**AMENDED AND RESTATED EMPLOYMENTAGREEMENT(Ronald Zazworsky)**

             THISEMPLOYMENT AGREEMENT (the "Agreement") is made and entered intoeffective as of May 28, 2001 by and between Ronald Zazworsky("Employee") and F.Y.I. Incorporated, a Delaware corporation (the"Company").  This Agreementhereby supersedes any other employment agreements or understandings, written ororal, between the Company and Employee.

**R E C I T A L S**

             Thefollowing statements are true and correct:

             As ofthe date of this Agreement, the Company is engaged primarily in the documentand information management outsourcing solutions business (the “Business”).

             Employeeis employed hereunder by the Company in a confidential relationship whereinEmployee, in the course of his employment with the Company, has and willcontinue to become familiar with and aware of information as to the Company'scustomers, specific manner of doing business, including the processes,techniques and trade secrets utilized by the Company, and future plans withrespect thereto, all of which has been and will be established and maintainedat great expense to the Company; this information is a trade secret andconstitutes the valuable goodwill of the Company.

             Therefore,in consideration of the mutual promises, terms, covenants and conditions setforth 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 asa Division President of Health and Government Services and Officer of theCompany.  As such, Employee shall haveresponsibilities, duties and authority reasonably accorded to and expected of aDivision President of the Company. Employee hereby accepts this employment upon the terms and conditionsherein contained and, subject to paragraph 1(b), agrees to devote his workingtime, attention and efforts to promote and further the business of the Company.

             (b)        Employee shall not, during the term ofhis employment hereunder, be engaged in any other business activity pursued forgain, profit or other pecuniary advantage except to the extent that suchactivity (i) does not interfere with Employee's duties andresponsibilities hereunder and (ii) does not violate paragraph 9hereof.  The foregoing limitations shallnot be construed as prohibiting Employee from making personal investments insuch form or manner as will neither require his services, other than to aminimal extent, in the operation or affairs of the companies or enterprises inwhich such investments are made nor violate the terms of paragraph 9.

 

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

             (a)         Base Salary; Annual Bonus.  The base salary payable to Employee shall be$275,000 per year (effective January 1, 2001), payable on a regular basisin accordance with the Company's standard payroll procedures but not less thanmonthly (pro-rated for any year in which Employee is employed for less than thefull year).  On at least an annual basisthe Board of Directors (the “Board”) will review Employee’s performance andmake increases to such base salary if, in its discretion, any such increase iswarranted.  For 2001 and subsequentyears, it is the Company's intent to develop a written Incentive Bonus Plansetting forth the criteria under which Employee and other officers and keyemployees will be eligible to receive year-end bonus awards. Employee shall beeligible for a bonus opportunity of up to 75% of Employee's annual base salarypayable in cash and/or equity of the Company (at the Company’s discretion) inaccordance with the Incentive Bonus Plan. The award of any bonus shall be based on the Company’s overallperformance and the total performance of the business managed and shall bepayable in various increments based on the performance. The incrementalpayments and the Company's targeted performance shall be determined by theBoard or the compensation committee thereof. For 2001, Employee has already been awarded Warrant No. 63 aspayment for any 2001 bonus opportunity.

             (b)        Other Compensation.  Employee shall be entitled to receiveadditional benefits and compensation from the Company in such form and to suchextent as specified below:

             (i)          Paymentof all premiums for coverage for Employee and Employee's dependent familymembers under health, hospitalization, disability, dental and other insuranceplans that the Company may have in effect from time to time.

             (ii)         Reimbursement for all business travel and otherout-of-pocket expenses reasonably incurred by Employee in the performance ofhis services pursuant to this Agreement and a $1,000 per month car allowance(determined on a pre-tax basis) (increased from $500 per month effective March2001).  All reimbursable expenses shallbe appropriately documented in reasonable detail by Employee upon submission ofany request for reimbursement, and in a format and manner consistent with theCompany's expense reporting policy.

             (iii)        Four (4) weeks paid vacation for each year during the periodof employment or such greater amount as may be afforded officers and keyemployees generally under the Company's policies in effect from time to time(pro-rated for any year in which Employee is employed for less than the fullyear).

             (iv)       The Company shall provide Employee with other executiveperquisites as may be available to or deemed appropriate for Employee by theBoard and participation in all other Company-wide employee benefits asavailable from time to time.

