EMPLOYMENT AGREEMENT


                 THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of
October 11, 1996, by and between HRB MANAGEMENT, INC., a Missouri corporation
("HRB") and FRANK L. SALIZZONI ("Executive").

                                  ARTICLE ONE

                                   EMPLOYMENT

                 1.01 - Agreement as to Employment.  HRB hereby employs
Executive as President and Chief Executive Officer of H&R BLOCK, INC., a
Missouri corporation ("Block") and the indirect parent corporation of HRB, and
Executive hereby accepts such employment by HRB, 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 HRB to serve as
the President and Chief Executive Officer of Block subject to the authority and
direction of Block's Board of Directors (the "Board") and, subject to the
foregoing, the Executive shall have such authority and responsibility and
duties as are normally associated with such position.

                 (b)   So long as he is employed under this Agreement,
Executive agrees to devote his full business time and efforts exclusively on
behalf of HRB and Block and to competently and diligently discharge his duties
hereunder.  Executive shall not be prohibited from engaging in such personal,
charitable, or other nonemployment activities as do not interfere with his
full-time employment hereunder and which do not violate the other provisions of
this Agreement.  Executive may, following approval by the Board, become a
member of the board of directors of a "for-profit" corporation or entity.
Such approval will not be unreasonably withheld by the Board but such approval
may be withheld if the Board reasonably determines that such activity conflicts
with Executive's duties hereunder, either in terms of Executive's time to be
devoted thereto or in terms of the relationship of such corporation's or
entity's business to the present or future business then conducted or proposed
to be conducted by Block, whether or not such business is directly competitive
with the business of Block.  Executive shall comply fully with all
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reasonable policies of HRB and Block as are from time to time in effect and
applicable to his position.

                 1.03 - Compensation.  (a) Base Salary.  HRB shall pay to
Executive during the period between September 17, 1996, and August 31, 1997, a
minimum gross salary at an annual rate of $500,000 ("Base Salary"), payable
semimonthly or at any other pay periods as HRB may use for its other executive
employees.  The Base Salary shall be reviewed for adjustment by the Board or
appropriate committee thereof no less often than annually during 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 Salary.  HRB shall pay to Executive
additional salary ("Additional Salary") through August 31, 1997, at an annual
rate of $150,000, payable semimonthly or at any other pay periods as HRB may
use for the payment of base salary to its other executive employees, provided
that payment of such Additional Salary shall commence on the first Base Salary
pay date of Executive of the first calendar month after the last calendar
month (the "Last Month") for which CompuServe Corporation ("CompuServe") pays
to Henry F. Frigon, former interim Chairman of CompuServe, any fees ("Frigon
Fees") for consultation or other services provided to CompuServe (other than
standard director fees) and then shall be paid at an annual rate equal to
$150,000 less the aggregate Frigon Fees paid for services provided by Frigon
between October 1, 1996, and the last day of the Last Month and, provided
further, that such Additional Salary shall cease as of the last day of the
month, if any, in which Block's direct or indirect percentage ownership of
CompuServe common stock is reduced below 50% or there occurs a sale or other
disposition of all or substantially all of the assets of CompuServe to a person
or entity not affiliated with Block.  The Additional Salary shall be reviewed
for adjustment by the Board or appropriate committee thereof no less often than
annually during the term of Executive's employment hereunder and, if adjusted
by the Board, such adjusted amount shall become the "Additional Salary" for
purposes of this Agreement.

                 (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 adopted by the Board in June 1996 and
approved by the shareholders of Block in September 1996.  Under such Plan, the
Executive shall have a target bonus for fiscal year 1997 of $325,000 and an
opportunity to earn 200% of such target bonus.  The payment of the actual award
under the Plan shall be based upon two criteria: (i) the criteria applicable to
$250,000 of the target amount shall be the degree to which Block achieves its
budgeted consolidated pre-tax earnings (exclusive of CompuServe) for fiscal
year 1997; and (ii) the criteria applicable to $75,000 of the target amount
shall be the degree to which CompuServe achieves its budgeted consolidated pre-





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<PAGE>   3
tax earnings for fiscal year 1997.  For purposes of Executive's participation
in such Plan for the fiscal year ending April 30, 1997, Executive shall be
deemed to have been employed by HRB on May 1, 1996, and his actual incentive
payout shall not be prorated.

                 (d)  Stock Options.  As approved by the Compensation
Committee of the Board, Executive is granted on October 11, 1996, a
nonqualified stock option under Block's 1993 Long-Term Executive Compensation
Plan to purchase 250,000 shares of Block's common stock at a price per share
equal to the closing price thereof on the New York Stock Exchange on the date
of grant. Such option shall expire on the seventh anniversary of the date of
grant and shall vest and become exercisable as to one-third of the shares
covered thereby on each of the first three anniversaries of the date of grant.

