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EXHIBIT 10.12
[HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
LOGO]
EMPLOYMENT LETTER
April 14, 2005
Harold McElraft
34 Meyersville Road
Chatham, NJ 07928
Dear Mr. McElraft:
Please allow this letter to serve as the
entire agreement between Hanover
Capital Mortgage Holdings, Inc. (the
"Company") and you, Harold McElraft (the
"Employee") with respect to certain aspects
of your employment with the Company.
The Company acknowledges and agrees that
the Employee is and will remain a
partner of, and has and will retain an
interest in, Tatum CFO Partners, LLP
("Tatum"), which will benefit the Company
in that the Employee will have access
to certain Tatum resources.
Beginning Date
The Employee will work for the Company as a
full-time employee beginning on
April 14, 2005.
Compensation
SALARY: $240,000 annually ("Salary").
Employee's Salary may be increased from
time to time, by the Company as determined
by annual reviews and performance
evaluations consistent with the policies of
the Company for its executive
management.
CASH BONUS: As determined from time to time
and approved by the compensation
committee of the Company's Board of
Directors.
EQUITY: Subject to future
considerations.
During the course of the Employee's
engagement hereunder, the Employee will
remain a partner of Tatum. As a partner of
Tatum, Employee will share with Tatum
a portion of his or her economic interest
in any stock options or equity bonus
that the Company may grant the Employee and
may also share with Tatum a portion
of any cash bonus and severance the Company
may pay the Employee, to the extent
specified in the Full-Time Permanent
Engagement Resources Agreement between the
Company and Tatum (the "Resources
Agreement"). The Company acknowledges and
consents to such arrangement.
Benefits
The Employee will be eligible to
participate in any Company employee benefits
programs (including but not limited to
personal days, vacation days and
holidays), insurance and retirement plans
(e.g., 401K) consistent with the
Company's policy and plan provisions as it
applies to executive management, and
the Employee will be exempt from any delay
periods required for eligibility, if
allowable under the plans.
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In lieu of the Employee participating in
the Company-sponsored employee
healthcare (i.e., medical, dental and
vision) benefits plans, the Employee will
remain on his or her current Tatum medical
plan. The Company will reimburse the
Employee for amounts paid by the Employee
for such medical insurance for himself
and (where applicable) his family of up to
$1,500 per month upon presentation of
reasonable documentation of premiums paid
by the Employee to Tatum. If
permissible under the U.S. federal tax law,
such amount will not be considered
reportable W-2 income, but instead as a
non-taxable benefits expense.
The Employee must receive
