Exhibit 10.2
 
Attachment C
 
Recapture Agreement
 
 

      Triggering Event   The recapture will be triggered if, at any time during
the executive’s employment with Freddie Mac (or, under certain circumstances
after termination of the executive’s employment, as described below), the Board
determines and notifies you in writing that any of the following (“Triggering
Events”) occurred:

 

  1.  The executive has obtained a legally binding right to bonus or incentive
payment based on materially inaccurate financial statements (which includes, but
is not limited to, statements of earnings, revenues, or gains) or any other
materially inaccurate performance metric criteria.     2.  As a result of
misconduct, Freddie Mac is required to prepare an accounting restatement due to
the material noncompliance of Freddie Mac with any financial reporting
requirements under the federal securities laws.     3.  The executive’s
employment with Freddie Mac is terminated for “cause” under subclauses (i) or
(iv) as defined below or, within two years of the termination of the executive’s
employment at Freddie Mac, the Board makes a determination that circumstances
existed at the time of the executive’s termination that would have justified
termination for cause under subclauses (i) or (iv) or the executive was later
convicted of or pleaded nolo contendere to a felony committed before the
termination date and such felony resulted in material business or reputational
harm to Freddie Mac.     4.  The executive’s employment with Freddie Mac is
terminated for “cause” under subclauses (ii) or (iii) as defined below, or
within two years of the termination of the executive’s employment at Freddie
Mac, the Board makes a determination that circumstances existed at the time of
the executive’s termination that would have justified a termination for cause
under subclauses (ii) or (iii) as defined below and that actions of the
executive resulted in material business or reputational harm to Freddie Mac.

--------------------------------------------------------------------------------

 

Recapture Agreement
Page 2 of 4
 
 

      Definition of
Cause   For purposes of this Recapture Agreement, “cause” shall mean the
occurrence of one or more of the following:

 
(i) The executive is convicted of or pleads nolo contendere to a charge of a
felony or any crime involving moral turpitude;
 
(ii) In carrying out his duties, the executive engages in conduct that
constitutes gross neglect or gross misconduct or any material violation of
applicable Freddie Mac rule or policy, including any policy relating to
investment by Freddie Mac employees in securities, the violation of which
amounts to gross neglect or gross misconduct;
 
(iii) The executive materially breaches any provision of the Memorandum
Agreement dated September 24, 2009 from Charles E. Haldeman to the executive; or
 
(iv) Any other willful or malicious misconduct on the executive’s part that is
substantially injurious to Freddie Mac.
 

  •  In each case, “cause” shall not exist unless and until Freddie Mac shall
have provided: (i) reasonable notice to the executive setting forth Freddie
Mac’s intention to make a determination that an event set forth in subclauses
(i), (ii), (iii) or (iv) has occurred; (ii) where remedial action is appropriate
and feasible, a reasonable opportunity for the executive to take such action;
(iii) an opportunity for the executive, together with the executive’s counsel,
to be heard before the Board; and (iv) executive with a copy of a resolution
duly adopted by a majority of the entire Board of Directors at a meeting of the
Board of Directors called and held for such purpose finding that in the good
faith opinion of the Board an event set forth in subclauses (i), (ii), (iii) or
(iv) has occurred. No act or failure to act by the executive will be considered
“willful” unless it is done, or omitted to be done, by the executive in bad
faith or without reasonable belief that the executive’s action or omission was
in the best interests of Freddie Mac.

--------------------------------------------------------------------------------

 

Recapture Agreement
Page 3 of 4
 
 

      Recapture Period    

 

  1.  In the case of the first Triggering Event, compensation subject to
recapture may include Recapture Eligible Compensation (as defined below) paid to
the Executive for up to two years prior to the Triggering Event.     2.  In the
case of the second Triggering Event, compensation is subject to recapture
consistent with Section 304 of the Sarbanes-Oxley Act of 2002.     3.  In the
case of the third Triggering Event, compensation subject to recapture may
include Recapture Eligible Compensation paid to the Executive for up to two
years prior to the date that the executive is terminated or subsequent to the
termination of employment.     4.  In the case of the fourth Triggering Event,
compensation subject to recapture may include Recapture Eligible Compensation
paid to the Executive at the time of termination of employment or subsequent to
the date of termination.

 
 

      Compensation
Subject to
Recapture   For purposes of this Recapture Agreement, “Recapture Eligible
Compensation” shall consist of the following:

 

  1.  In the case of the first Triggering Event, Recapture Eligible Compensation
consists of the annual short-term incentive (“STI”) (i.e., the annual bonus) and
the annual long-term incentives (“LTI”).     2.  In the case of the second
Triggering Event, Recapture Eligible Compensation consists of bonuses and
profits described in section 304 of the Sarbanes-Oxley Act of 2002.     3.  In
the case of the third and fourth Triggering Events, Recapture Eligible
Compensation consists of the annual STI, the annual LTI and any severance
benefits paid.

 

          In the event that the executive is terminated for cause under any of
the subclauses (i), (ii), (iii) or (iv) specified in the Definition of Cause
above, the executive forfeits rights to any future payment of annual STI, LTI or
severance benefits that might otherwise have been due pursuant to the terms of
applicable plans or awards from the date of executive’s termination forward.

--------------------------------------------------------------------------------

 

Recapture Agreement
Page 4 of 4
 

          With respect to any recapture of compensation:

 

  •  A recapture of STI or other cash paid, for such compensation that the Board
determines is subject to repayment, would require the executive to repay the
gross amount of the compensation previously paid. Additionally, any further
obligation of Freddie Mac to make payments under such plans could be cancelled.
    •  A recapture of LTI or other stock-based award granted, for such awards
that the Board determines, would require the executive to repay Freddie Mac the
full fair market value of the award(s) based upon vesting date. Additionally,
any unvested and/or unexercised stock-based awards could be cancelled.     • 
Base salary paid prior to the date of the Triggering Event is not subject to
recapture.     •  The executive’s assets acquired prior to employment by Freddie
Mac or acquired from sources other than Freddie Mac directly are not subject to
recapture under this agreement. The right to recapture is not retroactive prior
to the date of employment.

 

      Amount to be Recaptured   The Board has discretion to determine the
appropriate amount required to be recaptured, if any, upon a Triggering Event,
which is intended to be the compensation in excess of what Freddie Mac would
have paid the executive had Freddie Mac taken into consideration the impact of
the Triggering Event at the time such compensation was awarded.           Any
disputes between the executive and Freddie Mac concerning the occurrence of a
Triggering Event or the amount subject to recapture shall be determined
exclusively in accordance with the substantive laws of the Commonwealth of
Virginia, excluding provisions of the Virginia law concerning choice-of-law that
would result in the law of any state other than Virginia being applied.

 
 
I agree to the terms of this Recapture Agreement
 
 

             
By:
  /s/ Ross J. Kari             Date:   September 24, 2009                   Ross
J. Kari