 

             (v)        TheCompany shall reimburse Employee up to $6,000 per year for expenditures onhealth, insurance, financial planning or tax planning benefits (or similarbenefits at the discretion of the Company) or club dues selected by Employee.

             3.          **[INTENTIONALLYLEFT BLANK]**

             4.          Term; Termination; Rights onTermination.  The term of thisAgreement shall begin on the date hereof and continue through December 31,2002.  On each December 31, theagreement shall automatically renew for a two (2) year period (such that uponsuch renewal, the new remaining term shall be two years), unless prior writtennotice is provided to Employee that it will not be renewed (the “Term”).  This Agreement and Employee's employment maybe terminated in any one of the following ways:

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

             (b)        Disability.  The Company will make efforts to reasonablyaccommodate Employee as required by applicable state or federal disabilitylaws.  However, the parties irrebutablypresume that, given Employee's position, it would be an undue hardship to theCompany if Employee is absent for more than three (3) consecutive months.  Therefore, if as a result of incapacity dueto physical or mental illness or injury, Employee shall have been absent from hisfull-time duties hereunder for three (3) consecutive months, then thirty (30)days after receiving written notice (which notice may occur before or after theend of such three (3) month period, but which shall not be effective earlierthan the last day of such three (3) month period), the Company may terminateEmployee's employment hereunder provided Employee is unable to resume hisfull-time duties at the conclusion of such notice period.  Also, Employee may terminate his employmenthereunder if his health should become impaired to an extent that makes thecontinued performance of his duties hereunder hazardous to his physical ormental health or his life, provided that Employee shall have furnished theCompany with a written statement from a qualified doctor to such effect andprovided, further, that at the Company's request made within thirty (30) daysof the date of such written statement, Employee shall submit to an examinationby a doctor selected by the Company who is reasonably acceptable to Employee orEmployee's doctor and such doctor shall have concurred in the conclusion ofEmployee's doctor.  In the event thisAgreement is terminated as a result of Employee's disability, Employee shallreceive from the Company, in a lump-sum payment due within ten (10) days of theeffective date of termination, the base salary at the rate then in effect forwhatever time period is remaining under the Term of this Agreement or for six(6) months, whichever amount is greater.

             (c)         Good Cause.  The Company may terminate the Agreement five(5) days after written notice to Employee for good cause, which shall be: (i)Employee's breach of this Agreement; (ii) Employee's negligence in theperformance or nonperformance (continuing for five (5) days after receipt of thewritten notice) of any of Employee's material duties and responsibilitieshereunder; (iii) Employee's dishonesty, fraud or misconduct with respect to thebusiness or affairs of the Company that adversely affects the operations orreputation of the Company; (iv) Employee's conviction of a felony crime; or (v)chronic alcohol abuse or illegal drug abuse by Employee.  In the event of a termination for goodcause, as enumerated above, Employee shall have no right to any severancecompensation.

 

             (d)        Without Cause.  At any time after the commencement ofemployment, the Company may, without cause, terminate this Agreement andEmployee's employment, effective ten (10) days after written notice is providedto Employee.  Employee may only beterminated without cause by the Company during the Term hereof if suchtermination is approved by the Board of Directors of the Company.  Should Employee be terminated by the Companywithout cause, Employee shall receive from the Company, in a lump-sum paymentdue on the effective date of termination, the base salary at the rate then ineffect for whatever time period is remaining under the Term of this Agreement.

             (e)         Change in Control.  Refer to paragraph 20 below.

             (f)         Termination by Employee for GoodReason.  Employee may terminate hisemployment hereunder for "Good Reason."  As used herein, "Good Reason" shall mean thecontinuance of any of the following after fifteen (15) days' prior writtennotice by Employee to the Company, specifying the basis for such Employee'shaving Good Reason to terminate this Agreement:

             (i)          Employee'sremoval from, or failure to be reappointed or reelected to, Employee's positionunder this Agreement, except as contemplated by paragraphs 4(a), (b), (c) and(e); or

             (ii)         Any other material breach of this Agreement by the Companythat is not cured within the fifteen (15) day time period set forth inparagraph 4(f) above, including the failure to pay Employee on a timely basisthe amounts to which he is entitled under this Agreement.

