Document:

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                                                                    EXHIBIT 10.2

                   FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
                     SEVERANCE POLICY FOR SENIOR MANAGEMENT

               (AS AMENDED AND RESTATED EFFECTIVE MARCH 13, 2000)

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                                TABLE OF CONTENTS
                                                                            PAGE

SECTION 1.     ESTABLISHMENT AND PURPOSE OF THE PLAN.........................1

SECTION 2.     ELIGIBLE EMPLOYEES............................................1

SECTION 3.     SEVERANCE PAY AND SEVERANCE BENEFITS..........................2

SECTION 4.     OFFSET........................................................5

SECTION 5.     PAYMENT OF SEVERANCE PAY......................................6

SECTION 6.     REINSTATEMENT.................................................6

SECTION 7.     WAIVER AND RELEASE AGREEMENT..................................6

SECTION 8.     PLAN ADMINISTRATION...........................................7

SECTION 9.     AMENDMENT/TERMINATION/VESTING.................................7

SECTION 10.    PAY AND OTHER BENEFITS........................................7

SECTION 11.    NO ASSIGNMENT.................................................8

SECTION 12.    RECOVERY OF PAYMENTS MADE BY MISTAKE..........................8

SECTION 13.    REPRESENTATIONS CONTRARY TO THE PLAN..........................9

SECTION 14.    NO EMPLOYMENT RIGHTS..........................................9

SECTION 15.    COMPANY INFORMATION...........................................9

SECTION 16.    CONFIDENTIALITY...............................................9

SECTION 17.    PLAN FUNDING.................................................10

SECTION 18.    APPLICABLE LAW...............................................10

SECTION 19.    SEVERABILITY.................................................10

SECTION 20.    PLAN YEAR....................................................10

SECTION 21.    RETURN OF COMPANY PROPERTY...................................10

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                   FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
                     SEVERANCE POLICY FOR SENIOR MANAGEMENT

SECTION 1         ESTABLISHMENT AND PURPOSE OF THE PLAN

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. (hereinafter "FSA") has adopted the
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. SEVERANCE POLICY FOR SENIOR
MANAGEMENT (hereinafter the "PLAN"), for the benefit of the Senior Management
(as hereinafter defined) of FSA and its current direct and indirect wholly-owned
subsidiaries (collectively referred to herein as the "COMPANY"), as described
herein. The Plan was adopted effective as of February 8, 1995. The Plan is
hereby amended and restated, as set forth in this Plan document, effective as of
March 13, 2000, to (i) provide reimbursement on a grossed-up basis for excise
taxes that might be payable by eligible employees due in respect of any payment
after giving effect to a "Change in Control" (as defined herein) of the Company,
and (ii) restrict adverse amendments to the Plan for eligible employees through
December 31, 2004. The Plan is an unfunded welfare benefit plan for purposes of
the Employee Retirement Income Security Act of 1974, as amended (hereinafter
"ERISA") and a severance pay plan within the meaning of the United States
Department of Labor regulations section 2510.3-2(b). The purpose of the Plan is
to provide an eligible employee whose employment terminates as described in
Section 2 with Severance Pay and Severance Benefits for a specified period of
time.

SECTION 2         ELIGIBLE EMPLOYEES

Members of Senior Management who have been employed with the Company for at
least one (1) year and whose employment is (i) terminated by the Company for any
reason other than for cause or (ii) constructively terminated, are eligible to
participate in the Plan and shall be considered "ELIGIBLE EMPLOYEES" under the
Plan. "SENIOR MANAGEMENT" means, and shall be limited to, the permanent members
of the Management Committee of the Company on the effective date of the Plan and
any person who shall hereafter be designated as eligible to participate in the
Plan by written notice thereof, signed by the President of the Company and
expressly stating that such person is a member of "Senior Management" for
purposes of the Plan. The permanent members of the Management Committee of the
Company on the effective date of the Plan are (a) the Chief Executive Officer of
the Company, (b) the Chief Operating Officer of the Company, (c) the General
Counsel of the Company, (d) the Chief Financial Officer of the Company, (e) the
Managing Director in charge of the Financial Guaranty Department of Financial
Security Assurance Inc., (f) the Chief Underwriting Officer of Financial
Security Assurance Inc. and (g) the Managing Director in charge of the Insured
Portfolio Management Department of Financial Security Assurance Inc. Termination
"FOR CAUSE" means termination for unethical practices, illegal conduct or gross
insubordination, but specifically excludes termination as a result of
substandard performance. "CONSTRUCTIVE TERMINATION" of employment occurs if an
eligible employee's compensation opportunity is significantly reduced out of
line with Company results, or if there is a material reduction in
responsibilities. The determination as to whether an employee has been (i)
terminated for cause, or (ii) constructively terminated, will be made by the
Plan Administrator, in its sole discretion.

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An otherwise eligible employee shall NOT be eligible for Severance Pay and
Severance Benefits under the Plan if:

      (a)   the eligible employee's  employment with the Company terminates by
            reason of death or disability;

      (b)   the eligible employee's employment with the Company terminates
            through retirement, voluntary resignation, job abandonment or
            failure to report for work;

      (c)   the eligible employee's employment with the Company is involuntarily
            terminated after the eligible employee refuses a transfer to a new
            position at the same geographical location of the Company, and such
            transfer does not constitute a constructive termination;

      (d)   the eligible employee is employed in a Company operation or facility
            substantially all of the assets of which are sold and the eligible
            employee is offered a comparable position, as determined by the Plan
            Administrator, with the purchaser;

      (e)   the eligible employee fails or refuses to continue in the employment
            of the Company until the end of the notice period provided for in
            the notice of termination described in Section 3 below (absent
            constructive termination during such notice period); or

      (f)   the Plan is terminated.

SECTION 3         SEVERANCE PAY AND SEVERANCE BENEFITS

In exchange for providing the Plan Administrator a valid Waiver and Release
Agreement in a form acceptable to the Company, an eligible employee shall be
eligible to receive Severance Pay and Severance Benefits in accordance with the
paragraphs set forth below. The consideration for the voluntary Waiver and
Release Agreement shall be the Severance Pay and the Severance Benefits that the
eligible employee would not otherwise be eligible to receive.

      (a)   SEVERANCE PAY. An eligible employee shall be eligible to receive
            Severance Pay in accordance with the following:

            (1)   CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER: Each
                  eligible employee who served as the Chief Executive Officer or
                  the Chief Operating Officer of the Company shall be eligible
                  to receive eighteen (18) months of pay.

            (2)   PERMANENT MEMBERS OF MANAGEMENT COMMITTEE: Each eligible
                  employee who served as a permanent member of the Management
                  Committee of the Company (and who did not serve as the Chief
                  Executive

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                  Office or the Chief Operating Officer of the Company) shall be
                  eligible to receive twelve (12) months of pay.

