Employment Agreement with Michael Strauss 08/26/99
Amendment to Employment Agreement 04/01/00
 
EXHIBIT 10.1
 
                              EMPLOYMENT AGREEMENT
 
          This Employment Agreement, dated as of August 26, 1999 (this
"Agreement"), is by and between American Home Mortgage Holdings, Inc., a
Delaware corporation having (the "Company"), and Michael Strauss (the
"Executive").
 
          Whereas the Company wishes to assure itself of the services of the
Executive, and the Executive desires to be employed by the Company, upon the
terms and conditions hereinafter set forth.
 
          Now, Therefore, the Company and the Executive hereby agree as follows:
 
          1.  Definitions.  Unless defined elsewhere in this Agreement,
              -----------
capitalized terms contained herein shall have the meanings set forth or
incorporated by reference in Section 19.
 
          2.  Employment.  The Company agrees to employ the Executive, and the
              ----------
Executive hereby accepts such employment by the Company and/or any subsidiary of
the Company, during the term set forth in Section 3 and on the other terms and
conditions of this Agreement.
 
          3.  Term.
              ----
 
          (a)  The term of this Agreement shall commence as of the closing of
the Company's initial public offering, and, subject to Section 3(b), shall
terminate at the close of business on the third anniversary of that date.
 
          (b)  The term of this Agreement set forth in Section 3(a) shall be
extended or further extended, as the case may be, without any action by the
Company or the Executive, on the third anniversary of the date hereof and on
each subsequent anniversary of the date hereof, for an additional period of one
year, until either party gives written notice to the other party in advance of
any anniversary of the date hereof, in the manner set forth in Section 15, that
the term in effect when such notice is given is not to be extended or further
extended, as the case may be, beyond the year following the next anniversary. If
the Executive shall continue in the full-time employment of the Company after
the term of this Agreement, such continued employment shall be at will, and
otherwise subject to the terms and conditions of this Agreement.
 
          4.  Position, Duties and Responsibilities, Rights.
              ---------------------------------------------
 
          (a)  During the term of this Agreement, the Executive shall serve as,
and be elected to and hold the office and title of Chairman of the Board,
President and Chief Executive Officer of the Company. As such, the Executive
shall report only to the Board of Directors of the Company, and shall have all
of the powers and duties usually incident to the office of Chairman of the Board
and Chief Executive Officer, and shall have powers to perform such other
 
                                      10-1
<PAGE>
 
reasonable additional duties as may from time to time be lawfully assigned to
the Executive by the Board of Directors.
 
          (b)  During the term of this Agreement, the Board of Directors and the
stockholders of the Company shall cause the Executive to be elected and re-
elected to the Board of Directors of the Company or its subsidiaries (and to be
appointed to any committees thereof), and the Executive agrees, if elected, to
serve on such Board(s) of Directors and committee(s) during the term of this
Agreement, without any additional compensation beyond that provided in this
Agreement.
 
          (c)  During the term of this Agreement, the Executive agrees to devote
substantially all the Executive's time, efforts and skills to the affairs of the
Company during the Company's normal business hours, except for vacations,
illness and incapacity, but nothing in this Agreement shall preclude the
Executive from devoting reasonable periods to (i) manage the Executive's
personal investments, (ii) participate in professional, educational, public
interest, charitable, civic or community activities, including activities
sponsored by trade organizations, and (iii) serve as a director or member of an
advisory committee of any corporation not in competition with the Company or any
of its subsidiaries, or as an officer, trustee or director of any charitable,
educational, philanthropic, civic, social or industry organizations, or as a
speaker or arbitrator, provided that the performance of the Executive's duties
or responsibilities in any of such capacities does not materially interfere with
the regular performance of the Executive's duties and responsibilities
hereunder.
 
          5.  Place of Performance.  In connection with the Executive's
              --------------------
employment by the Company, the Executive shall be based at the Company's
principal executive offices, and shall not be required to be absent therefrom on
travel status or otherwise for more than a reasonable time each year as
necessary or appropriate for the performance of the Executive's duties
hereunder.
 
