**AMENDED AND RESTATED EMPLOYMENTAGREEMENT(Ed H. Bowman, Jr.)**

             This Employment Agreement (the"Agreement") by and between F.Y.I. Incorporated, a Delawarecorporation (the "Company"), and Ed H. Bowman, Jr.("Employee") is hereby entered into and effective as of May 18,2001.  This Agreement hereby supersedesany other employment agreements or understandings, written or oral, between theCompany and Employee.

RE C I T A L S

             The following statements are trueand correct:

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

             Employee is employed hereunder bythe Company in a confidential relationship wherein Employee, in the course ofhis employment with the Company, has and will continue to become familiar withand aware of information as to the Company's customers, specific manner ofdoing business, including the processes, techniques and trade secrets utilizedby the Company, and future plans with respect thereto, all of which has beenand will be established and maintained at great expense to the Company; thisinformation is a trade secret and constitutes the valuable goodwill of theCompany.

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

AG R E E M E N T S

             1.          Employment and Duties.

             (a)         The Company hereby employs Employee asPresident and Chief Executive Officer. As such, Employee shall have responsibilities, duties and authorityreasonably accorded to and expected of a President and Chief Executive Officerand will report directly to the Board of Directors of the Company (the"Board").  Employee herebyaccepts this employment upon the terms and conditions herein contained and,subject to paragraph 1(b), agrees to devote his working time, attention andefforts 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 and responsibilitieshereunder and (ii) does not violate paragraph 3 hereof.  The foregoing limitations shall not beconstrued as prohibiting Employee from (A) serving on the boards ofdirectors of other companies or (B) making personal investments in suchform or manner as will neither require his services, other than to a minimalextent, in the operation or affairs of the companies or enterprises in whichsuch investments are made nor violate the terms of paragraph 3 hereof.

 

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

             (a)         *BaseSalary*.  The base salarypayable to Employee shall be $575,000 per year (effective January 1,2001), payable on a regular basis in accordance with the Company's standardpayroll procedures but not less than bi-monthly.  On at least an annual basis, the Board will review Employee'sperformance and may make increases to such base salary if, in its discretion,any such increase is warranted. Such recommended increase would, in alllikelihood, require approval by the Board or a duly constituted committee thereof.

             (b)        *IncentiveBonus Plan*.  Employee shallbe eligible for a bonus opportunity of up to 100% of his annual base salary inaccordance with the Company’s Incentive Bonus Plan as modified from time totime, payable in cash and/or equity of the Company (at the Company’sdiscretion).  The bonus payment and theCompany's targeted performance shall be determined and approved by the Board orthe compensation committee thereof.  For2001, Employee has already been awarded Warrant No. 58 as payment for any2001 bonus opportunity.

             (c)         *ExecutivePerquisites, Benefits and 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 his dependent family membersunder health, hospitalization, disability, dental, life and other insuranceplans that the Company may have in effect from time to time, and not lessfavorable than the benefits provided to other Company executives.

             (ii)         Reimbursement for all business travel and otherout-of-pocket expenses reasonably incurred by Employee in the performance ofhis services pursuant to this Agreement. All reimbursable expenses shall be appropriately documented in reasonabledetail by Employee upon submission of any request for reimbursement, and in aformat and manner consistent with the Company'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(prorated for any year in which Employee is employed for less than the fullyear).

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

             (v)        TheCompany shall reimburse Employee up to $300 per month for club dues actuallyincurred by Employee, provided that such club is used at least 50% ofthe time for business purposes.

 

             (vi)       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, which will include participation in the Company'sIncentive Compensation Plan.

             (vii)      The Company shall provide Employee with reasonable assistancein 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 aSupplemental Retirement Plan/Survivor Protection Plan to be placed inside theCompany’s Non-Qualified Plan and provide Employee with such benefit.

             (x)         TheCompany shall reimburse Employee up to $15,000 per year for expenditures onhealth, insurance, financial planning or tax planning benefits (or similarbenefits, or such other benefits at the discretion of the Company) or clubdues, all as selected by Employee.