In the event of any dispute with respect to thetermination by the Employee for Good Reason, such dispute shall be resolvedpursuant to the provisions of paragraph 16 below.  In the event that it is determined that Good Reason did exist,the Company shall pay all amounts and damages to which Employee may be entitledas a result of such breach, including interest thereon and all reasonable legalfees and expenses and other costs incurred by Employee to enforce his rightshereunder.  Should Employee terminatehis employment for Good Reason, Employee shall receive from the Company, in alump-sum payment due on the effective date of termination, the base salary atthe rate then in effect for whatever time period is remaining under the Term ofthis Agreement or for six (6) months, whichever amount is greater.

             (g)        Termination by Employee Without Cause.   If Employee resigns or otherwise terminateshis employment without Good Reason pursuant to paragraph 4(f), Employee shallreceive no severance compensation.

 

Upon termination of this Agreement for any reasonprovided in clauses (a) through (g) above, Employee shall be entitled toreceive all compensation earned and all benefits and reimbursements vested ordue through the effective date of termination. Additional compensation subsequent to termination, if any, will be dueand payable to Employee only to the extent and in the manner expressly providedabove or in paragraph 16.  All otherrights and obligations of the Company and Employee under this Agreement shallcease as of the effective date of termination, except that the Company'sobligations under paragraph 10 herein and Employee's obligations underparagraphs 5, 6, 7, 8, 9 and 11 herein shall survive such termination inaccordance with their terms.

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

             6.          Inventions.  Employee shall disclose promptly to theCompany any and all significant conceptions and ideas for inventions,improvements and valuable discoveries, whether patentable or not, which areconceived or made by Employee, solely or jointly with another, during theperiod of employment or within one (1) year thereafter, and which are directlyrelated to the business or activities of the Company (including the Company’ssubsidiaries) and that Employee conceives as a result of his employment by theCompany.  Employee hereby assigns andagrees 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 otherinstruments that the Company shall deem necessary to apply for and obtainletters patent of the United States or any foreign country or to otherwiseprotect the Company's interest therein.

             7.          Trade Secrets.  Employee agrees that he will not, during orafter the term of this Agreement with the Company, disclose the specific termsof the Company's (including the Company’s subsidiaries) relationships oragreements with their respective significant vendors or customers or any othersignificant and material trade secret of the Company (including the Company’ssubsidiaries), whether in existence or proposed, to any person, firm,partnership, corporation or business for any reason or purpose whatsoever.

             8.          Disclosure of Information.  Employee agrees that for a period of three(3) years after the date hereof or during the Term of this Agreement and for aperiod of three (3) years thereafter, whichever is longer, without the priorwritten consent of the Company, Employee shall not, directly or indirectly,through any form of ownership, in any individual or representative oraffiliated capacity whatsoever, except as may be required by law, reveal,divulge, disclose or communicate to any person, firm, association, corporationor other entity in any manner whatsoever information of any kind, nature ordescription concerning: (i) the names of any prior or present suppliers orcustomers with respect to the Business, (ii) the prices for products orservices with respect to the Business, (iii) the names of personnel withrespect to the Business, (iv) the manner of operation with respect to theBusiness, (v) the plans, trade secrets, or other data of any kind, nature ordescription, whether tangible or intangible, with respect to the Business, or(vi) any other financial, statistical or other information regarding thebusiness acquired by the Company that the Company designates or treats asconfidential or proprietary.  Theagreements set forth herein shall not apply to any information that at the timeof disclosure or thereafter is generally available to and known by the public(other than as a result of a disclosure directly or indirectly by Employee inviolation of this Agreement).  Withoutregard to whether any or all of the foregoing matters would be deemedconfidential, material or important, the parties hereto stipulate that asbetween them, the same are important, material and confidential and gravelyaffect the effective and successful conduct of the Business and its goodwill.

