Exhibit 10.10




DYNEX
CAPITAL, INC.




PERFORMANCE
BONUS POOL




FOR
CAPITAL RAISING ACTIVITIES




The
following describes the performance bonus pool for capital raising activities
for calendar year 2009 (the “Capital Bonus Pool”).  The purpose of the
Capital Bonus Pool is to compensate certain eligible participants for equity
capital raising activities during 2009.  The eligible participants
will be determined by the Compensation Committee of the Board of Directors, and
will include at a minimum, Thomas Akin, Chief Executive Officer, Byron Boston,
Chief Investment Officer, and Stephen Benedetti, Chief Financial Officer and
Chief Operating Officer (together with any other participants determined by the
Compensation Committee, the “Participants”)




Determination
of the Capital Bonus Pool




The
amount available in the Capital Bonus Pool will be equal to 1% of the gross
amount of preferred and/or common equity capital raised by the Company in 2009
provided that the aggregate amount of such equity capital raised during 2009
equals or exceeds $50 million.  The equity capital raised will exclude
any amounts raised, if any, via a dividend reinvestment program, the Company’s
Controlled Equity Offering (“CEO”) program, or any similar “at the market”
offering program, provided, however, that amounts raised through issuances
pursuant to the CEO or similar “at the market” offering programs as a result of
privately negotiated transactions will be included in the equity capital amount
that determines the Capital Bonus Pool.   Such amounts will be
determined in the sole discretion of the Compensation Committee.




The
amount available for the Capital Bonus Pool will be determined on the closing
date of each respective offering (the “Determination Date”).  The
initial Determination Date will be the closing date of the first equity offering
that equals or exceeds $50 million in the aggregate.  Payments under
the Capital Bonus Pool will be made in shares of restricted common stock of the
Company or in cash, as discussed below.  For payments in shares of
restricted common stock of the Company, the stock price used to calculate the
number of shares to be granted to each Participant on each Determination Date
will be equal to the weighted average issue price per share of that equity
capital raised.  With respect to the initial Determination Date, in
the event that there are multiple equity offerings necessary to equal or exceed
the $50 million threshold, the stock price used to calculate the number of
shares to be granted to each Participant will be equal to the weighted average
issue price per share for all of the capital raises making up such multiple
equity offerings.







Allocation
of the Capital Bonus Pool




The
Capital Bonus Pool will be allocated by the Compensation Committee of the Board
of Directors among the individual Participants based on recommendations made by
the Chief Executive Officer of the Company and the assessment by the
Compensation Committee of the Board of Directors of each Participant's
contribution to the equity capital raising activities of the
Company.  The Compensation Committee will make these allocation
determinations shortly before each Determination Date.




Payment
of the Capital Bonus Pool




Payment
of amounts due to the Participants under the Capital Bonus Pool will be made
within 10 business days immediately following each Determination Date in the
form of restricted common stock of the Company granted under and pursuant to the
terms of the Company’s then applicable equity compensation plan that has been
approved by shareholders, as the same may be amended from time to time (the
“Incentive Plan).  Such restricted stock will vest 100% on the second
anniversary of such Determination Date, provided such vesting provisions are
permitted by the Incentive Plan.  If such vesting provisions are not
permitted by the Incentive Plan on such Determination Date, the amounts due
under the Capital Bonus Pool for that Determination Date will be paid to the
Participant in cash within 10 business days following such Determination
Date.  All Determination Dates will occur during calendar year 2009,
and all payments under the Capital Bonus Pool will be paid in cash or stock on
or before March 15, 2010.










Approved
by the Compensation Committee of the Board of Directors on March 26,
2009


Approved
by the Board of Directors on March 30, 2009