EXHIBIT 10.1 TERMINATION AGREEMENT

Exhibit 10.1

TERMINATION AGREEMENT

     THIS TERMINATION AGREEMENT (“this Agreement”) is entered into as of the 7th day of January, 2005, by and between H&R Block, Inc., a Missouri corporation (“HRB”), H&R Block Financial Advisors, Inc., a Michigan corporation (“HRBFA”) and Brian L. Nygaard (“Nygaard”).

ARTICLE ONE

TERMINATION OF EMPLOYMENT

     1.  Mutual Agreement to Terminate Employment Agreement . HRBFA and Nygaard are parties to an Employment Agreement dated November 5, 2001 (the “Employment Agreement”), and the parties desire to terminate Nygaard’s employment according to Section 1.07(b) of the Employment Agreement by this Agreement. The parties agree, however, to treat Nygaard’s termination of employment as a “Qualifying Termination,” as such term is used in the Employment Agreement, for purposes of determining Nygaard’s severance compensation and benefits as set forth in Section 3 of this Agreement. The parties further agree that the termination is not the result of the elimination of the position of President and Chief Executive Officer of HRBFA. Such employment and the Employment Agreement will terminate effective as of the close of business on January 7, 2005, or such earlier date as is agreed upon by the parties in writing (the “Termination Date”). By this Agreement, the parties agree to waive any notice of termination required by the Employment Agreement. Unless otherwise agreed in this Agreement, the termination of the Employment Agreement will not be effective as to those portions of the Employment Agreement which, by their express terms as set forth therein, require performance by either party following termination of the Employment Agreement.

     2.  Resignation as Officer . Nygaard will resign (a) as President and Chief Executive Officer of HRBFA and (b) from any and all officer and director positions held with HRBFA and with all other subsidiaries of HRB (all such other subsidiaries of HRB, “Affiliates”). Such resignations will be effective as of the Termination Date. Nygaard will execute resignations in the form attached hereto as Exhibit A contemporaneously with his execution of this Agreement.

     3.  Surviving Obligations . Notwithstanding the above, the termination of Nygaard’s employment will not affect the following provisions of the Employment Agreement which, by their express terms as set forth therein, impose continuing obligations on one or more of the parties following termination of the Employment Agreement:

     3.  Severance Compensation and Benefits .

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     (a) In consideration of Nygaard’s promises herein, HRBFA agrees to continue to employ Nygaard through the Termination Date. On the Termination Date, Nygaard will be given the opportunity to execute a release agreement (the “Release Agreement”) in the form attached hereto as Exhibit B. If Nygaard executes the Release Agreement on the Termination Date, HRB and HRBFA will agree to provide the compensation and benefits under the H&R Block Severance Plan as follows and as described in the Release Agreement on the terms described therein:

     (i) HRB and HRBFA will pay to Nygaard $312,000 (which amount represents an aggregate of one-half of Nygaard’s (A) annual base salary and (B) target short-term incentive compensation for HRBFA’s fiscal year 2005, each determined as of the date of this Agreement) over the 6-month period beginning on the Termination Date in semi-monthly equal installments of $26,000 (less required tax withholdings and elected benefit withholdings). Such payments shall not encompass payment to Nygaard for any unused vacation or other paid time off accrued as of the Termination Date, payment for which will be made in accordance with HRB’s policy as soon as administratively feasible after the Termination Date.

     (ii) Nygaard will remain eligible to participate in those health and welfare plans maintained by HRBFA offering medical, dental, vision, employee assistance, flexible spending account, life insurance, and accidental death and dismemberment insurance benefits during the 6-month period beginning on the Termination Date on the same basis as employees of HRBFA, after which Nygaard may be eligible to continue coverage of those benefits provided under group health plans in accordance with his rights under Section 4980B of the Internal Revenue Code of 1986, as amended.

     (iii) Those portions of any outstanding incentive stock options and nonqualified stock options to purchase shares of HRB’s common stock granted to Nygaard by HRB (“Stock Options”) that are scheduled to vest between the Termination Date and July 6, 2006 (based solely on the time-specific vesting schedule included in the applicable stock option agreement), shall vest and become exercisable as of the Termination Date. Accordingly, Nygaard shall have until October 6, 2005 to exercise such Stock Options. The operation of such provision is subject to Nygaard’s execution of an amendment to the affected stock option agreements in the form attached as an exhibit to the Release Agreement.

     (iv) All restrictions on any shares of HRB’s common stock awarded to Nygaard by HRB (“Restricted Shares”) that would have lapsed absent a termination of employment in accordance with their terms by reason of time between the Termination Date and July 6, 2006 shall terminate (and shall be fully vested) as of the Termination Date. Any shares unaffected by the operation of this section 3(a)(iv) shall be forfeited to HRB on the Termination Date. A list of the Restricted Shares existing and (A) vested as of the date of this Agreement and (B) to become vested pursuant to Section 5 of the Release Agreement is attached hereto as Exhibit C.

     (v) HRB and HRBFA will arrange for Right Management Consultants to provide outplacement services to Nygaard for the 12-month period beginning on the Termination Date.

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     (b) The compensation and benefits described in Section 3(a) of this Agreement will cease and no further compensation and benefits will be provided to Nygaard under the Release Agreement if Nygaard violates any of the post-employment obligations under Section 5 of this Agreement and Articles Two and Three of the Employment Agreement.

     (c) The parties agree that, in accordance with Section 1.07(c) of the Employment Agreement, upon termination of Nygaard’s employment under the Employment Agreement, and payment of the Compensation and Benefits under the Severance Plan as stated in Section 3 of this Agreement, HRB and HRBFA will have no further obligations to Nygaard under the Employment Agreement and no further payments of base salary or other compensation or benefits will be payable by HRB or HRBFA to Nygaard thereunder.

