Prepared by MerrillDirect





AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

(Thomas C. Walker)


             This Employment Agreement (the
"Agreement") by and between F.Y.I. Incorporated, a Delaware
corporation (the "Company"), and Thomas C. Walker
("Employee") is hereby entered into and effective as of May 18,
2001.  This Agreement hereby supersedes
any other employment agreements or understandings, written or oral, between the
Company and Employee.


R
E C I T A L S


             The following statements are true
and correct:


             As of the date of this Agreement,
the Company is engaged primarily in the business of providing document and
information management outsourcing solutions.


             Employee is employed hereunder by
the Company in a confidential relationship wherein Employee, in the course of
his employment with the Company, has and will continue to become familiar with
and aware of information as to the Company's customers, specific manner of
doing business, including the processes, techniques and trade secrets utilized
by the Company, and future plans with respect thereto, all of which has been
and will be established and maintained at great expense to the Company; this
information is a trade secret and constitutes the valuable goodwill of the
Company.


             Therefore, in consideration of the
mutual promises, terms, covenants and conditions set forth herein and the
performance of each, it is hereby agreed as follows:


A
G R E E M E N T S


             1.          Employment and Duties.


             (a)         The Company hereby employs Employee as
Chairman of the Board and Chief Development Officer.  As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of a Chairman of the Board and
Chief Development Officer and will report directly to the Board of Directors of
the Company (the “Board”).  Employee
hereby accepts this employment upon the terms and conditions herein contained
and, subject to paragraph 1(b), agrees to devote his working time, attention
and efforts to promote and further the business of the Company.


             (b)        Employee shall not, during the term of
his employment hereunder, be engaged in any other business activity pursued for
gain, profit or other pecuniary advantage except to the extent that such
activity (i) does not interfere with Employee's duties and responsibilities
hereunder and (ii) does not violate paragraph 3 hereof.  The foregoing limitations shall not be
construed as prohibiting Employee from (A) serving on the boards of
directors of other companies or (B) making personal investments in such
form or manner as will neither require his services, other than to a minimal
extent, in the operation or affairs of the companies or enterprises in which
such investments are made nor violate the terms of paragraph 3 hereof.





 


             2.          Compensation.  For all services rendered by Employee, the
Company shall compensate Employee as follows:


             (a)         Base
Salary.  The base salary
payable to Employee shall be $330,000 per year (effective January 1,
2001), payable on a regular basis in accordance with the Company's standard
payroll procedures but not less than bi-monthly.


             (b)        Incentive
Bonus Plan.  Employee shall
be eligible for a bonus opportunity of up to 65% of his annual base salary in
accordance with the Company’s Incentive Bonus Plan as modified from time to
time, payable in cash and/or equity of the Company (at the Company’s
discretion).  The bonus payment and the
Company's targeted performance shall be determined and approved by the Board or
the compensation committee thereof.  For
2001, Employee has already been awarded Warrant No. 57 as payment for any
2001 bonus opportunity.


             (c)         Executive
Perquisites, Benefits and Other Compensation.  Employee shall be entitled to receive
additional benefits and compensation from the Company in such form and to such
extent as specified below:


             (i)          Payment
of all premiums for coverage for Employee and his dependent family members
under health, hospitalization, disability, dental, life and other insurance
plans that the Company may have in effect from time to time, and not less
favorable than the benefits provided to other Company executives.



             (ii)         Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Employee in the performance of
his services pursuant to this Agreement. 
All reimbursable expenses shall be appropriately documented in
reasonable detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense reporting
policy.



             (iii)        Four (4) weeks paid vacation for each year during the period
of employment or such greater amount as may be afforded officers and key
employees generally under the Company's policies in effect from time to time
(prorated for any year in which Employee is employed for less than the full
year).



             (iv)       An automobile allowance in the amount of $1,000 per month (increased
from $500 per month effective March 2001).



             (v)        The
Company shall reimburse Employee up to $300 per month for club dues actually
incurred by Employee, provided that such club is used at least 50% of
the time for business purposes.






