Document:

Untitled Document

AMENDED AND
RESTATED  
EMPLOYMENT AGREEMENT 

     THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered
into as of the 16th day of April, 2006 by and between MFA MORTGAGE INVESTMENTS,
INC., a Maryland corporation (“MFA”), and RONALD A. FREYDBERG, an
individual residing at 3 Red Roof Drive, Rye Brook, New York 10573 (the “Executive”). 

W I T N E S S
E T H: 

     WHEREAS,
MFA and the Executive entered into an employment agreement, effective as of
August 1, 2002 and amended as of March 30, 2004 (the “Employment
Agreement”); 

     WHEREAS,
MFA and the  Executive  desire to amend the  terms of the  Executive’s  employment
and extend the period of  employment  set  forth  in  the  Employment  Agreement  to
December 31,  2008 on the  terms and  conditions  set forth in  this Agreement; and 

     WHEREAS,
the  Executive  wishes to continue  serving  MFA  and  MFA  wishes  to  secure  the
continued  exclusive  services  of the  Executive  under the  terms  and  conditions
described below. 

     NOW
THEREFORE,  in  consideration  of the  foregoing  premises  and the  mutual  agreements
herein  contained,  the  parties  hereto  agree to amend  and  restate  the  Employment
Agreement in its entirety to read as follows: 

     1. Term of Employment. 

          (a)
MFA hereby employs the  Executive,  and the Executive  hereby  accepts  employment  with
MFA,  in the  positions  and  with  the  duties  and  responsibilities  as  set  forth
in  Paragraph 2  below for the Term of Employment,  subject to the  terms and
conditions of this Agreement. 

          (b)
The term of employment (the “Term of Employment”) under this Agreement
shall include the Initial Term and each Renewal Term. The Initial Term shall
commence as of April 16, 2006 and shall continue until December 31,
2008. The Term of Employment shall automatically renew for a one-year period
(each such renewal, a “Renewal Term”) at the end of the Initial Term and each
Renewal Term, unless either party shall give notice to the other not less than
six months prior to the end of the Initial Term or any Renewal Term, as the case
may be, of his or its intent not to renew such Initial Term or Renewal Term, as
the case may be. Notwithstanding the foregoing sentences of this Paragraph 1(b),
the Term of Employment may be terminated before the expiration of the Initial
Term or any Renewal Term in accordance with Paragraph 5 hereof. 

     2. Position; Duties and Responsibilities. 

          (a)
During the Term of Employment, the Executive shall be employed as Executive Vice
President and Chief Portfolio Officer of MFA, reporting to the President and
Chief Executive Officer of MFA (the “CEO”), with such duties and
day-to-day management responsibilities as are customarily performed by persons
holding such offices at similarly situated mortgage REITs and such other
duties as may be mutually agreed upon between the Executive and the CEO. 

          (b)
During the Term of Employment, the Executive shall, without additional compensation,
also (i) serve on the board of directors of, serve as an officer of, and/or
perform such executive and consulting services for, or on behalf of, such
subsidiaries or affiliates of MFA as the CEO and/or the Board of Directors of
MFA (the “Board of Directors”) may, from time to time, request. MFA and
such subsidiaries and affiliates are hereinafter referred to, collectively, as the
“Company.” For purposes of this Agreement, the term “affiliate” shall
have the meaning ascribed thereto in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the “Act”). 

          (c)
During the Term of  Employment,  the Executive  shall  serve  MFA  faithfully,
diligently  and  to the  best  of his  ability  and shall  devote  substantially  all of
his time and  efforts to his  employment  and the  performance of his duties  under  this
Agreement.  Nothing  herein  shall  preclude  the  Executive  from engaging in charitable
and community  affairs  and managing his  personal,  financial and legal  affairs,  so
long as such  activities do not materially  interfere with his  carrying  out  his
duties  and  responsibilities  under  this  Agreement. 

     3.  Compensation. 

          (a)  Base Salary. During the Term of Employment, the Executive shall be entitled to
receive an annualized base salary (the “Base Salary”) of not less than
six hundred seventy five thousand dollars ($675,000). 

          (b)  Performance Bonus. The Executive shall be eligible to participate in a
Performance Bonus Pool for Senior Executives (the “Bonus Pool”) each
year during the Term of Employment. The aggregate Bonus Pool shall be determined by
reference to MFA’s Return on Average Equity (“ROAE”) as more fully
described in Exhibit A to this Agreement, and shall be allocated among the CEO and
MFA’s two Executive Vice Presidents based on the recommendation of the CEO
and the assessment by the Compensation Committee of the Board of Directors (the
“Compensation Committee”) of each participant’s performance. The
Compensation Committee, in its discretion, can adjust the aggregate Bonus Pool
downward in any year by as much as ten percent (10%) depending upon the
Compensation Committee’s assessment of MFA leverage, book value stability and
share price relative to peer group, among other considerations. 

          Twenty-five
percent (25%),  or such  larger  percentage  upon  which  the  Executive  and the
Compensation  Committee  shall  agree,  of any amount in excess of  $100,000  allocated
to the  Executive  from the Bonus Pool with respect  to  calendar  year  2006  will be
paid  in  restricted  stock.  Fifty  percent (50%),  or such  larger  percentage
upon which  the Executive and the  Compensation  Committee shall agree, of  any amount in
excess of $100,000  allocated  to the  Executive  from the Bonus  Pool with  respect to
calendar  year 2007 and  each  subsequent  year will be paid in  restricted  stock.  In
each case,  twenty-five  percent (25%) of the restricted stock  will  vest  upon
grant,  and  an  additional  twenty-five  percent (25%)  will vest on  January 1st
of each of the first  three  years  following  the  grant.  Such  restricted  stock
cannot  be  transferred  or  sold  during  the  Executive’s  employment  by MFA
until the  value of the  Executive’s  stock  holdings  in  MFA  exceeds  three
times  his  Base  Salary;  thereafter,  stock may be sold or  transferred  to the  extent
the  value of the  Executive’s  stock  holdings  exceeds  such  multiple. 

          (c) Equity Compensation. The Executive shall be eligible to receive such stock
option, restricted stock, phantom share or dividend equivalent rights grants or
other equity awards as the Compensation Committee or the Board of Directors, as the
case may be, shall deem appropriate. 

          (d) Discretion to Increase Compensation. Nothing in this Agreement shall preclude
the Board of Directors or the Compensation Committee from increasing or considering
increasing the Executive’s compensation during the Term of Employment. The
Base Salary as adjusted to reflect any increase shall be the Base Salary for all
purposes of this Agreement. 

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     4. Employee Benefit Programs and Fringe Benefits. 

          During
the  Term  of  Employment,  the  Executive  shall be entitled  to five weeks of  vacation
each  calendar year and to  participate  in all executive  incentive  and employee
benefit  programs of MFA now or  hereafter  made  available to MFA’s  senior
executives  or salaried  employees  generally,  as such  programs  may be in  effect
from time to  time.  MFA  shall  reimburse  the  Executive  for  any and all  necessary,
customary and usual  business  expenses,  properly  receipted  in  accordance  with MFA’s
policies,  incurred  by  Executive in connection with his employment. 

     5. Termination of Employment. 

          (a) Termination Due to Death or Disability. If the Executive’s employment is
terminated during the Term of Employment by reason of the Executive’s death
or Disability, the Executive’s Term of Employment shall terminate
automatically without further obligations to the Executive, his legal representative
or his estate, as the case may be, under this Agreement except for (i) any
compensation earned but not yet paid, including and without limitation, any
amount of Base Salary accrued or earned but unpaid and any other payments payable
to the Executive pursuant to Paragraph 5(e) below, which amounts shall be
promptly paid in a lump sum to the Executive, his legal representative or his estate,
as the case may be, and (ii) continued payment on a monthly basis of the
Executive’s then current Base Salary for a period of one year following
the date of such termination, which shall be paid to the Executive, his legal
representative or his estate, as the case may be. In the event of such
termination due to his Disability, Executive’s health insurance coverage shall
be continued at MFA’s expense for the duration of such Disability; provided,
that, if such coverage cannot be provided under MFA’s health insurance
policy for the duration of such Disability, such coverage or the cost of
comparable coverage shall be provided by MFA until the Executive’s attainment
of age 65 or such later date through which coverage is permissible under MFA’s
health insurance policy. 

          (b) Termination Without Cause or for Good Reason. In the event the Executive’s
employment is terminated by MFA without Cause (including by notice of MFA’s
determination not to renew the Initial Term or any Renewal Term pursuant to
Paragraph 1(b)) or by the Executive for Good Reason, unless any such
termination is preceded by the Executive’s giving notice of his determination
not to renew the Initial Term or any Renewal Term pursuant to Paragraph 1(b),
the Executive shall be entitled to both continued payments of his then current
Base Salary and continued health insurance coverage at MFA’s expense, until
the later to occur of (i) the expiration of the Term of Employment, or (ii) the
first anniversary of such termination of employment, such Base Salary being
payable at the same time such amounts would have been payable to the Executive had
his employment not terminated. 

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          (c) Termination by MFA for Cause or Voluntary Termination by the Executive. In the
event the Executive’s employment is terminated by MFA for Cause, or is
terminated by the Executive on his own initiative for other than a Good Reason
(including pursuant to Paragraph 1(b)), the Executive shall be entitled to any
compensation earned but not yet paid, including and without limitation, any amount
of Base Salary accrued or earned but unpaid and any other payments payable to the
Executive pursuant to Paragraph 5(e) below, as of the date of termination. 

          (d) Termination Related to Change in Control. In the event of (1) the termination
of the Executive’s employment by MFA without Cause that occurs both within
two months before a Change in Control and following the occurrence of a
Pre-Change-in-Control Event, (2) the resignation of his employment by the
Executive for any reason within three months following a Change in Control, or (3) the
termination of the Executive’s employment by MFA other than for Cause or the
Employee’s resignation of his employment for Good Reason within twelve months
following a Change in Control, 

	 	     (i)
MFA shall pay to Executive  in a lump sum,  within 30  days  following the  termination
of  employment,  an  amount  equal  to  300%  of  the  sum  of  (a) the  Executive’s
then  current  Base  Salary and  (b) the  Executive’s  highest bonus  for  the
two  preceding  years;

      

	 	     (ii)
all  of  the  Executive’s  outstanding  restricted  stock,  phantom  shares  and
stock  options  shall  immediately  vest  in full  and  such  options  shall  remain
exercisable,  and  any  dividend  equivalents  associated  therewith  shall  continue to
be payable,  until the earlier of (a) 90 days  following  the date  of such  termination
and (b) the date on which  each  such option  would have  expired had the  Executive’s
employment not terminated; and

      

	 	     (iii)
the Executive  shall  continue to  participate in all  health,  life  insurance,
retirement  and  other  benefit  programs  at MFA’s  expense  for the balance  of
the  Term of  Employment,  to the same  extent  as  though  the  Executive’s
employment  had  not  terminated.
 