          6.  Compensation.
              ------------
 
          (a)  During the term of this Agreement, the Company shall pay the
Executive, and the Executive agrees to accept a base salary at the rate of not
less than $ 350,000.00 per year, with increases in such rate in accordance with
the Company's regular administrative practices of salary increases applicable to
senior officers from time to time during the term of this Agreement (the annual
base salary as increased from time to time during the term of this Agreement
being hereinafter referred to as the "Base Salary"). The Base Salary shall be
paid in installments no less frequently than monthly. Any increase in Base
Salary or other compensation shall not limit or reduce any other obligation of
the Company hereunder, and once established at an increased specified rate, the
Executive's Base Salary hereunder shall not thereafter be reduced.
 
          (b)  During the term of this Agreement, the Executive shall be a full
participant in any and all of the Company's short and long-term incentive plans
and equity compensation plans in which senior officers of the Company
participate that are in effect on the date hereof or that may hereafter be
adopted, including, without limitation, the Company's 1999 Omnibus Stock
Incentive Plan (the "Stock Incentive Plan"), with at least the same reward
opportunities, if any, that are provided to other senior officers of the Company
from time to time
 
                                      10-2
<PAGE>
 
during the term of this Agreement, provided that in no event shall the Executive
be granted stock options, restricted stock awards or other stock-based long-term
incentives after a Change in Control less often than annually, nor on terms and
conditions (including performance goals) less favorable to the Executive than
those which (a) are granted to officers or employees of similar position and
status in the Company, or (b) were granted to the Executive during the term of
this Agreement prior to such Change in Control (or, if shorter, during the three
years preceding the Change in Control), nor on fewer than the following number
of shares:
 
                (i)  the average annual number of shares awarded (in the case of
     restricted stock awards), or underlying options granted, to the Executive
     during the term of this Agreement prior to such Change in Control (or, if
     shorter, during the two years preceding the Change in Control); or
 
                (ii) if greater than the number described in clause (i) above,
     the number of shares whose Fair Market Value on the date the shares are
     optioned or awarded to the Executive equals the average annual Fair Market
     Value (determined on the respective grant or award date) of the shares that
     were optioned or awarded to the Executive during the term of this Agreement
     prior to such Change in Control (or, if shorter, during the two years
     preceding the Change in Control).
 
          (c)  During the term of this Agreement, the Executive shall be
eligible to receive a bonus in the discretion of the Company's Board of
Directors.
 
          (d)  During the term of this Agreement, the Executive shall be
entitled to (i) perquisites, including, without limitation, an office and
secretarial and clerical staff, (ii) use of an automobile, and expenses incurred
therewith by the Executive, and (iii) fringe benefits, including, without
limitation, parking and health insurance, in each case at least equal to, and on
the same terms and conditions as, those attached to the Executive's office on
the date hereof, as the same may be improved from time to time during the term
of this Agreement, as well as to reimbursement, upon proper accounting, of all
reasonable expenses and disbursements incurred by the Executive in the course of
the Executive's duties.
 
          (e)  The Executive, the Executive's dependents and beneficiaries shall
be entitled to all benefits and service credit for benefits during the term of
this Agreement to which senior officers of the Company and their dependents and
beneficiaries are entitled as the result of the employment of such officers
during the term of this Agreement under the terms of employee plans and
practices of the Company and its subsidiaries, including, without limitation,
any pension plans, profit sharing plans, any non-qualified deferred compensation
plans and related "rabbi" trusts, the Company's life insurance plans, its
disability benefit plans, its vacation and holiday pay plans, its medical,
dental and welfare plans, and other present or successor plans and practices of
the Company and its subsidiaries for which senior officers, their dependents and
beneficiaries are eligible, and to all payments and other benefits under any
such plan or practice subsequent to the term of this Agreement as a result of
participation in such plan or practice during the term of this Agreement.
 
                                      10-3
<PAGE>
 
          7.  Termination of Employment.
              -------------------------
 
          (a)  The term of this Agreement shall terminate upon the death of the
Executive.
 