                  For purposes of determining the amount of Severance Pay to
            which an eligible employee is entitled, "MONTHS OF PAY" (a) shall be
            determined on the basis of (a) the eligible employee's monthly
            salary on his or her separation date and (b) shall include the
            eligible employee's most recent bonus (or three year average, if
            higher), with one-twelfth (1/12th) of such bonus amount being
            allocated to each month of pay. An eligible employee's base salary
            and bonus shall include amounts deferred under the Financial
            Security Assurance Holdings Ltd. Deferred Compensation Plan and the
            Financial Security Assurance Inc. Cash or Deferred Plan, and amounts
            allocated to the Financial Security Assurance Flex Plan. For this
            purpose, "BONUS" shall also include any amounts converted into an
            equity bonus under the Financial Security Assurance Holdings Ltd.
            1993 Equity Participation Plan. For all purposes of the Plan, the
            term "SEPARATION DATE" shall mean the last day the eligible employee
            is actively employed by the Company. In the event an eligible
            employee receives formal written notice of a future termination of
            employment and employment is not terminated until the date provided
            in such notice, then the Plan Administrator may, in its discretion,
            reduce the period of Severance Pay by the length of the notice
            period, in an amount of up to one-third (1/3) of the severance
            period. For purposes of the Plan, "SEVERANCE PERIOD" shall mean the
            period of time over which an eligible employee is to receive
            Severance Pay pursuant to this Section 3.

      (b)   SEVERANCE BENEFITS.

            (1)   CONTINUATION OF HOSPITAL, MEDICAL, DENTAL, PRESCRIPTION DRUG
                  AND VISION COVERAGES. An eligible employee may elect
                  continuation of his or her Company sponsored hospital,
                  medical, dental, prescription drug and vision benefits
                  ("HEALTH BENEFITS") under COBRA, as defined in Section
                  4980B(f)(2) of the Internal Revenue Code of 1986, as amended
                  ("COBRA COVERAGE") for a period of up to eighteen (18) months
                  following the separation date. The eligible employee shall pay
                  the same premium paid by active employees for their Company
                  sponsored health benefits and the Company shall pay the
                  remaining portion of the premium during the severance period.
                  The COBRA coverage provided at this reduced cost shall
                  continue until the end of the month for which the eligible
                  employee is permitted to pay the same premium paid by
                  similarly situated active employees for their Company
                  sponsored health benefits. After the end of the severance
                  period, the eligible employee may elect to continue his or her
                  health benefits under COBRA for up to the remainder of the
                  eighteen (18) months; however, the eligible employee must pay
                  the full premium for such coverage plus a two percent (2%)
                  administrative charge, or 102% of the total premium cost. If
                  the eligible employee dies prior to the end of

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                  the period of time that he or she would have received his or
                  her Severance Benefits, and if the eligible employee's spouse
                  and/or dependents are entitled to continued COBRA coverage,
                  the Company shall pay the entire cost of such coverage for the
                  remainder of the severance period. Thereafter, the spouse
                  and/or dependents may elect to continue COBRA coverage;
                  however they must pay the full premium cost for such coverage
                  plus a two percent (2%) administrative charge.

            (2)   LIFE INSURANCE BENEFITS. Coverage under the Financial Security
                  Assurance Inc. Life and AD & D Insurance Plan shall continue
                  on the same basis as for similarly situated active employees
                  during the severance period to the extent, if any, that the
                  insurance carrier will so allow.

            (3)   DISABILITY INSURANCE COVERAGE. Coverage under Company
                  sponsored disability insurance shall continue on the same
                  basis as for similarly situated active employees during the
                  severance period to the extent, if any, that the insurance
                  carrier will so allow.

      (c)   CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

            (1)   GROSS-UP PAYMENTS. Anything in the Plan to the contrary
                  notwithstanding, in the event that it shall be determined that
                  any payment or distribution by the Company to or for the
                  benefit of an eligible employee (whether paid or payable or
                  distributed or distributable pursuant to the terms of the Plan
                  or otherwise) (a " PAYMENT") would be subject to the excise
                  tax imposed by Sections 280G and 4999 of the Internal Revenue
                  Code of 1986, as amended (the "CODE"), or that any interest or
                  penalties are incurred by an eligible employee with respect to
                  such excise tax (such excise tax, together with any such
                  interest and penalties, being hereinafter collectively
                  referred to as the "EXCISE TAX"), then the eligible employee
                  shall be entitled to receive an additional payment (the
                  "GROSS-UP PAYMENT") in an amount such that after payment by
                  the eligible employee of all taxes (including any interest or
                  penalties imposed with respect to such taxes and Excise Tax)
                  imposed upon the Gross-Up Payment, the eligible employee
                  retains an amount of the Gross-Up Payment equal to the Excise
                  Tax imposed upon the Payments.

            (2)   DETERMINATION OF GROSS-UP PAYMENTS. Notwithstanding the
                  provisions of Section 8, all determinations required to be
                  made under this Section 3(c), including whether and when the
                  Gross-Up Payment is required and the amount of such Gross-Up
                  Payment including any determination of the parachute payments
                  under Code Section 280G(b)(2), and the assumptions to be
                  utilized in arriving at such determinations shall be made by a
                  nationally recognized certified public accounting firm that is
                  mutually selected by the eligible employee and the Company
                  (the

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                                                                          page 5

                  "ACCOUNTING FIRM") which shall provide detailed supporting
                  calculations both to the Company and the eligible employee
                  within 15 business days of the receipt of notice from the
                  eligible employee that there has been a Payment, or such
                  earlier time as is requested by the Company. All fees and
                  expenses of the Accounting Firm shall be borne solely by the
                  Company. Any Gross-Up Payment shall be paid by the Company to
                  the eligible employee within five days of the receipt of the
                  Accounting Firm's determination. Any determination by the
                  Accounting Firm shall be binding upon the Company and the
                  eligible employee. As a result of uncertainty in the
                  application of Section 4999 of the Code at the time of the
                  initial determination by the Accounting Firm hereunder, it is
                  possible that the Gross-Up Payment made will have been an
                  amount less than the Company should have paid pursuant to this
                  Section 3(c) (the "Underpayment"). In the event that the
                  eligible employee thereafter is required to make a payment of
                  any Excise Tax, the Accounting Firm shall determine the amount
                  of the Underpayment and any such Underpayment shall be
                  promptly paid by the Company to or for the benefit of the
                  eligible employee.

The Plan Administrator, acting in its sole discretion may, in writing, enhance
the amount of Severance Pay and/or Severance Benefits that an eligible employee
is eligible to receive over the amount of Severance Pay and Severance Benefits
described above and/or make available to the eligible employee other forms of
Severance Benefits.