The  Executive,
in his  sole  and  absolute  discretion,  may  elect  to  reduce  any  such  payment  in
order  to  avoid  imposition  of  the  excise  tax  under  Section 4999  of  the
Internal Revenue Code of 1986, as amended. 

          (e) Other Payments. Upon the termination of the Executive’s employment, in
addition to the amounts payable under any Paragraph above, the Executive shall be
entitled to receive the following: 

	 	     (i)
any  annual  bonus  earned  during  one  or  more  preceding years but not paid;
 

	 	     (ii)
any  vested  deferred  compensation  (including  any  interest  accrued  on or
appreciation  in  value  of  such deferred amounts);
 

	 	     (iii)
reimbursement  for  reasonable  business  expenses  incurred but not yet reimbursed by
MFA; and
 

	 	     (iv)
any  other  benefits  to which the  Executive  or his  legal  representative  may be
entitled under the 2004  Equity  Compensation  Plan  and  under  all  other  applicable
plans and  programs  of MFA,  as provided  in Paragraph 4 above.
 

	 	     (v)
upon the  termination of the  Executive's  employment  pursuant to  Paragraphs  5(a) or
5(b)  above,  all of  the  Executive's  outstanding  restricted  stock,  phantom  shares
and stock options  shall  immediately  vest  in  full  and  such  options  shall  remain
exercisable,  and  any  dividend  equivalents  associated  therewith  shall  continue  to
be payable  until the earlier of (a) 90 days  following  the date  of such  termination
and (b) the date on which  each  such option  would have  expired had the  Executive's
employment not terminated.
 

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          (f) No Mitigation; No Offset. In the event of any termination of the Executive’s
employment under this Agreement, he shall be under no obligation to seek other
employment or otherwise in any way to mitigate the amount of any payment provided
for in this Paragraph 5, and there shall be no offset against amounts due
him under this Agreement on account of any remuneration attributable to any
subsequent employment that he may obtain. 

          (g) Payments Subject to Section 409A. Notwithstanding anything herein to the
contrary, the Executive shall not be entitled to any payment pursuant to this
Paragraph 5 prior to the earliest date permitted under Section 409A of
the Internal Revenue Code of 1986, as amended, and applicable Treasury
regulations thereunder. To the extent any payment pursuant to this Paragraph 5
is required to be delayed six months pursuant to the special rules of Section 409A
related to “specified employees,” each affected payment shall be delayed
until six months after the Executive’s termination of employment. 

          (h) Mutual Release. MFA’s obligation to make any payment or provide any benefit
pursuant to this Paragraph 5 shall be contingent upon, and is the consideration
for, the Executive executing and delivering to MFA a general release (the “Release”),
substantially in the form annexed hereto as Exhibit B, releasing MFA, and all
current and former members, officers and employees of MFA, from any claims
relating to the Executive’s employment hereunder, other than claims relating to
continuing obligations under, or preserved by, (x) this Agreement or (y) any
compensation or benefit plan, program or arrangement in which the Executive was
participating as of the date of termination of his employment, and no such
amounts shall be provided until the Executive executes and delivers to MFA a
letter which provides that the Executive had not revoked such Release after
seven days following the date of the Release. The Release shall also be executed
by MFA and delivered to the Executive as part of the consideration for the
Executive’s execution and delivery of the Release, and, except as
otherwise provided under the terms of the Release, shall release the Executive
from any and all claims MFA may have against the Executive. 

     6. Definitions. 

          For
purposes  of  this  Agreement,  the  following terms shall be defined as set forth below: 

          (a) Cause. “Cause” shall mean the Executive’s (i) conviction, or
entry of a guilty plea or a plea of nolo contendre with respect to, a felony, a
crime of moral turpitude or any crime committed against MFA, other than traffic
violations; (ii) engagement in willful misconduct, willful or gross
negligence, or fraud, embezzlement or misappropriation relating to significant
amounts, in each case in connection with the performance of his duties under this
Agreement; (iii) failure to adhere to the lawful directions of the CEO
and/or the Board of Directors that are reasonably consistent with his duties and
position provided for herein; (iv) breach in any material respect of any of
the provisions of Paragraph 7 of this Agreement resulting in material and
demonstrable economic injury to MFA; (v) chronic or persistent substance abuse
that materially and adversely affects his performance of his duties under this
Agreement; or (vi) breach in any material respect of the terms and provisions
of this Agreement resulting in material and demonstrable economic injury to MFA.
Notwithstanding the foregoing, (i) the Executive shall be given written
notice of any action or failure to act that is alleged to constitute Cause (a
“Default”), and an opportunity for 20 business days from the date of such
notice in which to cure such Default, such period to be subject to extension in the
discretion of the CEO or, in his absence, the Board of Directors; and (ii) regardless
of whether the Executive is able to cure any Default, the Executive shall not be
deemed to have been terminated for Cause without (x) reasonable prior
written notice to the Executive setting forth the reasons for the decision to
terminate the Executive for Cause, (y) an opportunity for the Executive,
together with his counsel, to be heard by the CEO or, in his absence, the Board of
Directors, and (z) delivery to the Executive of a notice of termination 

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approved by
said CEO or, in his absence, the Board of Directors, stating his  or its good faith
opinion that the Executive has engaged in actions or conduct  described in the preceding
sentence, which notice specifies the particulars of  such action or conduct in reasonable
detail; provided, however, MFA may suspend  the Executive with pay until such time
as his right to appear before the CEO or  the Board of Directors, as the case may be, has
been exercised, so long as such  appearance is within two (2) weeks of the date of
suspension. 

          (b) Change in Control. A “Change in Control” shall mean the occurrence of
any one of the following events: 

	 	     (i)
any “person,” as such term is used in Sections 13(d) and 14(d) of
the Act (other than MFA, any of its affiliates or any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust of MFA
or any of its affiliates) together with all affiliates and “associates” (as
such term is defined in Rule 12b-2 under the Act) of such person, shall
become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of MFA representing 30% or
more of either (A) the combined voting power of MFA’s then outstanding
securities having the right to vote in an election of the Board of Directors (“voting
securities”) or (B) the then outstanding shares of common stock of MFA (“Shares”)
(in either such case other than as a result of an acquisition of securities
directly from MFA); or
 

	 	     (ii)
persons who, as of the effective date of this Agreement, constitute MFA’s
Board of Directors (the “Incumbent Directors”) cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the Board of
Directors, provided that any person becoming a Director of MFA subsequent to
the effective date whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors shall, for purposes
of this Agreement, be considered an Incumbent Director; or
 

	 	     (iii)
there shall  occur  (A) any  consolidation  or merger  of MFA or any subsidiary
where the  shareholders  of  MFA,  immediately  prior  to  the  consolidation  or
merger,  would  not,  immediately  after  the  consolidation  or merger,  beneficially
own (as such  term  is  defined  in  Rule 13d-3  under  the  Act),  directly or
indirectly,  shares  representing  in the  aggregate  60% or more of the  voting
securities  of  the  corporation  issuing cash or  securities  in the  consolidation  or
merger (or of its  ultimate  parent  corporation,  if any), (B) any sale, lease,
exchange  or other  transfer  (in one  transaction  or a series  of  transactions
contemplated  or  arranged  by  any  party as a single plan) of all or  substantially
all  of the  assets  of MFA or  (C) any  plan or  proposal  for the liquidation or
dissolution of MFA.
 

	 	Notwithstanding
the  foregoing,  a  “Change  in  Control” shall not be deemed  to have
occurred  for  purposes of the  foregoing  clause (i)  solely as the  result  of  an
acquisition  of  securities  by  MFA  which,  by  reducing  the  number  of Shares or
other  voting  securities  outstanding,  increases  (x) the  proportionate  number
of Shares  beneficially  owned  by any  person  to 30% or  more  of the  Shares  then
outstanding  or (y) the  proportionate  voting  power  represented  by the  voting
securities  beneficially  owned by any  person  to 30% or more of the  combined  voting
power  of  all  then  outstanding  voting  securities;  provided,  however,  that, if any
person  referred  to in  clause (x)  or (y) of this  sentence  shall  thereafter
become the beneficial owner of any  additional  Shares or other voting  securities (other
than pursuant to a stock split,  stock  dividend,  or  similar  transaction),  then a
“Change  in  Control” shall be  deemed to have  occurred  for  purposes  of
this Paragraph 6(b).
 

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          (c) Disability. “Disability” shall mean the Executive’s inability for a
period of six consecutive months, to render substantially the services provided for
in this Agreement by reason of mental or physical disability, whether resulting
from illness, accident or otherwise, other than by reason of chronic or
persistent abuse of any substance (such as narcotics or alcohol). 

          (d)
 Good Reason.  “Good Reason” shall mean: 

	 	     (i)
a  material  diminution  in  the  Executive’s  title,  duties or responsibilities;
 

	 	     (ii)
relocation  of the  Executive’s  place of  employment  without  his  consent
outside  the  New  York  City  metropolitan area;
 

	 	     (iii)
the  failure  of  MFA  to  pay  within  thirty  (30) business days any payment due
from MFA;
 

	 	     (iv)
the  failure  of  MFA  to  pay  within  a  reasonable  period  after the date when
amounts are  required to  be paid to the Executive  under any benefit  programs  or
plans; or
 

	 	     (v)
the  failure  by MFA  to  honor  any of its  material  obligations herein.
 

          (e) Non Cash Items and Merger Expenses. “Non Cash Items and Merger Expenses” shall
mean depreciation, merger expenses, gains/losses on asset sales, and impairment
charges. 

