Exhibit 10.1
    

    

    

    
      FIFTH ADDENDUM TO EMPLOYMENT AGREEMENT
    

    

    

    
      THIS FIFTH ADDENDUM TO EMPLOYMENT AGREEMENT (the “Fifth Addendum”) is
      made effective as of the 30th day of December, 2008, by and between
      Anworth Mortgage Asset Corporation, a Maryland corporation (“Anworth”),
      and Joseph Lloyd McAdams (the “Executive”).
    

    
      W I T N E S S E T H : 
    

    
      WHEREAS, the Executive and Anworth Mortgage Advisory Corporation (the
      “Company”) entered into an employment agreement dated January 1, 2002
      (as amended to date, the “Agreement”);
    

    
      WHEREAS, the Agreement was assumed by Anworth and the Executive, and the
      Company and Anworth entered into an addendum to such employment
      agreement dated April 18, 2002 (the “Addendum”), an addendum to such
      employment agreement dated May 28, 2004 (the “Second Addendum”) an
      addendum to such employment agreement dated June 27, 2006 (the “Third
      Addendum”); and addendum to such employment agreement dated February 22,
      2008 (the “Fourth Addendum”)
    

    
      WHEREAS, Anworth and the Executive desire to further modify the terms of
      the Executive’s employment under the Agreement.
    

    
      NOW THEREFORE, the parties hereby covenant and agree as follows:
    

    
      1. Effective Date. This Fifth Addendum shall become
      effective on the date hereof.
    

    
      2. Incentive Plan and Bonus (Section 4(b) of the Agreement).
      Paragraph 4 of Section 4(b)(iii) of the Agreement is hereby amended by
      inserting the phrase “Twenty-Five percent (25%)” and is restated as
      follows:
    

    
      “Twenty-Five percent (25%) of any amount in excess of $100,000 allocated
      to the Executive from the Pool with respect to calendar year 2009 and
      each subsequent year will be paid in common stock subject to certain
      restrictions set forth in Appendix A hereto and in accordance with the
      2004 Equity Plan.”
    

    
      3. Appendix A of the Agreement). The first paragraph of
      Appendix A of the Agreement is hereby restated as follows:
    

    
      
        

        

      

      
        
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      “The Company’s return on average equity (“ROAE”) is calculated as the
      twelve-month GAAP net income available to common stockholders minus
      depreciation, gains/losses on asset sales and impairment
      charges/recoveries, divided by the average stockholder equity less
      (1) goodwill and (2) preferred stockholder equity.”
    

    

    

    
      4. Remaining Terms Unchanged. The parties agree that all
      terms and conditions of the Agreement (as modified by this Fifth
      Addendum), including, but not limited to, all provisions pertaining to
      compensation, termination, choice of law and arbitration, shall remain
      in full force and effect as modified hereby.
    

    
      IN WITNESS WHEREOF, this Fifth Addendum to Employment Agreement is
      executed as of the day and year first above written.
    

    

    

    
    	
          Executive
        	

        
	

        	
           
        
	
          /s/ Joseph Lloyd McAdams
        	

        
	
          Joseph Lloyd McAdams
        	

        


    

    

    

    
    	
          
            Anworth Mortgage Asset
          

          
            Corporation
          

        	

        
	

        	

        	
           
        
	
          By:
        	
          /s/ Thad M. Brown
        	

        
	

        	
          Name: Thad M. Brown
        	

        
	

        	
          Title: Chief Financial Officer
        	

        


    

    

    

    
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