Document:

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                                                                    Exhibit 10.1

                  CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

         This Agreement ("Agreement") is made as of December 16, 2002 by and
between Harris Interactive Inc. ("Harris"), a Delaware corporation with offices
at 60 Corporate Woods, Rochester, New York 14623, and Gordon S. Black ("Black"),
an individual with an address of 4747 W. Lake Road, Canandaigua, New York 14424.

         WHEREAS, Black has been and continues to be employed by Harris as its
Chairman and Chief Executive Officer, and

         WHEREAS, Black and Harris entered into a Confidentiality and
Non-Competition Agreement dated as of September 1, 1999 (the "Non-Compete
Agreement"), and

         WHEREAS, the parties desire to replace the Non-Compete Agreement and to
set forth in writing their mutual agreements regarding the continued employment
of Black,

         NOW THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

         "Base Salary" means $300,000 per annum, or such higher base salary as
may hereafter be approved by the Board of Directors.

         "Bonus" shall mean non-salary, discretionary cash compensation, whether
paid under a performance-based bonus plan or otherwise.

         "Cause" means Black's: (a) refusal to perform, failure to perform, or
misconduct in the performance of, the duties set forth in Section 3 hereof
provided that such refusal, failure, or misconduct is material and has continued
after Harris has given Black fifteen days written notice specifying the same in
reasonable detail, and further provided that failure to perform by reason of
Disability shall not be Cause, (b) overt and willful disobedience of lawful
orders or directives issued by the Board of Directors of Harris that are within
the scope of Black's duties to Harris, provided that such overt and willful
disobedience has continued after Harris has given Black fifteen days' written
notice specifying the same in reasonable detail, (c) conviction or of commission
of any felony, whether or not related to performance of duties under this
Agreement, (d) commission of any other illegal act if committed in connection
with the performance of duties for Harris if such act could reasonably tend to
bring Harris or Black into disrepute in the community, (e) breach of the
material terms of this Agreement provided, however, in the case of any breach
that is curable in all material respects, such breach has continued uncured
after Harris has given Black fifteen days' written notice specifying the same in
reasonable detail, and/or (f) material violation of Harris's written rules,
regulations or policies provided that such violation has continued after Harris
has given Black fifteen days written notice specifying the same in reasonable
detail.

         "Change in Control" means the occurrence of any of the following
events:

                  (i) any Person is or becomes the Beneficial Owner, directly or
         indirectly, of securities of Harris (not including in the securities
         beneficially owned by such Person any securities acquired directly from
         Harris or its Affiliates) representing 50% or more of the combined
         voting power of Harris's then outstanding securities; or

                  (ii) the following individuals cease for any reason to
         constitute a majority of the number of directors then serving as
         directors of Harris: individuals who, on the date hereof, constitute
         the Board of

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         Directors of Harris and any new director (other than a director whose
         initial assumption of office is in connection with the settlement of an
         actual or threatened election contest, including but not limited to a
         consent solicitation, relating to the election of directors of Harris)
         whose appointment or election by the Board of Directors of Harris or
         nomination for election by Harris's stockholders was approved or
         recommended by a vote of at least a majority of the directors then
         still in office who either were directors on the date hereof or whose
         appointment, election or nomination for election was previously so
         approved or recommended; or

                  (iii) there is consummated a merger or consolidation of Harris
         or any direct or indirect subsidiary of Harris with any other
         corporation or entity, other than (A) a merger or consolidation which
         would result in the voting securities of Harris outstanding immediately
         prior to such merger or consolidation continuing to represent (either
         by remaining outstanding or by being converted into voting securities
         of the surviving entity or any Parent thereof), in combination with the
         ownership of any trustee or other fiduciary holding securities under an
         employee benefit plan of Harris or any subsidiary of Harris, at least
         50% of the combined voting power of the securities of Harris, such
         surviving entity or any Parent thereof outstanding immediately after
         such merger or consolidation or (B) a merger or consolidation effected
         solely to implement a recapitalization of Harris (or similar
         transaction) in which no Person is or becomes the Beneficial Owner,
         directly or indirectly, of securities of Harris (not including in the
         securities beneficially owned by such Person any securities acquired
         directly from Harris or its Affiliates) representing 50% or more of the
         combined voting power of Harris's then outstanding securities; or

                  (iv) the stockholders of Harris approve a plan of complete
         liquidation or dissolution of Harris, or there is consummated a sale or
         disposition by Harris or any of its subsidiaries of any assets which
         individually or as part of a series of related transactions constitute
         all or substantially all of Harris's consolidated assets, other than
         any such sale or disposition to an entity at least 50% of the combined
         voting power of the voting securities of which stockholders of Harris
         are Beneficial Owners in substantially the same proportions as their
         Beneficial Ownership of the voting securities of Harris immediately
         prior to such sale or disposition.