SECTION 4         OFFSET

Severance Pay and Severance Benefits provided under the Plan shall be offset by
any severance pay or severance benefits provided to an eligible employee under
an authorized written employment agreement containing a severance provision, an
authorized written severance agreement, or any other group
reorganization/restructuring benefit plan or program sponsored by the Company.
By accepting Severance Pay and Severance Benefits under the Plan, an eligible
participant waives all rights to receive benefits under the Financial Security
Assurance Holdings Ltd. Severance Policy. In the event an eligible employee who
is receiving Severance Pay and Severance Benefits under the Plan is employed
with any other employer during the severance period, due and unpaid Severance
Pay shall be offset by an amount equal to fifty percent (50%) of the
compensation received by the eligible employee from the new employment during
the severance period, and Severance Benefits shall cease. The eligible employee
shall be obligated to refund any amounts paid by the Company as Severance Pay
that exceed the amount of Severance Pay payable to the eligible employee
hereunder giving effect to the offset referred to in the preceding sentence. An
eligible employee shall, as a condition of receiving Severance Pay and Severance
Benefits under the Plan, undertake to provide to the Company prompt notice of
the commencement of any new employment of such eligible employee during the
severance period.

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SECTION 5         PAYMENT OF SEVERANCE PAY

Severance Pay that becomes payable shall be paid in installments in accordance
with the Company's regular payroll payment schedule commencing with the first
regular payroll payment date occurring after expiration of the seven (7) day
period during which an eligible employee may revoke his or her Waiver and
Release Agreement (as explained more fully below under the Section entitled
"WAIVER AND RELEASE AGREEMENT"); however, the Plan Administrator reserves the
right in its sole discretion to pay Severance Pay in a lump sum. All legally
required taxes and any sums owing to the Company shall be deducted from
Severance Pay payments.

SECTION 6         REINSTATEMENT

If an eligible employee returns to a temporary assignment with the Company while
receiving Severance Pay and Severance Benefits, payments of Severance Pay and
availability of Severance Benefits shall cease during the period of temporary
employment and shall resume at the conclusion of the temporary assignment. In
the event that an eligible employee who is receiving Severance Pay or Severance
Benefits is permanently reemployed by the Company, the payment of Severance Pay
and the availability of Severance Benefits under the Plan shall cease as of the
date his or her reemployment begins.

SECTION 7         WAIVER AND RELEASE AGREEMENT

In order to receive Severance Pay and Severance Benefits, an eligible employee
must submit a signed Waiver and Release Agreement form to the Plan Administrator
no later than twenty-one (21) days after his or her separation date. If the
termination of the eligible employee is part of a group termination, the signed
Waiver and Release Agreement must be submitted to the Plan Administrator no
later than forty-five (45) days after his or her separation date. Attached to
the Waiver and Release Agreement, if required by law, as Attachment I will be a
list of job titles and ages of employees of the Company who are eligible for the
Plan, and as Attachment II will be a list of the ages of employees of the
Company who are not eligible for the Plan. An eligible employee may revoke his
or her signed Waiver and Release Agreement within seven (7) days of his or her
signing the Waiver and Release Agreement. A revocation by an eligible employee
must be made in writing and must be received by the Plan Administrator within
such seven (7) day period. An eligible employee who timely revokes his or her
Waiver and Release Agreement shall not be eligible to receive any Severance Pay
and Severance Benefits under the Plan. An eligible employee who timely submits a
signed Waiver and Release Agreement form and who does not exercise his or her
right of revocation shall be eligible to receive Severance Pay and Severance
Benefits. Eligible employees shall be encouraged to contact their personal
attorney to review the Waiver and Release Agreement form if they so desire.

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SECTION 8         PLAN ADMINISTRATION

FSA shall serve as the "Plan Administrator" of the Plan and a "named fiduciary"
within the meaning of such terms as defined in ERISA. The Plan Administrator
shall have the discretionary authority to determine eligibility for Plan
benefits and to construe the terms of the Plan, including the making of factual
determinations. The decisions of the Plan Administrator shall be final and
conclusive with respect to all questions concerning the administration of the
Plan. The Plan Administrator may delegate to other persons responsibilities for
performing certain of the duties of the Plan Administrator under the terms of
the Plan and may seek such expert advice as the Plan Administrator deems
reasonably necessary with respect to the Plan. The Plan Administrator shall be
entitled to rely upon the information and advice furnished by such delegatees
and experts, unless actually knowing such information and advice to be
inaccurate or unlawful. The Plan Administrator shall establish and maintain a
reasonable claims procedure, including a procedure for appeal of denied claims.
In no event shall an eligible employee or any other person be entitled to
challenge a decision of the Plan Administrator in court or in any other
administrative proceeding unless and until the claim and appeals procedures
established under the Plan have been complied with and exhausted.

SECTION 9         AMENDMENT/TERMINATION/VESTING

The Company may terminate or amend the Plan at any time and from time to time,
for any reason or no reason; PROVIDED, HOWEVER, that any such termination or
amendment of the Plan that is adverse to the interest of any eligible employee
under the Plan shall be effective only (i) as to any eligible employee first
becoming an Employee after the date of such amendment or termination or (ii) as
to any other employee, on or after December 31, 2004. Any amendment or
termination of the Plan shall be adopted by the Board of Directors of FSA and
executed by an authorized officer of FSA. In no event will the termination of
the Plan reduce Severance Pay and Severance Benefits previously granted to an
eligible employee under the Plan.

SECTION 10        PAY AND OTHER BENEFITS

An eligible employee's participation in all of the Company's employee pension
benefit plans and employee welfare plans in which he or she is enrolled as of
his or her separation date shall cease as of his or her separation date, except
as provided above with respect to COBRA coverage and life insurance benefits.
All pay and other benefits, including unreimbursed valid business expenses and
accrued but unpaid salary (but excluding Plan benefits), payable to an eligible
employee upon his or her separation date shall be paid in accordance with the
terms of those established policies, plans and procedures. An eligible employee
who is participating in the Plan shall not be eligible for any other type of
severance benefits under any other severance pay plan, program or policy of the
Company. Eligible employees shall receive payment for unused vacation days on
the first payroll date following the eligible employee's termination of
employment. Such payment shall be equal to one twentieth (1/20th) of one month
of Severance Pay for every vacation day and shall be paid in a single lump sum
payment. Such payment shall

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                                                                        page 8

not reduce the amount of Severance Pay otherwise payable to the eligible
employee under the Plan. For purposes of the foregoing,

      (a)   total vacation days for any eligible employee in respect of any
            calendar year shall equal the sum of:

            (1)   carryover vacation days to which the eligible employee is
                  entitled in accordance with Company policy from the year prior
                  to the year in which the eligible employee's separation date
                  occurred; and

            (2)   the product (rounded up to the nearest whole number) of:

                  (A)   the annual number of vacation days to which the eligible
                        employee is entitled in accordance with Company policy;
                        and

                  (B)   a fraction,

                        (i)   the numerator of which is the number of days of
                              the year which have elapsed from the January 1 of
                              the year in which the eligible employee's
                              separation date occurs through and including the
                              eligible employee's separation date, and

                        (ii)  the denominator of which is three hundred and
                              sixty-five (365); and

      (b)   unused vacation days for any eligible employee in respect of any
            calendar year will equal total vacation days in respect of such year
            determined in accordance with subsection (a) above, less vacation
            days used in such year.