 



             (vi)       The Company shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for Employee by the
Board and participation in all other Company-wide employee benefits as
available from time to time, which will include participation in the Company's
Incentive Compensation Plan.



             (vii)      The Company shall provide Employee with reasonable assistance
in personal tax planning from Arthur Andersen LLP.



             (viii)     Participation in the Company’s 401(k) Plan and Non-Qualified
Plan.



             (ix)        The Company shall, under Employee’s direction, establish a
Supplemental Retirement Plan/Survivor Protection Plan to be placed inside the
Company’s Non-Qualified Plan and provide Employee with such benefit.



             (x)         The
Company shall reimburse Employee up to $7,000 per year for expenditures on
health, insurance, financial planning or tax planning benefits (or similar
benefits, or such other benefits at the discretion of the Company) or club
dues, all as selected by Employee.



             3.          Non-Competition Agreement.


             (a)         Subject to Section 3(a), Employee will
not, during the period of his employment by or with the Company, and for a
period of two (2) years immediately following the termination of his employment
under this Agreement, for any reason whatsoever, directly or indirectly, for
himself or on behalf of or in conjunction with any other person, company,
partnership, corporation, business or entity of whatever nature:


             (i)          engage,
as an officer, director, shareholder, owner, partner, joint venturer, or in a
managerial capacity, whether as an employee, independent contractor, consultant
or advisor, or as a sales representative, in any business selling any products
or services in direct competition with the Company, within 100 miles of (i) the
principal executive offices of the Company or (ii) any place to which the
Company provides products or services or in which the Company (including the
subsidiaries thereof) is in the process of initiating business operations
during the term of this covenant (the "Territory");



             (ii)         call upon any person who is, at that time, within the
Territory, an employee of the Company (including the subsidiaries thereof) in a
managerial capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of the Company (including the
subsidiaries thereof), provided that Employee shall be permitted to call upon
and hire any member of his immediate family;



             (iii)        call upon any person or entity which is, at that time, or
which has been, within one (1) year prior to that time, a customer of the
Company (including the subsidiaries thereof) within the Territory for the
purpose of soliciting or selling products or services in direct competition
with the Company within the Territory;






 



             (iv)       call upon any prospective acquisition candidate, on Employee's
own behalf or on behalf of any competitor, which candidate was either called
upon by the Company (including the subsidiaries thereof) or for which the
Company made an acquisition analysis, for the purpose of acquiring such entity;
or



             (v)        disclose
customers, whether in existence or proposed, of the Company (or the
subsidiaries thereof) to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever.



             As used in paragraph 3(a),
references to the business, customers, Territory, etc. of the Company refer to
the status of the Company prior to any Change in Control (i.e., such breadth of business, customers,
Territory, etc. shall not automatically be expanded to include those of a
successor to the Company resulting from a Change in Control).  Notwithstanding the above, the foregoing
covenant shall not be deemed to prohibit Employee from acquiring as an
investment not more than three percent (3%) of the capital stock of a competing
business, whose stock is traded on a national securities exchange or
over-the-counter.


             (b)        Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the foregoing
covenant, and because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate remedy,
Employee agrees that the foregoing covenant may be enforced by the Company in
the event of breach by him by injunctions and restraining orders without the
necessity of posting any bond therefor.


             (c)         In the course of Employee’s employment
with the Company, Employee will become exposed to certain of the Company’s
confidential information and business relationships, which the above covenants
are designed to protect.  It is agreed
by the parties that the foregoing covenants in this paragraph 3 impose a
reasonable restraint on Employee in light of the activities and business of the
Company (including the Company's subsidiaries) on the date of the execution of
this Agreement and the current plans of the Company (including the Company's
subsidiaries); but it is also the intent of the Company and Employee that such
covenants be construed and enforced in accordance with the changing activities,
business and locations of the Company (including the Company's subsidiaries)
throughout the term of this covenant, whether before or after the date of
termination of the employment of Employee, subject to the following
paragraph.  For example, if, during the
Term of this Agreement, the Company (including the Company's subsidiaries)
engages in new and different activities, enters a new business or established
new locations for its current activities or business in addition to or other
than the activities or business enumerated under the Recitals above or the
locations currently established therefor, then Employee will be precluded from
soliciting the customers or employees of such new activities or business or
from such new location and from directly competing with such new business
within 100 miles of its then-established operating location(s) through the term
of this covenant.