          (b)  The Company may terminate the Executive's employment during the
term of this Agreement for Cause as provided in Section 7(b)(i) or in the event
of Disability as provided in Section 7(b)(ii).
 
                (i)  This Agreement shall be considered terminated for "Cause'
     only:
 
                        (A)  if the Executive willfully and repeatedly fails to
     substantially perform the Executive's duties hereunder, other than by
     reason of a Disability;
 
                        (B)  if the Executive is grossly negligent or engages in
     gross misconduct in the performance of the Executive's duties hereunder;
 
                        (C)  if the Executive knowingly engages in an act of
     dishonesty intended to result in substantial personal enrichment at the
     expense of the Company, an act of fraud or embezzlement, or any conduct
     resulting in a felony conviction;
 
     and, in the case of each of clauses (A), (B) and (C) above, the applicable
     conditions set forth in Section 7(e) are satisfied.
 
          Anything in this Section 7(b) to the contrary notwithstanding, the
     Executive's employment shall in no event be considered terminated by the
     Company for Cause if termination takes place (I) as the result of bad
     judgment or negligence on the part of the Executive other than gross
     negligence or willful or reckless misconduct, (II) for any act or omission
     in respect of which a determination could properly be made that the
     Executive met the applicable standard of conduct prescribed for
     indemnification or reimbursement or payment of expenses of an officer or
     director under the Bylaws or Certificate of Incorporation of the Company or
     the laws of the State of Delaware or the directors' or officers' liability
     insurance of the Company in each case as in effect at the time of such act
     or omission, (III) as the result of an act or omission which occurred more
     than three calendar months prior to the Executive's having been given
     Notice of Termination for such act or omission unless the commission of
     such act or such omission was not or could not reasonably have been, at the
     time of such commission or omission, known to a member of the Board of
     Directors (other than the Executive) , in which case more than three
     calendar months from the date the commission of such act or such omission
     was or could reasonably have been so known, (IV) as the result of a
     continuing course of action which commenced and was or could reasonably
     have been known to a member of the Board of Directors (other than the
     Executive) more than three calendar months prior to Notice of Termination
     having been given to the Executive for such course of action, or (V)
     because of an act or omission believed by the Executive in good faith to
     have been in, or not opposed to, the interests of the Company.
 
                                      10-4
<PAGE>
 
                (ii) The term "Disability" as used in this Agreement means an
     accident or physical or mental illness which prevents the Executive from
     substantially performing the Executive's duties hereunder for six
     consecutive months. The term of this Agreement shall end as of the close of
     business on the last day of such six month period but without prejudice to
     any payments due to the Executive in respect of disability under this
     Agreement or any plan or practice of the Company. The amount of any
     payments payable under Section 6(a) during such six month period shall be
     reduced by any payments to which the Executive may be entitled for the same
     period because of disability under any disability or pension plan or
     arrangement of the Company or any subsidiary or affiliate thereof.
 
          (c)  The Executive may terminate the Executive's employment during the
term of this Agreement for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (i) any assignment to the Executive without the Executive's
express written consent of any duties, functions, authority or responsibilities
other than those contemplated by, or any material limitation or expansion
without the Executive's express written consent of the duties, functions
authority or responsibilities of the Executive in any respect not contemplated
by, Section 4(a), including, without limitation, a change in reporting
relationships, any such assignment, limitation or expansion being deemed a
continuing breach of this Agreement, (ii) a reduction of the Executive's rate of
compensation or any other failure by the Company to comply with Section 6, (iii)
failure by the Company to comply with Section 5, (iv) failure by the Company to
obtain the assumption of, and the agreement to perform, this Agreement by any
successor as contemplated in Section 11(a), (v) such assignment, limitation or
expansion described in the foregoing clause (i), reduction described in the
foregoing clause (ii) or failure described in the foregoing clauses (ii), (iii)
or (iv), as the case may be, is not cured within 30 days after receipt by the
Company of written notice from the Executive describing such event or (vi) a
determination by the Executive made in good faith that, as a result of a
detrimental change in circumstances after a Change in Control significantly
affecting the Executive's position, the Executive is unable properly to carry
out all of the authorities, powers, functions, duties and responsibilities
attached to the Executive's position and contemplated by Section 4(a), and the
situation is not remedied within 30 days after receipt by the Company of written
notice from the Executive of such determination.
 
