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Exhibit 10.4
DIME MORTGAGE, INC.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx, Xxxxxxx 00000
June 22, 0000
Xxxxxx X. Xxxxxx
c/o North American Mortgage Company
0000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Re: Agreement Regarding Initial Employment Terms
Dear Xx. Xxxxxx:
This letter agreement (the "Letter Agreement") is intended to detail
elements of your initial compensation arrangements with Dime Mortgage, Inc.
("DMI") to become applicable upon your commencement of employment by DMI. DMI
agrees to employ you, and you agree to be employed by DMI, on the following
terms and conditions:
1. As an employee of DMI, your principal responsibilities will
include assisting the CEO and COO of DMI in matters relating to the
consolidation of North American Mortgage Company's operations with those of DMI
following Consummation (as defined below). You will also have responsibility for
such other duties as may be assigned to you by the CEO or COO of DMI from time
to time. Your place of employment will be Santa Rosa, California. You will be
employed by DMI for a term of ninety (90) days (the "Term") from the date of
Consummation, provided, that the Term may be extended for an additional one (1)
month period at the request of DMI in its sole discretion upon notice given to
you not later than 30 days prior to the expiration of the initial ninety day
term.
Your salary will be at a rate of $265,000 (the "Base Salary") per
annum, payable with respect to the period of your employment by DMI in
accordance with DMI's normal payroll practices. You will be eligible to
participate in DMI's incentive plan during 1997 and the portion of 1998
comprising the Term; provided, that: (1) you will receive a minimum incentive
award of (x) $95,000 for calendar year 1997 less (y) the total amount of any
performance or other bonuses or awards which are paid, or accrued to be paid, to
you under the annual executive bonus plan or any other bonus plan or arrangement
in respect
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of 1997 by North American Mortgage Company (and its subsidiaries) prior to the
date of Consummation in respect of such year; and (2) if the Term (after taking
into account any extension thereof as provided in the preceding paragraph) shall
include a portion of calendar year 1998, you will receive at the end of the Term
a minimum incentive award of $95,000 as pro rated for the portion of the Term
comprising calendar year 1998; except that no such incentive award shall be
payable to you by DMI if prior to December 31, 1997, in the case of clause (1),
or prior to the end of the Term, in the case of clause (2), your employment is
terminated (a) by you or (b) by DMI for "cause" (as defined below). You will be
eligible during the Term to participate in such life, medical, and other
insurance plans or programs as are made available by DMI to its full-time
salaried employees. In consideration of DMI's agreement to employ you under the
terms described above, and otherwise in consideration of the payments to be made
to you pursuant to Schedule 6.19 of the "Transaction Agreement" (as defined
below), unless otherwise consented to by DMI in writing, you will not disclose
or make accessible to any other person, firm, corporation, association or other
entity any confidential, non-public information regarding North American
Mortgage Company, DMI or their parents or subsidiaries, except (i) as approved
by DMI in the course of DMI's business for DMI's benefit, or (ii) when required
to do so by law.
2. This Letter Agreement shall become effective, and is expressly
subject to and conditioned, upon the consummation ("Consummation") of the
transaction contemplated by that certain Agreement and Plan of Combination,
dated as of June 22, 1997, between Dime Bancorp, Inc. ("Bancorp") and North
American Mortgage Company (the "Transaction Agreement"). (If in connection with
the transactions contemplated by the Transaction Agreement, the mortgage banking
operations of DMI are transferred to another entity that is a direct or indirect
subsidiary of Bancorp, then this Letter Agreement shall be assumed by, and be
binding upon, such entity and the term "DMI" as used herein shall mean such
entity.) Accordingly, your employment by DMI, and DMI's agreement to be bound by
the terms hereof, is expressly conditioned upon and subject to Consummation. If
for any reason the Consummation does not occur as contemplated in the
Transaction Agreement, DMI shall have no obligation to employ you, shall have no
further obligation or liability to you under this Letter Agreement whatsoever,
and the terms of this Letter Agreement shall become automatically void and
without further effect.