             It is further agreed by the parties
hereto that, in the event that Employee shall cease to be employed hereunder,
and shall enter into a business or pursue other activities not in competition
with the Company (including the Company's subsidiaries), or similar activities
or business in locations the operation of which, under such circumstances, does
not violate clause (i) of this paragraph 3, and in any event such new business,
activities or location are not in violation of this paragraph 3 or of
Employee's obligations under this paragraph 3, if any, Employee shall not be
chargeable with a violation of this paragraph 3 if the Company (including the
Company's subsidiaries) shall thereafter enter the same, similar or a
competitive (i) business, (ii) course of activities or (iii) location, as
applicable.





 


             (d)        The covenants in this paragraph 3 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant.  Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed to such extent.


             (e)         All of the covenants in this paragraph
3 shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of Employee
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of such
covenants.  It is specifically agreed
that the period of two (2) years following Employee’s employment set forth at
the beginning of this paragraph 3, during which the agreements and covenants of
Employee made in this paragraph 3 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this paragraph 3.


             4.          Place of Performance.


             (a)         Employee’s place of employment is the
Company’s headquarters in Dallas, Texas. 
Employee understands that he may be requested by the Board to relocate
from his present residence to another geographic location in order to more
efficiently carry out his duties and responsibilities under this Agreement or
as part of a promotion or other increase in duties and responsibilities.  In the event that Employee is requested to
relocate and agrees to do so, the Company will pay all relocation costs to move
Employee, his immediate family and their personal property and effects.  Such costs may include, by way of example,
but are not limited to, pre-move visits to search for a new residence,
investigate schools or for other purposes; temporary lodging and living costs
prior to moving into a new permanent residence; duplicate home carrying costs;
all closing costs on the sale of Employee's present residence and on the
purchase of a comparable residence in the new location; and added income taxes
that Employee may incur, as a result of any payment hereunder, to the extent
any relocation costs are not deductible for tax purposes.  The general intent of the foregoing is that
Employee shall not personally bear any out-of-pocket cost as a result of the
relocation, with an understanding that Employee will use his best efforts to
incur only those costs which are reasonable and necessary to effect a smooth,
efficient and orderly relocation with minimal disruption to the business
affairs of the Company and the personal life of Employee and his family.


             (b)        Notwithstanding the above, if Employee
is requested by the Board to relocate and Employee refuses, such refusal shall
not constitute "good cause" for termination of this Agreement under
the terms of paragraph 5(c).





 


             5.          Term; Termination; Rights on
Termination.  The term of this
Agreement shall begin on the date hereof and continue through December 31,
2002 (the "Term").  This
Agreement and Employee's employment may be terminated earlier in any one of the
following ways:


             (a)         Death.  The death of Employee shall immediately
terminate the Agreement with no severance compensation due to Employee's
estate.



             (b)        Disability.  If, as a result of incapacity due to
physical or mental illness or injury, Employee shall have been absent from his
full-time duties hereunder for four (4) consecutive months, then thirty (30)
days after receiving written notice (which notice may occur before or after the
end of such four (4) month period, but which shall not be effective earlier
than the last day of such four (4) month period), the Company may terminate
Employee's employment hereunder provided Employee is unable to resume his
full-time duties at the conclusion of such notice period.  Also, Employee may terminate his employment
hereunder if his health should become impaired to an extent that makes the
continued performance of his duties hereunder hazardous to his physical or
mental health or his life, provided that Employee shall have furnished the
Company with a written statement from a qualified doctor to such effect and
provided, further, that, at the Company's request made within thirty (30) days
of the date of such written statement, Employee shall submit to an examination
by a doctor selected by the Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the conclusion of
Employee's doctor.  In the event this
Agreement is terminated as a result of Employee's disability, Employee shall
receive from the Company, in a lump-sum payment due within ten (10) days of the
effective date of termination, the base salary at the rate then in effect for
whatever time period is remaining under the Term of this Agreement or for one
(1) year, whichever amount is greater.