          (d)  Notwithstanding anything to the contrary set forth herein,
subject to the Bylaws of the Company, the Board of Directors shall have the
right by majority vote of the entire membership of the Board of Directors to
terminate the Executive's employment for any reason other than Cause at any
time, subject to the consequences of such termination as set forth in Section 8.
 
          (e)  In no event shall the Company be entitled to terminate the
Executive's employment during the term of this Agreement for Cause pursuant to
Section 7(b), unless and until all of the following take place, provided that
Sections 7(e)(i) through (iii) shall not apply to any termination for Cause
pursuant to Section 7(b)(i)(C):
 
                (i)  the Secretary of the Company, pursuant to a resolution duly
     adopted by the affirmative vote of not less than a majority of the entire
     membership of the Board of Directors at a meeting called for that purpose,
     gives written notice to the Executive (the "Warning Notice") setting forth
     with particularity (A) the specific
 
                                      10-5
<PAGE>
 
     provision of this Agreement that the Executive is alleged to have failed to
     satisfy, (B) the acts or omissions alleged to constitute such failure, (C)
     the date on which the Executive shall be given a reasonable opportunity to
     appear before and be heard by the Board of Directors concerning the
     allegations, which date shall be not less than 30 nor more than 90 days
     after the Executive's receipt of the Warning Notice, and (D) the loss of
     rights under this Agreement that shall occur unless the Executive
     diligently and in good faith takes reasonable steps to remedy such failure
     within 30 days after the Executive's receipt of the Warning Notice; and
 
                (ii) the Executive does not diligently and in good faith take
     all reasonable steps to remedy such failure within 30 days after the
     Executive's receipt of the Warning Notice; and
 
                (iii)  the Executive is given a reasonable opportunity to appear
     before and be heard by the Board of Directors concerning the allegations,
     in accordance with the Warning Notice; and
 
                (iv) the Secretary of the Company gives the Executive a
     certified copy of a resolution duly adopted by the affirmative vote of not
     less than a majority of the entire membership of the Board of Directors
     after any opportunity to appear before the Board of Directors required by
     Section 7(e)(iii), at a meeting called for that purpose, that sets forth
     the Board of Director's finding that the Executive both (A) failed to
     satisfy the specific provision of this Agreement set forth in the Warning
     Notice previously given, or if no such Warning Notice is required pursuant
     to this Section 7(c), the specific provision of the Agreement set forth in
     such resolution, and (B) if Sections 7(e)(i) through (iii) apply, did not
     diligently and in good faith take all reasonable steps to remedy such
     failure within 30 days after the Executive's receipt of the Warning Notice,
     and that in all cases specifies the particulars thereof in detail.
 
          (f)  Any termination by the Company pursuant to Section 7(b) or by the
Executive pursuant to Section 7(c) shall be communicated by a written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provisions so indicated.
 
          (g)  "Date of Termination" shall mean (i) if the Executive's
employment is terminated by the Executive's death, the date of the Executive's
death, (ii) if the Executive's employment is terminated pursuant to Section
7(b)(ii), 30 days after Notice of Termination is given (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such 30 day period), and (iii) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given.
 
          8.  Compensation on Termination.  The parties recognize and agree
              ---------------------------
that, if the Company terminates the Executive's employment during the term of
this Agreement other than pursuant to Section 7(b), or if, in connection with or
following a Change in Control, the Executive's position is eliminated or the
Executive is no longer the chief executive officer of the Company with all
power, authority and responsibility normally attendant to such office and
consistent with his prior position, or if the Executive terminates the
Executive's employment during the term of this Agreement for Good Reason
pursuant to Section 7(c), the actual damages to the
 
                                      10-6
<PAGE>
 
Executive would be difficult if not impossible to ascertain and agree that the
Executive's sole remedy shall be a right to receive amounts determined and paid
in accordance with the provisions of this Section 8. The Executive shall not be
required to mitigate the amount of any payment provided for in this Section 8 by
seeking other employment or otherwise, nor shall any compensation earned by the
Executive in other employment or otherwise reduce the amount of any payment
provided for in this Section 8.
 