     4.  Business Expenses; Commitments . HRBFA will promptly pay directly, or reimburse Nygaard for, all business expenses to the extent such expenses are paid or incurred by Nygaard during the term of the Employment Agreement in accordance with HRBFA’s policy in effect from time to time and to the extent such expenses were reasonable and necessary to the conduct by Nygaard of HRBFA’s business; provided, however, during the period from the date of this Agreement through the Termination Date and at all times thereafter, Nygaard will not initiate, make, renew, confirm or ratify any contracts or commitments for or on behalf of HRB, HRBFA or any Affiliate, nor will Nygaard incur any expenses on behalf of HRB, HRBFA or any Affiliate without HRB’s prior written consent except for those expenses incurred on behalf of HRBFA that are reasonable and necessary to the conduct by Nygaard of HRBFA’s business.

     5.  Nygaard’s Responsibilities .

     (a) During the period from the date of this Agreement through the Termination Date, Nygaard will be reasonably and appropriately responsive to, and fully supportive of the management of HRB, HRBFA and Affiliates and will be cooperative with such management in providing information regarding areas of his expertise and experience with HRB and HRBFA. Nygaard acknowledges that his employment responsibilities may be reduced prior to the Termination Date at HRBFA’s sole discretion.

     (b) After the Termination Date, in the event a (i) claim is asserted against HRB, HRBFA or any Affiliates and/or their respective employees, agents, officers, or directors or (ii) a government investigation is commenced with respect to HRB, HRBFA or any Affiliates and/or their respective employees, agents, officers, or directors, Nygaard will assist and cooperate with HRB, HRBFA or Affiliates in good faith and in such manner as is reasonably possible in developing the information, or providing the statements, documents or testimony reasonably required to properly respond to or defend such claim or government investigation. HRBFA will reimburse Nygaard for his out-of-pocket expenses directly associated with providing such assistance and cooperation. If such assistance and cooperation requires a substantial amount of Nygaard’s time, HRBFA agrees to reasonably compensate Nygaard for such time, except in litigation matters where Nygaard is a named party. In such cases Nygaard will continue to provide reasonable assistance and cooperation, as requested, and will receive reimbursement for his out-of-pocket expenses directly associated with providing such assistance and cooperation, but receive no compensation for his time.

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     (c) Nygaard will not at any time or in any manner (i) defame HRB, HRBFA, or any Affiliate or their respective past or present directors and employees, (ii) make disparaging statements to the media, to any employee or contractor of HRB, HRBFA or any Affiliate, or to any other person or entity concerning HRB, HRBFA or any Affiliate, their respective past or present directors and employees or any matter related to his employment or non-employment, or (iii) do any deliberate act designed primarily to injure the business or reputation of HRB, HRBFA or any Affiliate.

     (d) For a period of 2 years after the Termination Date, Nygaard may not directly or indirectly recruit, solicit, or hire any employees of subsidiaries of HRB (“HRB Employees”) or otherwise induce any such HRB Employee to leave the employment of the applicable employer-subsidiary of HRB to become an employee of or otherwise be associated with any other party or with Nygaard or any company or business with which Nygaard is or may become associated. The running of the 2-year period will be suspended during any period of violation and/or any period of time required to enforce this covenant by litigation or threat of litigation.

     (e) During the time Nygaard is receiving payments pursuant to the Release Agreement, and for 2 years after the cessation of such payments, Nygaard may not directly or indirectly solicit or enter into any arrangement with any person or entity which is, at the time of the solicitation, a significant customer of HRB, HRBFA, or an Affiliate for the purpose of engaging in any business transaction of the nature performed by HRB, HRBFA or such Affiliate, or contemplated to be performed by HRB, HRBFA or such Affiliate, for such customer, provided that this Section 5(e) will only apply to customers for whom Nygaard personally provided services while employed by HRBFA or customers about whom or which Nygaard acquired material information while employed by HRBFA. The running of the 2-year period will be suspended during any period of violation and/or any period of time required to enforce this covenant by litigation or threat of litigation.

     (f) During the time Nygaard is receiving payments pursuant to the Release Agreement, and for 2 years after the cessation of such payments, Nygaard shall not engage in, or own or control any interest in (except as a passive investor in less than one percent of the outstanding securities of publicly held companies), or act as an officer, director or employee of, or consultant, advisor or lender to, (i) any firm, corporation, partnership, limited liability company, institution, business, government agency, or entity that at the time of the initiation of such engagement, ownership, control, or action by Executive, engages in, or has developed a plan to engage in a business whose core strategy is to integrate the provision of tax and/or accounting products or services with the provisions of investment products or services to its clients, or (ii) any subsidiary, division or segment or a firm, corporation, partnership, limited liability company, institution, business, government agency, or entity that at the time of the initiation of such engagement, ownership, control, or action by Nygaard, engages in, or has developed a plan to engage in a business that integrates the provision of tax and/or accounting products or services with the provision of investment products or services to its clients. The running of the 2-year period will be suspended during any period of violation and/or any period of time required to enforce this covenant by litigation or threat of litigation.

     (g) The parties acknowledge that the restrictions contained in this Agreement and the surviving restrictions of the Employment Agreement are reasonable, but should any provisions of any Section of this Agreement or the surviving restrictions of the

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Employment 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 or the other surviving provisions of the Employment Agreement will not be affected thereby and the provision found invalid, illegal, or otherwise unenforceable or unreasonable will be considered by the parties 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, will be enforced.

     (h) HRB and HRBFA may agree to waive any of Nygaard’s obligations under this Agreement or the surviving post-employment obligations under the Employment Agreement; provided that any such waiver must be in writing