          (f) Pre-Change-in-Control Event. A “Pre-Change-in-Control Event” shall mean the
occurrence of any one of the following events: 

	 	     (i)
the Board  shall  adopt a  resolution  to the  effect  that  any  person  has  taken
actions  which,  if  consummated,  would  result in such person  acquiring  effective
control  of the  business  and  affairs of  MFA;
 

	 	     (ii)
there  shall  commence  a  tender  offer  or  proxy  contest  resulting  in  any  of  the
transactions  specified  in  subparagraphs (i)-(iii)  of  Paragraph 6(b);
 

	 	     (iii)
MFA  shall  make any  agreement  resulting  in any of  the  transactions  specified  in
subparagraphs (i)-(iii) of Paragraph 6(b);
 

	 	     (iv)
there  shall  be  a  public  announcement  of  a  transaction  of  the  kind  specified
in  subparagraphs (i)-(iii) of Paragraph 6(b); or
 

	 	     (v)
any other meeting,  writing or written  communication  with,  by  or  to  the  Board  of
Directors  or  any  officer or  executive of MFA,  that is held,  made or  undertaken  in
good  faith  in  anticipation  of  a  Change in Control.
 

          (g) Return on Average Equity. “Return on Average Equity” shall mean twelve
months GAAP net income plus (minus) certain Non Cash Items and Merger Expenses
divided by average Tangible Net Worth. 

          (h) Tangible Net Worth. “Tangible Net Worth” shall mean stockholder equity
less (i) goodwill and (ii) preferred stockholder equity. 

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     7. Covenant Not To Compete. 

          In
the event of the termination of the Executive’s employment with MFA other
than upon notification by the Executive of the nonrenewal of the Term of
Employment, the Executive will not, without the prior written consent of MFA,
manage, operate, control or be connected as a stockholder (other than as a holder
of shares publicly traded on a stock exchange or the NASDAQ National Market
System, provided that the Executive shall not own more than five percent of the
outstanding shares of any publicly traded company) or partner with, or as an
officer, director, employee or consultant of, any mortgage REIT for a period of one
year following termination of his employment with MFA. For a period of one
year following the termination of his employment by MFA for any reason, the
Executive shall not solicit any employees of MFA to work for any mortgage REIT.
Except as otherwise required by law, the Executive shall keep confidential all
materials, files, reports, correspondence, records and other documents
(collectively the “Company Materials”) used, prepared or made available
to him in connection with his employment by MFA and which have not otherwise been
made available to the public, and upon termination of his employment shall return
such Company Materials to MFA. The Executive acknowledges that MFA may seek
injunctive relief or other specific enforcement of its rights under this Paragraph. 

     8. Indemnification. 

          MFA
shall  indemnify  the  Executive  to the  fullest  extent  permitted  by  Maryland  law
as amended  from  time to time in connection  with the  Executive’s  duties with
MFA,  against  all  costs,  expenses,  liabilities  and losses  (including,  without
limitation,  attorneys’ fees,  judgments,  fines,  penalties,  ERISA  excise  taxes
and  amounts  paid in  settlement)  actually  and  reasonably  incurred  by  the
Executive in connection  with an action,  suit or  proceeding.  During  the Term of
Employment  and for six  years  following  the  date of the  Executive’s
termination  as an  officer  of  MFA,  MFA  (or  any  successor  thereto)  shall  provide
comprehensive  coverage  under  its  officers  and  directors  insurance  policy  (or
policies)  on  substantially  the same  terms and levels  that it  provides  to its
senior  executive  officers, at MFA’s sole cost. 

     9. Assignability; Binding Nature. 

          This
Agreement shall inure to the benefit of MFA and the Executive and their respective
successors, heirs (in the case of the Executive) and assigns. No rights or
obligations of MFA under this Agreement may be assigned or transferred by MFA
except that any such rights or obligations may be assigned or transferred
pursuant to a merger or consolidation in which MFA is not the continuing entity,
or the sale or liquidation of all or substantially all of the assets of MFA, provided that the assignee or transferee is the successor to all or substantially
all of the assets of MFA and such assignee or transferee assumes the liabilities,
obligations and duties of MFA, as contained in this Agreement, either contractually
or as a matter of law. This Agreement shall not be assignable by the Executive. 

     10. Representation. 

          MFA
represents  and  warrants  that  it  is  fully  authorized  and empowered to enter into
this  Agreement  and  that  its  entering  into  this  Agreement  and  the  performance
of its  obligations  under this Agreement will not  violate any agreement  between MFA
and any other person,  firm  or organization or any law or governmental regulation. 

-8- 

     11. Entire Agreement. 

          This
Agreement  contains  the  entire  agreement  between  MFA  and  the  Executive
concerning  the  subject  matter hereof and  supersedes  all prior  agreements,
understandings,  discussions,  negotiations and  undertakings,  whether written or oral,
between them with respect thereto. 

     12. Amendment or Waiver. 

          This
Agreement  cannot be changed,  modified  or  amended  without  the  consent  in  writing
of  both  the  Executive  and MFA.  No waiver by either MFA or the  Executive  at  any
time  of  any  breach  by  the  other  party  of  any  condition  or provision  of this
Agreement  shall be deemed a  waiver of a similar or  dissimilar  condition  or provision
at  the  same or at any  prior  or  subsequent  time.  Any  waiver  must  be  in  writing
and  signed  by  the  Executive  or  an  authorized officer of MFA, as the case may be. 

     13. Severability. 

          In
the event that any  provision  or portion  of  this  Agreement  shall  be  determined  to
be  invalid  or  unenforceable  for  any  reason,  in  whole  or in  part,  the
remaining  provisions  of this  Agreement  shall be unaffected  thereby  and  shall
remain in full  force  and  effect to the  fullest extent permitted by law. 

     14. Reasonableness. 

          To
the  extent  that  any  provision  or  portion of this  Agreement is determined  to be
unenforceable  by a court of law or  equity,  that  provision  or  portion of  this
Agreement  shall  nevertheless  be  enforceable  to  the  extent that such court
determines is reasonable. 

     15. Survivorship. 

          The
respective  rights and  obligations  of  the parties  hereunder  shall survive any
termination of this  Agreement  to  the  extent  necessary  to  the  intended
preservation of such rights and obligations. 

     16. Governing Law. 

          This
Agreement  and all rights  thereunder,  and  any  controversies  or  disputes  arising
with  respect  thereto,  shall be governed by and construed  and  interpreted  in
accordance  with  the  laws  of the  State  of  New  York,  applicable  to  agreements
made and to be performed  entirely  within  such  State,  without  regard  to  conflict
of  laws  provisions  thereof  that  would  apply  the law of any  other  jurisdiction. 

     17. Dispute Resolution. 

          In
the  event  of any  dispute,  controversy  or claim  arising  out of or  relating  to
this  Agreement  or  Executive’s  employment or  termination  thereof (other than a
controversy  or  claim  arising  under  Paragraph  7,  to  the  extent  necessary  for
MFA  (or  its  affiliates,  where  applicable)  to enforce the provisions  thereof),  the
parties  hereby agree to settle such dispute,  controversy  or claim in  a binding
arbitration  by a single  arbitrator  in accordance  with  the  Commercial  Arbitration
Rules  of  the  American  Arbitration  Association,  which  arbitration  shall  be
conducted in New York,  New York.  The parties  agree that the  arbitral  award  shall be
final and  non-appealable  and shall  be  the  sole  and  exclusive  remedy  between  the
parties  hereunder.  The parties  agree that  judgment on the  arbitral  award  may  be
entered  in  any  court  having  competent  jurisdiction  over  the  parties  or  their
assets.  All  reasonable fees and expenses  related to any such  arbitration  (including
reasonable  attorneys’ fees  and  related  disbursements) shall be paid by MFA. 

-9- 

     18. Legal Fees. 

          MFA
shall  pay  directly  all  reasonable  legal fees incurred by the  Executive in
connection  with the  negotiation, preparation and execution of this Agreement. 

     19. Notices. 

          Any
notice  given to either  party  shall be  in  writing  and  shall be  deemed  to have
been  given  when  delivered  personally  or  sent  by  certified  or  registered  mail,
postage  prepaid,  return  receipt  requested,  duly  addressed  to  the  party
concerned,  if  to  MFA,  at  its  principal office,  and if to the Executive,  at the
address of  the  Executive  shown  on  MFA’s  records  or  at  such  other  address
as such party may give notice of. 

     20. Headings. 

          The
headings  of the  paragraphs  contained  in this  Agreement are for  convenience  only
and shall not be  deemed to  control or affect the  meaning or  construction  of  any
provision of this Agreement. 

     21. Counterparts. 

          This
Agreement  may be  executed  in two or  more counterparts. 

-10- 

     IN
WITNESS  WHEREOF,  the  undersigned  have executed  this Agreement as of the date first
written above. 

	 	 	MFA
      MORTGAGE INVESTMENTS, INC.
	 	 	 	

	 	By:   	/s/
      James   A.
                                                  Brodsky
	 	  	 	
      

    
	 	 	Name:  	James A. Brodsky
	 	 	Title:  	Chairman,
                                                  Compensation
                                                  Commitee

	 	 	 	 
	 	/s/
      Stewart Zimmerman 
	 	  	   
 
	 	 	 Stewart
      Zimmerman
	 	 	 	 

-11- 

Exhibit A

Aggregate
Performance Bonus Pool for Senior Executives

Aggregate
bonus pool can be adjusted  down by as much as 10%,  dependent  upon  Compensation
Committee’s  assessment  of  leverage,  book value  stability  and share price
relative to  peer group.  Individual  bonus  allocation from pool dependent  upon
Compensation  Committee’s  assessment of  performance in  accordance with the
Committee’s Charter. 

Bonus Pool

	ROAE less than 4.5%	 	 	$	 400,000	 
	ROAE 4.5% to 8.0%	 	 	$	 600,000	 
	ROAE greater than 8.0%	 	 	 	See Below	 

Senior
Executive Bonus Pool Example

	ROAE	 	 	 	8%
	 	 	9%
	 	 	10%
	
	 
	12%
	
	 
	13%
	
	 
	14%
	
	 
	16%
	
	 
	18%
	
	 
	20%
	
	 
	22%
        and above
	 
	9/30/05
      Common Equity	 	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 
	Net
      Income	 	 	 	46,080,000	 	 	51,840,000	 	 	57,600,000	 	 	69,120,000	 	 	74,880,000	 	 	80,640,000	 	 	92,160,000	 	 	103,680,000	 	 	115,200,000	 	 	126,720,000	 
	 
	Net
      Income to achieve 8%	 	 
	hurdle	 	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 
	Earnings
      over Hurdle	 	 	 	0	 	 	5,760,000	 	 	11,520,000	 	 	23,040,000	 	 	28,800,000	 	 	34,560,000	 	 	46,080,000	 	 	57,600,000	 	 	69,120,000	 	 	80,640,000	 
	Aggregate
      Bonus Pool	 	 	 	600,000	 	 	1,000,000	 	 	1,500,000	 	 	1,800,000	 	 	2,200,000	 	 	3,000,000	 	 	3,600,000	 	 	4,200,000	 	 	5,100,000	 	 	6,000,000	 

In  the  event
of a  fractional  ROAE  (with  respect  to the  percentages  contained  in the  above
table),  the  Aggregate  Bonus Pool shall be  interpolated  in linear  fashion  between
the applicable whole percentages. 