SECTION 11        NO ASSIGNMENT

Severance Pay or Severance Benefits payable under the Plan shall not be subject
to anticipation, alienation, pledge, sale, transfer, assignment, garnishment,
attachment, execution, encumbrance, levy, lien, or charge, and any attempt to
cause such Severance Pay or Severance Benefits to be so subjected shall not be
recognized, except to the extent required by law.

SECTION 12        RECOVERY OF PAYMENTS MADE BY MISTAKE

An eligible employee shall be required to return to the Company any Severance
Pay or Severance Benefits, or portion thereof, made by a mistake of fact or law.

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SECTION 13        REPRESENTATIONS CONTRARY TO THE PLAN

No employee, officer, or director of the Company has the authority to alter,
vary or modify the terms of the Plan except by means of an authorized written
amendment to the Plan. No verbal or written representations contrary to the
terms of the Plan and its written amendments shall be binding upon the Plan, the
Plan Administrator or the Company.

SECTION 14        NO EMPLOYMENT RIGHTS

The Plan shall not confer employment rights upon any person. No person shall be
entitled, by virtue of the Plan, to remain in the employ of the Company and
nothing in the Plan shall restrict the right of the Company to terminate the
employment of any eligible employee at any time.

SECTION 15        COMPANY INFORMATION

Eligible employees may have access to Company Information. Recognizing that the
disclosure or improper use of such Company Information will cause serious and
irreparable injury to the Company, as a condition of receiving Severance Pay and
Severance Benefits eligible employees with such access acknowledge that (i) they
will not at any time, directly or indirectly, disclose Company Information to
any third party or otherwise retain or use such Company Information for their
own benefit or the benefit of others, (ii) if they disclose or improperly use
any Company Information, the Company shall be entitled to apply for and receive
an injunction to restrain any violation of this paragraph, and (iii) eligible
employees shall be liable for any damages the Company incurs, including
litigation costs and reasonable attorneys' fees.

"COMPANY INFORMATION" shall mean any confidential, financial, marketing,
business, technical or other information, including, without limitation,
information that the eligible employee prepared, caused to be prepared, received
in connection with and/or contemporaneous with his or her employment with the
Company, such as information provided by customers that is not generally known
in the industry, objective and subjective evaluations of management,
transactions or proposed transactions, trade secrets, personnel information and
marketing methods and techniques. The term "COMPANY INFORMATION" specifically
excludes information that is generally known in the industry (except when known
based upon the eligible employee's actions in contravention of this provision)
or that is otherwise publicly available.

SECTION 16        CONFIDENTIALITY

Eligible employees are prohibited from disclosing the existence of this Plan and
its terms and conditions, to any other past, present or future employees of the
Company, or to any other person, except (and in such cases, only to the extent
necessary) to the eligible employee's immediate family, attorneys, accountants,
financial advisors, lending institutions, federal, state or local taxing
authorities, or as otherwise required by law, or for the enforcement of the Plan
terms.

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SECTION 17        PLAN FUNDING

No eligible employee shall acquire by reason of the Plan any right in or title
to any assets, funds, or property of the Company. Any Severance Pay or Severance
Benefits that become payable under the Plan are unfunded obligations of the
Company and shall be paid from the general assets of the Company. No employee,
officer, director or agent of the Company guarantees in any manner the payment
of Severance Pay or Severance Benefits.

SECTION 18        APPLICABLE LAW

The Plan shall be governed and construed in accordance with ERISA and in the
event that any reference shall be made to State law, the internal laws of the
State of New York shall apply.

SECTION 19        SEVERABILITY

If any provision of the Plan is found, held or deemed by a court of competent
jurisdiction to be void, unlawful or unenforceable under any applicable statute
or other controlling law, the remainder of the Plan shall continue in full force
and effect.

SECTION 20        PLAN YEAR

The ERISA plan year of the Plan shall be the calendar year.

SECTION 21        RETURN OF COMPANY PROPERTY

All Company property (including keys, credit cards, identification cards, office
equipment, portable computers and cellular telephones) and Company Information
(including all copies, duplicates, reproductions or excerpts thereof) must be
returned by the eligible employee as of his or her separation date in order for
such eligible employee to commence receiving Severance Pay and Severance
Benefits under the Plan.

                        FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

                        By:      /s/ Robert P. Cochran
                            ----------------------------------------

                        Its: Chairman and Chief Executive Officer
                            ----------------------------------------

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                                                                 ATTACHMENT I TO
          FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. SEVERANCE POLICY FOR SENIOR
                                                                      MANAGEMENT

                          WAIVER AND RELEASE AGREEMENT

      (1) WAIVER AND RELEASE, ETC. In consideration for the Severance Pay and
Severance Benefits to be provided to me under the terms of the FINANCIAL
SECURITY ASSURANCE HOLDINGS LTD. SEVERANCE POLICY FOR SENIOR MANAGEMENT
(hereinafter, the "Plan"), I, on behalf of myself and my heirs, executors,
administrators, attorneys and assigns, hereby waive, release and forever
discharge FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. (hereinafter, the
"Company") and the Company's parent, subsidiaries, divisions and affiliates,
whether direct or indirect, its and their joint ventures and joint venturers
(including its and their respective directors, officers, associates,
employees, shareholders, partners and agents, past, present and future), and
each of its and their respective successors and assigns (hereinafter
collectively referred to as "Releasees"), from any and all known or unknown
actions, causes of action, claims or liabilities of any kind which have or
could be asserted against the Releasees arising out of or related to my
employment with and/or separation from employment with the Company and/or any
of the other Releasees and/or any other occurrence up to and including the
later of the date of this Agreement and the date of termination of employment
with the Company and/or any of the other Releasees, including but not limited
to:

      (a)   claims, actions, causes of action or liabilities arising under
            Title VII of the Civil Rights Act, as amended, the Age
            Discrimination in Employment Act, as amended, the Employee
            Retirement Income Security Act, as amended, the Rehabilitation
            Act, as amended, the Americans with Disabilities Act, as amended,
            the Family and Medical Leave Act, as amended, and/or any other
            federal, state, municipal, or local employment discrimination
            statutes (including, but not limited to, claims based on age,
            sex, attainment of benefit plan rights, race, religion, national
            origin, marital status, sexual orientation, ancestry, harassment,
            parental status, handicap, disability, retaliation, and veteran
            status); and/or

      (b)   claims, actions, causes of action or liabilities arising under any
            other federal, state, municipal, or local statute, law, ordinance or
            regulation; and/or

      (c)   any other claim whatsoever including, but not limited to, claims
            for severance pay, claims based upon breach of contract, wrongful
            termination, defamation, intentional infliction of emotional
            distress, tort, personal injury, invasion of privacy, violation
            of public policy, negligence and/or any other common law,
            statutory or other claim whatsoever arising out of or relating to
            my employment with and/or separation from employment with the
            Company and/or any of the other Releasees,

but excluding the right to file an administrative charge or participate in an
investigation conducted by the Equal Employment Opportunity Commission (the
"EEOC"), any claims which I may make under state workers' compensation or
unemployment laws, and/or any claims which by law I cannot waive. I am waiving,
however, any right to monetary recovery should the EEOC or any other agency
pursue any claim on my behalf. I further waive, release, and discharge the

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Company and/or any of the other Releasees from any reinstatement rights that I
have or could have and I acknowledge that I have not suffered any on-the-job
injury for which I have not already filed a claim. I also agree, without any
reservation whatsoever, never to sue the Company and/or any of the Releasees on
the basis of any and all claims of any type to date arising out of any aspect of
my employment with and/or separation from employment with the Company and/or any
of the Releasees. I understand that this Agreement includes a release of all
known and unknown claims arising up to and including the date of this Agreement.