          (a)  If the Company shall terminate the Executive's employment during
the term of this Agreement other than pursuant to Section 7(b), or if, in
connection with or following a Change in Control, the Executive's position is
eliminated or the Executive is no longer the chief executive officer of the
Company with all power, authority and responsibility normally attendant to such
office and consistent with his prior position, or if the Executive shall
terminate the Executive's employment during the term of this Agreement for Good
Reason pursuant to Section 7(c), then, as severance pay or liquidated damages or
both:
 
                (i)  the Company shall pay the Executive the Executive's full
     Base Salary through the Date of Termination at the rate in effect at the
     time Notice of Termination is given, together with any other amounts
     payable to the Executive under Section 6 for periods prior to the Date of
     Termination and all outstanding stock options shall become immediately
     vested and exercisable;
 
                (ii) the Company shall pay the Executive a lump sum payment, on
     the tenth day after the Date of Termination, equal to 299% of (A) the Base
     Salary at the rate in effect as of the Date of Termination, plus (B) the
     average annual incentive award awarded to the Executive by the Company or
     any subsidiary of the Company for any of the five most recent fiscal years
     for which annual incentive award determinations were made before the Date
     of Termination, except as limited by applicable law; provided, however,
     that notwithstanding the foregoing, under no circumstances shall the
     Company pay the Executive a payment that would result in an "Excess
     Parachute Payment," as defined in Section 280G(b) of the Code; provided,
     further, that in the event any payment under this clause (ii) would
     constitute an Excess Parachute Payment, such payment shall be reduced to
     the extent necessary so that the payment does not constitute an Excess
     Parachute Payment; and
 
                (iii)  the Company shall pay any amounts payable under Section
     17.
 
          (b)  If the Executive's employment terminates under any circumstance
that does not entitle the Executive to payments under Section 8(a) (including a
termination by reason of the death or Disability of the Executive, or by reason
of the Company or the Executive electing not to extend or further extend the
term of this Agreement pursuant to Section 3(b)), the Executive shall not be
entitled to receive any compensation under Section 6 accruing after the date of
such termination, or any payment under Section 8(a) (other than Section 9).
 
          (c)  Nothing in Section 8(a) or 8(b) shall deprive the Executive of
any rights, payments, benefits or service credit for benefits after termination
of employment which were earned pursuant to any provision of this Agreement or
any plan or practice of the Company on or prior to such termination including,
without limitation, any pension or welfare benefits and any
 
                                      10-7
<PAGE>
 
rights under the Company's pension, deferred compensation or stock option or
other benefit plans and any legal fees and expenses payable pursuant to Section
17.
 
          9.  Indemnification.  The Company shall indemnify the Executive to
              ---------------
the fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, for all amounts (including, without
limitation, judgments, fines, settlement payments, expenses and attorneys' fees)
incurred or paid by the Executive in connection with any action, suit,
investigation or proceeding arising out of or relating to the performance by the
Executive of services for, or the acting by the Executive as a director, officer
or employee of, the Company, or any subsidiary of the Company or any other
Person at the Company's request. Nothing in this Section 9 or elsewhere in this
Agreement is intended to prevent the Company from indemnifying the Executive to
any greater extent than is required by this Section 9.
 