         As used herein, "Affiliate" shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act; "Beneficial Owner" shall
have the meaning set forth in Rule 13d-3 under the Exchange Act; "Exchange Act"
shall mean the Securities Exchange Act of 1934, as amended from time to time;
"Parent" shall mean any entity that becomes the Beneficial Owner of at least 80%
of the voting power of the outstanding voting securities of Harris or of an
entity that survives any merger or consolidation of Harris or any direct or
indirect subsidiary of Harris; and "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include Harris or any of its
subsidiaries, a trustee or other fiduciary holding securities under an employee
benefit plan of Harris or any of its Affiliates, an underwriter temporarily
holding securities pursuant to an offering of such securities, or a corporation
or entity owned, directly or indirectly, by the stockholders of Harris in
substantially the same proportions as their ownership of stock of Harris.

         "Confidential Information" means any and all information and material
proprietary to Harris or not generally known or available to the public in which
Harris has any interest or rights now or in the future, including without
limitation Harris's business strategies, client lists, supplier lists, partners,
agreement terms, pricing, databases, products, designs, processes, systems,
methods; trade secrets, know-how, data, technical plans, drawings, information,
inventions, formulas, technology and anything else that might be construed as
proprietary or confidential in nature. Confidential Information shall not
include information and material (i) publicly available through no action by
Black, (ii) released by Harris with a written waiver of confidentiality, (iii)
lawfully obtained from third parties, or (iv) previously known or developed by
third parties independently of Harris and Black provided that such knowledge or
development can be independently substantiated.

         "Disability" shall mean a disability that would, after the passage of
any applicable waiting period, entitle Black to coverage under Harris's long
term disability insurance policies covering executive employees ("Disability
Policies").

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         "Good Reason" means: (a) material breach of Harris's obligations
hereunder provided that such breach continues after Black has given Harris
fifteen days written notice specifying the same in reasonable detail, or (b)
Harris's continued assignment to Black of substantial duties that are
inconsistent with those described in Section 3 hereof after fifteen days written
notice of objection by Black specifying the same in reasonable detail.

         "Termination Date" means (a) the earlier of (i) December 31, 2003, (ii)
the date of Black's death, and (iii) the date on which Black's employment is
terminated under Section 7(c), or (b) a later date, if any, to which such date
is extended by mutual agreement of the parties.

         2. Employment. Harris shall employ Black, and Black accepts employment
from Harris, as Chairman and Chief Executive Officer of Harris.

         3. Duties.

         (a) Through and including the Termination Date, Black shall perform
such duties, consistent with those of his office, as may be reasonably requested
from time to time by the Board of Directors. Among other duties and as so
requested by the Board of Directors, Black's primary focus and efforts shall be
(i) to act as spokesperson for Harris in connection with, meet with, and
otherwise assist Harris in its dealings with, the investment community, market
research industry organizations, and potential strategic partners, (ii) to
assist Harris with its relationships with major clients and potential clients,
(iii) to assist Harris in achieving conversion of existing clients from
traditional to internet research methodologies, and (iv) to assist Harris with
continued development and implementation of its research capabilities and
methodologies as well as other strategic matters. In connection therewith, Black
shall cooperate and coordinate with the executive officers of Harris including
without limitation the President and Chief Operating Officer and the Group
Presidents. Black shall report only to the Board of Directors (or a duly
authorized committee thereof). Black acknowledges that the Board of Directors
reserves the right in its sole discretion to modify Black's title to any one or
more of Chief Executive Officer, Chairman, Executive Chairman, or Chairman
Emeritus, with a corresponding adjustment of his duties and efforts consistent
with his changed office, provided, that it shall not be deemed a violation of
this Agreement if, in connection with or after a Change in Control, the Board of
Directors (or its successor following a Change in Control) modifies (or subject
to Section 7(b), eliminates) Black's title, duties, or efforts so long as after
any such modification any ongoing title or office is consistent with the status
of a Chairman Emeritus and his duties and efforts, if any, are consistent with
his changed title and office. Subject at all times to the authority and
direction of the Board of Directors, Black shall have such authority as is
reasonably necessary to carry out his duties hereunder.