                 (e)  Performance Units.  As approved by the Compensation
Committee of the Board, Executive is awarded 6,500 performance units under the
H&R Block Long-Term Performance Program (the "Program") for the Performance
Period May 1, 1996 through April 30, 1999, subject to the terms of the Program.
Such award is made as of the date of this Agreement and the provisions of
Section 4 of the Program, limiting the time during which the award of the units
under the Program may take place from May 1 to September 15 of any year, are
waived for the purpose of the award to Executive.

                 (f)  Relocation Benefits.

                                  (i) HRB shall reimburse the Executive for all
         reasonable packing, shipping and transportation costs incurred by
         Executive in relocating himself, his family and personal property from
         Potomac, Maryland, to the Greater Kansas City Area.  In addition, HRB
         shall reimburse Executive for the costs of interim (up to 120 days
         after the date of this Agreement) housing in Kansas City, prior to the
         time Executive's family relocates to Kansas City and for the costs of
         air fare, parking, etc.; for weekend trips to Potomac during such
         period.

                                  (ii)  HRB shall reimburse Executive for
         the reasonable and customary charges for real estate commissions and
         legal fees, if any, in connection with the sale of Executive's
         residence in Potomac, Maryland, and the purchase of a residence in the
         Greater Kansas City Area.

                                  (iii)  Executive shall exercise his
         reasonable best efforts to cause the sale at the highest price of his
         Maryland residence.  In the event that, despite such efforts,
         Executive is unable to sell such residence within six months after the
         date of this Agreement, upon request by Executive, HRB shall either:





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<PAGE>   4
         purchase such residence, free and clear of all liens and encumbrances,
         at a price equal to the mean average of three appraisals by three
         qualified, independent appraisers (one selected and paid for by HRB;
         one selected and paid for by Executive; and one selected by such
         appraisers and paid one-half by each of HRB and Executive); or, at
         HRB's election, cause such purchase to be made by an independent
         relocation service in accordance with economically similar
         arrangements.

                 1.04 - Business Expenses.  HRB 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 approved by the Board and in effect from time to time and to the extent
such expenses are reasonable and necessary to the conduct by Executive of
Block's business.

                 1.05 - Fringe Benefits.  During the term of Executive's
employment hereunder, HRB shall make available to Executive such insurance,
sick leave, deferred compensation, stock options (also referred to in Section
1.03(d) 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 HRB, Block or Block's other
subsidiaries; provided, however, such benefits shall not be substantially
dissimilar from those offered by HRB or Block during fiscal year 1997 to
Executive's predecessor at Block.  Executive shall be entitled immediately to
20 days of paid vacation each fiscal year during the term of his employment
hereunder.  Executive shall not be required to fulfill any waiting-period
requirements in order to be eligible for participation in applicable, HRB
health insurance plans.

                 1.06 - Termination Without Cause.  (a) Except as provided in
subsection (d) below, if HRB terminates Executive's employment without "cause"
(as defined below), then, upon such termination of Executive's employment HRB
shall continue to pay to Executive the Base Salary in effect upon such
termination throughout the two-year period following such termination as the
same would have been made had Executive remained employed by HRB hereunder.

                 (b)  As used in this Agreement, the term "cause" shall
refer only to any one or more of the following grounds:

                          (i) 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





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                          (ii) 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

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

                          (iv) 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 Block's benefit plans; or

                          (v) 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 HRB or Block for HRB executives.

                 (c) The termination of Executive's employment under this
Agreement for any reason (or no reason) by HRB or by Executive during the
60-day period following the date of the occurrence of a "Change of Control" of
Block shall be considered a termination of Executive's employment without cause
for purposes of this Agreement.  For the purpose of this subsection, a "Change
of Control" shall mean:

                          (i) 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, 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





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                          (ii)  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

                          (iii) approval by the shareholders of Block of 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, or a complete liquidation or
         dissolution of Block or of the sale or other disposition of all or
         substantially all of the assets of Block.

                 (d)  The sale, distribution or other disposition by Block
or a subsidiary of Block of all or substantially all of the common stock of
CompuServe held by Block or a subsidiary of Block on the date of this
Agreement, or the sale by Block or a subsidiary of Block of all or
substantially all of the assets of CompuServe shall not constitute a "sale or
other disposition of all or substantially all of the assets of Block" for
purposes of subsection 1.06(c)(iii) of this Agreement.

                 (e)  Upon termination of Executive's employment under this
Agreement, except as set forth in this Section 1.06, HRB shall have no further
obligations under this Agreement and no further payments of Base Salary,
Additional Salary or bonus shall be payable by HRB to Executive, except as set
forth in this Section 1.06 and except as required by the express terms of any
written benefit plans or written arrangements maintained by HRB and applicable
to Executive at the time of such termination of Executive's employment.