 

             9.          Noncompetition.  (a) Employee agrees that during the Term ofthis Agreement and, upon termination of Employee’s employment by the Companyfor a period of three (3) years thereafter, he shall not:

             (i)          Call upon, solicit, divert, take away or attemptto call upon, solicit, divert or take away any existing (or those existingwithin one (1) year prior to that time) customers, suppliers, businesses, oraccounts of the Company (including the subsidiaries thereof) in connection withany business substantially similar to the Business;

             (ii)         call upon, hire, attempt to hire, contact or solicit withrespect to hiring (for Employee or on behalf of another) any person who is, atthat time, or who has been within one (1) year prior to that time, an employeeof the Company (including the subsidiaries thereof) in a managerial or salescapacity, provided that Employee shall be permitted to call upon and hire anymember of his immediate family;

             (iii)        Lend credit, money orreputation for the purpose of establishing or operating a businesssubstantially similar to the Business in the territory defined as 100 miles inand around the Company’s and its affiliates’ operations (the “Territory”);

             (iv)       Do any act that Employeeknew or reasonably should have known might directly injure the Company in anymaterial respect or that might divert customers, suppliers or employees fromthe Business; and

             (v)        Without limiting the generality of the foregoingprovisions, conduct a business substantially similar to the Business under thename “F.Y.I. Incorporated” or any other trade names, trademarks or servicemarks heretofore used by the Company or its affiliates.

             In the course of Employee’semployment with the Company, Employee will become exposed to certain of theCompany’s confidential information and business relationships, which the abovecovenants are designed to protect.  The covenants in subsections (i) through (v) areintended to restrict Employee from competing in any manner with the Company orthe Business in the activities that have heretofore been carried on by theCompany or its affiliates.  Theobligations set forth in subsections (i) through (v) above shall apply toactions by Employee, through any form of ownership, and whether as principal,officer, director, agent, employee, employer, consultant, stockholder or holderof any equity security (beneficially or as trustee of any trust), lender,partner, joint venturer or in any other individual or representative oraffiliated capacity whatsoever. However, none of the foregoing shall prevent  Employee from being the holder of up to 5.0% in the aggregate ofany class of securities of any corporation engaged in the activities describedin subsection (i) through (v) above, provided that such securities are listedon a national securities exchange or reported on the Nasdaq National Market.

 

             10.        Indemnification.  In the event Employee is made a party to anythreatened, pending or completed action, suit or proceeding, whether civil,criminal, administrative or investigative (other than an action by the Companyagainst Employee), by reason of the fact that he is or was performing servicesunder this Agreement, then the Company shall indemnify Employee against allexpenses (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 theCompany are made a party to the same third-party action, complaint, suit orproceeding, the Company agrees to engage competent legal representation, andEmployee agrees to use the same representation, provided that if counselselected by the Company shall have a conflict of interest that prevents suchcounsel from representing Employee, Employee may engage separate counsel andthe Company shall pay all attorneys' fees of such separate counsel.  Further, while Employee is expected at alltimes to use his best efforts to faithfully discharge his duties under thisAgreement, Employee shall not be held liable to the Company for errors or omissionsmade in good faith where Employee has not exhibited negligence or performedcriminal and fraudulent acts which damage the business of the Company.

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

             12.        Assignment; Binding Effect.  Employee understands that he has beenselected for employment by the Company on the basis of his personalqualifications, experience and skills. Employee agrees, therefore, he cannot assign all or any portion of hisperformance under this Agreement and the Company agrees not to assign all orany portion of its obligations under this Agreement (other than to a successoras a result of a Change in Control). Subject to the preceding, this Agreement shall be binding upon, inure tothe benefit of and be enforceable by the parties hereto and their respectiveheirs, legal representatives, successors and assigns.

 

             13.        Complete Agreement.  This Agreement is not a promise of futureemployment.  Employee has no oralrepresentations, understandings or agreements with the Company or any of itsofficers, directors or representatives covering the same subject matter as thisAgreement.  This written Agreement isthe final, complete and exclusive statement and expression of the agreementbetween the Company and Employee and of all the terms of this Agreement, and itcannot be varied, contradicted or supplemented by evidence of any prior orcontemporaneous oral or written agreements. This Agreement may not be later modified except by a further writingsigned by a duly authorized officer of the Company and Employee, and no term ofthis Agreement may be waived except by writing signed by the party waiving thebenefit of such term.

             14.        Notice.  Whenever any notice is required hereunder, it shall be given inwriting 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                |
|             | 2200 Ross  Avenue                   |
|             | Suite  2200                              |
|             | Dallas,  Texas 75201                     |
|             | Attn:  Charles C. Reeder, Esq. |
|             |                                     |
| To  Employee:    | Ronald  Zazworsky                        |
|             | 456 Ivy Park Lane                        |
|             | Atlanta, Georgia 30342                   |

Notice shall be deemed given and effective three (3)days after the deposit in the United States mail of a writing addressed as aboveand sent first class mail, certified, return receipt requested, or whenactually received.  Either party maychange the address for notice by notifying the other party of such change inaccordance with this paragraph 14.