-13- 

EXHIBIT B

Mutual
Release

     This
Mutual Release of Claims (this “Release”) is made as of _____________,
by and between MFA MORTGAGE INVESTMENTS, INC. (the “Company”) and
_________________ (the “Executive”). 

     1. Release by the Company. 

          (a)
The Company on behalf of itself, its agents, successors, affiliated entities and
assigns, in consideration for the Executive’s execution and delivery of this
Release, hereby forever releases and discharges the Executive, and his agents,
heirs, successors, assigns, executors and administrators, from any and all known
and unknown causes of action, actions, judgments, liens, indebtedness, damages,
losses, claims, liabilities, and demands of whatsoever kind and character in
any manner whatsoever arising on or prior to the date of this Release, including
but not limited to (i) any claim for breach of contract, breach of implied
covenant, breach of oral or written promise, defamation, interference with
contract relations or prospective economic advantage, negligence,
misrepresentation; (ii) any and all liability that was or may have been
alleged against or imputed to the Executive by the Company or by anyone acting on
its behalf; (iii) any punitive, compensatory or liquidated damages; and (iv) all
rights to and claims for attorneys’ fees and costs except as otherwise provided
in his employment agreement with the Company dated April 16, 2006 (the “Employment
Agreement”). 

          (b)
The  Company  shall  not  file  or  cause  to  be  filed  any  action,  suit,  claim,
charge  or  proceeding  with any  federal,  state or local court or agency  relating  to
any claim  within the scope of this  Release.  In  the  event  there  is  presently
pending  any  action,  suit,  claim,  charge  or  proceeding  within  the  scope  of
this  Release,  or if such a proceeding  is commenced in the future,  the Company shall
promptly  withdraw it, with  prejudice,  to  the  extent  it  has  the  power  to  do
so.  The  Company  represents  and  warrants  that its has not assigned any claim
released  herein,  or  authorized  any other  person to assert  any claim on its behalf. 

          (c)
Anything  to  the  contrary  notwithstanding  in this Release or the Employment
Agreement,  this  Release  shall not apply to claims or  damages  based on  (i) any
right or claim  that  arises  after the date on which  the Company  executes  this
Release,  including  any right to  enforce the  Employment  Agreement  with respect to
provisions  pertaining  to  matters  that  arise  after  the  date  of the  Release and
that survive  termination  of  employment  or (ii)  any act of  willful  misconduct,
gross  negligence,  fraud or  misappropriation of funds. 

     2. Release by the Executive. 

          (a)
The  Executive,  on  behalf  of  himself, his agents,  heirs,  successors,  assigns,
executors  and  administrators,  in  consideration  for  the  termination  payments  and
other  consideration  provided  for  under  the  Employment  Agreement,  hereby forever
releases and discharges  the Company,  and its  successors,  its  affiliated  entities,
and,  in such  capacities,  its  past and  present  directors,  employees,  agents,
attorneys,  accountants,  representatives,  plan  fiduciaries,  successors  and  assigns
from any and all  known  and  unknown  causes  of  action,  actions,  judgments,  liens,
indebtedness,  damages,  losses, claims,  liabilities,  and demands of  whatsoever  kind
and  character  in any manner  whatsoever  arising  on or prior to the date of this
Release,  including  but not  limited  to  (i) any  claim for  breach of  contract,
breach  of  implied  covenant,  breach  of  oral or  written  promise,  wrongful
termination,  intentional  infliction  of emotional  distress,  defamation,  interference
with contract  relations or  prospective  economic  advantage,  negligence,
misrepresentation  or employment  discrimination,  and  including  without  limitation
alleged  violations  of  Title VII  of the  Civil  Rights  Act  of  1964,  as
amended,  prohibiting  discrimination  based on race,  color,  religion,  sex or
national  origin;  the Family and  Medical  Leave Act;  the Americans With  Disabilities
Act; the Age  Discrimination  in  Employment  Act;  other  federal,  state and  local
laws,  ordinances and  regulations;  and any unemployment or workers’ 

-14- 

compensation
law,  excepting  only those  obligations  of the  Company  pursuant to Paragraph 5
of the Employment  Agreement  or otherwise  continuing  under the  Employment  Agreement
and  any  claims to  benefits  under any  compensation  or  benefit  plan,  program  or
arrangement  in which  the  Executive  was  participating  as  of  the  date  of
termination  of  his  employment;  (ii) any and all  liability  that was or may have
been  alleged  against  or  imputed  to  the  Company  by  the  Executive  or  by  anyone
acting  on  his  behalf;  (iii) all  claims for wages,  monetary or  equitable
relief,  employment  or  reemployment  with the  Company in any  position,  and any
punitive,  compensatory  or liquidated  damages;  and (iv) all  rights to and claims
for  attorneys’ fees and costs except as  otherwise provided in the Employment
Agreement. 

          (b)
The  Executive  shall  not  file or  cause  to  be  filed  any  action,  suit,  claim,
charge  or  proceeding  with any  federal,  state or local court or agency  relating  to
any claim  within the scope of this  Release.  In  the  event  there  is  presently
pending  any  action,  suit,  claim,  charge  or  proceeding  within  the  scope  of
this  Release,  or if such a proceeding  is commenced in the future,  the Executive shall
promptly  withdraw it, with prejudice,  to  the  extent  he  has  the  power  to  do  so.
The  Executive  represents  and  warrants  that he has not  assigned any claim  released
herein,  or  authorized  any other  person to assert  any claim on his behalf. 

          (c)
In  the  event  any  action,  suit,  claim,  charge or proceeding  within the scope of
this Release  is  brought  by  any  government  agency,  putative  class  representative
or other third party to vindicate  any alleged  rights of the Executive,  (i) the
Executive shall,  except to  the extent  required or  compelled  by law,  legal  process
or  subpoena,  refrain  from  participating,  testifying  or  producing documents
therein,  and (ii) all damages,  inclusive  of  attorneys’ fees,  if  any,
required  to be  paid  to the  Executive  by the  Company as a  consequence  of such
action,  suit,  claim,  charge  or  proceeding  shall be  repaid to the  Company by the
Executive  within ten (10) days of his receipt  thereof. 

          (d)
BY  HIS  SIGNATURE  BELOW,  THE  EXECUTIVE ACKNOWLEDGES THAT: 

               (1)
HE HAS  RECEIVED A COPY OF  THIS  RELEASE  AND  WAS  OFFERED  A  PERIOD  OF  TWENTY-ONE
(21) DAYS TO REVIEW AND CONSIDER IT; 

               (2)
IF HE SIGNS  THIS  RELEASE  PRIOR TO THE  EXPIRATION OF TWENTY-ONE  DAYS, HE KNOWINGLY
AND  VOLUNTARILY WAIVES AND GIVES UP THIS RIGHT OF REVIEW; 

               (3)
HE  HAS  THE  RIGHT  TO  REVOKE THIS  RELEASE FOR A PERIOD OF SEVEN  (7) DAYS  AFTER
HE  SIGNS  IT  BY  MAILING  OR  DELIVERING  A  WRITTEN  NOTICE  OF  REVOCATION TO THE
COMPANY’S  GENERAL  COUNSEL,  NO LATER THAN  THE  CLOSE OF  BUSINESS  ON THE
SEVENTH  DAY AFTER THE DAY ON  WHICH HE SIGNED THIS RELEASE; 

               (4)
THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE SEVEN DAY
REVOCATION PERIOD HAS EXPIRED WITHOUT THE RELEASE HAVING BEEN REVOKED (THE “EFFECTIVE
DATE”); 

-15- 

               (5)
THIS  RELEASE  WILL  BE  FINAL AND  BINDING  AFTER  THE  EXPIRATION  OF THE  REVOCATION
PERIOD  REFERRED  TO IN  SECTION 2(d)(3).  HE  AGREES  NOT  TO  CHALLENGE ITS
ENFORCEABILITY; 

               (6)
HE IS AWARE  OF HIS  RIGHT  TO  CONSULT  AN  ATTORNEY,  HAS BEEN  ADVISED  IN  WRITING
TO  CONSULT  WITH AN  ATTORNEY,  AND HAS  HAD THE  OPPORTUNITY  TO  CONSULT  WITH AN
ATTORNEY,  IF DESIRED,  PRIOR TO SIGNING THIS  RELEASE; 

               (7)
NO PROMISE  OR  INDUCEMENT  FOR THIS  RELEASE  HAS BEEN  MADE  EXCEPT AS SET FORTH IN
THIS  RELEASE; 

               (8)
HE  IS  LEGALLY  COMPETENT  TO EXECUTE  THIS  RELEASE AND ACCEPT FULL  RESPONSIBILITY
FOR  IT; AND 

               (9)
HE  HAS  CAREFULLY  READ  THIS  RELEASE,  ACKNOWLEDGES  THAT  HE HAS NOT  RELIED  ON ANY
REPRESENTATION  OR STATEMENT,  WRITTEN OR ORAL,  NOT SET FORTH  IN THIS  DOCUMENT,  AND
WARRANTS  AND  REPRESENTS  THAT HE IS  SIGNING THIS RELEASE KNOWINGLY AND VOLUNTARILY. 

-16- 

     IN
WITNESS  WHEREOF,  the parties  have  hereunto set  their hands this _____ day of
___________________. 

	 	 	 	

      

      
	 	By:   	 
	 	  	 	 
 
	 	 	 	Name: 
	 	 	 	Title: Executive

	 	 	MFA MORTGAGE
      INVESTMENTS, INC.
	 	 	 	

      

      
	 	By:   	 
	 	  	 	 
 
	 	 	 	Name: 
	 	 	 	Title:

-17-Untitled Document

AMENDED AND
RESTATED  
EMPLOYMENT AGREEMENT 

     THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered
into as of the 16th day of April, 2006 by and between MFA MORTGAGE INVESTMENTS,
INC., a Maryland corporation (“MFA”), and WILLIAM S. GORIN, an
individual residing at 1050 Fifth Avenue, New York, New York 10028 (the “Executive”). 

