dividends payable with respect to unvested Restricted Shares and vote
such unvested Restricted Shares at any meeting of shareholders of Block.

                  (g) Relocation Benefits.

                      (i)  BFC shall reimburse Executive for reasonable packing,
         shipping, transportation costs and other expenses incurred by Executive
         in relocating himself, his family and personal property to the Greater
         Kansas City Area, in accordance with the H&R Block Executive Relocation
         Program.

                      (ii) To the extent that Executive incurs taxable income
         related to any relocation benefits paid pursuant to this Agreement, BFC
         shall pay to Executive such additional amount as is necessary to "gross
         up" such benefits and cover the anticipated income tax liability
         resulting from such taxable income.

                  1.04 - Business Expenses. BFC shall promptly pay directly, or
reimburse Executive for, all business expenses, to the extent such expenses are
paid or incurred by Executive during the term hereof in accordance with Block
policy in effect from time to time and to the extent such expenses are
reasonable and necessary to the conduct by Executive of BFC's business.

                  1.05 - Fringe Benefits. During the term of Executive's
employment hereunder, BFC shall make available to Executive such insurance, sick
leave, deferred compensation, short-term incentive compensation, bonuses, stock
options (also referred to in Subsection 1.03(e) above), retirement, vacation,
and other like benefits as are approved by the Board or the Compensation
Committee thereof and provided from time to time to the other executive-level
employees of BFC or Block's other subsidiaries.

                  1.06 - Termination of Employment.

                  (a) Termination Due to a Change in Control or Without Cause.

                      (i) If Executive terminates Executive's employment under
         this Agreement during the 180-day period following the date of the
         occurrence of a "Change in Control" of Block, or if BFC terminates
         Executive's employment under this Agreement for any reason other than
         for "cause," then, upon any such termination of Executive's employment,
         (A)

                                       3

<PAGE>   4

         BFC shall pay to Executive compensation at an annual rate equal to the
         sum of (I) the annual rate of Base Salary in effect upon such
         termination, and (II) the aggregate short-term incentive compensation
         (under the H&R Block Short-Term Incentive Plan and any discretionary
         incentive program) paid by BFC to Executive for the last fiscal year
         completed before the fiscal year in which the termination of employment
         occurs (or, if such termination occurs prior to end of the fiscal year
         in which the Employment Date occurs, the amount of actual aggregate
         short-term incentive compensation to which Executive would have been
         entitled (with any discretionary incentive compensation calculated at
         target) had Executive remained employed through the last day of such
         fiscal year), such compensation to be paid throughout the one-year
         period following such termination at such periodic intervals as Base
         Salary would have been made had Executive remained employed by BFC
         hereunder; (B) any portion of any option to purchase shares of Block
         common stock granted pursuant to Subsections 1.03(e) or 1.05 of this
         Agreement and held by Executive at the time of such termination of
         employment that is not yet vested in accordance with its terms shall
         fully vest upon the date of such termination of employment, and shall
         be exercisable to the extent so vested for a period of three months
         after such date of termination of employment; (C) any Restricted Shares
         granted pursuant to Subsection 1.03(f) of this Agreement and held by
         Executive at the time of such termination of employment that are not
         yet vested (meaning the Shares are still subject to restrictions) shall
         fully vest upon the date of such termination of employment, and all
         restrictions on any Restricted Shares so vested shall terminate; and
         (D) HRB shall, during the one-year period following such termination,
         continue Executive's health, basic life, and disability insurance
         benefits (such health insurance benefits to be provided by BFC's
         payment (whether directly or by reimbursement) of Executive's
         premiums/contributions due as a result of Executive selecting
         continuation coverage (COBRA) under the plan providing such benefits)
         but only to the extent Executive does not obtain similar benefits paid
         for by a third party after such termination..

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

                                    (A) the acquisition, other than from Block,
                  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 35% or more of the then outstanding
                  voting securities of Block entitled to vote generally in the
                  election of directors, but excluding, for this purpose, any
                  such acquisition by Block or any of its subsidiaries, or any
                  employee benefit plan (or related trust) of Block or its
                  subsidiaries, 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 Block
                  immediately prior to such acquisition in substantially the
                  same proportion as their ownership,

                                       4

<PAGE>   5

                  immediately prior to such acquisition, of the then outstanding
                  voting securities of Block entitled to vote generally in the
                  election of directors, as the case may be; or

                                    (B) individuals who, as of the date hereof,
                  constitute the Board (as of the date hereof, the "Incumbent
                  Board") cease for any reason to constitute at least a majority
                  of the 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

                                    (C) approval by the shareholders of Block of
                  (I) a reorganization, merger or consolidation of Block, 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 Block
                  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
                  resulting from such reorganization, merger or consolidation,
                  (II) a complete liquidation or dissolution of Block, voluntary
                  or involuntary, or (III) the sale or other disposition of all
                  or substantially all of the assets of Block.