         (b) Until the Termination Date, Black shall assist the Board of
Directors in developing and implementing a senior management succession plan and
other transition issues.

         (c) Until the Termination Date, Black agrees to devote the time and
effort reasonably necessary to perform his duties. Black's principal office
shall remain in the Rochester, New York metropolitan area, although the parties
acknowledge that Black will be expected to undertake a reasonable amount of
travel in furtherance of the duties described in Section 3(a).

         (d) Until and following the Termination Date, Black will act and
communicate in a manner consistent with maintenance of the good will and
positive internal and public perception of Harris.

         4. Board of Directors.

         (a) Black shall continue as a member of the Board of Directors of
Harris until the earliest of (i) the expiration of his elected term(s) of office
as a director, (ii) his resignation as a director, or (iii) his removal as a
director pursuant to Delaware law and the Certificate of Incorporation and
Bylaws of Harris.

         (b) During the term of this Agreement and for so long as he is
receiving payments under Section 5(a)(iii), Black shall not be entitled to
compensation for services as a director applicable only to non-employee
directors of Harris.

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         5. Payment and Provision of Benefits to Black. Subject to and in
consideration of Black's compliance with this Agreement, and in lieu of any and
all other compensation and benefits whether pursuant to agreement, company
policy or otherwise (except as otherwise required by law):

         (a) Harris shall provide to Black:

                  (i) his Base Salary through and including the Termination
         Date, payable in monthly installments on the last business day of each
         calendar month,

                  (ii) Bonus under the existing bonus programs applicable to
         Black for the current fiscal year, and any other programs approved by
         the Compensation Committee of Harris's Board of Directors applicable to
         executive employees, pro rated for the period through and including the
         Termination Date,

                  (iii) following the Termination Date (unless Black's
         employment shall have been validly terminated under Section 7(c)),
         payments in consideration of his continuing obligations under Sections
         3(d), 9, and 11 hereof equal to two times his Base Salary payable in
         twenty-four equal monthly installments commencing on the first day of
         the first month following the Termination Date,

                  (iv) health and dental insurance benefits comparable to those
         then provided to other executive employees of Harris, subject to the
         same co-pay, deductibles, and the like applicable to such executive
         employees, through and including the Termination Date,

                  (v) following the Termination Date (unless Black's employment
         shall have been validly terminated under Section 7(c)), coverage by
         Harris's health and dental insurance plans, or if such coverage is not
         available, reimbursement for health and dental insurance benefits
         obtained by Black, in an amount equal to the amount then paid by Harris
         for such benefits for other executive employees and subject to the same
         co-pay, deductibles, and the like, commencing the day after the
         Termination Date and continuing through and including Black's
         sixty-fifth (65th) birthday (provided, that Harris and Black shall
         cooperate to take such steps as are reasonably practical to qualify
         Black for continued coverage by Harris's health and dental insurance
         plans following the Termination Date),

                  (vi) term life insurance and long and short term disability
         coverage under policies of general applicability to Harris's executive
         employees, through and including the Termination Date,

                  (vii) a car allowance of $700 per month through and including
         the Termination Date, and

                  (viii) participation to the extent he is otherwise eligible
         therefor in Harris's 401(k) Plan and Employee Stock Purchase Plan,
         through and including the Termination Date.

         (b) Through and including the Termination Date, Harris will maintain
the existing $300,000 whole life insurance policy on Black's life issued by the
Prudential Insurance Company, and the existing $1,000,000 term life insurance
policy on his life issued by the Prudential Insurance Company. At Black's
election, exercised by giving written notice to Harris before or within thirty
days after the Termination Date, Harris will transfer to Black ownership of and
beneficial interests in such policies. Prior to any such transfer, Harris may
receive a distribution of the cash value of such policies and after any such
transfer Harris shall have no further obligations, including without limitation
obligations to pay premiums, with respect to such policies. If Black does not
elect to have such policies transferred to him, Harris shall be free to retain,
cancel, change beneficiaries of, or otherwise deal in any manner with such
policies.