             (c)         Good Cause.  The Company may terminate the Agreement ten
(10) days after written notice to Employee for good cause, which shall be: (1)
Employee's material and irreparable breach of this Agreement; (2) Employee's
gross negligence in the performance or intentional nonperformance (continuing
for ten (10) days after receipt of the written notice) of any of Employee's
material duties and responsibilities hereunder; (3) Employee's dishonesty, fraud
or misconduct with respect to the business or affairs of the Company which
materially and adversely affects the operations or reputation of the Company;
(4) Employee's conviction of a felony crime; or (5) chronic alcohol abuse or
illegal drug abuse by Employee.  In the
event of a termination for good cause, as enumerated above, Employee shall have
no right to any severance compensation.



             (d)        Without
Cause.  At any time after the
commencement of employment, the Company may, without cause, terminate this
Agreement and Employee's employment, effective thirty (30) days after written
notice is provided to the Employee. 
Should Employee be terminated by the Company without cause, Employee
shall receive from the Company, in a lump-sum payment due on the effective date
of termination, two (2) times the base salary at the rate then in effect, as
severance pay.  Further, any termination
without cause by the Company shall operate to shorten the period set forth in
paragraph 3(a) and during which the terms of paragraph 3 apply to one (1) year
from the date of termination of employment.






 



             (e)         Change in
Control.  Refer to paragraph
12 below.



             (f)         Termination
by Employee for Good Reason. 
Employee may terminate his employment hereunder for "Good
Reason."  As used herein,
"Good Reason" shall mean the continuance of any of the following
after ten (10) days' prior written notice by Employee to the Company,
specifying the basis for such Employee's having Good Reason to terminate this
Agreement:



             (i)          the
assignment to Employee of any duties materially and adversely inconsistent with
Employee's position as specified in paragraph 1 hereof (or such other position
to which he may be promoted), including status, offices, responsibilities or
persons to whom Employee reports as contemplated under paragraph 1 of this
Agreement, or any other action by the Company which results in a material and
adverse change in such position, status, offices, titles or responsibilities;



             (ii)         Employee's removal from, or failure to be reappointed or reelected
to, Employee's position under this Agreement, except as contemplated by
paragraphs 5(a), (b), (c) and (e); or



             (iii)        any other material breach of this Agreement by the Company
that is not cured within the ten (10) day time period set forth in paragraph
5(f) above, including the failure to pay Employee on a timely basis the amounts
to which he is entitled under this Agreement.



In the event of any termination by the
Employee for Good Reason, as determined by a court of competent jurisdiction or
pursuant to the provisions of paragraph 16 below, the Company shall pay all
amounts and damages to which Employee may be entitled as a result of such
breach, including interest thereon and all reasonable legal fees and expenses
and other costs incurred by Employee to enforce his rights hereunder.  In addition, Employee shall be entitled to
receive from the Company, in a lump-sum payment due on the effective date of
termination, two (2) times the base salary at the rate then in effect, as
severance pay.  Further, none of the
provisions of paragraph 3 shall apply in the event this Agreement is terminated
by Employee for Good Reason.


             (g)        Termination by Employee Without Cause.  If Employee resigns or otherwise terminates
his employment without Good Reason pursuant to paragraph 5(f), Employee shall
receive no severance compensation.