W I T N E S S
E T H: 

     WHEREAS,
MFA and the Executive entered into an employment agreement, effective as of
August 1, 2002 and amended as of September 25, 2003 (the “Employment
Agreement”); 

     WHEREAS,
MFA and the  Executive  desire to amend the  terms of the  Executive’s  employment
and extend the period of  employment  set  forth  in  the  Employment  Agreement  to
December 31,  2008 on the  terms and  conditions  set forth in  this Agreement; and 

     WHEREAS,
the  Executive  wishes to continue  serving  MFA  and  MFA  wishes  to  secure  the
continued  exclusive  services  of the  Executive  under the  terms  and  conditions
described below. 

     NOW
THEREFORE,  in  consideration  of the  foregoing  premises  and the  mutual  agreements
herein  contained,  the  parties  hereto  agree to amend  and  restate  the  Employment
Agreement in its entirety to read as follows: 

     1. Term of Employment. 

          (a)
MFA hereby employs the  Executive,  and the Executive  hereby  accepts  employment  with
MFA,  in the  positions  and  with  the  duties  and  responsibilities  as  set  forth
in  Paragraph 2  below for the Term of Employment,  subject to the  terms and
conditions of this Agreement. 

          (b)
The term of employment (the “Term of Employment”) under this Agreement
shall include the Initial Term and each Renewal Term. The Initial Term shall
commence as of April 16, 2006 and shall continue until December 31,
2008. The Term of Employment shall automatically renew for a one-year period
(each such renewal, a “Renewal Term”) at the end of the Initial Term and each
Renewal Term, unless either party shall give notice to the other not less than
six months prior to the end of the Initial Term or any Renewal Term, as the case
may be, of his or its intent not to renew such Initial Term or Renewal Term, as
the case may be. Notwithstanding the foregoing sentences of this Paragraph 1(b),
the Term of Employment may be terminated before the expiration of the Initial
Term or any Renewal Term in accordance with Paragraph 5 hereof.. 

     2. Position; Duties and Responsibilities. 

          (a)
During the Term of Employment, the Executive shall be employed as Chief Financial
Officer/Executive Vice President of MFA, reporting to the President and Chief
Executive Officer of MFA (the “CEO”), with such duties and day-to-day
management responsibilities as are customarily performed by persons holding such
offices at similarly situated mortgage REITs and such other duties as may be
mutually agreed upon between the Executive and the CEO. 

          (b)
During the Term of Employment,  the Executive  shall,  without additional  compensation,
also (i) serve on the board  of directors of, serve as an officer of,  and/or
perform such  executive and  consulting  services for, or on behalf of, such
subsidiaries  or  affiliates  of  MFA as the  CEO  and/or  the 

Board
  of Directors of MFA (the “Board of Directors”) may, from time
  to time, request. MFA and such subsidiaries and affiliates are hereinafter referred
  to, collectively, as the “Company.” For purposes of this Agreement,
  the term “affiliate” shall have the meaning ascribed thereto in Rule 12b-2
  under the Securities Exchange Act of 1934, as amended (the “Act”).

          (c)
During the Term of  Employment,  the Executive  shall  serve  MFA  faithfully,
diligently  and  to the  best  of his  ability  and shall  devote  substantially  all of
his time and  efforts to his  employment  and the  performance of his duties  under  this
Agreement.  Nothing  herein  shall  preclude  the  Executive  from engaging in charitable
and community  affairs  and managing his  personal,  financial and legal  affairs,  so
long as such  activities do not materially  interfere with his  carrying  out  his
duties  and  responsibilities  under  this  Agreement. 

     3. Compensation. 

          (a) Base Salary. During the Term of Employment, the Executive shall be entitled to
receive an annualized base salary (the “Base Salary”) of not less than
six hundred seventy five thousand dollars ($675,000). 

          (b) Performance Bonus. The Executive shall be eligible to participate in a
Performance Bonus Pool for Senior Executives (the “Bonus Pool”) each
year during the Term of Employment. The aggregate Bonus Pool shall be determined by
reference to MFA’s Return on Average Equity (“ROAE”) as more fully
described in Exhibit A to this Agreement, and shall be allocated among the CEO
and MFA’s two Executive Vice Presidents based on the recommendation of the
CEO and the assessment by the Compensation Committee of the Board of Directors
(the “Compensation Committee”) of each participant’s performance.
The Compensation Committee, in its discretion, can adjust the aggregate Bonus Pool
downward in any year by as much as ten percent (10%) depending upon the
Compensation Committee’s assessment of MFA leverage, book value stability and
share price relative to peer group, among other considerations. 

          Twenty-five
percent (25%),  or such  larger  percentage  upon  which  the  Executive  and the
Compensation  Committee  shall  agree,  of any amount in excess of  $100,000  allocated
to the  Executive  from the Bonus Pool with respect  to  calendar  year  2006  will be
paid  in  restricted  stock.  Fifty  percent (50%),  or such  larger  percentage
upon which  the Executive and the  Compensation  Committee shall agree, of  any amount in
excess of $100,000  allocated  to the  Executive  from the Bonus  Pool with  respect to
calendar  year 2007 and  each  subsequent  year will be paid in  restricted  stock.  In
each case,  twenty-five  percent (25%) of the restricted stock  will  vest  upon
grant,  and  on  additional  twenty-five  percent (25%)  will vest on  January 1st
of each of the first  three  years  following  the  grant.  Such  restricted  stock
cannot  be  transferred  or  sold  during  the  Executive’s  employment  by MFA
until the  value of the  Executive’s  stock  holdings  in  MFA  exceeds  three
times  his  Base  Salary;  thereafter,  stock may be sold or  transferred  to the  extent
the  value of the  Executive’s  stock  holdings  exceeds  such  multiple. 

          (c) Equity Compensation. The Executive shall be eligible to receive such stock
option, restricted stock, phantom share or dividend equivalent rights grants or
other equity awards as the Compensation Committee or the Board of Directors, as the
case may be, shall deem appropriate. 

          (d) Discretion to Increase Compensation. Nothing in this Agreement shall preclude
the Board of Directors or the Compensation Committee from increasing or considering
increasing the Executive’s compensation during the Term of Employment. The
Base Salary as adjusted to reflect any increase shall be the Base Salary for all
purposes of this Agreement. 

2 

     4. Employee Benefit Programs and Fringe Benefits. 

          During
the  Term  of  Employment,  the  Executive  shall be entitled  to five weeks of  vacation
each  calendar year and to  participate  in all executive  incentive  and employee
benefit  programs of MFA now or  hereafter  made  available to MFA’s  senior
executives  or salaried  employees  generally,  as such  programs  may be in  effect
from time to  time.  MFA  shall  reimburse  the  Executive  for  any and all  necessary,
customary and usual  business  expenses,  properly  receipted  in  accordance  with MFA’s
policies,  incurred  by  Executive in connection with his employment. 

     5. Termination of Employment. 

          (a) Termination Due to Death or Disability. If the Executive’s employment is
terminated during the Term of Employment by reason of the Executive’s death
or Disability, the Executive’s Term of Employment shall terminate
automatically without further obligations to the Executive, his legal representative
or his estate, as the case may be, under this Agreement except for (i) any
compensation earned but not yet paid, including and without limitation, any
amount of Base Salary accrued or earned but unpaid and any other payments payable
to the Executive pursuant to Paragraph 5(e) below, which amounts shall be
promptly paid in a lump sum to the Executive, his legal representative or his estate,
as the case may be, and (ii) continued payment on a monthly basis of the
Executive’s then current Base Salary for a period of one year following
the date of such termination, which shall be paid to the Executive, his legal
representative or his estate, as the case may be. In the event of such
termination due to his Disability, Executive’s health insurance coverage shall
be continued at MFA’s expense for the duration of such Disability; provided,
that, if such coverage cannot be provided under MFA’s health insurance
policy for the duration of such Disability, such coverage or the cost of
comparable coverage shall be provided by MFA until the Executive’s attainment
of age 65 or such later date through which coverage is permissible under MFA’s
health insurance policy. 

          (b) Termination Without Cause or for Good Reason. In the event the Executive’s
employment is terminated by MFA without Cause (including by notice of MFA’s
determination not to renew the Initial Term or any Renewal Term pursuant to
Paragraph 1(b)) or by the Executive for Good Reason, unless any such
termination is preceded by the Executive’s giving notice of his determination
not to renew the Initial Term or any Renewal Term pursuant to Paragraph 1(b),
the Executive shall be entitled to both continued payments of his then current
Base Salary and continued health insurance coverage at MFA’s expense, until
the later to occur of (i) the expiration of the Term of Employment or (ii) the
first anniversary of such termination of employment, such Base Salary being
payable at the same time such amounts would have been payable to the Executive had
his employment not terminated. 

          (c) Termination by MFA for Cause or Voluntary Termination by the Executive. In the
event the Executive’s employment is terminated by MFA for Cause, or is
terminated by the Executive on his own initiative for other than a Good Reason
(including pursuant to Paragraph 1(b)), the Executive shall be entitled to any
compensation earned but not yet paid, including and without limitation, any amount
of Base Salary accrued or earned but unpaid and any other payments payable to the
Executive pursuant to Paragraph 5(e) below, as of the date of termination. 

          (d) Termination Related to Change in Control. In the event of (1) the termination
of the Executive’s employment by MFA without Cause that occurs both within
two months before a Change in Control and following the occurrence of a
Pre-Change-in-Control Event, (2) the resignation of his employment by the
Executive for any reason within three months following a Change in Control, or (3) the
termination of the Executive’s employment by MFA other than for Cause or the
Employee’s resignation of his employment for Good Reason within twelve months
following a Change in Control, 

3 

	 	     (i)
MFA shall pay to Executive  in a lump sum,  within 30  days  following the  termination
of  employment,  an  amount  equal  to  300%  of  the  sum  of  (a) the  Executive’s
then  current  Base  Salary and  (b) the  Executive’s  highest bonus  for  the
two preceding  years;
 

	 	     (ii)
all  of  the  Executive’s  outstanding  restricted  stock,  phantom  shares  and
stock  options  shall  immediately  vest  in full  and  such  options  shall  remain
exercisable,  and  any  dividend  equivalents  associated  therewith  shall  continue to
be payable,  until the earlier of (a) 90 days  following  the date  of such  termination
and (b) the date on which  each  such option  would have  expired had the  Executive’s
employment not terminated; and
 

	 	     (iii)
the Executive  shall  continue to  participate in all  health,  life  insurance,
retirement  and  other  benefit  programs  at MFA’s  expense  for the balance  of
the  Term of  Employment,  to the same  extent  as  though  the  Executive’s
employment  had  not  terminated.
 