         (c) Through and including the Termination Date, Black shall continue to
accrue, and may use, vacation time in accordance with company policy. Subject to
company policy regarding limitations on carry-over of vacation time, Harris
shall pay Black all of his vacation time accrued and unused, as well as
reimbursement for ordinary and customary business expenses incurred through and
including, the Termination Date.

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         (d) If a Disability of Black occurs prior to the Termination Date, then
during the period that Black is receiving disability payments under Harris's
Disability Policies: (i) until and including the Termination Date, such
disability payments shall be in lieu of any payments to which Black would be
otherwise entitled under Section 5(a)(i) and, to the extent applicable to such
period, payments to which Black would be otherwise entitled under Section
5(a)(ii) hereof; and (ii) following the Termination Date, the monthly payments
otherwise due Black under Section 5(a)(iii) shall be reduced by an amount equal
to any monthly disability payment to which he is entitled under the Disability
Policies for the month in which such Section 5(a)(iii) payment is made.

         (e) Harris shall reimburse Black for his attorney fees and
disbursements related to the transactions contemplated by this Agreement up to a
maximum of $30,000.

         (f) All payments hereunder shall be subject to any required withholding
of federal, state and local taxes pursuant to any applicable law or regulation.

         (g) If a Change of Control shall have occurred, then (i)
notwithstanding anything to the contrary in Section 7(c) hereof or otherwise,
but subject to Black's continuing obligation to comply with Sections 3(d), 9,
10, and 11 hereof, Black shall in all events be entitled to the payments and
benefits described in Sections 5(a)(iii) and 5(a)(v) hereof, and (ii) in
addition to any other rights he may have hereunder, Black may elect by notice to
Harris, to receive all amounts not yet paid under Section 5(a)(iii) in a lump
sum, payable on the later of ten days after such notice is given or the
Termination Date.

         6. Research Activities. For a period of two years after the Termination
Date, Black shall have access to and a fully paid, irrevocable license to use,
existing Harris research data without charge for the purpose of preparing books
and articles based on this research, giving appropriate credit to Harris.
Following the Termination Date, if Black so requests, Harris shall continue to
provide to Black, without charge, such secretarial and technical support as the
Board of Directors of Harris shall deem reasonable in connection with the
research then being conducted. In addition, prior to a Change of Control Harris
shall give fair consideration to any appropriate requests by Black for
additional internet data collection in connection with such research, provided
the same can be accomplished without undue cost or disruption to Harris. Section
10 hereof shall not apply to any intellectual property developed or created by
Black in connection with the post-Termination Date activities described herein,
all of which shall be and remain the property of Black; provided, however,
intellectual property developed or created by Harris shall remain the property
of Harris and Harris shall have a fully paid, irrevocable license to use the
intellectual property developed or created by Black based in whole or in
material part on Harris research and intellectual property in connection with
its business or operations, giving appropriate credit to Black. In case of
conflict between the provisions of this Section 6 and Section 9 or Section 11,
the provisions of Section 9 and Section 11 shall be controlling.

         7. Termination.

         (a) Harris reserves the right to terminate Black's employment at any
time with or without Cause, and Black reserves the right to terminate his
employment at any time with or without Good Reason and in any of such events,
neither party shall have any further obligation to the other under Section 2 or
Section 3 hereof.

         (b) If Harris terminates Black's employment without Cause or Black
validly terminates his employment for Good Reason prior to the Termination Date,
Harris shall nonetheless remain liable for, and pay or provide to Black, all of
the payments and benefits specified in Section 5 through the Termination Date,
and thereafter as specified in Section 5(a)(iii) and Section 5(a)(v).

         (c) If Harris validly terminates Black's employment with Cause or Black
terminates his employment without Good Reason (including by death) prior to a
Termination Date that occurs other than by operation of this Section 7(c),
Harris's obligations under Section 5 shall be cancelled and of no further effect
as of the Termination Date, but Harris shall remain liable to pay Black all
amounts accrued hereunder prior to the Termination Date. The cessation of
employment of Black shall not be deemed to be for Cause unless and until there
shall have been delivered to Black a copy of a resolution adopted by the
affirmative vote of a majority of the entire membership of the Board of
Directors after at least five business days notice is provided to Black and
Black is given an opportunity,

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together with counsel, to be heard by the Board of Directors of Harris at a
meeting (which may be by telephonic conference call), finding that in the good
faith opinion of the Board of Directors of Harris Black is guilty of the conduct
described in the definition of Cause and describing in reasonable detail the
particulars thereof. The cessation of employment of Black shall not be deemed to
be for Good Reason unless and until Black shall have provided to Harris at least
five business days' notice describing in reasonable detail the particulars
thereof.