Upon termination of this Agreement for
any reason provided in clauses (a) through (g) above, Employee shall be
entitled to receive all compensation earned and all benefits vested and reimbursements
due through the effective date of termination. 
Additional compensation subsequent to termination, if any, will be due
and payable to Employee only to the extent and in the manner expressly provided
above or in paragraph 16.  All other
rights and obligations of the Company and Employee under this Agreement shall
cease as of the effective date of termination, except that the Company's
obligations under paragraph 9 herein and Employee's obligations under
paragraphs 3, 6, 7, 8 and 10 herein shall survive such termination in
accordance with their terms.





 


             6.          Return of Company Property.  All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company (including
the Company’s subsidiaries) or its representatives, vendors or customers which
pertain to the business of the Company (including the Company’s subsidiaries)
shall be and remain the property of the Company and be subject at all times to
its discretion and control.  Likewise,
all correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company (including the Company’s subsidiaries) which is collected by Employee
shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.


             7.          Inventions.  Employee shall disclose promptly to the
Company any and all significant conceptions and ideas for inventions, improvements
and valuable discoveries, whether patentable or not, which are conceived or
made by Employee, solely or jointly with another, during the period of
employment or within one (1) year thereafter, and which are directly related to
the business or activities of the Company (including the Company’s
subsidiaries) and which Employee conceives as a result of his employment by the
Company.  Employee hereby assigns and
agrees to assign all his interests therein to the Company or its nominee.  Whenever requested to do so by the Company,
Employee shall execute any and all applications, assignments or other
instruments that the Company shall deem necessary to apply for and obtain
letters patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.


             8.          Trade Secrets.  Employee agrees that he will not, during or
after the term of this Agreement with the Company, disclose the specific terms
of the Company's (including the Company’s subsidiaries) relationships or
agreements with its significant vendors or customers or any other significant
and material trade secret of the Company (including the Company’s
subsidiaries), whether in existence or proposed, to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever,
except as is disclosed in the ordinary course of business.


             9.          Indemnification.  In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify Employee against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Employee in connection
therewith.  In the event that both
Employee and the Company are made a party to the same third-party action,
complaint, suit or proceeding, the Company agrees to engage competent legal
representation, and Employee agrees to use the same representation, provided
that if counsel selected by the Company shall have a conflict of interest that
prevents such counsel from representing Employee, Employee may engage separate
counsel and the Company shall pay all attorneys' fees of such separate
counsel.  Further, while Employee is
expected at all times to use his best efforts to faithfully discharge his
duties under this Agreement, Employee cannot be held liable to the Company for
errors or omissions made in good faith where Employee has not exhibited gross,
willful and wanton negligence and misconduct or performed criminal and
fraudulent acts which materially damage the business of the Company.





 


             10.        No Prior Agreements.  Employee hereby represents and warrants to
the Company that the execution of this Agreement by Employee and his employment
by the Company and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity.  Further, Employee agrees to
indemnify the Company for any claim, including, but not limited to, attorneys'
fees and expenses of investigation, by any such third party that such third
party may now have or may hereafter come to have against the Company based upon
or arising out of any non-competition agreement, invention or secrecy agreement
between Employee and such third party which was in existence as of the date of
this Agreement.


             11.        Assignment; Binding Effect.  Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. 
Employee agrees, therefore, he cannot assign all or any portion of his
performance under this Agreement and the Company agrees not to assign all or
any portion of its obligations under this Agreement (other than to a successor
as a result of a Change in Control). 
Subject to the preceding two (2) sentences and the express provisions of
paragraph 12 below, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.


             12.        Change in Control.


             (a)         Unless
he elects to terminate this Agreement pursuant to (c) below, Employee
understands and acknowledges that the Company may be merged or consolidated
with or into another entity and that such entity shall automatically succeed to
the rights and obligations of the Company hereunder.