      (2) COMPANY INFORMATION. I acknowledge that I may have access to certain
confidential and other information of the Company, referred to in the Plan as
"Company Information". Recognizing that the disclosure or improper use of
Company Information may cause serious and irreparable injury to the Company, I
agree that I will not at any time, directly or indirectly, disclose Company
Information or use Company Information for my own benefit or the benefit of any
other party except as permitted under the Plan.

      (3) COOPERATION; RETURN OF COMPANY PROPERTY. I agree to cooperate with the
Company with respect to providing information with respect to matters with which
I was involved at the time of my termination of employment. I agree to return to
the Company all Company property in my possession as promptly as practicable,
including, without limitation, any keys, credit cards, documents and records,
identification cards, office equipment, portable computers, mobile telephones
and parking permits.

      (4) CONSEQUENCES OF BREACH. In the event that I breach this Agreement by
violating any of the provisions of paragraph (1), (2) or (3), I acknowledge that
(q) the Company shall be entitled to apply for and receive an injunction to
restrain any violation of such paragraphs, (b) I shall be required to pay the
Company's and/or any of the Releasees' litigation costs and expenses, including
reasonable attorneys' fees, associated with defending against my lawsuit and (c)
I shall be obligated to repay to the Company eighty percent (80%) of the
Severance Pay already paid to me and to forfeit eighty percent (80%) of the
Severance Pay not yet paid to me. Such repayment and/or forfeiture shall not
affect the validity of this Agreement.

      (5) OFFSET. I understand that, in the event I become employed with any
other employer during the severance period, due and unpaid Severance Pay will be
offset by an amount equal to fifty percent (50%) of the compensation received by
me from the new employment during the severance period, and Severance Benefits
shall cease. I agree to refund any amounts paid by the Company as Severance Pay
that exceed the amount of Severance Pay payable to me under the Plan giving
effect to the offset referred to in the preceding sentence. I further agree to
provide to the Company prompt notice of the commencement of any such new
employment.

      (6) OTHER PLANS. I understand that this Agreement will not limit any of my
rights or obligations in respect of any Company sponsored plans, each of which
has its own provisions governing the rights of employees thereunder in respect
of which I agree to remain bound, except that I hereby waive, release and shall
not assert in any forum any claim or right arising out of or in connection with
my termination of employment on the basis that such termination interfered

<PAGE>

                                                                          page 3

with attainment of any rights under such a plan or was otherwise discriminatory
or illegal. The foregoing plans include the Company's pension plans (Money
Purchase Plan and Supplemental Executive Retirement Plan), Cash or Deferred Plan
(401(k) plan), home computer program, cafeteria plan ("flex plan"), medical
plans, Supplemental Restricted Stock Plan, 1993 Equity Participation Plan and
Deferred Compensation Plan. I understand that, for purposes of determining my
rights under the foregoing plans, my employment with the Company will be deemed
to have been terminated by the Company without cause.

      (7) REVIEW AND REVOCATION PERIODS. I acknowledge that I have been given at
least twenty-one (21) days to consider this Agreement thoroughly and I was
encouraged to consult with my personal attorney, if desired, before signing
below. I understand that I may revoke this Agreement within seven (7) days after
its signing and that any revocation must be made in writing and submitted within
such seven (7) day period to the Plan Administrator. I further understand that
if I revoke this Agreement, I shall not receive Severance Pay and Severance
Benefits under the Plan.

      (8) SEVERABILITY. I agree that if any provision of this Agreement is
found, held or deemed by a court of competent jurisdiction to be void, unlawful
or unenforceable under any applicable statute or controlling law, the remainder
of this Agreement shall continue in full force and effect.

      (9) GOVERNING LAW. This Agreement is deemed made and entered into in the
State of New York, and in all respects shall be interpreted, enforced and
governed under the internal laws of the State of New York, to the extent not
governed by federal law. Any dispute under this Agreement shall be adjudicated
by a court of competent jurisdiction in the State of New York.

      THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES THAT HE OR SHE HAS
CAREFULLY READ AND FULLY UNDERSTANDS ALL THE PROVISIONS OF THIS AGREEMENT AND
HAS VOLUNTARILY ENTERED INTO THIS AGREEMENT BY SIGNING BELOW AS OF THE DATE SET
FORTH BELOW.

----------------------------------------------
                  (Print name)

----------------------------------------------  ---------------------------
                  (Signature)                               (Date)<PAGE>

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

                                JONATHAN B. SHAW

This Amended and Restated Employment Agreement (the "Agreement") by and between
F.Y.I. Incorporated, a Delaware corporation ("F.Y.I." or the "Company") and
Jonathan B. Shaw ("Employee") is hereby entered into and effective as of the
date of January 26, 2000. This Agreement hereby supersedes any other employment
agreements or understandings; written or oral, between the Imagent Acquisition
Corp., F.Y.I. and Employee.

                                 R E C I T A L S

The following statements are true and correct:

As of the date of this Agreement, the Company is engaged primarily in the
business of providing document management and information management services.

Employee is employed hereunder by the Company in a confidential relationship
wherein Employee, in the course of his employment with the Company, has and will
continue to become familiar with and aware of information as to the Company's
customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.

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

                               A G R E E M E N T S

         1.  EMPLOYMENT AND DUTIES.

         (a) The Company hereby employs Employee as Business Segment Manager and
officer of several subsidiaries. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of a Business Segment
Manager and officer of several subsidiaries. Employee hereby accepts this
employment upon the terms and conditions herein contained and,

<PAGE>

subject to paragraph 1(b), agrees to devote his working time, attention and
efforts to promote and further the business of the Company.

         (b) Employee shall not, during the term of his employment hereunder,
be engaged in any other business activity pursued for gain, profit or other
pecuniary advantage except to the extent that such activity (i) does not
interfere with Employee's duties and responsibilities hereunder and (ii) does
not violate paragraph 3 hereof. The foregoing limitations shall not be
construed as prohibiting Employee from making personal investments in such
form or manner as will neither require his services in the operation or
affairs of the companies or enterprises in which such investments are made
nor violate the terms of paragraph 3 hereof.