         8. Non-Compete Agreement. The Non-Compete Agreement and any other
understandings or agreements between Harris and Black related to the terms and
conditions of his employment are hereby terminated, shall have no further force
and effect, and are replaced hereby.

         9. Confidentiality. During the course of his employment, Black may have
access to, develop, or otherwise be exposed to or aware of Confidential
Information. Black acknowledges that the Confidential Information must be kept
strictly confidential. During and after termination of Black's employment by
Harris Black agrees: (a) to take every reasonable precaution to safeguard and
treat the Confidential Information as confidential, (b) not to disclose the
Confidential Information to any third party except as part and in furtherance of
the business of Harris, and (c) not to disclose or use the Confidential
Information in any manner that would not be in furtherance of the interests of
Harris.

         10. Ownership of Intellectual Property. During Black's employment with
Harris prior to the date hereof, Black individually or with others may have been
involved in the development, invention, or creation of proprietary material,
methods, intellectual property, inventions, or technology including without
limitation items or materials that may be patentable, and during his future
employment with Harris, Black individually or with others may be involved in the
same. All such materials, methods, intellectual property, inventions, and
technology are developed on behalf of Harris and in the course of Black's
employment by Harris, and Harris shall be the sole and exclusive owner thereof
and shall have all proprietary rights therein. Black shall execute and deliver
any assignments, licenses, or other agreements necessary or desirable from time
to time to give Harris the full benefit of such ownership.

         11. Non-Competition.

         (a) Prior to the Termination Date, Black shall not, directly or
indirectly in any capacity (including among others as a director, officer,
employee, agent, consultant, partner or equity owner of any entity, except as
owner of less than 5% of the shares of the publicly traded stock of a
corporation), compete in any manner with Harris.

         (b) During the two-year period following the Termination Date, Black
shall not, directly or indirectly in any capacity (including among others as a
director, officer, employee, agent, consultant, partner or equity owner of any
entity, except as owner of less than 5% of the shares of the publicly traded
stock of a corporation), compete with Harris. Without limitation, Black shall
not competitively solicit or otherwise deal in a competitive way with any of the
clients or customers of Harris as of the time of his termination (including any
client to whom Harris has sold services or products in the two years prior to
termination and any prospective client or customer who has been targeted or
approached by Harris within the previous six months) with respect to any
services or products competitive with those of Harris, or which otherwise
directly or indirectly in any manner compete with Harris in any line of business
carried on or planned by Harris during Black's employment.

         (c) Black acknowledges that damages for any breach of this Section 11
will be difficult, if not impossible, to calculate and that legal remedies for
breach of this provision will be inadequate. Therefore, Harris shall be entitled
to obtain injunctive relief to enforce this provision in addition to any other
remedy at law or equity including termination of payments hereunder.

         12. Related Agreements/Further Assurances. The parties agree to
mutually cooperate in the execution and delivery of any documents and
agreements, and in the taking of any actions, reasonably necessary or desirable
to effectuate the purposes of this Agreement. Among others and as a condition of
the post Termination Date benefits to be provided hereunder, on the Termination
Date Black shall deliver to Harris a release in favor of Harris in the form
attached hereto as Exhibit A.

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         13. Notices. Any notice or demand upon any party hereto shall be deemed
to have been sufficiently given or served for all purposes hereof when in
writing and delivered in person or by nationally recognized overnight courier
with receipt requested, or three business days after it is mailed certified mail
postage prepaid, return receipt requested, addressed to the address shown in the
preamble to this Agreement or to such other address as may be designated by any
party by notice given to the other in the manner described in this Section 13,
and in the case of notice to Harris, with a copy given or served in the same
manner addressed to Beth Ela Wilkens, Harris Beach LLP, 99 Garnsey Road,
Pittsford, New York 14534, and in the case of Black, with a copy given or served
in the same manner addressed to Douglas E. Barzelay, Patterson Belknap, Webb &
Tyler LLP, 1133 Avenue of the Americas, New York, New York 10036.

