1
Exhibit 10.2
DIME MORTGAGE, INC.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx, Xxxxxxx 00000
June 22, 1997
Xxxxxxxx X. Xxxxx
000 Xxxxxxxx Xxxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Re: Agreement Regarding Initial Employment Terms
Dear Xx. Xxxxx:
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), including the consolidation of
origination networks. Your title will be Vice Chairman. Your place of employment
will be Santa Rosa, California. 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. You
will be employed by DMI for a term of one (1) year (the "Term") from the date of
Consummation.
Your salary will be at a rate of $550,000 (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) $225,000 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 of 1997 by North American Mortgage Company (and its subsidiaries)
prior to the date of Consummation in respect of such year and (2) at the end of
the Term you will receive a
2
2
minimum incentive award of $225,000 as pro rated for the portion of the Term
comprising calendar year 1998, except that no such incentive award will 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. During the Term, you will be eligible to participate in one
or more programs providing defined contribution retirement benefits with the
rate of employer contributions (or deemed employer contributions) not less in
the aggregate than that previously provided by North American Mortgage Company
(but with no such contributions to be made or accrue with respect to any
payments to be made pursuant to the "Transaction Agreement" or otherwise
pursuant to Section 3 of this Letter Agreement (as defined below)). 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 to the Transaction Agreement, you agree that, for the period
commencing on the date of this Letter Agreement, and ending on the first
anniversary of the later of your termination of employment (for any reason) with
DMI and with North American Mortgage Company, you covenant and agree that you
will not solicit or otherwise encourage any employee, agent or representative of
DMI or any person who was employed by DMI or by North American Mortgage Company
as an employee, agent or representative at the time of your termination of
employment or during the six month period prior to the later of your termination
of employment with DMI and with North American Mortgage Company (or their
parents or subsidiaries), to terminate his or her employment with DMI (or North
American Mortgage Company) or such parent or subsidiary, or to become an
officer, board member, owner, partner, consultant, employee, agent or
representative of any person, firm, corporation, association or other entity
engaged in the mortgage banking business; provided that the foregoing shall not
preclude you from soliciting for employment any person terminated by DMI or
North American Mortgage Company subsequent to your termination without cause.
Unless otherwise consented to by DMI in writing, during or following your
employment by DMI, 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
3
3
(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
Dime Bancorp, Inc. 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 Transaction
Agreement, or if you voluntarily terminate your employment with North American
Mortgage Company prior to the Consummation, 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 to the extent of any benefits to be properly
provided to you pursuant to Schedule 6.19 to the Transaction 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 otherwise 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
4
4
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 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.
5
5
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 by the parties
hereto 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
-----------------------------------------
AGREED AND ACCEPTED
/s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Date: June 22, 1997