         2. COMPENSATION. For all services rendered by Employee, the Company
shall compensate Employee as follows:

         (a) BASE SALARY. The base salary payable to Employee shall be $198,000
per year, payable on a regular basis in accordance with the Company's standard
payroll procedures but not less than monthly. On at least an annual basis, the
Board will review Employee's performance and may make increases to such base
salary if, in its discretion, any such increase is warranted. Such recommended
increase would, in all likelihood, require approval by the Board or a duly
constituted committee thereof.

         (b) INCENTIVE BONUS PLAN. For 2000 and subsequent years, it is the
Company's intent to develop a written Incentive Bonus Plan setting forth the
criteria under which Employee will be eligible to receive year-end bonus awards.
Employee is eligible to participate in the Bonus Plan up to 50% of base pay.
Employee acknowledges receipt of Warrant No. 42 in payment for any 2000 Bonus
opportunity.

         (c) EXECUTIVE PERQUISITES, BENEFITS AND OTHER COMPENSATION. Employee
shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below:

             (i) Payment of all premiums for coverage for Employee and his
         dependent family members under health, hospitalization, disability,
         dental, life and other insurance plans that the Company may have in
         effect from time to time, with benefits provided to Employee under this
         clause (i) to be at least equal to such benefits provided to F.Y.I.
         executives.

<PAGE>

                  (ii) Reimbursement for all business travel and other
         out-of-pocket expenses reasonably incurred by Employee in the
         performance of his services pursuant to this Agreement. All
         reimbursable expenses shall be appropriately documented in reasonable
         detail by Employee upon submission of any request for reimbursement,
         and in a format and manner consistent with the Company's expense
         reporting policy.

                  (iii) Four (4) weeks paid vacation for each year during the
         period of employment or such greater amount as may be afforded officers
         and key employees generally under the Company's policies in effect from
         time to time (pro rated for any year in which Employee is employed for
         less than the full year).

                  (iv) The Company shall provide Employee a $500 per month car
         allowance (determined on a pre-tax basis).

                  (v) The Company shall reimburse Employee up to $200 per month
         for club dues actually incurred by Employee, PROVIDED that such club is
         used at least 50 percent of the time for business purposes.

                  (vi) The Company shall provide Employee with other executive
         perquisites as may be available to or deemed appropriate for Employee
         by the Board and participation in all other Company-wide employee
         benefits as available from time to time, which may include
         participation in F.Y.I.'s 1995 Long-Term Incentive Compensation Plan.

         3.       NON-COMPETITION AGREEMENT.

         (a)      Subject to Section 3(c), Employee will not, during the
period of his employment by or with the Company, and for a period of two (2)
years immediately following the termination of his employment under this
Agreement, for any reason whatsoever, directly or indirectly, for himself or
on behalf of or in conjunction with any other person, persons, company,
partnership, corporation or business of whatever nature:

                  (i) engage, as an officer, director, shareholder, owner,
         partner, joint venturer, or in a managerial capacity, whether as an
         employee, independent contractor, consultant or advisor, or as a sales
         representative, in any business selling any products or services in
         direct competition with the Company, within 100 miles of (i) the
         principal executive offices of the Company or (ii) any place to which
         the Company provides products or services or in which the Company is in
         the process of initiating business operations during the term of this
         covenant (collectively, the "Territory");

                                   -3-
<PAGE>

                  (ii) call upon any person who is, at that time, within the
         Territory, an employee of the Company (including the respective
         subsidiaries thereof) in a managerial capacity for the purpose or with
         the intent of enticing such employee away from or out of the employ of
         the Company (including the respective subsidiaries thereof), provided
         that Employee shall be permitted to call upon and hire any member of
         his or her immediate family;

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

                  (iv) call upon any prospective acquisition candidate, on
         Employee's own behalf or on behalf of any competitor, which candidate
         was either called upon by the Company (including the respective
         subsidiaries thereof) or for which the Company made an acquisition
         analysis, for the purpose of acquiring such entity, provided that the
         Employee shall not be charged with violating this section unless and
         until the Employee shall have knowledge or notice that such prospective
         acquisition candidate was called upon, or that an acquisition analysis
         was made for the purpose of acquiring such entity; or

                  (v) disclose customers, whether in existence or proposed, of
         the Company (or the respective Subsidiaries thereof) to any person,
         firm, partnership, corporation or business for any reason or purpose
         whatsoever.

         Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Employee from acquiring as an investment not more than three percent
(3%) of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.

         (b)      Because of the difficulty of measuring economic losses to
the Company as a result of a breach of the foregoing covenant, and because of
the immediate and irreparable damage that could be caused to the Company for
which they would have no other adequate remedy, Employee agrees that the
foregoing covenant may be enforced by the Company in the event of breach by
him by injunctions and restraining orders.

         (c)      It is agreed by the parties that the foregoing covenants in
this paragraph 3 impose a reasonable restraint on Employee in light of the
activities

                                   -4-
<PAGE>

and business of the Company on the date of the execution of this Agreement
and the current plans of F.Y.I.; but it is also the intent of the Company and
Employee that such covenants be construed and enforced in accordance with the
changing activities, business and locations of the Company throughout the
term of this covenant, whether before or after the date of termination of the
employment of Employee, subject to the following paragraph. For example, if,
during the term of this Agreement, the Company engages in new and different
activities, enters a new business or established new locations for its
current activities or business in addition to or other than the activities or
business enumerated under the Recitals above or the locations currently
established therefore, then Employee will be precluded from soliciting the
customers or employees of such new activities or business or from such new
location and from directly competing with such new business within 100 miles
of its then-established operating location(s) through the term of this
covenant.

                  It is further agreed by the parties hereto that, in the
event that Employee shall cease to be employed hereunder, and shall enter
into a business or pursue other activities not in competition with the
Company, or similar activities or business in locations the operation of
which, under such circumstances, does not violate clause (i) of this
paragraph 3, and in any event such new business, activities or location are
not in violation of this paragraph 3 or of Employee's obligations under this
paragraph 3, if any, Employee shall not be chargeable with a violation of
this paragraph 3 if the Company shall thereafter enter the same, similar or a
competitive (i) business, (ii) course of activities or (iii) location, as
applicable.

         (d)      The covenants in this paragraph 3 are severable and
separate, and the unenforceability of any specific covenant shall not affect
the provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.

         (e)      All of the covenants in this paragraph 3 shall be construed
as an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is
specifically agreed that the period of two (2) years stated at the beginning
of this paragraph 3, during which the agreements and covenants of Employee
made in this paragraph 3 shall

                                   -5-
<PAGE>

be effective, shall be computed by excluding from such computation any time
during which Employee is in violation of any provision of this paragraph 3.

         4.       [Intentionally left blank.]