The  Executive,
in his  sole  and  absolute  discretion,  may  elect  to  reduce  any  such  payment  in
order  to  avoid  imposition  of  the  excise  tax  under  Section 4999  of  the
Internal Revenue Code of 1986, as amended. 

          (e)
  Other Payments. Upon the termination of the Executive’s employment,
  in addition to the amounts payable under any Paragraph above, the Executive
  shall be entitled to receive the following: 

	 	     (i)
any  annual  bonus  earned  during  one  or  more  preceding years but not paid;
 

	 	     (ii)
any  vested  deferred  compensation  (including  any  interest  accrued  on or
appreciation  in  value  of  such deferred amounts);
 

	 	     (iii)
reimbursement  for  reasonable  business  expenses  incurred but not yet reimbursed by
MFA; and
 

	 	     (iv)
any  other  benefits  to which the  Executive  or his  legal  representative  may be
entitled under the 2004  Equity  Compensation  Plan  and  under  all  other  applicable
plans and  programs  of MFA,  as provided  in Paragraph 4 above.
 

	 	     (v)
upon  the  termination  of  the  Executive's  employment  pursuant to Paragraphs  5(a)
or 5(b)  above,  all of the  Executive's  outstanding  restricted  stock,  phantom
shares and stock options  shall  immediately  vest in  full  and  such  options  shall
remain  exercisable,  and  any  dividend  equivalents  associated  therewith  shall
continue to  be  payable  until  the  earlier  of  (a)  90  days  following  the date of
such  termination  and (b) the  date on which each such  option  would  have  expired
had the Executive's employment not terminated.
 

          (f) No Mitigation; No Offset. In the event of any termination of the Executive’s
employment under this Agreement, he shall be under no obligation to seek other
employment or otherwise in any way to mitigate the amount of any payment provided
for in this Paragraph 5, and there shall be no offset against amounts due
him under this Agreement on account of any remuneration attributable to any
subsequent employment that he may obtain. 

          (g) Payments Subject to Section 409A. Notwithstanding anything herein to the
contrary, the Executive shall not be entitled to any payment pursuant to this
Paragraph 5 prior to the earliest date permitted under Section 409A of
the Internal Revenue Code of 1986, as amended, and applicable Treasury
regulations thereunder. To the extent any payment pursuant to this Paragraph 5
is required to be delayed six months pursuant to the special rules of Section 409A
related to “specified employees,” each affected payment shall be delayed
until six months after the Executive’s termination of employment. 

4 

          (h) Mutual Release. MFA’s obligation to make any payment or provide any benefit
pursuant to this Paragraph 5 shall be contingent upon, and is the consideration
for, the Executive executing and delivering to MFA a general release (the “Release”),
substantially in the form annexed hereto as Exhibit B, releasing MFA, and all
current and former members, officers and employees of MFA, from any claims
relating to the Executive’s employment hereunder, other than claims relating to
continuing obligations under, or preserved by, (x) this Agreement or (y) any
compensation or benefit plan, program or arrangement in which the Executive was
participating as of the date of termination of his employment, and no such
amounts shall be provided until the Executive executes and delivers to MFA a
letter which provides that the Executive had not revoked such Release after
seven days following the date of the Release. The Release shall also be executed
by MFA and delivered to the Executive as part of the consideration for the
Executive’s execution and delivery of the Release, and, except as
otherwise provided under the terms of the Release, shall release the Executive
from any and all claims MFA may have against the Executive. 

     6. Definitions. 

     For
purposes  of  this  Agreement,  the  following terms shall be defined as set forth below: 

          (a) Cause. “Cause” shall mean the Executive’s (i) conviction, or
entry of a guilty plea or a plea of nolo contendre with respect to, a felony, a
crime of moral turpitude or any crime committed against MFA, other than traffic
violations; (ii) engagement in willful misconduct, willful or gross
negligence, or fraud, embezzlement or misappropriation relating to significant
amounts, in each case in connection with the performance of his duties under this
Agreement; (iii) failure to adhere to the lawful directions of the CEO
and/or the Board of Directors that are reasonably consistent with his duties and
position provided for herein; (iv) breach in any material respect of any of
the provisions of Paragraph 7 of this Agreement resulting in material and
demonstrable economic injury to MFA; (v) chronic or persistent substance abuse
that materially and adversely affects his performance of his duties under this
Agreement or (vi) breach in any material respect of the terms and provisions
of this Agreement resulting in material and demonstrable economic injury to MFA.
Notwithstanding the foregoing, (i) the Executive shall be given written
notice of any action or failure to act that is alleged to constitute Cause (a
“Default”), and an opportunity for 20 business days from the date of such
notice in which to cure such Default, such period to be subject to extension in the
discretion of the CEO or, in his absence, the Board of Directors and (ii) regardless
of whether the Executive is able to cure any Default, the Executive shall not be
deemed to have been terminated for Cause without (x) reasonable prior
written notice to the Executive setting forth the reasons for the decision to
terminate the Executive for Cause, (y) an opportunity for the Executive,
together with his counsel, to be heard by the CEO or, in his absence, the Board of
Directors and (z) delivery to the Executive of a notice of termination
approved by said CEO or, in his absence, the Board of Directors, stating his
or its good faith opinion that the Executive has engaged in actions or conduct
described in the preceding sentence, which notice specifies the particulars of
such action or conduct in reasonable detail; provided, however, MFA may suspend
the Executive with pay until such time as his right to appear before the CEO or
the Board of Directors, as the case may be, has been exercised, so long as such
appearance is within two (2) weeks of the date of suspension. 

          (b) Change in Control. A “Change in Control” shall mean the occurrence of
any one of the following events: 

5 

	 	     (i)
any “person”, as such term is used in Sections 13(d) and 14(d) of
the Act (other than MFA, any of its affiliates or any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust of MFA
or any of its affiliates) together with all affiliates and “associates” (as
such term is defined in Rule 12b-2 under the Act) of such person, shall
become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of MFA representing 30% or
more of either (A) the combined voting power of MFA’s then outstanding
securities having the right to vote in an election of the Board of Directors (“voting
securities”) or (B) the then outstanding shares of common stock of MFA (“Shares”)
(in either such case other than as a result of an acquisition of securities
directly from MFA); or
 

	 	     (ii)
persons who, as of the effective date of this Agreement, constitute MFA’s
Board of Directors (the “Incumbent Directors”) cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the Board of
Directors, provided that any person becoming a Director of MFA subsequent to
the effective date whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors shall, for purposes
of this Agreement, be considered an Incumbent Director; or
 

	 	     (iii)
there shall  occur  (A) any  consolidation  or merger  of MFA or any subsidiary
where the  shareholders  of  MFA,  immediately  prior  to  the  consolidation  or
merger,  would  not,  immediately  after  the  consolidation  or merger,  beneficially
own (as such  term  is  defined  in  Rule 13d-3  under  the  Act),  directly or
indirectly,  shares  representing  in the  aggregate  60% or more of the  voting
securities  of  the  corporation  issuing cash or  securities  in the  consolidation  or
merger (or of its  ultimate  parent  corporation,  if any), (B) any sale, lease,
exchange  or other  transfer  (in one  transaction  or a series  of  transactions
contemplated  or  arranged  by  any  party as a single plan) of all or  substantially
all  of the  assets  of MFA or  (C) any  plan or  proposal  for the liquidation or
dissolution of MFA.
 

	 	     Notwithstanding
the  foregoing,  a  “Change  in  Control” shall  not be  deemed  to have
occurred  for  purposes of the  foregoing  clause (i)  solely  as  the  result  of
an  acquisition  of  securities  by MFA which,  by reducing  the number of  Shares  or
other  voting  securities  outstanding,  increases  (x) the  proportionate  number
of  Shares  beneficially  owned by any  person  to 30% or more of  the  Shares  then
outstanding  or  (y) the  proportionate  voting  power  represented  by  the  voting
securities  beneficially  owned by any person  to 30% or more of the  combined  voting
power of all  then  outstanding  voting  securities;  provided,  however,  that,  if  any
person  referred  to  in  clause (x) or (y) of this sentence  shall  thereafter
become  the  beneficial  owner  of  any  additional  Shares  or  other  voting
securities  (other  than  pursuant  to  a  stock  split,  stock  dividend,  or  similar
transaction),  then a  “Change  in  Control” shall be  deemed to have  occurred
for  purposes  of  this Paragraph 6(b).
 

          (c)
Disability. “Disability” shall mean the Executive’s inability for a
period of six consecutive months, to render substantially the services provided for
in this Agreement by reason of mental or physical disability, whether resulting
from illness, accident or otherwise, other than by reason of chronic or
persistent abuse of any substance (such as narcotics or alcohol). 

          (d) Good Reason. “Good Reason” shall mean: 

	 	     (i)
a  material  diminution  in  the  Executive’s  title,  duties or responsibilities;
 

	 	     (ii)
relocation  of the  Executive’s  place of  employment  without  his  consent
outside  the  New  York  City  metropolitan area;
 

6 

	 	     (iii)
the  failure  of  MFA  to  pay  within  thirty  (30) business days any payment due
from MFA;
 

	 	     (iv)
the  failure  of  MFA  to  pay  within  a  reasonable  period  after the date when
amounts are  required to  be paid to the Executive  under any benefit  programs  or
plans; or
 

	 	     (v)
the  failure  by MFA  to  honor  any of its  material  obligations herein.
 

          (e) Non Cash Items and Merger Expenses. “Non Cash Items and Merger Expenses” shall
mean depreciation, merger expenses, gains/losses on asset sales, and impairment
charges. 

