exv10w11








 




    Exhibit 10.11



 


	 	 	 
	
    
	
 
	
    CORPORATE POLICY









 




    Subject:
    Severance —
    Officers
    



 




    Policy
    Number:
    3-254.1
    



 




    Control
    Point:
    Director-Employee
    Relations
    



 




    Approval
    Authority:
    EVP-Human
    Resources
    



 




    Signature:
    Paul
    George [Signature on original kept by Legal]
    



 




 




    Summary
    of this Policy



 



    This policy sets forth the eligibility requirements and amount
    of Severance Pay available to Eligible Officers.
    Defined terms are italicized. Please see Appendix A for
    definitions. Further details can be found in Freddie Mac’s
    Severance Plan Summary Plan Description.



 


		
	
    I.  
	
    Under
    what circumstances is Severance Pay provided?




 



    Freddie Mac provides Severance Pay to a Severance
    Eligible Officer pursuant to the terms of this Policy. In
    addition, in the event an employee becomes a Severance
    Eligible Officer as a result of a Reduction in Force,
    Freddie Mac also provides Notice Pay, even if the
    Severance Eligible Officer does not sign an agreement and
    release of claims.



 



    A Severance Eligible Officer’s employment is
    terminated as of the Separation Date. Such former
    officer’s eligibility to receive any benefit from or to
    continue participation in other plans maintained by the company
    is governed by the terms and provisions of those plans.



 



    In addition, the provision of Severance Pay to a
    Severance Eligible Officer is subject to the approval of
    Freddie Mac’s regulator.



 


		
	
    II.  
	
    What
    procedures are followed to determine severance
    eligibility?




 



    Business-area management will submit to their respective Human
    Resources Business Partner (“HRBP”) for review any
    proposed termination of employment (including any proposed
    voluntary separation that could result in Severance Pay)
    or proposed offer of Comparable Employment prior to
    discussing the same with the impacted officer. The Director of
    Employee Relations in the Human Resources Division determines
    whether the employee is a Severance Eligible Officer, and
    interprets and applies this policy.



 



    Employee Relations, after consulting with the HRBP, the Legal
    Division, and possibly business-area management, also determines
    whether a job position to be offered to an Eligible Officer
    is Comparable Employment. Eligible Officers will be
    evaluated for Comparable Employment, if at all, based on
    criteria including (but not limited to) their historical
    performance ratings and management’s assessment of relative
    skills.



 



    After Employee Relations determines that the employee is a
    Severance Eligible Officer, business-area management
    provides Notice to the Severance Eligible Officer.
    Business-area management will give Notice in advance of
    the Separation Date, if at all, to the extent that
    advance notification is consistent with business circumstances
    or required by law.














 






	 	 	 
	
    
	
 
	
    CORPORATE POLICY









 



    Business-area management, after consulting with the HRBP, also
    establishes the Separation Date of a Severance
    Eligible Officer.



 


		
	
    III.  
	
    What is
    required for a Severance Eligible Officer to receive
    Severance Pay?




 



    As a condition of receiving Severance Pay, a Severance
    Eligible Officer must sign an agreement and release of
    claims. Freddie Mac has exclusive discretion to determine what
    terms will be included within the agreement and release of
    claims. Among other things, the agreement and release of claims
    may contain provisions related to the following:



 


			
	 	    • 
	
    Full release of claims

	 
	 	    • 
	
    Non-participation in claims against Freddie Mac

	 
	 	    • 
	
    Notice of receipt of subpoenas

	 
	 	    • 
	
    Treatment of confidential information

	 
	 	    • 
	
    Non-competition

	 
	 	    • 
	
    Non-solicitation of Freddie Mac employees

	 
	 	    • 
	
    Notice of future employment

	 
	 	    • 
	
    Return of Freddie Mac property

	 
	 	    • 
	
    Non-disparagement

	 
	 	    • 
	
    Obligation to reasonably cooperate

	 
	 	    • 
	
    Damages in the event of breach

	 
	 	    • 
	
    Preclusion
    and/or
    restriction from future Freddie Mac employment




 



    Business-area management may require an Eligible Officer
    to provide services to Freddie Mac up to and including the
    Separation Date as a condition of receiving Severance
    Pay.



 



    If a Severance Eligible Officer does not receive
    two-weeks of advance Notice of
    his/her
    Separation Date from Freddie Mac, and does not execute an
    agreement and release of claims proffered by the company, then
    the officer will receive Pay in Lieu of Notice for the
    two-week period following the date of Notice, and will
    receive no Severance Pay.



