Exhibit 10.1
September 17, 2004
Xx. Xxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Dear Xxxxx:
The Xxxxxx Xxx Board of Directors proposes that the following amendments be
made to your Employment Agreement, executed by Xxxxxx Mae in April 2004 and
previously amended on June 30, 2004:
• Amend Section 1.14 by adding the following last sentence:
Notwithstanding the foregoing, if OFHEO shall by
regulation require, effective on or after January 1,
2007, that the Chairman of the Corporation’s Board of
Directors may not also serve as the Chief Executive
Officer of the Corporation, elimination of Employee’s
dual role to the extent necessary to comply with such
regulation shall not, in and of itself, constitute
Good Reason.
• Amend Section 2.1 by adding the following last sentence:
Notwithstanding the foregoing, if OFHEO shall by
regulation require, effective on or after January 1,
2007, that the Chairman of the Corporation’s Board of
Directors may not also serve as the Chief Executive
Officer of the Corporation, elimination of Employee’s
dual role to the extent necessary to comply with such
regulation shall not, in and of itself, constitute a
breach of this Section 2.1.
• Amend Section 2.2 by adding the following last sentence:
Notwithstanding the foregoing, if OFHEO shall by
regulation require, effective on or after January 1,
2007, that the Chairman of the Corporation’s Board of
Directors may not also serve as the Chief Executive
Officer of the Corporation, elimination of Employee’s
dual role to the extent necessary to comply with such
regulation shall not, in and of itself, constitute a
breach of this Section 2.2.
Xxxxxxxx X. Xxxxxx
September 17, 2004
Page 2 of 3
• Amended Section 4.1(b) to read as follows:
(b) For Cause: Notwithstanding any other provision
hereunder, the Corporation may terminate Employee’s
employment for “Cause,” which shall mean that
Employee has (A) materially harmed the Corporation
by, in connection with his service under this
Agreement, engaging in dishonest or fraudulent
actions or willful misconduct, or performing his
duties in a grossly negligent manner, or (B) been
convicted of, or pleaded nolo contendere with respect
to, a felony. The Corporation by written notice may
terminate Employee’s employment for Cause at any time
following the occurrence of an event described in
(B). Employee shall not be deemed to have been
terminated for Cause following the occurrence of an
event described in (A) unless the Corporation shall
have provided (i) reasonable notice to Employee
setting forth the Corporation’s intention to
terminate for Cause, (ii) where remedial action is
feasible, a reasonable opportunity for such action,
(iii) an opportunity for Employee, together with his
counsel, to be heard before the Board and (iv)
Employee with a notice of termination stating that
Employee was guilty of the conduct set forth in this
Section 4.1(b)(A) and specifying the particulars
thereof in detail. No act or failure to act will be
considered “willful” unless it is done, or omitted to
be done, by Employee in bad faith or without
reasonable belief that his action or omission was in
the best interests of the Corporation.
• Amend Section 5.3 to read as follows:
Section 5.3. Termination for Cause. In the event of
a Termination of Employment for Cause, except as
provided in Section 5.1 Employee shall not be
entitled to any payments or benefits except as
follows: Employee shall be entitled to all of
Employee’s Base Salary which has accrued to the date
of termination and any benefits or awards (whether of
options, stock or other property) which have vested
prior to such date. The Corporation shall have no
further obligations to Employee.
• Add a New Section 6.15 to read as follows:
Section 6.15. Change in Position. If OFHEO shall by
regulation require, effective on or after January 1,
2007, that the Chairman of the Corporation’s Board of
Directors may
Xxxxxxxx X. Xxxxxx
September 17, 2004
Page 3 of 3
not also serve as the Chief Executive Officer of the
Corporation and, in consequence thereof, Employee’s
dual role is required to be eliminated, Employee
shall be entitled to choose which of those positions
to relinquish. Following any such adjustment in his
positions and notwithstanding Section 1.14(b) and
Section 3.1, Employee shall receive such future
compensation, commensurate with his continuing
position and consistent with the Act, as the
Compensation Committee of the Board determines.
If you agree to the foregoing, please so indicate by signing the enclosed copy
of this letter in the space indicated below and returning a fully executed copy
of the letter to my attention, whereupon your Employment Agreement will be
amended.
| |
Sincerely, |
|
/s/ Xxxx Xxxxxxx |
|
Xxxx Xxxxxxx |
Chairman, Compensation Committee |
AGREED TO AND ACCEPTED:
| |
|
|
|
/s/ Xxxxxxxx X. Xxxxxx
|
|
September 17, 2004 |
|
|
|
|
|
Xxxxxxxx X. Xxxxxx
|
|
Date |
|