          (f) Pre-Change-in-Control Event. A “Pre-Change-in-Control Event” shall mean the
occurrence of any one of the following events: 

	 	     (i)
the Board  shall  adopt a  resolution  to the  effect  that  any  person  has  taken
actions  which,  if  consummated,  would  result in such person  acquiring  effective
control  of the  business  and  affairs of  MFA;
 

	 	     (ii)
there  shall  commence  a  tender  offer  or  proxy  contest  resulting  in  any  of  the
transactions  specified  in  subparagraphs (i)-(iii)  of  Paragraph 6(b);
 

	 	     (iii)
MFA  shall  make any  agreement  resulting  in any of  the  transactions  specified  in
subparagraphs (i)-(iii) of Paragraph 6(b);
 

	 	     (iv)
there  shall  be  a  public  announcement  of  a  transaction  of  the  kind  specified
in  subparagraphs (i)-(iii) of Paragraph 6(b); or
 

	 	     (v)
any other meeting,  writing or written  communication  with,  by  or  to  the  Board  of
Directors  or  any  officer or  executive of MFA,  that is held,  made or  undertaken  in
good  faith  in  anticipation  of  a  Change in Control.
 

          (g) Return on Average Equity. “Return on Average Equity” shall mean twelve
months GAAP net income plus (minus) certain Non Cash Items and Merger Expenses
divided by average Tangible Net Worth. 

          (h) Tangible Net Worth. “Tangible Net Worth” shall mean stockholder equity
less (i) goodwill and (ii) preferred stockholder equity. 

     7. Covenant Not To Compete. 

          In
  the event of the termination of the Executive’s employment with MFA other
  than upon notification by the Executive of the nonrenewal of the Term of Employment,
  the Executive will not, without the prior written consent of MFA, manage, operate,
  control or be connected as a stockholder (other than as a holder of shares publicly
  traded on a stock exchange or the NASDAQ National Market System, provided that
  the Executive shall not own more than five percent of the outstanding shares
  of any publicly traded company) or partner with, or as an officer, director,
  employee or consultant of, any mortgage REIT for a period of one year following
  termination of his employment with MFA. For a period of one year following the
  termination of his employment by MFA for any reason, the Executive shall not
  solicit any employees of MFA to work for any mortgage REIT. Except as otherwise
  required by law, the Executive shall keep confidential all materials, files,
  reports, correspondence, records and other documents (collectively the “Company
  Materials”) used, prepared or made available to him in connection with
  his employment by MFA and which have not otherwise been made available to the
  public, and upon termination of his employment shall return such Company Materials
  to MFA. The Executive acknowledges that MFA may seek injunctive relief or other
  specific enforcement of its rights under this Paragraph. 

7 

     8. Indemnification. 

          MFA
shall  indemnify  the  Executive  to the  fullest  extent  permitted  by  Maryland  law
as amended  from  time to time in connection  with the  Executive’s  duties with
MFA,  against  all  costs,  expenses,  liabilities  and losses  (including,  without
limitation,  attorneys’ fees,  judgments,  fines,  penalties,  ERISA  excise  taxes
and  amounts  paid in  settlement)  actually  and  reasonably  incurred  by  the
Executive in connection  with an action,  suit or  proceeding.  During  the Term of
Employment  and for six  years  following  the  date of the  Executive’s
termination  as an  officer  of  MFA,  MFA  (or  any  successor  thereto)  shall  provide
comprehensive  coverage  under  its  officers  and  directors  insurance  policy  (or
policies)  on  substantially  the same  terms and levels  that it  provides  to its
senior  executive  officers, at MFA’s sole cost. 

     9. Assignability; Binding Nature. 

          This
Agreement  shall  inure to the benefit  of MFA and the  Executive  and  their  respective
successors,  heirs (in the case of the  Executive)  and assigns.  No rights  or
obligations  of MFA under this  Agreement  may be assigned  or  transferred  by  MFA
except  that  any  such  rights  or  obligations  may be  assigned  or  transferred
pursuant  to a  merger or  consolidation  in which  MFA is not the  continuing  entity,
or the sale or  liquidation  of all or  substantially  all of the  assets  of MFA,
provided  that  the  assignee  or  transferee  is the  successor to all or  substantially
all of  the  assets of MFA and such  assignee  or  transferee  assumes  the  liabilities,
obligations and duties of MFA, as contained  in this  Agreement,  either  contractually
or as a matter  of  law.  This  Agreement  shall  not  be  assignable  by  the  Executive. 

     10. Representation. 

          MFA
represents  and  warrants  that  it  is  fully  authorized  and empowered to enter into
this  Agreement  and  that  its  entering  into  this  Agreement  and  the  performance
of its  obligations  under this Agreement will not  violate any agreement  between MFA
and any other person,  firm  or organization or any law or governmental regulation. 

     11. Entire Agreement. 

          This
Agreement  contains  the  entire  agreement  between  MFA  and  the  Executive
concerning  the  subject  matter hereof and  supersedes  all prior  agreements,
understandings,  discussions,  negotiations and  undertakings,  whether written or oral,
between them with respect thereto. 

     12. Amendment or Waiver. 

          This
Agreement  cannot be changed,  modified  or  amended  without  the  consent  in  writing
of  both  the  Executive  and MFA.  No waiver by either MFA or the  Executive  at  any
time  of  any  breach  by  the  other  party  of  any  condition  or provision  of this
Agreement  shall be deemed a  waiver of a similar or  dissimilar  condition  or provision
at  the  same or at any  prior  or  subsequent  time.  Any  waiver  must  be  in  writing
and  signed  by  the  Executive  or  an  authorized officer of MFA, as the case may be. 

8 

     13. Severability. 

          In
the event that any  provision  or portion  of  this  Agreement  shall  be  determined  to
be  invalid  or  unenforceable  for  any  reason,  in  whole  or in  part,  the
remaining  provisions  of this  Agreement  shall be unaffected  thereby  and  shall
remain in full  force  and  effect to the  fullest extent permitted by law. 

     14. Reasonableness. 

          To
the  extent  that  any  provision  or  portion of this  Agreement is determined  to be
unenforceable  by a court of law or  equity,  that  provision  or  portion of  this
Agreement  shall  nevertheless  be  enforceable  to  the  extent that such court
determines is reasonable. 

     15. Survivorship. 

          The
respective  rights and  obligations  of  the parties  hereunder  shall survive any
termination of this  Agreement  to  the  extent  necessary  to  the  intended
preservation of such rights and obligations. 

     16. Governing Law. 

          This
Agreement  and all rights  thereunder,  and  any  controversies  or  disputes  arising
with  respect  thereto,  shall be governed by and construed  and  interpreted  in
accordance  with  the  laws  of the  State  of  New  York,  applicable  to  agreements
made and to be performed  entirely  within  such  State,  without  regard  to  conflict
of  laws  provisions  thereof  that  would  apply  the law of any  other  jurisdiction. 

     17. Dispute Resolution. 

          In
the  event  of any  dispute,  controversy  or claim  arising  out of or  relating  to
this  Agreement  or  Executive’s  employment or  termination  thereof (other than a
controversy  or  claim  arising  under  Paragraph  7,  to  the  extent  necessary  for
MFA  (or  its  affiliates,  where  applicable)  to enforce the provisions  thereof),  the
parties  hereby agree to settle such dispute,  controversy  or claim in  a binding
arbitration  by a single  arbitrator  in accordance  with  the  Commercial  Arbitration
Rules  of  the  American  Arbitration  Association,  which  arbitration  shall  be
conducted in New York,  New York.  The parties  agree that the  arbitral  award  shall be
final and  non-appealable  and shall  be  the  sole  and  exclusive  remedy  between  the
parties  hereunder.  The parties  agree that  judgment on the  arbitral  award  may  be
entered  in  any  court  having  competent  jurisdiction  over  the  parties  or  their
assets.  All  reasonable fees and expenses  related to any such  arbitration  (including
reasonable  attorneys’ fees  and  related  disbursements) shall be paid by MFA. 

     18. Legal Fees. 

          MFA
shall  pay  directly  all  reasonable  legal fees incurred by the  Executive in
connection  with the  negotiation, preparation and execution of this Agreement. 

     19. Notices. 

          Any
notice  given to either  party  shall be  in  writing  and  shall be  deemed  to have
been  given  when  delivered  personally  or  sent  by  certified  or  registered  mail,
postage  prepaid,  return  receipt  requested,  duly  addressed  to  the  party
concerned,  if  to  MFA,  at  its  principal office,  and if to the Executive,  at the
address of  the  Executive  shown  on  MFA’s  records  or  at  such  other  address
as such party may give notice of. 

9 

     20. Headings. 

          The
headings  of the  paragraphs  contained  in this  Agreement are for  convenience  only
and shall not be  deemed to  control or affect the  meaning or  construction  of  any
provision of this Agreement. 

     21. Counterparts. 

          This
Agreement  may be  executed  in two or  more counterparts. 

10 

     IN
WITNESS  WHEREOF,  the  undersigned  have executed  this Agreement as of the date first
written above. 

	 	 	MFA
      MORTGAGE INVESTMENTS, INC.
	 	 	 	

	 	By:   	/s/
      Stewart Zimmerman 
	 	  	 	
      

    
	 	 	Name:  	Stewart Zimmerman 
	 	 	Title:  	Chairman,
                                                              Chief
                                                              Executive
                                                              Officer
                                                              and
                                                              President

	 	 	 	

      

      
	 	By:   	/s/ William
                                                              S.
                                                              Gorin 
	 	  	 	 
 
	 	 	Name:  	William S. Gorin 
	 	 	Title:  	Executive
                                                              Vice
                                                              President
                                                              and
                                                              Chief
                                                              Financial
                                                              Officer

11 

Exhibit A

Aggregate
Performance Bonus Pool for Senior Executives

Aggregate
bonus pool can be adjusted  down by as much as 10%,  dependent  upon  Compensation
Committee’s  assessment  of  leverage,  book value  stability  and share price
relative to  peer group.  Individual  bonus  allocation from pool dependent  upon
Compensation  Committee’s  assessment of  performance in  accordance with the
Committee’s Charter. 