                           (iii) For the purpose of this subsection, "cause"
         shall mean any one or more of the following grounds:

                                    (A) Executive's commission of an act
                  materially and demonstrably detrimental to the good will of
                  Block or any subsidiary of Block, which act constitutes gross
                  negligence or willful misconduct by the Executive in the
                  performance of his material duties to Block; or

                                    (B) commission by Executive of any act of
                  dishonesty or breach of trust resulting or intending to result
                  in material personal gain or enrichment of Executive at the
                  expense of Block or any subsidiary of Block; or

                                    (C) Executive's conviction of a misdemeanor
                  (involving an act of moral turpitude) or a felony; or

                                    (D) for any reason (or no reason) at any
                  time after the last day of Block's fiscal year during which
                  Executive attains normal retirement age under

                                       5

<PAGE>   6

                  Block's benefit plans; or

                                    (E) Executive's death or total and permanent
                  disability. The term "total and permanent disability" shall
                  have the meaning ascribed thereto under any long-term
                  disability plan maintained by BFC or Block for BFC executives.

                  (b) Termination Due to Mutual Agreement. The parties may
terminate Executive's employment under this Agreement at any time by mutual
written agreement.

                  (c) No Further Obligations. Upon termination of Executive's
employment under this Agreement, BFC shall have no further obligations under
this Agreement and no further payments of Base Salary or other compensation or
benefits shall be payable by BFC to Executive, except (i) as set forth in this
Section 1.06, (ii) as required by the express terms of any written benefit plans
or written arrangements maintained by BFC and applicable to Executive at the
time of such termination of Executive's employment, (iii) as may be required by
law, or (iv) as may be mutually agreed upon between the parties in a negotiated
Employment Agreement Termination package.

                                   ARTICLE TWO

                                      LOAN

                  BFC shall loan $250,000 to Executive on the Employment Date.
Such loan and its terms shall be evidenced by a promissory note in the form
attached hereto as Exhibit A, to be signed by Executive on the Employment Date.

                                  ARTICLE THREE

                                 CONFIDENTIALITY

                  3.01 - Background and Relationship of Parties. The parties
acknowledge (for all purposes including, without limitation, Articles Three and
Four of this Agreement) that Block and its subsidiaries have been and will be
engaged in a continuous program of acquisition and development respecting their
businesses, present and future, and that, in connection with Executive's
employment by BFC, Executive will be expected to have access to all information
of value to BFC and Block and that Executive's employment creates a relationship
of confidence and trust between Executive and Block with respect to any
information applicable to the businesses of Block and its subsidiaries.
Executive will possess or have unfettered access to information that has been
created, developed, or acquired by Block and its subsidiaries or otherwise
become known to Block and its subsidiaries and which has commercial value in the
businesses in which Block and its subsidiaries have been and will be engaged and
has not been publicly disclosed by Block. All information described above is
hereinafter called "Proprietary Information." By way of illustration, but not
limitation, Proprietary Information includes trade secrets, customer lists and
information, employee lists and information, developments, systems, designs,
know-how, marketing plans,

                                       6

<PAGE>   7

product information, business and financial information and plans, strategies,
forecasts, new products and services, financial statements, budgets,
projections, prices, and acquisition and disposition plans. Proprietary
Information shall not include any portions of such information which are now or
hereafter made public by third parties in a lawful manner or made public by
parties hereto without violation of this Agreement.

                  3.02 - Proprietary Information is Property of Block.

                  (a) All Proprietary Information shall be the sole property of
Block (or the applicable subsidiary of Block) and its assigns, and Block (or the
applicable subsidiary of Block) shall be the sole owner of all patents,
copyrights, trademarks, names, and other rights in connection therewith and
without regard to whether Block (or any subsidiary of Block) is at any
particular time developing or marketing the same. Executive hereby assigns to
Block any rights Executive may have or may acquire in such Proprietary
Information. At all times, Executive will keep in strictest confidence and trust
all Proprietary Information and Executive will not use or disclose any
Proprietary Information without the written consent of Block, except as may be
necessary in the ordinary course of performing duties as an employee of BFC or
as may be required by law or the order of any court or governmental authority.