             (b)        In
the event of a pending Change in Control wherein the Employee has not received
written notice at least fifteen (15) business days prior to the anticipated
closing date of the transaction giving rise to the Change in Control from the
successor to all or a substantial portion of the Company's business and/or
assets that such successor is willing as of the closing to assume and agree to
perform the Company's obligations under this Agreement in the same manner and
to the same extent that the Company is hereby required to perform, such Change
in Control shall be deemed to be a termination of this Agreement by the Company
and the amount of the lump-sum severance payment due to Employee shall be six
(6) times Employee’s annual salary immediately prior to the Change in Control
and the non-competition provisions of paragraph 3 shall not apply
whatsoever.  Payment shall be made
either at closing of the transaction if notice is served at least five (5) days
before closing or within ten (10) days of Employee’s written notice.


             (c)         In
any Change in Control situation in which Employee has received written notice
from the successor to the Company that such pending successor is willing to
assume the Company's obligations hereunder or Employee receives notice after
(or within fifteen (15) business days prior to) the Change in Control that
Employee is being terminated, Employee may nonetheless, at his sole discretion,
elect to terminate this Agreement by providing written notice to the Company at
any time prior to closing of the transaction and up to one (1) year after the
closing of the transaction giving rise to the Change in Control.  In such case, the amount of the lump-sum
severance payment due to Employee shall be six (6) times Employee’s annual salary
in effect immediately prior to the Change in Control and the non-competition
provisions of paragraph 3 shall all apply. 
Payment shall be made either at closing if notice is served at least
five (5) days before closing or within ten (10) days of written notice by
Employee.


             (d)        For
purposes of applying paragraph 5 under the circumstances described in (b) and
(c) above, the effective date of termination will be the later of the closing
date of the transaction giving rise to the Change in Control or Employee’s
notice as described above, and all compensation, reimbursements and lump-sum
payments due Employee must be paid in full by the Company at such time.  Further, Employee will be given sufficient
time in order to comply with the Securities and Exchange Commission’s
regulations to elect whether to exercise and sell all or any of his vested
options to purchase Common Stock of the Company, including any options with
accelerated vesting under the provisions of the Company's 1995 Stock Option
Plan, as amended or any warrants, such that he may convert the options or
warrants to shares of Common Stock of the Company at or prior to the closing of
the transaction giving rise to the Change in Control, if he so desires.


             (e)         A "Change in Control" shall
be deemed to have occurred if:


             (i)          any
person, other than the Company or an employee benefit plan of the Company,
acquires directly or indirectly the Beneficial Ownership (as defined in Section
13(d) of the Securities Exchange Act of 1934, as amended) of any voting
security of the Company and immediately after such acquisition such person is,
directly or indirectly, the Beneficial Owner of voting securities representing
30% or more of the total voting power of all of the then-outstanding voting
securities of the Company;



             (ii)         the individuals (A) who, as of the closing date of the
Company’s initial public offering, constitute the Board of Directors of the
Company (the “Original Directors”) or (B) who thereafter are elected to the
Board of Directors of the Company and whose election, or nomination for
election, to the Board of Directors of the Company was approved by a vote of at
least two-thirds (2/3) of the Original Directors then still in office (such
directors becoming “Additional Original Directors” immediately following their
election) or (C) who are elected to the Board of Directors of the Company and
whose election, or nomination for election, to the Board of Directors of the
Company was approved by a vote of at least two-thirds (2/3) of the Original
Directors and Additional Original Directors then still in office (such
directors also becoming “Additional Original Directors” immediately following
their election), cease for any reason to constitute a majority of the members
of the Board of Directors of the Company;






 



             (iii)        the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company, a reverse
stock split of outstanding voting securities of the Company, or consummation of
any such transaction if stockholder approval is not sought or obtained, other than
any such transaction which would result in at least 75% of the total voting
power represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by holders of at
least 75% of the outstanding voting securities of the Company immediately prior
to the transaction, with the voting power of each such continuing holder
relative to other such continuing holders not substantially altered in the
transaction; or



             (iv) the stockholders of the Company
shall approve a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the Company
(including the Company’s subsidiaries)).