          10.  Non-competition; Non-solicitation.
               ---------------------------------
 
          (a)  In consideration of this Agreement, the Executive agrees that,
for the period ending on the later of (i) the first anniversary of the
termination of the Executive's employment with the Company by the Company for
Cause or by the Executive without Good Reason, and (ii) the third anniversary of
the closing of the Company's initial public offering (the "Non-Competition
Period"), the Executive will not, directly or indirectly (whether as a sole
proprietor, partner or venturer, stockholder, director, officer, employee,
consultant or in any other capacity as principal or agent or through any Person,
subsidiary or employee acting as nominee or agent):
 
                (i)  conduct or engage in or be interested in or associated with
     any Person which conducts or engages in the AHM Business within the United
     States;
 
                (ii) take any action, directly or indirectly, to finance,
     guarantee or provide any other material assistance to any Person engaged in
     the AHM Business;
 
                (iii)  solicit, contact or accept business of any client or
     counterparty whom the Company served or conducted business with or whose
     name became known to the Executive as a potential client or counterparty
     while in the employ of the Company or during the Non-Competition Period; or
 
                (iv) influence or attempt to influence any Person that is a
     contracting party with the Company at any time during the Non-Competition
     Period to terminate any written or oral agreement with the Company.
 
          For purposes of this Section 10, the term "AHM Business" shall mean
the mortgage banking business as conducted by the Company and any business
involving the supply of services substantially similar to services provided by
the Company at the time of the termination of the Executive's employment.
 
          (b)  The Executive shall not, whether for the Executive's own account
or in conjunction with or on behalf of any other Person, solicit or entice away
from the Company any officer, employee or customer of the Company during the
term hereof or the Non-Competition Period nor engage, hire, employ, or induce
the employment of any such Person whether or not such officer, employee or
customer would commit a breach of contract by reason of leaving service or
transferring business.
 
                                      10-8
<PAGE>
 
          (c)  The restrictive provisions hereof shall not prohibit the
Executive from (i) having an equity interest in the securities of any entity
engaged in the Business or any business with respect to which the Executive
obtained confidential or proprietary data or information, which entity's
securities are listed on a nationally-recognized securities exchange or
quotation system or traded in the over-the-counter market, to the extent that
such interest does not exceed 5% of the outstanding equity interests of such
entity, (ii) investing as a passive investor in an entity engaging in the
Business that is not so listed or traded, so long as such interest does not
exceed 5% of the outstanding equity interests of such entity or (iii) with the
prior written consent of the Company, serving as a director or other advisor to
any other Person.
 
          (d)  The Executive agrees that the covenants contained in this Section
10 are reasonable covenants under the circumstances, and further agrees that if
in the opinion of a court of competent jurisdiction, such restraint is not
reasonable in any respect, such court shall have the right, power and authority
to excise or modify such provision or provisions of these covenants which as to
such court shall appear not reasonable and to enforce the remainder thereof as
so amended.
 
          11.  Successors; Binding Agreement.
               -----------------------------
 
          (a)  The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the extent
that the Company would be required to perform it if no such succession had taken
place; provided that no such agreement with a successor shall release the
Company without the Executive's express written consent. Failure of the Company
to obtain such agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to compensation
from the Company in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive's employment were terminated by the
Company other than pursuant to Section 7(b), except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
 
          (b)  If the Executive should die while any amounts are due and payable
to the Executive hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of the Agreement to the Executive's
devisees, legatee, or other designee or, if there be no such designee, to the
Executive's estate.
 
          (c)  Except as to withholding of any tax under the laws of the United
States or any state or locality, neither this Agreement nor any right or
interest hereunder nor any amount payable at any time hereunder shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, attachment, or
other legal process, or encumbrance of any kind by the Executive or the
beneficiaries of the Executive or by legal representatives without the Company's
prior written consent, nor shall there be any right of set-off or counterclaim
in respect of any debts or liabilities of the Executive, the Executive's
beneficiaries or legal representatives against any right or interest hereunder
or any amount payable at any time hereunder to the Executive, the Executives
beneficiaries or legal representatives; provided, however, that nothing in this
Section 11 shall preclude the Executive from designating a
 
                                      10-9
<PAGE>
 
beneficiary to receive any benefit payable on the Executive's death, or the
legal representatives of the Executive from assigning any rights hereunder to
the Person or Persons entitled thereto under the Executive's will or, in case of
intestacy, to the Person or Persons entitled thereto under the laws of intestacy
applicable to the Executive's estate.
 
          12.  Parties.  This Agreement shall be binding upon and shall inure
               -------
to the benefit of the Company and the Executive, the Executive's heirs,
beneficiaries and legal representatives.
 