             3.          Non-Competition Agreement.

             (a)         Subject to Section 3(a), Employee willnot, during the period of his employment by or with the Company, and for aperiod of two (2) years immediately following the termination of his employmentunder this Agreement, for any reason whatsoever, directly or indirectly, forhimself 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 managerialcapacity, whether as an employee, independent contractor, consultant oradvisor, or as a sales representative, in any business selling any products orservices in direct competition with the Company, within 100 miles of (i) theprincipal executive offices of the Company or (ii) any place to which theCompany provides products or services or in which the Company (including thesubsidiaries thereof) is in the process of initiating business operationsduring the term of this covenant (the "Territory");

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

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

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

 

             (v)        disclosecustomers, whether in existence or proposed, of the Company (or thesubsidiaries thereof) to any person, firm, partnership, corporation or businessfor any reason or purpose whatsoever.

             As used in paragraph 3(a),references to the business, customers, Territory, etc. of the Company refer tothe 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 asuccessor to the Company resulting from a Change in Control).  Notwithstanding the above, the foregoingcovenant shall not be deemed to prohibit Employee from acquiring as aninvestment not more than three percent (3%) of the capital stock of a competingbusiness, whose stock is traded on a national securities exchange orover-the-counter.

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

             (c)         In the course of Employee’s employmentwith the Company, Employee will become exposed to certain of the Company’sconfidential information and business relationships, which the above covenantsare designed to protect.  It is agreedby the parties that the foregoing covenants in this paragraph 3 impose areasonable restraint on Employee in light of the activities and business of theCompany (including the Company's subsidiaries) on the date of the execution ofthis Agreement and the current plans of the Company (including the Company'ssubsidiaries); but it is also the intent of the Company and Employee that suchcovenants 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 oftermination of the employment of Employee, subject to the followingparagraph.  For example, if, during theTerm of this Agreement, the Company (including the Company's subsidiaries)engages in new and different activities, enters a new business or establishednew locations for its current activities or business in addition to or otherthan the activities or business enumerated under the Recitals above or thelocations currently established therefor, then Employee will be precluded fromsoliciting the customers or employees of such new activities or business orfrom such new location and from directly competing with such new businesswithin 100 miles of its then-established operating location(s) through the termof this covenant.

             It is further agreed by the partieshereto that, in the event that Employee shall cease to be employed hereunder,and shall enter into a business or pursue other activities not in competitionwith the Company (including the Company's subsidiaries), or similar activitiesor business in locations the operation of which, under such circumstances, doesnot 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 ofEmployee's obligations under this paragraph 3, if any, Employee shall not bechargeable with a violation of this paragraph 3 if the Company (including theCompany's subsidiaries) shall thereafter enter the same, similar or acompetitive (i) business, (ii) course of activities or (iii) location, asapplicable.

 

             (d)        The covenants in this paragraph 3 areseverable and separate, and the unenforceability of any specific covenant shallnot affect the provisions of any other covenant.  Moreover, in the event any court of competent jurisdiction shalldetermine that the scope, time or territorial restrictions set forth areunreasonable, then it is the intention of the parties that such restrictions beenforced to the fullest extent which the court deems reasonable, and theAgreement shall thereby be reformed to such extent.

             (e)         All of the covenants in this paragraph3 shall be construed as an agreement independent of any other provision in thisAgreement, and the existence of any claim or cause of action of Employeeagainst the Company, whether predicated on this Agreement or otherwise, shallnot constitute a defense to the enforcement by the Company of such covenants.  It is specifically agreed that the period oftwo (2) years following Employee’s employment set forth at the beginning ofthis paragraph 3, during which the agreements and covenants of Employee made inthis paragraph 3 shall be effective, shall be computed by excluding from suchcomputation any time during which Employee is in violation of any provision ofthis paragraph 3.

             4.          Place of Performance.

             (a)         Employee’s place of employment is theCompany’s headquarters in Dallas, Texas. Employee understands that he may be requested by the Board to relocatefrom his present residence to another geographic location in order to moreefficiently carry out his duties and responsibilities under this Agreement oras part of a promotion or other increase in duties and responsibilities.  In the event that Employee is requested torelocate and agrees to do so, the Company will pay all relocation costs to moveEmployee, 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 costsprior to moving into a new permanent residence; duplicate home carrying costs;all closing costs on the sale of Employee's present residence and on thepurchase of a comparable residence in the new location; and added income taxesthat Employee may incur, as a result of any payment hereunder, to the extentany relocation costs are not deductible for tax purposes.  The general intent of the foregoing is thatEmployee shall not personally bear any out-of-pocket cost as a result of therelocation, with an understanding that Employee will use his best efforts toincur only those costs which are reasonable and necessary to effect a smooth, efficientand orderly relocation with minimal disruption to the business affairs of theCompany and the personal life of Employee and his family.