             (f)         Continuation
of Benefits.  (i) Following the
termination of the Executive’s employment in connection with a Change in
Control (as contemplated by paragraph 12(b) or 12(c) of this Agreement) (a
“Change in Control Termination”) and until the earlier of (A) three (3)
years following such Change in Control Termination or (B) the date on which the
Executive becomes employed by a new employer (other than to the successor to
the Company following such Change in Control), the Company shall, at its
expense, provide the Executive with medical, dental, life insurance, disability
and accidental death and dismemberment benefits (“Insurance Benefits”) at the
highest level provided to the Executive immediately prior to the Change in
Control; provided, however, if the Executive becomes employed by a new employer
that maintains Insurance Benefits that either (x) do not cover the Executive
with respect to a pre-existing condition that was covered under the Company’s
Insurance Benefits, or (y) do not cover the Executive for a designated waiting
period, or (z) do not provide for a certain benefit, the Executive’s coverage
under the Company’s Insurance Benefits shall continue (with respect to such
area of non-coverage described in (x), (y) or (z), as applicable), without
limitation, until the earlier of the end of the applicable period of
non-coverage under the new employer’s Insurance Benefits or the third
anniversary of the Change in Control.



             (ii) Following a Change in Control
Termination the special benefit allowance of $7,000 contemplated by
paragraph 2(c)(x) of this Agreement will continue for 3 years thereafter.



             (iii) The Company shall reimburse
all reasonable expenses incurred by the Executive for reasonable office and
secretarial expenses and for reasonable professional outplacement services by
qualified consultants selected by the Executive for up to 3 years after a
Change in Control Termination.






 



             (iv) The Executive shall not be
required to seek other employment following a Change in Control Termination and
any compensation earned from other employment shall not reduce the amounts
otherwise payable under this Agreement.



              (g)       If
any portion of the severance benefits, Change in Control benefits or any other
payment under this Agreement, or under any other agreement with, or plan of the
Company, including but not limited to stock options, warrants and other
long-term incentives (in the aggregate “Total Payments”) would be subject to
the excise tax imposed by Section 4999 of the Code, as amended (or any
similar tax that may hereafter be imposed) or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the “Excise Tax”),
then Employee shall be entitled to receive from the Company an additional
payment (the “Gross-up Payment”) (i.e., in addition to such other severance
benefits, Change in Control benefits or any other payments under this
Agreement) in an amount such that the net amount of Total Payments and Gross-up
Payment retained by the Employee, after the calculation and deduction of all
Excise Tax on the Total Payments and all federal, state and local income tax,
employment tax and Excise Tax on the Gross-up Payment, shall be equal to the Total
Payments.


             For
purposes of this paragraph Employee’s applicable Federal, state and local taxes
shall be computed at the maximum marginal rates, taking into account the effect
of any loss of personal exemptions resulting from receipt of the Gross-Up Payment.


             All
determinations required to be made under this paragraph 12, including
whether a Gross-Up Payment is required under this paragraph, and the
assumptions to be used in determining the Gross-Up Payment, shall be made by
the Company’s current independent accounting firm, or such other firm as the
Company may designate in writing prior to a Change in Control (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the
Company and Employee within twenty business days of the receipt of notice from
Employee that there will likely be a Change in Control, or such earlier time as
is requested by the Company.  In the
event that the Accounting Firm is serving as accountant or auditor for the
party effecting the Change in Control or is otherwise unavailable, Employee
(together with all other employees with comparable appointment rights in their
respective employment agreements such that all such employees may collectively
select a single accounting firm) may appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
with respect to such determinations described above shall be borne solely by
the Company.