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<PAGE>   7

                                  ARTICLE TWO

                                CONFIDENTIALITY

                 2.01 - Background and Relationship of Parties.  The parties
acknowledge (for all purposes including, without limitation, Articles Two and
Three 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 HRB, Executive will be expected to have access to all information
of value to HRB 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, developments, designs, marketing plans, product information, business
and financial information and plans, strategies, forecasts, new products and
services, financial statements, budgets, projections, prices and acquisition
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.

                 2.02 - 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 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 HRB or an officer of Block 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 HRB for any reason (including no reason), Executive





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shall promptly deliver to HRB 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 HRB.  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 THREE

                    NON-HIRING; NO CONFLICTS; NONCOMPETITION

                 3.01 - General.  The parties hereto acknowledge that, during
the course of Executive's employment by HRB, the Executive shall have access to
information valuable to HRB 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 HRB, 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.

                 3.02 - 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 later of:  termination by HRB
or Executive for any reason (or no reason) 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.

                 3.03 - No Conflicts.  Executive represents that the
performance by Executive of all the terms of this Agreement will not breach any
agreement as 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
with him to HRB or Block nor will Executive use in the performance of
employment responsibilities at HRB 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





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Executive may have to former employers and Executive shall fulfill all such
obligations during his employment with HRB.

                 3.04 - Non-Competition.

                 (a) During any period of Executive's employment with HRB,
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 time Executive is receiving payments
hereunder and for a period of one year after the later of: termination of
Executive's employment hereunder by HRB or Executive (for any reason including
no reason); or cessation of such payments; Executive will not (except as
permitted by subsection (c) below) 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 of Block or any of its subsidiaries (or which Block or any
such subsidiary is or was engaged in evaluating or developing) at the time
Executive's employment terminates or during the 180-day period prior thereto.

                 (c) For purposes of subsection 3.04(b) above, as to Block, the
term "line of business" shall not include any line of business which is
immaterial in quantity and character to the business and prospective businesses
of Block or any subsidiary of Block; and, as to any corporation, firm,
institution or business with which Executive proposes to become associated, as
set forth in said subsection 3.04(b), any line of business which is immaterial
in size within the industry it operates and to such corporation, firm,
institution or business.

                 3.05 - Reasonableness of Restrictions.  Executive acknowledges
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 HRB 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.





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                                  ARTICLE FOUR

                                 MISCELLANEOUS


                 4.01 - 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 HRB 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.

                 4.02 - Entire Agreement.  This Agreement constitutes the
entire agreement and understanding between HRB 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 HRB.  Failure of HRB, 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.

                 4.03 - Specific Performance by Executive.  Executive
acknowledges that money damages alone will not adequately compensate HRB or
Block for breach of any of Executive's covenants and agreements herein and,
therefore, in the event of the breach or threatened breach of any such covenant
or agreement by Executive, in addition to all other remedies available to HRB
and Block at law, in equity or otherwise, HRB and Block shall each be entitled
to injunctive relief compelling specific performance of (or other compliance
with) the terms hereof.

                 4.04 - 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 HRB,
Block and their successors and assigns.  Executive may not assign or transfer
to others the right to receive payments hereunder nor the obligation to perform
duties hereunder.

                 4.05 - Withholding Taxes.  From any payments due hereunder to
Executive from HRB, there shall be withheld amounts reasonably believed by HRB
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 HRB.

                 4.06 - Indemnification.  To the fullest extent permitted by
law and Block's Bylaws, HRB hereby indemnifies during and after the period of
Executive's employment hereunder the Executive from





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and against all loss, costs, damages and expenses including, without
limitation, legal expenses of counsel selected by HRB to represent the
interests of Executive (which expenses HRB 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 HRB or Block or serving in such capacity for another corporation at the
request of HRB or Block.

                 4.07 - Notices.  Notices hereunder shall be deemed delivered
five days following deposit thereof in the United States mails (postage
prepaid) addressed to Executive at: 9735 Beman Woods Way, Potomac, Maryland
20854 and to HRB at:  4400 Main Street, Kansas City, Missouri 64111; Attn:
Henry W. Bloch; or to such other address and/or person designated by either
party in writing to the other party.

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

                 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:  12/10/96                     /s/ Frank L. Salizzoni
        -----------------------      -----------------------
                                     Frank L. Salizzoni

Accepted and Agreed:


HRB MANAGEMENT, INC.,
a Missouri corporation




By:/s/ Henry W. Bloch          
   ----------------------------
   Henry W. Bloch, Chairman



Dated:  12/10/96               
        -----------------------


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Source: OneCLE Business Contracts.