         14. Representation/Drafting. Each of the parties acknowledges that it
has been represented by legal counsel in the negotiation and drafting of this
Agreement, that this Agreement has been drafted by mutual effort, and that no
ambiguity in this Agreement shall be construed against either party as
draftsperson.

         15. Successors and Assigns. This Agreement shall inure to the benefit
of, and shall be binding upon, the respective heirs, legal representatives,
successors, and assigns of the parties hereto.

         16. Term. The term of this Agreement shall commence on the date hereof
and shall expire on the Termination Date, except that the obligations provided
in Sections 3(d), 4(b), 5(a)(iii), 5(a)(v), 5(b), 5(f), 5(g), 6, 8, 9, 10,
11(b), 11(c), 12, 14, 15, 16, 17, 18, 19, and 20 shall survive and be continuing
in accordance with their terms, and except that any financial obligation accrued
prior to the Termination Date shall survive until discharged by the payment
thereof.

         17. Governing Law. This Agreement shall be construed under and governed
by the laws of the State of New York, without reference to principles of
conflicts of laws. The parties hereto consent to exclusive venue in the courts
of the State of New York sitting in Monroe County, or in the United States
District Court, Western District of New York with respect to any dispute
regarding the subject matter hereof. If any legal action is commenced to enforce
or interpret the provisions of this Agreement, or to recover damages for its
breach, all reasonable legal fees, disbursements, and court costs paid or
incurred by the prevailing party arising out of or resulting from such action or
proceeding shall be reimbursed by the other party to the prevailing party in
such action or proceeding.

         18. Entire Agreement/Waivers. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and shall not
be modified or amended except in writing signed by both of the parties. No
waiver of any breach of this Agreement shall be a waiver of any preceding or
succeeding breach, and no waiver of any right under this Agreement shall be
construed as a waiver of any other right. Harris and Black shall not be required
to give notice to enforce strict adherence to all terms of this Agreement.

         19. Severability. If one or more of the provisions in this Agreement
are deemed unenforceable by law, then the remaining provisions shall continue in
full force and effect.

         20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which,
when taken together, shall be deemed to constitute the same Agreement.

                            [Signature pages follow]

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

                                            HARRIS INTERACTIVE INC.

                                            By: /s/ BRUCE A. NEWMAN
                                                    -------------------------
                                            Title:  Chief Financial Officer,
                                                    Secretary and Treasurer
                                                    -------------------------

                                                /s/ GORDON S. BLACK
                                            ---------------------------------
                                                    GORDON S. BLACKExhibit 10.4

                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of the 1st
day of November, 2002, by and between MFA MORTGAGE INVESTMENTS, INC., a Maryland
corporation ("MFA"), and TERESA D. COVELLO, an individual residing at 12 Wincott
Drive, Melville, New York 11747 (the "Executive").

                              W I T N E S S E T H :

WHEREAS, MFA wishes to offer employment to, and secure the exclusive services
of, the Executive, and the Executive wishes to accept such offer, under the
terms and conditions described below. NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein contained, the parties hereto agree as
follows:

Term of Employment.

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.

The Term of Employment under this Agreement shall include the Initial Term and
each Renewal Term. The Initial Term shall commence as of November 1, 2002 and
shall continue until October 31, 2003. 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 90 days prior to the end of the Initial
Term or any Renewal Term, as the case may be, of her or its intent not to renew
such Initial Term or Renewal Term, as the case may be.

Position; Duties and Responsibilities.

During the Term of Employment, the Executive shall be employed as
Controller/Senior Vice President of MFA, reporting to the Chief Financial
Officer of MFA (the "CFO"), 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 Chief Executive Officer of MFA (the
"CEO") and/or the CFO.

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, the CFO 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").

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

Compensation.

Base Salary. During the Term of Employment, MFA shall pay to the Executive a
base salary (the "Base Salary") equal to $140,000 per annum. The Base Salary
shall be paid in accordance with MFA's normal payroll practices.

Performance Bonus. The Executive shall be eligible to receive an annual
performance bonus in such amount, in such manner and at such time as shall be
recommended by the CEO and/or the CFO and approved by the Compensation Committee
of the Board of Directors or the Board of Directors, as the case may be.