 


             Employee
agrees (unless requested otherwise by the Company) to use reasonable efforts to
contest in good faith any subsequent determination by the Internal Revenue
Service that Employee owes an amount of Excise Tax greater than the amount
determined pursuant to this paragraph; provided, that Employee shall be
entitled to reimbursement by the Company (on an after tax basis) of all fees
and expenses reasonably incurred by Employee in contesting such
determination.  In the event the
Internal Revenue Service or any court of competent jurisdiction determines that
Employee owes an amount of Excise Tax that is greater than the amount
previously taken into account and paid under this Agreement (such additional
Excise Tax being the “Additional Excise Tax”), the Company shall promptly pay
to Employee the amount of such shortfall. 
In the case of any payment that the Company is required to make to
Employee pursuant to the preceding sentence (a “Later Payment”), the Company
shall also pay to Employee an additional amount such that after payment by
Employee of all of Employee’s applicable Federal, state and local taxes,
including any interest and penalties assessed by any taxing authority, on the
Later Payment, Employee will retain from the Later Payment an amount equal to
the Additional Excise Tax, which Employee shall use to pay the Additional
Excise Tax, which Employee shall use to pay the Additional Excise Tax.


             (h)        In the event of a Change in Control, the
Company shall require that the ultimate parent entity (or if no parent entity,
the acquiring entity itself) of any entity that acquires control (through
ownership of securities or assets, consistent with the definitional triggers of
a Change in Control set forth above) of the Company in connection with such
Change in Control assume or guaranty the Company’s obligations under paragraphs
12(f) and 12(g) of this Agreement.


             13.        Complete Agreement.  This Agreement is not a promise of future
employment.  Employee has no oral
representations, understandings or agreements with the Company or any of its
officers, directors or representatives covering the same subject matter as this
Agreement.  This written Agreement is
the final, complete and exclusive statement and expression of the agreement
between the Company and Employee and of all the terms of this Agreement, and it
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. 
This written Agreement may not be later modified except by a further
writing signed by a duly authorized officer of the Company and Employee, and no
term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such term.


             14.        Notice.  Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:




	To
  the Company:	F.Y.I.
  Incorporated
	 	3232
  McKinney Avenue
	 	Suite
  1000
	 	Dallas,
  Texas 75204
	 	Attn:  President
	 	 
	with
  a copy to:	F.Y.I.
  Incorporated
	 	3232
  McKinney Avenue
	 	Suite
  1000
	 	Dallas,
  Texas 75204
	 	Attn:  General Counsel
	 	 
	with
  a copy to:	Locke
  Liddell & Sapp LLP
	 	2200
  Ross Avenue
	 	Suite
  2200
	 	Dallas,
  Texas 75201
	 	Attn:  Charles C. Reeder, Esq.
	 	 
	To
  Employee:	Thomas
  C. Walker
	 	3510
  Turtle Creek Blvd., #10-A
	 	Dallas,
  Texas 75219







 





 


Notice
shall be deemed given and effective three (3) days after the deposit in the
U.S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or when actually received.  Either party may change the address for notice by notifying the
other party of such change in accordance with this paragraph 14.


             15.        Severability; Headings.  If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative.  The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.


             16.        Arbitration.  Any unresolved dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect.  The arbitrators shall
not have the authority to add to, detract from, or modify any provision hereof
nor to award punitive damages to any injured party.  The arbitrators shall have the authority to order back-pay,
severance compensation, vesting of options (or cash compensation in lieu of
vesting of options), reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. 
A decision by a majority of the arbitration panel shall be final and
binding.  Judgment may be entered on the
arbitrators' award in any court having jurisdiction.  The costs of any arbitration proceeding shall be borne by the
party or parties not prevailing in such proceeding determined by the
arbitrators.


[Balance of sheet intentionally
left blank]










             17.        Governing Law.  This Agreement shall in all respects be
construed according to the laws of the State of Delaware.


 




	 	EMPLOYEE:
	 	 
	 	 
	 	


	 	Thomas
  C. Walker
	 	 
	 	 
	 	 
	 	F.Y.I.
  INCORPORATED
	 	 
	 	 
	 	 
	 	By:  /s/  
  Ed H. Bowman, Jr.
	 	


	 	Title:	President
  and Chief

  Executive Officer