         5.       TERM; TERMINATION; RIGHTS ON TERMINATION. The term of this
Agreement shall begin on the date hereof and continue for one (1) year (the
"Initial Term"). This Agreement and Employee's employment may be terminated
in any one of the followings ways:

                  (a) DEATH. The death of Employee shall immediately terminate
         the Agreement with no severance compensation due to Employee's estate.

                  (b) DISABILITY. If, as a result of incapacity due to physical
         or mental illness or injury, Employee shall have been absent from his
         full-time duties hereunder for four (4) consecutive months, then thirty
         (30) days after receiving written notice (which notice may occur before
         or after the end of such four (4) month period, but which shall not be
         effective earlier than the last day of such four (4) month period), the
         Company may terminate Employee's employment hereunder provided Employee
         is unable to resume his full-time duties at the conclusion of such
         notice period. Also, Employee may terminate his employment hereunder if
         his health should become impaired to an extent that makes the continued
         performance of his duties hereunder hazardous to his physical or mental
         health or his life, provided that Employee shall have furnished the
         Company with a written statement from a qualified doctor to such effect
         and provided, further, that, at the Company's request made within
         thirty (30) days of the date of such written statement, Employee shall
         submit to an examination by a doctor selected by the Company who is
         reasonably acceptable to Employee or Employee's doctor and such doctor
         shall have concurred in the conclusion of Employee's doctor. In the
         event this Agreement is terminated as a result of Employee's
         disability, Employee shall receive from the Company, in a lump-sum
         payment due within ten (10) days of the effective date of termination,
         the base salary at the rate then in effect for whatever time period is
         remaining under the Initial Term of this Agreement or for one (1) year,
         whichever amount is greater.

                  (c) GOOD CAUSE. The Company may terminate the Agreement ten
         (10) days after written notice to Employee for good cause, which shall
         be: (1) Employee's material and irreparable breach of this Agreement;
         (2) Employee's gross negligence in the performance or intentional
         nonperformance (continuing for ten (10) days after receipt of the
         written

                                   -6-
<PAGE>

         notice) of any of Employee's material duties and responsibilities
         hereunder; (3) Employee's dishonesty, fraud or misconduct with
         respect to the business or affairs of the Company which materially
         and adversely affects the operations or reputation of the Company;
         (4) Employee's conviction of a felony crime; or (5) chronic alcohol
         abuse or illegal drug abuse by Employee. In the event of a
         termination for good cause, as enumerated above, Employee shall have
         no right to any severance compensation.

                  (d) WITHOUT CAUSE. At any time after the commencement of
         employment, the Company may, without cause, terminate this Agreement
         and Employee's employment, effective thirty (30) days after written
         notice is provided to the Employee. Employee may only be terminated
         without cause by the Company during the Initial Term hereof if such
         termination is approved by at least sixty-six percent (66%) of the
         members of the Board of Directors of F.Y.I. Should Employee terminate
         his employment for Good Reason, Employee shall receive from the
         Company, in a lump-sum payment due on the effective date of
         termination, the base salary at the rate then in effect for whatever
         time period is remaining under the Initial Term of this Agreement or
         for one (1) year, whichever amount is greater. Further, in the event
         any termination by the Employee for Good Reason, the period set forth
         in paragraph 3(a) during which the terms of paragraph 3 apply shall be
         reduced to one (1) year from the date of termination of employment.

                  (e) CHANGE IN CONTROL OF F.Y.I. Refer to paragraph 12 below.

                  (f) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may
         terminate his employment hereunder for "Good Reason." As used herein,
         "Good Reason" shall mean the continuance of any of the following after
         15 days' prior written notice by Employee to the Company, specifying
         the basis for such Employee's having Good Reason to terminate this
         Agreement:

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

                                   -7-
<PAGE>

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

                           (iii) any other material breach of this Agreement by
                  the Company, including the failure to pay Employee on a timely
                  basis the amounts to which he is entitled under this
                  Agreement.

In the event of any dispute with respect to the termination by the Employee for
Good Reason, such dispute shall be resolved pursuant to the provisions of
paragraph 16 below. In the event that it is determined that Good Reason did
exist, the Company shall pay all amounts and damages to which Employee may be
entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce his rights hereunder. Should Employee terminate his employment for Good
Reason, Employee shall receive from the Company, in a lump-sum payment due on
the effective date of termination, the base salary at the rate then in effect
for whatever time period is remaining under the Initial Term of this Agreement
or for one (1) year, whichever amount is greater. Further, in the event any
termination by the Employee for Good Reason, the period set forth in paragraph
3(a) during which the terms of paragraph 3 apply shall be reduced to one (1)
year from the date of termination of employment.

                  (g) TERMINATION BY EMPLOYEE WITHOUT CAUSE. If Employee resigns
         or otherwise terminates his employment without Good Reason pursuant to
         paragraph 5(f), Employee shall receive no severance compensation.

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

         6. RETURN OF COMPANY PROPERTY. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company,
their representatives, vendors or customers which pertain to the business of
the

                                   -8-
<PAGE>

Company shall be and remain the property of the Company, as the case may be,
and be subject at all times to their discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company which is collected by Employee shall be delivered promptly to the
Company without request by it upon termination of Employee's employment.

         7. INVENTIONS. Employee shall disclose promptly to the Company any
and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made
by Employee, solely or jointly with another, during the period of employment
or within one (1) year thereafter, and which are directly related to the
business or activities of the Company and which Employee conceives as a
result of his employment by the Company. Employee hereby assigns and agrees
to assign all his interests therein to the Company or its nominee. Whenever
requested to do so by the Company, Employee shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.

         8. TRADE SECRETS. Employee agrees that he will not, during or after
the term of this Agreement with the Company, disclose the specific terms of
the Company's relationships or agreements with their respective significant
vendors or customers or any other significant and material trade secret of
the Company, whether in existence or proposed, to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever.

         9. INDEMNIFICATION. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Company against Employee), by reason of the fact that he is or was performing
services under this Agreement, then the Company shall indemnify Employee
against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Employee
in connection therewith. In the event that both Employee and the Company are
made a party to the same third-party action, complaint, suit or proceeding,
the Company agrees to engage competent legal representation, and Employee
agrees to use the same representation, provided that if counsel selected by
the Company shall have a conflict of interest that prevents such counsel from
representing Employee, Employee may engage separate counsel and the Company
shall pay all attorneys' fees of such separate counsel. Further, while
Employee is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement,

                                   -9-
<PAGE>

Employee cannot be held liable to the Company for errors or omissions made in
good faith where Employee has not exhibited gross, willful and wanton
negligence and misconduct or performed criminal and fraudulent acts which
materially damage the business of the Company.

         10. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.

         11. ASSIGNMENT; BINDING EFFECT. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.

         12.  CHANGE IN CONTROL.

         (h)  Unless he elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that the Company may be merged
or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.