Long-Term Incentive Program. The Executive shall be eligible to receive such
stock option, restricted stock or dividend equivalent rights grants as the
Compensation Committee of the Board of Directors or the Board of Directors, as
the case may be, shall deem appropriate.

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Annual Review. The Compensation Committee of the Board of Directors or the Board
of Directors, as the case may be, shall, at least annually, review the
Executive's entire compensation package to determine whether it continues to
meet MFA's compensation objectives.

Employee Benefit Programs and Fringe Benefits.

During the Term of Employment, the Executive shall be entitled to four 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 the Executive in connection with her employment.

Termination of Employment.

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, her legal representative or her
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, her legal representative or her 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 six months following the date of such
termination, which shall be paid to the Executive, her legal representative or
her estate, as the case may be.

Termination Without Cause. In the event the Executive's employment is terminated
by MFA without Cause, unless such termination is preceded by the Executive's
giving notice of her 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 her then current Base Salary and continued health
insurance coverage at MFA's expense, until the earlier of (i) the expiration of
the Term of Employment or (ii) the six-month 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 her employment not terminated.

Termination by MFA for Cause or Voluntary Termination by the Executive. In the
event the Executive's employment is terminated by MFA for Cause, is terminated
by the Executive voluntarily or is terminated by MFA 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.

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 and in anticipation of a Change in Control, (2) the resignation of
her 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 Executive's resignation of her employment for Good
Reason within twelve months following a Change in Control:

MFA shall pay to Executive in a lump sum, within 30 days following the
termination of employment, an amount equal to nine months of the Executive's
Base Salary plus 75% of the prior year's annual performance bonus;

all of the Executive's outstanding stock options shall immediately vest in full
and become exercisable for a period of 90 days from the date of termination but
in no event beyond the date on which any such option would have expired had the
Executive's employment not terminated; and

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.

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The Executive, in her 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.

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:

      o     any annual bonus earned during one or more preceding years but not
            paid;

      o     any vested deferred compensation (including any interest accrued on
            such deferred amounts);

      o     reimbursement for reasonable business expenses incurred but not yet
            reimbursed by MFA; and

      o     any other benefits to which the Executive or her legal
            representative may be entitled under applicable plans and programs
            of MFA, as provided in Paragraph 4 above.

No Mitigation; No Offset. In the event of any termination of the Executive's
employment under this Agreement, she 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 she may obtain.

Definitions.

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

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 the Company, (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 her duties under this Agreement; (iii) failure to adhere
to the lawful directions of the CEO, the CFO and/or the Board of Directors that
are reasonably consistent with her 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 her
performance of her 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 her 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 her
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 weeks of the date
of suspension.

Change in Control. A "Change in Control" shall mean the occurrence of any one of
the following events: 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

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of MFA ("Shares") (in either such case other than as a result of an acquisition
of securities directly from MFA); or persons who, as of the effective date of
MFA's Second Amended and Restated 1997 Stock Option Plan, 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 the
Plan, be considered an Incumbent Director; or there shall occur (A) any
consolidation or merger of MFA or any subsidiary where the stockholders 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 50% 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).

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).

Good Reason. "Good Reason" shall mean:

      o     a material diminution in the Executive's title, duties or
            responsibilities;

      o     relocation of the Executive's place of employment without her
            consent outside the New York City metropolitan area;

      o     the failure of MFA to pay within 30 business days any payment due
            from MFA;

      o     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

      o     the failure by MFA to honor any of its material obligations herein.

Covenant Not To Compete.

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 her employment with MFA. During such one-year
period, the Executive shall not solicit any employees of the Company 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 her employment by MFA and which have not
otherwise been made available to the public, and upon termination of her
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.

Indemnification.

MFA shall indemnify the Executive to the fullest extent permitted by Maryland
law in effect as of the date hereof in connection with the Executive's duties
with the Company, against all costs, expenses, liabilities and losses
(including, without limitation, attorneys' fees, judgments, fines, penalties,
ERISA excise taxes and amounts paid in settlement)

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actually and reasonably incurred by the Executive in connection with an action,
suit or proceeding.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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.

Counterparts.

This Agreement may be executed in two or more counterparts.

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

                                        MFA Mortgage Investments, Inc.

                                        By:
                                           -------------------------------------
                                           Name:  Stewart Zimmerman
                                           Title: Chief Executive Officer
                                                   and President

                                           -------------------------------------
                                           Teresa D. Covello

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