3. It is a further condition to DMI's agreement to enter into and be
bound by the terms of this Letter Agreement that you hereby agree you will not
be entitled to, and shall by and upon your execution of this Letter Agreement be
deemed to have irrevocably waived, any rights to any severance or other benefits
in connection with the termination of your employment with North American
Mortgage Company or DMI (except
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to the extent of any benefits to be properly provided to you pursuant to
Schedule 6.19 to the Termination Agreement that have not yet been paid), whether
under any severance agreement, arrangement or plan to which you are otherwise a
party or in which you may otherwise be a participant, including without
limitation, as may be provided in that certain Termination Agreement, dated as
of February 7, 1995 between you and North American Mortgage Company (the
"Termination Agreement"), and under the North American Mortgage Company Senior
Executive Severance Pay Plan (the "Severance Pay Plan"), and that upon
effectiveness of this Letter Agreement, the Termination Agreement and your right
to any benefits under the Severance Pay Plan shall finally terminate and be of
no further force or effect; provided, however, that you will continue to be
eligible during the one (1) year period following the termination of your
employment with DMI for medical and life insurance benefits on the same basis as
if your employment by DMI had continued for that year.
4. You shall have no right to receive any severance pay or severance
benefit or any other compensation or benefit for any period after the date of
the termination by DMI of your employment for cause or following the voluntary
termination by you of your employment prior to the end of the Term. As used in
this Letter Agreement "cause" shall mean your personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform assigned duties or willful violation of any law,
rule or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order.
5. Notwithstanding the foregoing, if any statute, regulation, order,
agreement or regulatory interpretation thereof that is valid and binding upon
DMI, including, without limitation, 12 USC Section 1828(k) and regulations
thereunder (each a "Regulatory Restriction") restricts, prohibits or limits the
amount of any payment or the provision of any benefit that DMI would otherwise
be liable for pursuant to this Letter Agreement, then the amount that DMI will
pay to you will not exceed the maximum amount permissible under such Regulatory
Restriction; provided, that if such Regulatory Restriction shall subsequently be
rescinded, superseded, amended or otherwise determined not to restrict, limit or
prohibit payment by DMI of amounts otherwise due you hereunder, DMI shall
promptly thereafter pay to you any amounts (or the value of any benefit)
previously withheld from you as a result of such Regulatory Restriction. As of
the date hereof, DMI represents there are no Regulatory Restrictions restricting
your rights to payments contemplated hereby. Further, if any amount otherwise
payable hereunder would be deemed to constitute a parachute payment (a
"Parachute Payment") within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and if any such Parachute Payment, when
added to any other payments that are deemed to
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constitute Parachute Payments, would otherwise result in the imposition of an
excise tax under Section 4999 of the Code, the amounts payable hereunder shall
be reduced by the smallest amount necessary to avoid the imposition of such
excise tax. Any such limitation shall be applied to such compensation and
benefit amounts, and in such order, as DMI shall determine in its sole
discretion. References to the Code hereunder shall be to the Code as presently
in effect or to the corresponding provisions of any succeeding law. Furthermore,
to the extent required to be included herein, all of the provisions required to
be included in this Letter Agreement pursuant to 12 C.F.R. 563.39(b) are hereby
deemed to be incorporated herein by reference and to be a part of this Letter
Agreement.
6. This Letter Agreement is intended solely to detail certain of
your initial compensation arrangements with DMI. Nothing in this Letter
Agreement confers upon you the right to continue in the employment of DMI or
interferes with or restricts in any way the right of DMI to terminate your
employment at any time, with or without cause.
7. Any payments due you hereunder shall be reduced by all applicable
withholding and other taxes.
8. This Letter Agreement shall be governed by the laws of the State
of New York, without regard to conflict of laws principles applied in the State
of New York. Except as otherwise provided above, this Letter Agreement may only
be amended in writing signed by both parties hereto.
Please indicate your acceptance to the terms of this Letter
Agreement by signing below. This Letter Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
Very truly yours,
DIME MORTGAGE, INC.
By: /s/ D. Xxxxx Xxxxx
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AGREED AND ACCEPTED
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