          13.  Entire Agreement; Amendment.
               ---------------------------
 
          (a)  This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all other
agreements between the parties with respect to the subject matter hereof.
 
          (b)  Any amendment of this Agreement shall not be binding unless in
writing and signed by both (i) an officer or director of the Company duly
authorized to do so and (ii) the Executive.
 
          14.  Enforceability.  In the event that any provision of this
               --------------
Agreement is determined to be invalid or unenforceable, the remaining terms and
conditions of this Agreement shall be unaffected and shall remain in full force
and effect, and any such determination of invalidity or enforceability shall not
affect the validity or enforceability of any other provision of this Agreement.
 
          15.  Notices.  All notices which may be necessary or proper for
               -------
either the Company or the Executive to give to the other shall be in writing and
shall be sent by hand delivery, registered or certified mail, return receipt
requested, overnight courier or facsimile, if to the Executive, to him at c/o
American Home Mortgage Holdings, Inc., 12 East 49th Street, New York, New York
10017 and, if to the Company, to it at its principal executive offices at 12
East 49th Street, New York, NY 10017, Attention: Human Resources Officer,
Facsimile: 212-546-6834, with a copy to Cadwalader, Wickersham & Taft, 100
Maiden Lane, New York, New York 10038, Attention: Louis Bevilacqua, Esq.,
Facsimile: 212-504-6666, and shall be deemed given when sent, provided that any
Notice of Termination or other notice given pursuant to Section 7 shall be
deemed given only when received. Either party may by like notice to the other
party change the address at which the Executive or it is to receive notices
hereunder.
 
          16.  Governing Law.  THIS AGREEMENT IS EXECUTED IN THE STATE OF NEW
               -------------
YORK AND SHALL BE GOVERNED BY, AND BE ENFORCEABLE IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.
 
          17.  Legal Fees and Expenses.  To induce the Executive to execute
               -----------------------
this Agreement and to provide the Executive with reasonable assurance that the
purposes of this Agreement will not be frustrated by the cost of its enforcement
should the Company fail to perform its obligations under this Agreement, the
Company shall pay and be solely responsible for any reasonable attorneys' fees
and expenses and court costs incurred by the Executive and
 
                                     10-10
<PAGE>
 
any of the Executive's beneficiaries, heirs or legal representatives as a result
of the Company's failure to perform this Agreement or any provision hereof to be
performed by the Company.
 
          18.  Effective Date.  This Agreement shall become effective upon
               --------------
completion of the Company's initial public offering.
 
          19.  Definitions.  The following terms, when capitalized in this
               -----------
Agreement, shall have the meanings set forth or incorporated by reference in
this Section 19.
 
          (a)  "Base Salary" shall have the meaning set forth in Section 6(a).
 
          (b)  "Board of Directors" means the Board of Directors of the Company,
as constituted from time to time.
 
          (c)  "Cause" shall have the meaning set forth in Section 7(b)(i).
 
          (d)  "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A under the Exchange Act, whether or not the
Company is subject to the Exchange Act at such time; provided, however, that
without limiting the generality of the foregoing, such a Change in Control shall
in any event be deemed to occur if and when:
 
                (i)  any person (as such term is used in Sections 13(d) and
     14(d)(2) of the Exchange Act), other than the Rhode Family Members, the
     Company, its subsidiaries and affiliates (as defined in Rule 12b-2 under
     the Exchange Act), becomes the beneficial owner (as defined in Rule 13d-3
     under the Exchange Act), directly or indirectly, of securities of the
     Company representing (A) more than 15% of the combined voting power of the
     Company's then outstanding securities, and (B) more than the percentage of
     the combined voting power of the Company's then outstanding securities
     beneficially owned, directly or indirectly, at that time by the Rhode
     Family Members;
 
                (ii) stockholders approve a merger or consolidation as a result
     of which securities representing less than 70% of the combined voting power
     of the outstanding voting securities of the surviving resulting corporation
     will be beneficially owned, directly or indirectly, in the aggregate by the
     former stockholders of the Company;
 
                (iii)  stockholders approve either (A) an agreement for the sale
     or disposition of all or substantially all of the Company's assets to an
     entity which is not a subsidiary of the Company, or (B) a plan of complete
     liquidation; or
 
                (iv) the Persons who were members the Board of Directors
     immediately before a tender offer by any Person other than the Company or a
     subsidiary
 
                                     10-11
<PAGE>
 
     or affiliate of the Company, or before a merger, consolidation, or
     contested election, or before any combination of such transactions, cease
     to constitute a majority of the Board of Directors as a result of such
     transaction or transactions.
 
