Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Employment Agreements



On August 28, 2020, the Compensation Committee of the Board of Directors of
Dynex Capital, Inc. (the "Company") approved new employment agreements with the
Company's Co-Chief Investment Officer, Smriti L. Popenoe (the "Popenoe
Agreement") and its Chief Financial Officer and Chief Operating Officer, Stephen
J. Benedetti (the "Benedetti Agreement"), and approved and recommended that the
independent members of the Board of Directors of the Company (the "Board")
approve a new employment agreement with its Chief Executive Officer, Byron L.
Boston (the "Boston Agreement" and together with the Popenoe Agreement and the
Benedetti Agreement, the "Employment Agreements"). On August 31, 2020, the
independent members of the Board approved the Boston Agreement. The Employment
Agreements are effective as of August 31, 2020 for Mr. Boston and August 28,
2020 for Ms. Popenoe and Mr. Benedetti. The Boston Agreement supersedes the
current employment agreement with the Company, dated December 8, 2016 that would
have expired on December 31, 2020, and the Popenoe Agreement and the Benedetti
Agreement are successors to their prior employment agreements with the Company
that expired on March 1, 2020.
Each Employment Agreement provides for an initial three-year term, which will be
extended automatically for an additional year at the end of the initial term and
each year thereafter, unless either the Company or the executive gives written
notice of non-renewal at least 90 days prior to the end of the then-current
term. Upon a Change in Control (as defined in the Employment Agreements), the
term of each Employment Agreement will be extended automatically for a period of
two years.
The Employment Agreements reflect the current annual base salaries of Mr.
Boston, Ms. Popenoe and Mr. Benedetti at the rates of $750,000, $500,000 and
$450,000, respectively, which may be increased or decreased, but not below the
current annual base salaries without the executive's consent, and may not be
decreased following a Change in Control. Each executive is eligible to receive
annual cash incentive awards pursuant to the Dynex Capital, Inc. Annual Cash
Incentive Plan (or any successor plan). The minimum target annual cash incentive
award for Mr. Boston is 200% of his base salary, and for Ms. Popenoe and Mr.
Benedetti, 150% of their respective base salaries. The maximum annual cash
incentive award for Mr. Boston shall be not less than 400% of his annual base
salary, and for Ms. Popenoe and Mr. Benedetti, 300% of their respective base
salaries. Each executive is also eligible to receive annual long-term incentive
awards pursuant to the Company's 2020 Stock and Incentive Plan (or any successor
plan) at the minimum target amount of $1,400,000 for Mr. Boston, $750,000 for
Ms. Popenoe and $652,500 for Mr. Benedetti. The actual annual cash incentive
award and long-term incentive award payouts may be more or less than target, but
cannot exceed the maximum amounts established.
Each executive remains entitled to participate in the employee and executive
benefit plans and programs offered by the Company in which other senior
executives of the Company are eligible to participate, including medical,
dental, life and disability insurance and retirement, deferred compensation and
savings plans, in accordance with the terms and conditions of such plans. Each
executive continues to be eligible for a company-provided cell phone, personal
data assistant and business-related usage fees for such items, as well as a
reimbursement for the cost of an annual concierge medical services program.
Under the Employment Agreements, each executive's employment may be terminated
by the Company with or without "Cause" (as defined in the Employment
Agreements). If the executive resigns for "Good Reason" (as defined in the
Employment Agreements) or the executive's employment is terminated by the
Company without Cause, not in connection with a Change in Control, the executive
is entitled to receive a lump sum severance payment equal to a multiple of the
sum of (i) the executive's annual base salary at the time of termination and
(ii) the average of the executive's annual incentive awards paid for the prior
three years. The multiple for Mr. Boston is two and the multiple for Ms. Popenoe
and Mr. Benedetti is 1.5. Additionally, each executive will be entitled to
receive (a) any amounts already earned but not yet paid (the "Accrued
Obligations"); (b) continued medical, dental, life and disability insurance
coverage (or payment in lieu) for 24 months for Mr. Boston and 18 months Ms.
Popenoe and Mr. Benedetti; (c) a prorated annual cash incentive award for the
year of termination (prorated for time employed through the date of termination
and based on performance at the greater of target or actual performance in the
case