         (i)  In the event of a pending Change in Control wherein the Company
and Employee have not received written notice at least five (5) business days
prior to the anticipated closing date of the transaction giving rise to the
Change in Control from the successor to all or a substantial portion of the
Company's business and/or assets that such successor is willing as of the
closing to assume and agree to perform the Company's obligations under this
Agreement in the same manner and to the same extent that the Company is
hereby required to perform, then such Change in Control shall be deemed to be
a termination of this Agreement by the Company without cause and the
applicable portions of paragraph 5(d) will apply; however, under such
circumstances, the amount of the

                                   -10-
<PAGE>

lump-sum severance payment due to Employee shall be triple the amount
calculated under the terms of paragraph 5(d) and the non-competition
provisions of paragraph 3 shall not apply whatsoever.

         (j)      In any Change in Control situation in which Employee has
received written notice from the successor to the Company that such successor
is willing to assume the Company's obligations hereunder, Employee may
nonetheless, at his sole discretion, elect to terminate this Agreement by
providing written notice to the Company at least five (5) business days prior
to the anticipated closing of the transaction giving rise to the Change in
Control. In such case, the applicable provisions of paragraph 5(d) will apply
as though the Company had terminated the Agreement without cause; however,
under such circumstances, the amount of the lump-sum severance payment due to
Employee shall be 150% the amount calculated under the terms of paragraph
5(d) and the non-competition provisions of paragraph 3 shall all apply for a
period of one (1) year from the effective date of termination.

         (k)      For purposes of applying paragraph 5 under the
circumstances described in (b) and (c) above, the effective date of
termination will be the closing date of the transaction giving rise to the
Change in Control and all compensation, reimbursements and lump-sum payments
due Employee must be paid in full by the Company at or prior to such closing.
Further, Employee will be given sufficient time and opportunity to elect
whether to exercise all or any of his vested options to purchase F.Y.I.
Common Stock, including any options with accelerated vesting under the
provisions of F.Y.I.'s 1995 Long-Term Incentive Compensation Plan, such that
he may convert the options to shares of F.Y.I. Common Stock at or prior to
the closing of the transaction giving rise to the Change in Control, if he so
desires.

         (l)      A "Change in Control" shall be deemed to have occurred if:

                  (i) any person, other than the F.Y.I. or an employee benefit
         plan of F.Y.I., acquires directly or indirectly the Beneficial
         Ownership (as defined in Section 13(d) of the Securities Exchange Act
         of 1934, as amended) of any voting security of the Company and
         immediately after such acquisition such Person is, directly or
         indirectly, the Beneficial Owner of voting securities representing 50%
         or more of the total voting power of all of the then-outstanding voting
         securities of the Company;

                  (ii) the individuals (A) who, as of the effective date of
         F.Y.I.'s registration statement with respect to its initial public
         offering, constitute the Board of Directors of F.Y.I. (the "Original
         Directors") or (B) who thereafter are elected to the Board of Directors
         of F.Y.I. and whose election,

                                   -11-
<PAGE>

         or nomination for election, to the Board of Directors of F.Y.I. was
         approved by a vote of at least two-thirds (2/3) of the Original
         Directors then still in office (such directors becoming "Additional
         Original Directors" immediately following their election) or (C) who
         are elected to the Board of Directors of F.Y.I. and whose election,
         or nomination for election, to the Board of Directors of F.Y.I. was
         approved by a vote of at least two-thirds (2/3) of the Original
         Directors and Additional Original Directors then still in office
         (such directors also becoming "Additional Original Directors"
         immediately following their election), cease for any reason to
         constitute a majority of the members of the Board of Directors of
         F.Y.I.;

                  (iii) the stockholders of F.Y.I. shall approve a merger,
         consolidation, recapitalization, or reorganization of F.Y.I., a reverse
         stock split of outstanding voting securities, or consummation of any
         such transaction if stockholder approval is not sought or obtained,
         other than any such transaction which would result in at least 75% of
         the total voting power represented by the voting securities of the
         surviving entity outstanding immediately after such transaction being
         Beneficially Owned by at least 75% of the holders of outstanding voting
         securities of F.Y.I. immediately prior to the transaction, with the
         voting power of each such continuing holder relative to other such
         continuing holders not substantially altered in the transaction; or

                  (iv) the stockholders of F.Y.I. shall approve a plan of
         complete liquidation of F.Y.I. or an agreement for the sale or
         disposition by F.Y.I. of all or a substantial portion of F.Y.I.'s
         assets (i.e., 50% or more of the total assets of F.Y.I.).

         (m)      Employee shall be reimbursed by the Company or its
successor for any excise taxes that Employee incurs under Section 4999 of the
Internal Revenue Code of 1986, as a result of any Change in Control. Such
amount will be due and payable by the Company or its successor within ten
(10) days after Employee delivers a written request for reimbursement
accompanied by a copy of his tax return(s) showing the excise tax actually
incurred by Employee and detailed supporting calculations of an accounting
firm selected by Employee used to determine such excise tax. If the Company's
accounting firm shall disagree with such determination, the parties shall
select an independent accounting firm to make a final determination. The
costs of such independent accounting firm shall be shared equally by the
parties.

         13. COMPLETE AGREEMENT. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or

                                   -12-
<PAGE>

agreements with the Company or any of its officers, directors or
representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete and exclusive statement and
expression of the agreement between the Company and Employee and of all the
terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and
Employee, and no term of this Agreement may be waived except by writing
signed by the party waiving the benefit of such term.

         14. NOTICE. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:

         To F.Y.I.:        Locke Liddell & Sapp LLP
                           2200 Ross Avenue, Suite 2200
                           Dallas, Texas 75201-6776
                           Attention:  Charles C. Reeder, Esq.

         With a copy to:   F.Y.I. Incorporated
                           3232 McKinney Avenue, Suite 900
                           Dallas, Texas 75204-7418
                           Attention:  Margot T. Lebenberg
                                       Senior Vice President and General Counsel

         To Employee:      Jonathan B. Shaw
                           25 Evan Way
                           Pikesville, MD  21208

Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change
in accordance with this paragraph 14.

         15. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall
be given to the intent manifested by the portion held invalid or inoperative.
The paragraph headings herein are for reference purposes only and are not
intended in any way

                                   -13-
<PAGE>

to describe, interpret, define or limit the extent or intent of the Agreement
or of any part hereof.

         16. ARBITRATION. Any unresolved dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order
back-pay, severance compensation, vesting of options (or cash compensation in
lieu of vesting of options), reimbursement of costs, including those incurred
to enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The direct expense of
any arbitration proceeding shall be borne by the Company.

         17. [Intentionally left blank.]

         18. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Delaware.

         19. COUNTERPARTS. This Agreement may be executed simultaneously in
two (2) or more counterparts, each of which shall be deemed an original and
all of which together shall constitute but one and the same instrument.

                                   -14-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                    EMPLOYEE:

                                    /s/ Jonathan B. Shaw
                                    -----------------------------

                                    F.Y.I. INCORPORATED

                                    By:/s/ Ed H. Bowman, Jr.
                                       ------------------------------
                                    Title: President and Chief Executive Officer

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