RYE BROOK, N.Y. (AP) -Joe Torre had a hunch it would come to this.
And when the New York Yankees offered him a one-year contract with a hefty paycut, performance-based bonuses - and no room to negotiate - he was insulted and figured he had no choice but to walk away.
``The fact that somebody is reducing your salary is just telling me they're not satisfied with what you're doing,'' Torre said Friday at a news conference. ``There really was no negotiation involved. I was hoping there would be, but there wasn't.
``If somebody wants you to do a job, if it takes them two weeks to figure out, yeah, we want to do this, should do this, yeah, you're a little suspicious.''
His voice trembling at times, Torre admitted he was uncomfortable and nervous talking about himself. He said his 12 years with the Yankees were the best time of his professional life - but he hasn't ruled out managing elsewhere.
Torre took a morning flight Thursday to Tampa, Fla., walked into George Steinbrenner's office at Legends Field and listened to the team's offer. He said he couldn't accept it, shook hands and left the ballpark, the Yankees' manager no more.
``I offered a concept we may talk about,'' Torre said. ``I don't want to go into Xs and Os here. More a concept that would work for both of us. It was term and how to go about it. But that was it. Money wasn't involved in the suggestion.''
After all he had accomplished - four World Series titles, 12 straight years in the playoffs, almost certain entry into the Hall of Fame - and after all the indignities, this was one he wasn't going to stand for.
``I was very much at peace with my decision,'' Torre said.
The 67-year-old Torre turned down a $5 million, one-year contract - $2.5 million less than he made this season, when the Yankees failed to make it past the first round of the playoffs for the third straight year.
``A difficult day,'' general manager Brian Cashman said Thursday. ``He will always be a Yankee.''
Bench coach Don Mattingly is the leading contender to replace Torre. Yankees broadcaster Joe Girardi, the NL Manager of the Year with Florida in 2006, is another top contender. Tony La Russa and Bobby Valentine also could be considered.
Most Yankees fans could see this day coming.
After losing the first two playoff games to Cleveland, owner George Steinbrenner said he didn't think Torre would be asked back if the Yankees didn't advance. New York hasn't won it all since 2000.
Torre, who made the playoffs in every year with the Yankees, indicated last week that he might be interested in managing elsewhere.
New York's offer included $3 million in bonuses if the Yankees reached next year's World Series - $1 million for each round reached - and an $8 million option for 2009 that would have become guaranteed if New York won the AL pennant.
Torre just completed a $19.2 million, three-year contract. The Chicago Cubs' Lou Piniella was the second-highest paid manager at $3.5 million.
``Under this offer, he would continue to be the highest-paid manager in major league baseball,'' team president Randy Levine said. ``We thought that we need to go to a performance-based model, having nothing to do with Joe Torre's character, integrity or ability. We just think it's important to motivate people.''
It appeared to be an offer designed to be rejected. Scott Boras, the agent for Yankees star Alex Rodriguez, said players would have interpreted an acceptance by Torre as weakness.
``It is difficult, near impossible, to accept a salary cut,'' Boras said. ``Successful people can afford their principles. They understand if they accept the position, there is a great risk the message to all under him is dissatisfaction. ``
Torre called Cashman on Tuesday and asked to meet with the 77-year-old Steinbrenner and the owners' sons, Hal and Hank, who have taken an increased role in recent month. They spent an hour together, and then Torre was gone.
Steinbrenner let his sons do the talking.
``The objective of the Yankees since the '20s has been to win the championship every year, just as the objective of (Vince) Lombardi with the Packers was or (Bill) Belichick and the Patriots,'' Hank said. ``None of us think we can win the championship every year, but that's the goal. Period.''
Torre led the Yankees to 10 AL East titles, but they haven't reached the World Series since 2003.
With 2,067 regular-season wins, Torre is eighth on the career list and was third among active managers behind the St. Louis Cardinals' La Russa (2,375) and the Atlanta Braves' Bobby Cox (2,255). Torre's four World Series titles are likely to earn him a place in the Hall of Fame - every manager with three or more has been inducted.
Torre's was the longest uninterrupted term for a Yankees manager since Casey Stengel held the job for 12 years from 1949-60. Stengel was pushed out, too, let go exactly 47 years earlier after his team lost a seven-game World Series to Pittsburgh.
Under Torre, the Yankees went 1,173-767. He trails only Joe McCarthy (1,460) for wins among Yankees managers.
Torre's departure could factor into whether potential free agents Mariano Rivera, Jorge Posada, Andy Pettitte and Rodriguez remain with the Yankees.
``We certainly hope that they decide to come back,'' Cashman said. ``At the end of the day we consider them Yankees and they will have an opportunity to remain part of the Yankees.''
Associated Press Writer Jim Fitzgerald in Harrison, freelance writer Mark Didtler in Tampa, Fla., AP National Writer Nancy Armour in Cleveland and AP Sports Writer Howard Ulman in Cleveland contributed to this report.

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