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of financial goals and at maximum in the case of non-financial and individual
goals) (a "Prorated Annual Incentive Award"); and (d) full vesting of any
unvested equity awards, with performance for any performance-based equity awards
determined based on the terms of the applicable grant agreement.
The Employment Agreements contain a "double trigger" provision for severance in
a Change in Control context. If the executive resigns for Good Reason or the
executive's employment is terminated by the Company without Cause on or within
two years after a Change in Control, the executive will be entitled to receive a
lump sum severance payment equal to 2.99 times the sum of (i) the executive's
annual base salary at the time of termination and (ii) the average of the
executive's annual incentive awards paid for the prior three years.
Additionally, each executive will be entitled to receive (a) his or her Accrued
Obligations; (b) continued medical, dental, life and disability insurance
coverage (or payment in lieu) for 36 months; (c) a Prorated Annual Incentive
Award for the year of termination; and (d) full vesting of any unvested equity
awards, with performance for any performance-based equity awards determined
based on the terms of the applicable grant agreement. .
If the executive's employment terminates due to death, the Employment Agreements
provide for a lump sum payment to the executive's estate of an amount equal to
the sum of (i) the executive's annual base salary at the time of the executive's
death and (ii) the average of the executive's annual incentive awards paid for
each of the prior three years. The executive's estate will also be entitled to
(a) the applicable Accrued Obligations; (b) a Prorated Annual Incentive Award
for the year of death and (c) full vesting of the executive's unvested equity
awards. If the executive's employment terminates due to disability, the
executive will be entitled to receive (x) his or her Accrued Obligations; (y) an
annual cash incentive award for the year of termination (based on performance at
the greater of target or actual performance in the case of financial goals and
at maximum in the case of non-financial and individual goals) and (z) full
vesting of any unvested equity awards, with performance for any
performance-based equity awards determined based on the terms of the applicable
grant agreement.
The Employment Agreements provide that if the Company determines not to renew
the agreement at the end of any term and terminates the executive's employment
without Cause at the end of the term, the executive will be entitled to receive
the same severance payments described above for a termination by the Company
without Cause. In the event the Company determines not to renew the agreement at
the end of any term and does not offer the executive a comparable replacement
employment agreement, the executive may terminate his or her employment for Good
Reason and receive the same severance payments described above for a termination
by the executive for Good Reason.
Except for the Accrued Obligations, payment of all of the severance payments
discussed above (other than in the event of death) remains contingent on the
executive signing a release in favor of the Company and its affiliates.
The Employment Agreements provide for Change in Control severance benefits on a
"best net" approach, under which the Change in Control severance benefits will
be reduced to avoid the golden parachute excise tax under Section 280G of the
Internal Revenue Code only if such a reduction would cause the executive to
receive more after-tax compensation than without a reduction.
The Employment Agreements also provide for a clawback of any incentive
compensation by the Company, including both equity and cash compensation, to the
extent required by federal or state law or regulation or stock exchange
requirement. Under the Employment Agreements, the executives remain subject to
certain restrictive covenants in favor of the Company, including (i) a
confidentiality covenant that applies during and following the executive's
employment for five years (or longer if the confidential information is a trade
secret), (ii) a non-solicitation covenant that applies during and for 12 months
following the executive's employment, and (iii) a non-competition covenant that
applies during the executive's employment and for 90 days following the
executive's employment if the executive does not receive severance benefits and
for six months following the executive's employment if he or she receives
severance benefits.
The full text of the Employment Agreements are attached as Exhibits 10.1, 10.2
and 10.3 to this Current Report on Form 8-K and are incorporated herein by
reference.


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Departure of Director

On August 31, 2020, Director Barry A. Igdaloff notified the Company's Board of his decision to resign from the Board and all committees on which he served, effective immediately. Mr. Igdaloff's decision was based on personal reasons and was not a result of any disagreement between Mr. Igdaloff and the Company on any matter relating to the Company's operations, policies, personnel or practices.

Mr. Igdaloff has been a director of the Company since 2000. The Company and the Board are grateful to Mr. Igdaloff for his contributions throughout his 20-year service.

The Board intends to appoint a new director to fill the vacancy created by Mr. Igdaloff's resignation. The Board is in the process of implementing a board refreshment and diversity policy that is intended to provide the Board with the best combination of knowledge, skills, experience and perspectives (including with respect to gender, age, race, culture and experience) among its members, to oversee and support the Company's strategy for the future. As part of this initiative, the Board is actively searching for director candidates who will further diversify the Board's composition as it relates to gender, age, race, culture and experience.

Item 9.01 Financial Statements and Exhibits.



(d) Exhibits
     Exhibit No.            Description
        10.1                  Employment Agreement, dated as of     August     3    1, 2020, between
                            Dynex Capital, Inc. and Byron L. Boston
        10.2                  Employment Agreement, dated as of     August 28    , 2020, between
                            Dynex Capital, Inc. and Smriti L. Popenoe
        10.3                  Employment Agreement, dated as of August 28, 2020, between Dynex
                            Capital, Inc. and Stephen J. Benedetti
         104                Cover Page Interactive Data File (embedded within the Inline XBRL
                            document)



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