                  (b) In the event of the termination of Executive's employment
by BFC, Executive shall promptly deliver to BFC all copies of all documents,
notes, drawings, specifications, documentation, data, and other materials of any
nature belonging to Block or any subsidiary of Block and obtained during the
course of Executive's employment with BFC. In addition, upon such termination,
Executive will not remove from the premises of Block or any subsidiary of Block
any of the foregoing or any reproduction of any of the foregoing or any
Proprietary Information that is embodied in a tangible medium of expression.

                                  ARTICLE FOUR

                    NON-HIRING; NO CONFLICTS; NONCOMPETITION

                  4.01 - General. The parties hereto acknowledge that, during
the course of Executive's employment by BFC, Executive shall have access to
information valuable to BFC and Block concerning the key employees of Block and
its subsidiaries ("Block Employees") and, in addition to Executive's access to
such information, Executive may, during (and in the course of) Executive's
employment by BFC, develop relationships with such Block Employees whereby
information valuable to Block and its subsidiaries concerning the Block
Employees was acquired by Executive. Such information includes, without
limitation: the identity, skills, and performance levels of the Block Employees,
as well as compensation and benefits paid by Block to such Block Employees.

                  4.02 - Non-Hiring. During the period of Executive's employment
hereunder and during the time Executive is receiving payments hereunder and for
a period of one year after the

                                       7

<PAGE>   8

later of termination by BFC or Executive of such employment or cessation of such
payments, the Executive will not knowingly recruit, solicit, or hire any Block
Employee or otherwise induce any such Block Employee to leave the employment of
Block (or the applicable employer-subsidiary of Block) to become an employee of
or otherwise be associated with any other party or with Executive or any company
or business with which Executive is or may become associated.

                  4.03 - No Conflicts. Executive represents in good faith that,
to the best of his knowledge, the performance by Executive of all the terms of
this Agreement will not breach any agreement to which Executive is or was a
party and which requires Executive to keep any information in confidence or in
trust. Executive has not brought and will not bring with him to BFC or Block nor
will Executive use in the performance of employment responsibilities at BFC any
proprietary materials or documents of a former employer that are not generally
available to the public, unless Executive has obtained express written
authorization from such former employer for their possession and use. Executive
has not and will not breach any obligation of confidentiality that Executive may
have to former employers and Executive shall fulfill all such obligations during
his employment with BFC.

                  4.04 - Non-Competition.

                  (a) During any period of Executive's employment with BFC,
Executive shall not engage in, or own or control any interest in (except as a
passive investor in publicly held companies, holding less than one percent of
its outstanding securities), or act as an officer, director, or employee of, or
consultant, advisor or lender to, any firm, corporation, institution, or
business which engages in any line of business which is competitive with any
line of business of Block or any of its subsidiaries (or which Block or any
subsidiary is engaged in evaluating or developing).

                  (b) During the one-year period immediately following the
termination of Executive's employment hereunder by BFC or Executive, Executive
will not own or control any interest in (except as a passive investor in
publicly held companies, holding less than one percent of its outstanding equity
securities) or act as an officer, director, or employee of, or consultant,
advisor, or lender to, any firm, corporation, institution, or business which
engages in the income tax return preparation business at the time Executive's
employment terminates.

                  (c) During the one-year period immediately following the
termination of Executive's employment hereunder by BFC or Executive, Executive
will not own or control any interest in (except as a passive investor in
publicly held companies, holding less than one percent of its outstanding equity
securities) or act as an officer, director, or employee of, or consultant,
advisor, or lender to, any firm, corporation, institution, or business which
engages in any line of business which is competitive with any line of business
included, as of the Employment Date, in the financial services segment of Block
(for Block's financial reporting purposes); except, however, during the one-year
period immediately following termination of Executive's employment hereunder by
BFC without "cause," Executive may, at Executive's option, own or control an
interest in (including as a passive investor in a publicly held company, holding
one percent or more

                                       8

<PAGE>   9

of its outstanding equity securities), or act as an officer, director or
employee of, or consultant, advisor or lender to, any firm, corporation,
institution or business which engages in any line of business which, at the time
Executive's employment terminates, is competitive with any line of business
included in such financial services segment of Block (and which does not also
engage in the income tax return preparation business) as of the Employment Date.
As of the effective date of any such ownership, control or act, HRB shall have
no further obligation to continue to pay compensation pursuant to subsection
1.06(a)(i)(A) of this Agreement and no further obligation to continue
Executive's health, basic life, and disability insurance benefits pursuant to
subsection 1.06(a)(i)(D) of this Agreement.