 


		
	
    IV.  
	
    How long
    is the Severance Period of a Severance Eligible
    Officer?




 



    The suggested Severance Period of a Severance Eligible
    Officer is stated in Table A. If the Severance Eligible
    Officer is entitled to receive Notice Pay, then
    his/her
    Severance Period shall be the Severance Period
    specified in Table A, minus the number of days of
    Notice Pay he/she is entitled to receive. In no event
    will a Severance Eligible Officer receive less than four
    weeks of Severance Pay in addition to Notice Pay.
    Freddie Mac has discretion to vary the length of the
    Severance Period and accordingly the amount of
    Severance Pay an officer receives.



 



    If the officer has executed a written agreement with the company
    prior to receiving Notice that specifies a Severance
    Period different from what is provided below, then the
    length of the Severance Period is as specified in that
    agreement.



 


 


		
	    Policy
    3-254.1 dated August 17, 2009
    	     2
    














 






	 	 	 
	
    
	
 
	
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    TABLE A

	
 
	
 
	
 

	
    Severance Period for Eligible Officers

	
 
	
 
	
 

	
    Service Completed

    Since Last Start Date
	
 
	
    Severance Period

	
 
	
 
	
 

	
    < 1 year
	
 
	
    2 months

	
 
	
 
	
 

	
    > 1 to < 2 years
	
 
	
    3 months

	
 
	
 
	
 

	
    > 2 to < 3 years
	
 
	
    4 months

	
 
	
 
	
 

	
    > 3 to < 4 years
	
 
	
    5 months

	
 
	
 
	
 

	
    > 4 to < 5 years
	
 
	
    6 months

	
 
	
 
	
 

	
    > 5 to < 6 years
	
 
	
    7 months

	
 
	
 
	
 

	
    > 6 to < 7 years
	
 
	
    8 months

	
 
	
 
	
 

	
    > 7 to < 8 years
	
 
	
    9 months

	
 
	
 
	
 

	
    > 8 to < 9 years
	
 
	
    10 months

	
 
	
 
	
 

	
    > 9 to < 10 years
	
 
	
    11 months

	
 
	
 
	
 

	
    > 10 years
	
 
	
    12 months

	
 
	
 
	
 











 


		
	
    V.  
	
    How does
    a Severance Eligible Officer receive his/her Severance
    Pay?




 



    A Severance Eligible Officer has the option of receiving
    his/her
    Severance Pay in periodic payments over the specified
    Severance Period coinciding with Freddie Mac’s
    standard payroll procedures. Alternatively, the Severance
    Eligible Officer may receive
    his/her
    Severance Pay in a Lump Sum. If the Severance
    Eligible Officer elects periodic payments,
    he/she may
    be eligible to continue
    his/her
    participation in certain benefits plans at a reduced cost, in
    accordance with the terms of those plans.



 



    If a former officer receiving Severance Pay dies before
    receiving
    his/her
    entire Severance Pay, then Freddie Mac will pay the
    balance to the former employee’s estate or personal
    representative.



 


		
	
    VI.  
	
    When does
    a Severance Eligible Officer have to elect Lump
    Sum or Periodic Payments?




 



    A Severance Eligible Officer must elect whether to
    receive
    his/her
    Severance Pay in a Lump Sum or in periodic
    payments by the date
    he/she signs
    the required agreement and release of claims. Failure to make an
    election upon execution of the agreement and release of claims
    will result in the Severance Eligible Officer receiving
    his/her
    Severance Pay in a Lump Sum.



 


		
	
    VII.  
	
    When does
    Severance Pay begin?




 



    Severance Pay will be paid in accordance with the
    company’s standard payroll practices, and will begin within
    30 days after 1) the company’s receipt of the
    Severance Eligible Officer’s properly executed
    agreement and release of claims, 2) if applicable,
    expiration of the revocation period specified in the agreement
    and release of claims, and (3) (applicable only to
    Specified Employees) six months has elapsed since the
    Separation Date.



 


 


		
	    Policy
    3-254.1 dated August 17, 2009
    	     3
    














 






	 	 	 
	
    
	
 
	
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    If the consideration period noted in the agreement and release
    of claims extends beyond the Separation Date and the
    company has not received the Severance Eligible
    Officer’s properly executed agreement and release of
    claims as of the Separation Date, the company will place
    the Severance Eligible Officer on unpaid Leave of Absence
    until (1) receipt of the properly signed agreement and
    release of claims or (2) the end of the consideration
    period (whichever comes first).