             15.        Severability; Headings.  If any portion of this Agreement is heldinvalid or inoperative, the other portions of this Agreement shall be deemedvalid and operative and, so far as is reasonable and possible, effect shall begiven to the intent manifested by the portion held invalid or inoperative.  The paragraph headings herein are forreference 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 controversyarising under or in connection with this Agreement shall be settled exclusivelyby arbitration, conducted before a panel of three (3) arbitrators in Dallas,Texas, in accordance with the rules of the American Arbitration Associationthen in effect.  The arbitrators shallnot have the authority to add to, detract from, or modify any provision hereofnor 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 ofvesting of options), reimbursement of costs, including those incurred toenforce this Agreement, and interest thereon in the event the arbitratorsdetermine that Employee was terminated without disability or good cause, asdefined in paragraphs 4(b) and 4(c), respectively, or that the Company hasotherwise materially breached this Agreement. A decision by a majority of the arbitration panel shall be final andbinding.  Judgment may be entered on thearbitrators' award in any court having jurisdiction.  The costs of any arbitration proceeding shall be borne by theparty or parties not prevailing in such proceeding as determined by thearbitrators.

             17.        Governing Law.  This Agreement shall in all respects beconstrued according to the laws of the State of Texas.

             18.        Counterparts.  This Agreement may be executedsimultaneously in two (2) or more counterparts, each of which shall be deemedan original and all of which together shall constitute but one and the sameinstrument.

             19.        Attorneys' Fees.  In the event of any litigation orarbitration arising under or in connection with this Agreement, the prevailingparty shall be entitled to reasonable attorneys' fees as determined by thecourt or arbitration panel, as the case may be.  Each party to this Agreement represents and warrants that it hasbeen represented by counsel in the negotiation and execution of this Agreement,including without limitation the provisions set forth in thisparagraph 19.

             20.        Change in Control.

             (a)         Unless he elects to terminate thisAgreement pursuant to (c) below, Employee understands and acknowledges that theCompany may be merged or consolidated with or into another entity and that suchentity shall automatically succeed to the rights and obligations of the Companyhereunder.

             (b)        In the event of a pending Change inControl wherein the Employee has not received written notice at least fifteen(15) business days prior to the anticipated closing date of the transactiongiving rise to the Change in Control from the successor to all or a substantialportion of the Company’s business and/or assets that such successor is willingas of the closing to assume and agree to perform the Company’s obligationsunder this Agreement in the same manner and to the same extent that the Companyis hereby required to perform, such Change in Control shall be deemed to be atermination of this Agreement by the Company and the amount of the lump-sumseverance payment due to Employee shall be 3 times Employee’s annual salaryimmediately prior to the Change in Control and the non-competition provisionsof paragraph 9 shall not apply whatsoever. Payment shall be made either at closing of the transaction if notice isserved at least five (5) days before closing or within ten (10) days ofEmployee’s written notice.

 

             (c)         In any Change in Control situation inwhich Employee has received written notice from the successor to the Companythat such pending successor is willing to assume the Company’s obligationshereunder or Employee receives notice after (or within fifteen (15) businessdays prior to) the Change in Control that Employee is being terminated,Employee may nonetheless, at his sole discretion, elect to terminate thisAgreement by providing written notice to the Company at any time prior toclosing of the transaction and up to two (2) years after the closing of thetransaction giving rise to the Change in Control.  In such case, the amount of the lump-sum severance payment due toEmployee shall be 3 times Employee’s annual salary in effect immediately priorto the Change in Control and the non-competition provisions of paragraph 9shall all apply.  Payment shall be madeeither at closing if notice is served at least five (5) days before closing orwithin ten (10) days of written notice by Employee.

             (d)        For purposes of applying paragraph 4under the circumstances described in (b) and (c) above, the effective date oftermination will be the later of the closing date of the transaction givingrise to the Change in Control or Employee’s notice as described above, and allcompensation, reimbursements and lump-sum payments due Employee must be paid infull by the Company at such time. Further, Employee will be given sufficient time in order to comply withthen Securities and Exchange Commission’s regulations to elect whether toexercise and sell all or any of his vested options to purchase Common Stock ofthe Company, including any options with accelerated vesting under theprovisions 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 ofthe Company at or prior to the closing of the transaction giving rise to theChange in Control, if he so desires.