                  4.05 - Reasonableness of Restrictions. Executive and BFC
acknowledge that the restrictions contained in this Agreement are reasonable,
but should any provisions of any Article of this Agreement be determined to be
invalid, illegal, or otherwise unenforceable or unreasonable in scope by any
court of competent jurisdiction, the validity, legality, and enforceability of
the other provisions of this Agreement shall not be affected thereby and the
provision found invalid, illegal, or otherwise unenforceable or unreasonable
shall be considered by BFC and Executive to be amended as to scope of
protection, time, or geographic area (or any one of them, as the case may be) in
whatever manner is considered reasonable by that court and, as so amended, shall
be enforced.

                                  ARTICLE FIVE

                                  MISCELLANEOUS

                  5.01 - Third-Party Beneficiary. The parties hereto agree that
Block is a third-party beneficiary as to the obligations imposed upon Executive
under this Agreement and as to the rights and privileges to which BFC is
entitled pursuant to this Agreement, and that Block is entitled to all of the
rights and privileges associated with such third-party-beneficiary status.

                  5.02 - Entire Agreement. This Agreement constitutes the entire
agreement and understanding between BFC and Executive concerning the subject
matter hereof. No modification, amendment, termination, or waiver of this
Agreement shall be binding unless in writing and signed by Executive and a duly
authorized officer of BFC. Failure of BFC, Block or Executive 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.

                  5.03 - Specific Performance by Executive. The parties
acknowledge that money damages alone will not adequately compensate BFC or Block
or Executive for breach of any of the covenants and agreements herein and,
therefore, in the event of the breach or threatened breach of any such covenant
or agreement by either party, in addition to all other remedies available at
law, in equity or otherwise, a wronged party shall be entitled to injunctive
relief compelling specific performance of (or other compliance with) the terms
hereof.

                                       9

<PAGE>   10

                  5.04 - Successors and Assigns. This Agreement shall be binding
upon Executive and the heirs, executors, assigns and administrators of Executive
or his estate and property and shall inure to the benefit of BFC, Block and
their successors and assigns. Executive may not assign or transfer to others the
obligation to perform Executive's duties hereunder.

                  5.05 - Withholding Taxes. From any payments due hereunder to
Executive from BFC, there shall be withheld amounts reasonably believed by BFC
to be sufficient to satisfy liabilities for federal, state, and local taxes and
other charges and customary withholdings. Executive remains primarily liable to
such authorities for such taxes and charges to the extent not actually paid by
BFC. This Section 5.05 shall not affect BFC's obligation to "gross up" any
relocation benefits paid to Executive pursuant to Subsection 1.03(g)(ii).

                  5.06 - Indemnification. To the fullest extent permitted by law
and Block's Bylaws, BFC hereby indemnifies during and after the period of
Executive's employment hereunder the Executive from and against all loss, costs,
damages, and expenses including, without limitation, legal expenses of counsel
selected by BFC to represent the interests of Executive (which expenses BFC
will, to the extent so permitted, advance to executive as the same are incurred)
arising out of or in connection with the fact that Executive is or was a
director, officer, employee, or agent of BFC or Block or serving in such
capacity for another corporation at the request of BFC or Block. Notwithstanding
the foregoing, the indemnification provided in this Section 5.06 shall not apply
to any loss, costs, damages, and expenses arising out of or relating in any way
to any employment of Executive by any former employer or the termination of any
such employment.

                  5.07 - Notices. Notices hereunder shall be deemed delivered
five days following deposit thereof in the United States mails (postage prepaid)
addressed to Executive at: [Address], with a copy to [Name and Address]; and to
BFC at: 4400 Main Street, Kansas City, Missouri 64111; Attn: Mark A. Ernst, with
a copy to James H. Ingraham, Esq., H&R Block, Inc., 4400 Main Street, Kansas
City, Missouri 64111; or to such other address and/or person designated by
either party in writing to the other party.

                  5.08 - Counterparts. This Agreement may be signed in
counterparts and delivered by facsimile transmission confirmed promptly
thereafter by actual delivery of executed counterparts.

                                       10

<PAGE>   11

                  Executed as a sealed instrument under, and to be governed by,
construed and enforced in accordance with, the laws of the State of Missouri.

                                                       EXECUTIVE:

Dated:  2/01/00                                        /s/ David J. Kasper
        ----------                                     ---------------------
                                                       David J. Kasper

Accepted and Agreed:

BLOCK FINANCIAL CORPORATION,
a Missouri corporation

By:   /s/ Frank L. Salizzoni
     ----------------------------------
     Frank L. Salizzoni, President

Dated:  2/3/00
        ----------

                                       11

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