             (b)        Notwithstanding the above, if Employeeis requested by the Board to relocate and Employee refuses, such refusal shallnot constitute "good cause" for termination of this Agreement underthe terms of paragraph 5(c).

             5.          Term; Termination; Rights onTermination.  The term of thisAgreement shall begin on the date hereof and continue through December 31,2005, and, unless terminated sooner as herein provided, shall continuethereafter on a five-year rolling basis on the same terms and conditionscontained herein until written notice is given by the Company or Employee, notless than sixty (60) days prior to the December 31st of anyanniversary date of this Agreement during the Initial Term or thereafter, thatthe balance of the term of the Agreement shall be five (5) years from theJanuary 1st following such notice (the “Term”).  This Agreement and Employee's employment maybe terminated in any one of the following ways:

 

             (a)         *Death*.  The death of Employee shall immediatelyterminate the Agreement with no severance compensation due to Employee'sestate.

             (b)        *Disability*.  If, as a result of incapacity due tophysical or mental illness or injury, Employee shall have been absent from hisfull-time duties hereunder for four (4) consecutive months, then thirty (30)days after receiving written notice (which notice may occur before or after theend of such four (4) month period, but which shall not be effective earlierthan the last day of such four (4) 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 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'sgross negligence in the performance or intentional nonperformance (continuingfor ten (10) days after receipt of the written notice) of any of Employee'smaterial duties and responsibilities hereunder; (3) Employee's dishonesty,fraud or misconduct with respect to the business or affairs of the Companywhich materially and adversely affects the operations or reputation of theCompany; (4) Employee's conviction of a felony crime; or (5) chronic alcoholabuse 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)        *WithoutCause*.  At any time after thecommencement of employment, the Company may, without cause, terminate thisAgreement and Employee's employment, effective thirty (30) days after writtennotice is provided to the Employee. Should Employee be terminated by the Company without cause, Employeeshall receive from the Company, in a lump-sum payment due on the effective dateof termination, the base salary at the rate then in effect for whatever timeperiod is remaining under the Term of this Agreement or for two (2) years,whichever amount is greater ("Severance Pay").  Further, any termination without cause bythe Company shall operate to shorten the period set forth inparagraph 3(a) and during which the terms of paragraph 3 apply to one (1)year from the date of termination of employment.

 

             (e)         *Change inControl*.  Refer to paragraph12 below.

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

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

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

             (iii)        any other material breach of this Agreement by the Companythat is not cured within the ten (10) day time period set forth in paragraph5(f) above, including the failure to pay Employee on a timely basis the amountsto which he is entitled under this Agreement.

In the event of any termination by theEmployee for Good Reason, as determined by a court of competent jurisdiction orpursuant to the provisions of paragraph 16 below, the Company shall pay allamounts and damages to which Employee may be entitled as a result of suchbreach, including interest thereon and all reasonable legal fees and expensesand other costs incurred by Employee to enforce his rights hereunder.  In addition, Employee shall be entitled toreceive Severance Pay for whatever time period is remaining under the Term ofthis Agreement or for two (2) years, whichever amount is greater.  Further, none of the provisions of paragraph3 shall apply in the event this Agreement is terminated by Employee for GoodReason.

             (g)        *Terminationby Employee Without Cause*. If Employee resigns or otherwise terminates his employment without GoodReason pursuant to paragraph 5(f), Employee shall receive no severancecompensation.

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

 

             6.          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 its representatives, vendors or customers whichpertain 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 toits discretion and control.  Likewise,all correspondence, reports, records, charts, advertising materials and othersimilar data pertaining to the business, activities or future plans of theCompany (including the Company’s subsidiaries) which is collected by Employeeshall be delivered promptly to the Company without request by it upontermination of Employee's employment.

             7.          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 which Employee conceives as a result of his employment by theCompany.  Employee hereby assigns and agreesto 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.

             8.          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 its significant vendors or customers or any other significantand 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, except as isdisclosed in the ordinary course of business.