Bonus Pool

	ROAE less than 4.5%	 	 	$	 400,000	 
	ROAE 4.5% to 8.0%	 	 	$	 600,000	 
	ROAE greater than 8.0%	 	 	 	See Below	 

Senior
Executive Bonus Pool Example

	ROAE	 	 	 	8%
	 	 	9%
	 	 	10%
	
	 
	12%
	
	 
	13%
	
	 
	14%
	
	 
	16%
	
	 
	18%
	
	 
	20%
	
	 
	22%
        and above
	 
	9/30/05
      Common Equity	 	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 	 	576,000,000	 
	Net Income	 	 	 	46,080,000	 	 	51,840,000	 	 	57,600,000	 	 	69,120,000	 	 	74,880,000	 	 	80,640,000	 	 	92,160,000	 	 	103,680,000	 	 	115,200,000	 	 	126,720,000	 
	 
	Net Income
      to achieve 8%	 	 
	hurdle	 	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 	 	46,080,000	 
	Earnings
      over Hurdle	 	 	 	0	 	 	5,760,000	 	 	11,520,000	 	 	23,040,000	 	 	28,800,000	 	 	34,560,000	 	 	46,080,000	 	 	57,600,000	 	 	69,120,000	 	 	80,640,000	 
	Aggregate
      Bonus Pool	 	 	 	600,000	 	 	1,000,000	 	 	1,500,000	 	 	1,800,000	 	 	2,200,000	 	 	3,000,000	 	 	3,600,000	 	 	4,200,000	 	 	5,100,000	 	 	6,000,000	 

In  the  event
of a  fractional  ROAE  (with  respect  to the  percentages  contained  in the  above
table),  the  Aggregate  Bonus Pool shall be  interpolated  in linear  fashion  between
the applicable whole percentages. 

Exhibit B

Mutual
Release

     This
Mutual Release of Claims (this “Release”) is made as of _______________,
by and between MFA MORTGAGE INVESTMENTS, INC. (the “Company”) and
_____________________ (the “Executive”). 

     1. Release by the Company. 

          (a)
The Company on behalf of itself, its agents, successors, affiliated entities and
assigns, in consideration for the Executive’s execution and delivery of this
Release, hereby forever releases and discharges the Executive, and his agents,
heirs, successors, assigns, executors and administrators, from any and all known
and unknown causes of action, actions, judgments, liens, indebtedness, damages,
losses, claims, liabilities, and demands of whatsoever kind and character in
any manner whatsoever arising on or prior to the date of this Release, including
but not limited to (i) any claim for breach of contract, breach of implied
covenant, breach of oral or written promise, defamation, interference with
contract relations or prospective economic advantage, negligence,
misrepresentation; (ii) any and all liability that was or may have been
alleged against or imputed to the Executive by the Company or by anyone acting on
its behalf; (iii) any punitive, compensatory or liquidated damages and (iv) all
rights to and claims for attorneys’ fees and costs except as otherwise provided
in his employment agreement with the Company dated April 16, 2006 (the “Employment
Agreement”). 

          (b)
The  Company  shall  not  file  or  cause  to  be  filed  any  action,  suit,  claim,
charge  or  proceeding  with any  federal,  state or local court or agency  relating  to
any claim  within the scope of this  Release.  In  the  event  there  is  presently
pending  any  action,  suit,  claim,  charge  or  proceeding  within  the  scope  of
this  Release,  or if such a proceeding  is commenced in the future,  the Company shall
promptly  withdraw it, with  prejudice,  to  the  extent  it  has  the  power  to  do
so.  The  Company  represents  and  warrants  that its has not assigned any claim
released  herein,  or  authorized  any other  person to assert  any claim on its behalf. 

          (c)
Anything  to  the  contrary  notwithstanding  in this Release or the Employment
Agreement,  this  Release  shall not apply to claims or  damages  based on  (i) any
right or claim  that  arises  after the date on which  the Company  executes  this
Release,  including  any right to  enforce the  Employment  Agreement  with respect to
provisions  pertaining  to  matters  that  arise  after  the  date  of the  Release and
that survive  termination  of  employment  or (ii)  any act of  willful  misconduct,
gross  negligence,  fraud or  misappropriation of funds. 

     2. Release by the Executive. 

          (a)
The  Executive,  on  behalf  of  himself, his agents,  heirs,  successors,  assigns,
executors  and  administrators,  in  consideration  for  the  termination  payments  and
other  consideration  provided  for  under  the  Employment  Agreement,  hereby forever
releases and discharges  the Company,  and its  successors,  its  affiliated  entities,
and,  in such  capacities,  its  past and  present  directors,  employees,  agents,
attorneys,  accountants,  representatives,  plan  fiduciaries,  successors  and  assigns
from any and all  known  and  unknown  causes  of  action,  actions,  judgments,  liens,
indebtedness,  damages,  losses, claims,  liabilities,  and demands of  whatsoever  kind
and  character  in any manner  whatsoever  arising  on or prior to the date of this
Release,  including  but not  limited  to  (i) any  claim for  breach of  contract,
breach  of  implied  covenant,  breach  of  oral or  written  promise,  wrongful
termination,  intentional  infliction  of emotional  distress,  defamation,  interference
with contract  relations or  prospective  economic  advantage,  negligence,
misrepresentation  or employment  discrimination,  and  including  without  limitation
alleged  violations  of  Title VII  of the  Civil  Rights  Act  of  1964,  as
amended,  prohibiting  discrimination  based on race,  color,  religion,  sex or
national  origin;  the Family and  Medical  Leave Act; 

the Americans
With  Disabilities  Act; the Age  Discrimination  in  Employment  Act;  other  federal,

state and  local  laws,  ordinances and  regulations;  and any unemployment or workers’ compensation
law,  excepting  only those  obligations  of the  Company  pursuant to Paragraph 5
of the Employment  Agreement  or otherwise  continuing  under the  Employment  Agreement
and  any  claims to  benefits  under any  compensation  or  benefit  plan,  program  or
arrangement  in which  the  Executive  was  participating  as  of  the  date  of
termination  of  his  employment;  (ii) any and all  liability  that was or may have
been  alleged  against  or  imputed  to  the  Company  by  the  Executive  or  by  anyone
acting  on  his  behalf;  (iii) all  claims for wages,  monetary or  equitable
relief,  employment  or  reemployment  with the  Company in any  position,  and any
punitive,  compensatory  or  liquidated  damages and  (iv) all  rights to and claims
for  attorneys’ fees and costs except as  otherwise provided in the Employment
Agreement. 

          (b)
The  Executive  shall  not  file or  cause  to  be  filed  any  action,  suit,  claim,
charge  or  proceeding  with any  federal,  state or local court or agency  relating  to
any claim  within the scope of this  Release.  In  the  event  there  is  presently
pending  any  action,  suit,  claim,  charge  or  proceeding  within  the  scope  of
this  Release,  or if such a proceeding  is commenced in the future,  the Executive shall
promptly  withdraw it, with prejudice,  to  the  extent  he  has  the  power  to  do  so.
The  Executive  represents  and  warrants  that he has not  assigned any claim  released
herein,  or  authorized  any other  person to assert  any claim on his behalf. 

          (c)
In  the  event  any  action,  suit,  claim,  charge or proceeding  within the scope of
this Release  is  brought  by  any  government  agency,  putative  class  representative
or other third party to vindicate  any alleged  rights of the Executive,  (i) the
Executive shall,  except to  the extent  required or  compelled  by law,  legal  process
or  subpoena,  refrain  from  participating,  testifying  or  producing  documents
therein and (ii) all  damages,  inclusive  of  attorneys’ fees,  if  any,
required  to be  paid  to the  Executive  by the  Company as a  consequence  of such
action,  suit,  claim,  charge  or  proceeding  shall be  repaid to the  Company by the
Executive  within ten (10) days of his receipt  thereof. 

          (d)
BY  HIS  SIGNATURE  BELOW,  THE  EXECUTIVE ACKNOWLEDGES THAT: 

               (1)
HE HAS  RECEIVED A COPY OF  THIS  RELEASE  AND  WAS  OFFERED  A  PERIOD  OF  TWENTY-ONE
(21) DAYS TO REVIEW AND CONSIDER IT; 

               (2)
IF HE SIGNS  THIS  RELEASE  PRIOR TO THE  EXPIRATION OF TWENTY-ONE  DAYS, HE KNOWINGLY
AND  VOLUNTARILY WAIVES AND GIVES UP THIS RIGHT OF REVIEW; 

               (3)
HE  HAS  THE  RIGHT  TO  REVOKE THIS  RELEASE FOR A PERIOD OF SEVEN  (7) DAYS  AFTER
HE  SIGNS  IT  BY  MAILING  OR  DELIVERING  A  WRITTEN  NOTICE  OF  REVOCATION TO THE
COMPANY’S  GENERAL  COUNSEL,  NO LATER THAN  THE  CLOSE OF  BUSINESS  ON THE
SEVENTH  DAY AFTER THE DAY ON  WHICH HE SIGNED THIS RELEASE; 

               (4)
THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE SEVEN DAY
REVOCATION PERIOD HAS EXPIRED WITHOUT THE RELEASE HAVING BEEN REVOKED (THE “EFFECTIVE
DATE”); 

15 

               (5)
THIS  RELEASE  WILL  BE  FINAL AND  BINDING  AFTER  THE  EXPIRATION  OF THE  REVOCATION
PERIOD  REFERRED  TO IN  SECTION 2(d)(3).  HE  AGREES  NOT  TO  CHALLENGE ITS
ENFORCEABILITY; 

               (6)
HE IS AWARE  OF HIS  RIGHT  TO  CONSULT  AN  ATTORNEY,  HAS BEEN  ADVISED  IN  WRITING
TO  CONSULT  WITH AN  ATTORNEY,  AND HAS  HAD THE  OPPORTUNITY  TO  CONSULT  WITH AN
ATTORNEY,  IF DESIRED,  PRIOR TO SIGNING THIS  RELEASE; 

               (7)
NO PROMISE  OR  INDUCEMENT  FOR THIS  RELEASE  HAS BEEN  MADE  EXCEPT AS SET FORTH IN
THIS  RELEASE; 

               (8)
HE  IS  LEGALLY  COMPETENT  TO EXECUTE  THIS  RELEASE AND ACCEPT FULL  RESPONSIBILITY
FOR  IT; AND 

               (9)
HE  HAS  CAREFULLY  READ  THIS  RELEASE,  ACKNOWLEDGES  THAT  HE HAS NOT  RELIED  ON ANY
REPRESENTATION  OR STATEMENT,  WRITTEN OR ORAL,  NOT SET FORTH  IN THIS  DOCUMENT,  AND
WARRANTS  AND  REPRESENTS  THAT HE IS  SIGNING THIS RELEASE KNOWINGLY AND VOLUNTARILY. 

16 

     IN
WITNESS  WHEREOF,  the parties  have  hereunto set  their hands this _____ day of
___________________. 

	 	 	 	

      

      
	 	By:   	 
	 	  	 	 
 
	 	 	 	Name: 
	 	 	 	Title: Executive

	 	 	MFA MORTGAGE
      INVESTMENTS, INC.
	 	 	 	

      

      
	 	By:   	 
	 	  	 	 
 
	 	 	 	Name: 
	 	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]