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

             (i)          anyperson, other than the Company or an employee benefit plan of the Company,acquires directly or indirectly the Beneficial Ownership (as defined in Section13(d) of the Securities Exchange Act of 1934, as amended) of any votingsecurity of the Company and immediately after such acquisition such person is,directly or indirectly, the Beneficial Owner of voting securities representing30% or more of the total voting power of all of the then-outstanding votingsecurities of the Company;

             (ii)         the individuals (A) who, as of the closing date of theCompany's initial public offering, constitute the Board of Directors of theCompany (the "Original Directors") or (B) who thereafter are electedto the Board of Directors of the Company and whose election, or nomination forelection, to the Board of Directors of the Company was approved by a vote of atleast two-thirds (2/3) of the Original Directors then still in office (suchdirectors becoming "Additional Original Directors" immediatelyfollowing their election) or (C) who are elected to the Board of Directors ofthe Company and whose election, or nomination for election, to the Board ofDirectors of the Company was approved by a vote of at least two-thirds (2/3) ofthe 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 amajority 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 reversestock split of outstanding voting securities of the Company, or consummation ofany such transaction if stockholder approval is not sought or obtained, otherthan any such transaction which would result in at least 75% of the totalvoting power represented by the voting securities of the surviving entityoutstanding immediately after such transaction being Beneficially Owned by theholders of at least 75% of outstanding voting securities of the Companyimmediately prior to the transaction, with the voting power of each suchcontinuing holder relative to other such continuing holders not substantiallyaltered in the transaction; or

             (iv)       the stockholders of the Company shall approve a plan ofcomplete liquidation of the Company or an agreement for the sale or dispositionby 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’ssubsidiaries)).

             (f)         If any portion of the severancebenefits, Change in Control benefits or any other payment under this Agreement,or under any other agreement with, or plan of the Company, including but notlimited to stock options, warrants and other long-term incentives (in theaggregate “Total Payments”) would be subject to the excise tax imposed bySection 4999 of the Code, as amended (or any similar tax that mayhereafter be imposed) or any interest or penalties with respect to such excisetax (such excise tax, together with any such interest and penalties, arehereinafter collectively referred to as the “Excise Tax”), then Employee shallbe entitled to receive from the Company an additional payment (the “Gross-upPayment”) in an amount such that the net amount of Total Payments and Gross-upPayment retained by the Employee, after the calculation and deduction of allExcise Tax on the Total Payments and all federal, state and local income tax, employmenttax and Excise Tax on the Gross-up Payment, shall be equal to the TotalPayments.

             Forpurposes of this paragraph Employee’s applicable Federal, state and local taxesshall be computed at the maximum marginal rates, taking into account the effectof any loss of personal exemptions resulting from receipt of the Gross-UpPayment.

             Alldeterminations required to be made under this paragraph 20, includingwhether a Gross-Up Payment is required under this paragraph, and theassumptions to be used in determining the Gross-Up Payment, shall be made bythe Company’s current independent accounting firm, or such other firm as theCompany may designate in writing prior to a Change in Control (the “AccountingFirm”), which shall provide detailed supporting calculations both to theCompany and Employee within twenty business days of the receipt of notice fromEmployee that there will likely be a Change in Control, or such earlier time asis requested by the Company.  In theevent that the Accounting Firm is serving as accountant or auditor for theparty effecting the Change in Control or is otherwise unavailable, Employee(together with all other employees with comparable appointment rights in theirrespective employment agreements such that all such employees may collectivelyselect a single accounting firm) may appoint another nationally recognizedaccounting firm to make the determinations required hereunder (which accountingfirm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firmwith respect to such determinations described above shall be borne solely bythe Company.

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

**[Balance of page intentionally left blank]**

             INWITNESS WHEREOF, the parties hereto have executed this Agreement as of the dayand year first above written.

|   |                 |
|--------|----------------------|
|   | F.Y.I.  INCORPORATED |
|   |                 |
|   |                 |
|   | By:                  |
|   |                      |
|   | Title:               |
|   |                 |
|   |                 |
|   | EMPLOYEE:            |
|   |                 |
|   |                 |
|   |                      |
|   | RONALD ZAZWORSKY     |
|   |                 |
|        |                      |  |