             9.          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 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 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 this Agreement,Employee cannot be held liable to the Company for errors or omissions made ingood faith where Employee has not exhibited gross, willful and wantonnegligence and misconduct or performed criminal and fraudulent acts whichmaterially damage the business of the Company.

 

             10.        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 of thisAgreement.

             11.        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 two (2) sentences and the express provisions ofparagraph 12 below, this Agreement shall be binding upon, inure to the benefitof and be enforceable by the parties hereto and their respective heirs, legalrepresentatives, successors and assigns.

             12.        Change in Control.

             (a)         Unlesshe elects to terminate this Agreement pursuant to (c) below, Employeeunderstands and acknowledges that the Company may be merged or consolidatedwith or into another entity and that such entity shall automatically succeed tothe rights and obligations of the Company hereunder.

             (b)        Inthe event of a pending Change in Control wherein the Employee has not receivedwritten notice at least fifteen (15) business days prior to the anticipatedclosing date of the transaction giving rise to the Change in Control from thesuccessor to all or a substantial portion of the Company's business and/orassets that such successor is willing as of the closing to assume and agree toperform the Company's obligations under this Agreement in the same manner andto the same extent that the Company is hereby required to perform, such Changein Control shall be deemed to be a termination of this Agreement by the Companyand the amount of the lump-sum severance payment due to Employee shall be ten(10) times Employee’s annual salary immediately prior to the Change in Controland the non-competition provisions of paragraph 3 shall not applywhatsoever.  Payment shall be madeeither at closing of the transaction if notice is served at least five (5) daysbefore closing or within ten (10) days of Employee’s written notice.

             (c)         Inany Change in Control situation in which Employee has received written noticefrom the successor to the Company that such pending successor is willing toassume the Company's obligations hereunder or Employee receives notice after(or within 15 business days prior to) the Change in Control that Employee isbeing terminated, Employee may nonetheless, at his sole discretion, elect toterminate this Agreement by providing written notice to the Company at any timeprior to closing of the transaction and up to two (2) years after the closingof the transaction giving rise to the Change in Control.  In such case, the amount of the lump-sumseverance payment due to Employee shall be ten times Employee’s annual salaryin effect immediately prior to the Change in Control and the non-competitionprovisions of paragraph 3 shall all apply. Payment shall be made either at closing if notice is served at leastfive (5) days before closing or within ten (10) days of written notice byEmployee.

 

             (d)        Forpurposes of applying paragraph 5 under the circumstances described in (b) and(c) above, the effective date of termination will be the later of the closingdate of the transaction giving rise to the Change in Control or Employee’s noticeas described above, and all compensation, reimbursements and lump-sum paymentsdue Employee must be paid in full by the Company at such time.  Further, Employee will be given sufficienttime in order to comply with the Securities and Exchange Commission’sregulations to elect whether to exercise and sell all or any of his vestedoptions to purchase Common Stock of the Company, including any options withaccelerated vesting under the provisions of the Company's 1995 Stock OptionPlan, as amended or any warrants, such that he may convert the options orwarrants to shares of Common Stock of the Company at or prior to the closing ofthe 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)          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 elected to theBoard 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” immediately following theirelection) or (C) who are elected to the Board of Directors of the Company andwhose election, or nomination for election, to the Board of Directors of theCompany was approved by a vote of at least two-thirds (2/3) of the OriginalDirectors and Additional Original Directors then still in office (suchdirectors also becoming “Additional Original Directors” immediately followingtheir election), cease for any reason to constitute a majority of the membersof 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 byholders of at least 75% of the 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)         Continuationof Benefits.  (i) Following thetermination of the Executive’s employment in connection with a Change inControl (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 theExecutive becomes employed by a new employer (other than to the successor tothe Company following such Change in Control), the Company shall, at itsexpense, provide the Executive with medical, dental, life insurance, disabilityand accidental death and dismemberment benefits (“Insurance Benefits”) at thehighest level provided to the Executive immediately prior to the Change inControl; provided, however, if the Executive becomes employed by a new employerthat maintains Insurance Benefits that either (x) do not cover the Executivewith respect to a pre-existing condition that was covered under the Company’sInsurance Benefits, or (y) do not cover the Executive for a designated waitingperiod, or (z) do not provide for a certain benefit, the Executive’s coverageunder the Company’s Insurance Benefits shall continue (with respect to sucharea of non-coverage described in (x), (y) or (z), as applicable), withoutlimitation, until the earlier of the end of the applicable period ofnon-coverage under the new employer’s Insurance Benefits or the thirdanniversary of the Change in Control.