          (e)  "Code" means the Internal Revenue Code of 1986, as amended.
 
          (f)  "Company" means American Home Mortgage Holdings, Inc., a Delaware
corporation, and any successors to its business and/or assets, which executes
and delivers an agreement provided for in Section 11(a) or which otherwise
becomes bound by all the terms and conditions of this Agreement by operation of
law.
 
          (g)  "Date of Termination" shall have the meaning set forth in Section
7(g).
 
          (h)  "Disability" shall have the meaning set forth in Section
7(b)(ii).
 
          (i)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
 
          (j)  "Fair Market Value" means Fair Market Value as defined in the
Stock Incentive Plan.
 
          (k)  "Good Reason" shall have the meaning set forth in Section 7(c).
 
          (l)  "Non-Competition Period" shall have the meaning set forth in
Section 10(a).
 
          (m)  "Notice of Termination" shall have the meaning set forth in
section 7(f).
 
          (n)  "Person" means any individual, corporation, partnership, limited
liability company, limited duration company, trust or other entity of any nature
whatsoever.
 
               (Remainder of This Page Intentionally Left Blank)
 
 
 
                                     10-12
<PAGE>
 
          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
 
                                American Home Mortgage Holdings, Inc.
 
 
                                     /s/ Michael Strauss
                                By:_______________________________________
                                   Name:   Michael Strauss
                                   Title:  President and Chief Executive Officer
 
 
                                     /s/ Michael Strauss
                                __________________________________________
                                              Michael Strauss

#Top of the Document

 

AMENDMENT TO EMPLOYMENT AGREEMENT
 
                                                                  Exhibit 10.1.2
 
                               LETTER AGREEMENT
                         AMENDING EMPLOYMENT AGREEMENT
 
 
April 1, 2000
 
 
Dear Mr. Strauss:
 
Reference is hereby made to your employment agreement, dated August 26, 1999
(the "Employment Agreement"), with American Home Mortgage Holdings, Inc. (the
"Company").  This letter hereby amends and restates Section 6(a) of the
Employment Agreement to read in its entirety as follows:
 
     "(a)  During the period from the commencement of the term of this Agreement
     until December 31, 1999, the Company shall pay the Executive, and the
     Executive agrees to accept, a base salary at the rate of not less than
     $130,000 per year.  Commencing January 1, 2000 and for the remainder of the
     term of this Agreement, the Company shall pay to the Executive, and the
     Executive agrees to accept, a base salary of not less than $350,000 per
     year, with increases in such rate in accordance with the Company's regular
     administrative practices of salary increases applicable to senior officers
     from time to time during the term of this Agreement (being hereinafter
     referred to as the "Base Salary").  The Base Salary shall be paid in
     installments no less frequently than monthly.  Any increase in Base Salary
     or other compensation shall not limit or reduce any other obligation of the
     Company hereunder, and once established at an increased specified rate, the
     Executive's Base Salary hereunder shall not thereafter be reduced."
 
Other than the amendment expressly set forth herein, the terms of the Employment
Agreement shall remain in full force and effect.
 
Kindly acknowledge your acceptance of the term of this letter agreement by
signing below and returning the signed original to the Company.  Please keep a
copy of this letter agreement for your files.
 
Sincerely,
 
/s/ Michael Strauss
_______________________________________
Michael Strauss
President and Chief Executive Officer
 
 
                                                      Acknowledged and Accepted:
 
                                                      /s/ Michael Strauss
                                                      __________________________
                                                      Michael Strauss
 
 

#Top of the Document