             (ii) Following a Change in ControlTermination the special benefit allowance of $15,000 contemplated byparagraph 2(c)(x) of this Agreement will continue for 3 years thereafter.

             (iii) The Company shall reimburseall reasonable expenses incurred by the Executive for reasonable office andsecretarial expenses and for reasonable professional outplacement services byqualified consultants selected by the Executive for up to 3 years after aChange in Control Termination.

             (iv) The Executive shall not berequired to seek other employment following a Change in Control Termination andany compensation earned from other employment shall not reduce the amountsotherwise payable under this Agreement.

              (g)       Ifany portion of the severance benefits, Change in Control benefits or any otherpayment under this Agreement, or under any other agreement with, or plan of theCompany, including but not limited to stock options, warrants and otherlong-term incentives (in the aggregate “Total Payments”) would be subject tothe excise tax imposed by Section 4999 of the Code, as amended (or anysimilar tax that may hereafter be imposed) or any interest or penalties withrespect to such excise tax (such excise tax, together with any such interestand penalties, are hereinafter collectively referred to as the “Excise Tax”),then Employee shall be entitled to receive from the Company an additionalpayment (the “Gross-up Payment”) (i.e., in addition to such other severancebenefits, Change in Control benefits or any other payments under thisAgreement) 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,employment tax and Excise Tax on the Gross-up Payment, shall be equal to theTotal Payments.

 

             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 12, 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 the partyeffecting the Change in Control or is otherwise unavailable, Employee (togetherwith all other employees with comparable appointment rights in their respectiveemployment agreements such that all such employees may collectively select asingle accounting firm) may appoint another nationally recognized accountingfirm to make the determinations required hereunder (which accounting firm shallthen 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 to Employeepursuant to the preceding sentence (a “Later Payment”), the Company shall alsopay to Employee an additional amount such that after payment by Employee of allof Employee’s applicable Federal, state and local taxes, including any interestand penalties assessed by any taxing authority, on the Later Payment, Employeewill retain from the Later Payment an amount equal to the Additional ExciseTax, which Employee shall use to pay the Additional Excise Tax.

             (h)        In the event of a Change in Control, theCompany shall require that the ultimate parent entity (or if no parent entity,the acquiring entity itself) of any entity that acquires control (throughownership of securities or assets, consistent with the definitional triggers ofa Change in Control set forth above) of the Company in connection with suchChange in Control assume or guaranty the Company’s obligations under paragraphs12(f) and 12(g) of this Agreement.

 

             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, including without limitationEmployee’s Amended and Restated Employment Agreement dated January 1, 1999,which is superseded and replaced in its entirety by this Agreement.  This written Agreement may not be latermodified except by a further writing signed by a duly authorized officer of theCompany and Employee, and no term of this Agreement may be waived except bywriting signed by the party waiving the benefit 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:  Chairman          |
|             |                          |
| with  a copy to: | F.Y.I.  Incorporated          |
|             | 3232  McKinney Avenue         |
|             | Suite  1000                   |
|             | Dallas,  Texas 75204          |
|             | Attn:  General Counsel   |
|             |                          |
| with  a copy to: | Charles  C. Reeder, Esq.      |
|             | Locke  Liddell & Sapp LLP |
|             | 2200  Ross Avenue             |
|             | Suite  2200                   |
|             | Dallas,  Texas 75201          |
|             |                          |
| To  Employee:    | Ed  H. Bowman, Jr.            |
|             | 3102  Drexel Drive            |
|             | Dallas,  Texas 75205          |

Noticeshall be deemed given and effective three (3) days after the deposit in theU.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 theother party of such change in accordance 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 5(b) and 5(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.

**[Balance of page intentionallyleft blank]**

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

 

|   | EMPLOYEE:            |
|--------|----------------------|
|   |                 |
|   |                 |
|   |                      |
|   | Ed  H. Bowman, Jr.   |
|   |                 |
|   |                 |
|   |                 |
|   | F.Y.I.  INCORPORATED |
|   |                 |
|   |                 |
|   | By:                  |
|   |                      |
|   | Title:               |
|   |                 |
|        |                      |  |