 



    Failure by a Severance Eligible Officer to submit a
    properly executed agreement and release of claims within the
    time period specified in such agreement will result in the
    proffered agreement and release of claims being withdrawn by the
    company.



 


		
	
    VIII.  
	
    What
    happens to Severance Pay upon re-employment by Freddie
    Mac?




 



    If a former officer receiving Severance Pay is
    re-employed by Freddie Mac before the end of the Severance
    Period, the former officer will forfeit any remaining unpaid
    Severance Pay. If the former officer received
    his/her
    Severance Pay as a Lump Sum, and becomes
    re-employed by Freddie Mac before the end of what would have
    been the Severance Period, Freddie Mac reserves the right
    to require that some or all of the Severance Pay be
    repaid as a condition of re-employment.



 


		
	
    IX.  
	
    Restriction
    on Specified Employees.




 



    If a Severance Eligible Officer is a Specified
    Employee, then
    he/she will
    not begin receiving
    his/her
    Severance Pay until six (6) months following
    his/her
    Separation Date, consistent with Treas. Reg.
    § 1.409A-3(g)(2),
    or any successor thereto. If the Severance Eligible Officer
    elected to receive
    his/her
    Severance Pay in periodic payments within the required
    election period, then
    he/she shall
    receive six months of Severance Pay in a Lump Sum
    upon the expiration of the six-month wait period, and then
    will receive the balance of
    his/her
    Severance Pay in periodic payments according to the
    company’s standard payroll procedures.



 


		
	
    X.  
	
    Where can
    officers find additional information about Freddie Mac’s
    severance plan?




 



    Officers may find additional information about the
    company’s severance plan in Freddie Mac’s Severance
    Plan Summary Plan Description.



 


		
	
    XI.  
	
    Reservation
    of Rights




 



    Freddie Mac reserves the right to amend or terminate this Policy
    or any of its provisions at any time for any reason in its sole
    discretion without giving rise to legal liability. Nothing in
    this Policy is intended nor shall be interpreted to create a
    contract of employment or alter the at-will employment
    relationship that otherwise may exist between Freddie Mac and
    such employee, or otherwise limit the discretion of either
    Freddie Mac or such employee to terminate the employment
    relationship at any time for any reason.



 




    Effective
    Date: August 17, 2009



 




    o  New

    x  Replaces
    Policy 3-254.1
    dated March 1, 2008

    x  Reviewed
    by Legal or Determined that No Legal Review Necessary
    



 


 


		
	    Policy
    3-254.1 dated August 17, 2009
    	     4
    














 






	 	 	 
	
    
	
 
	
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    Appendix A
    Definitions



 




    Comparable
    Employment



 



    Comparable Employment will be assessed on a
    case-by-case
    basis. Exact criteria the company will use include each of the
    following, all of which must be met for the position to be
    deemed comparable.



 


			
	 	    • 
	
    The content of the job to which the employee may be assigned. To
    be comparable, the new position must require substantially the
    same skill set and technical knowledge.

	 
	 	    • 
	
    The commuting distance associated with the new position. To be
    comparable, the new position must not increase the commuting
    distance for the employee by more than 50 miles each way,
    or increase the commuting distance for the employee such that
    the total commuting distance exceeds 90 miles each way.

	 
	 	    • 
	
    To be comparable, the employee’s base salary must not
    decrease by more than 10%.




 




    Eligible
    Officer



 



    An employee who is appointed by Freddie Mac as an officer of the
    company.



 




    Gross
    Misconduct



 



    The occurrence or existence of any of the following:



 


			
	 	    • 
	
    Recurrent or flagrant insubordination related to core job duties
    and responsibilities;

	 
	 	    • 
	
    Stealing property belonging to Freddie Mac, another employee, or
    other theft in connection with employment;

	 
	 	    • 
	
    Committing fraud, including computer fraud;

	 
	 	    • 
	
    Willfully destroying property;

	 
	 	    • 
	
    Inflicting bodily harm on another employee, threatening another
    employee with a weapon, or conviction (including any plea of
    nolo contendere) of a crime;

	 
	 	    • 
	
    Committing harassment;

	 
	 	    • 
	
    Engaging in discriminatory behavior;

	 
	 	    • 
	
    Recurring or habitual tardiness or absenteeism which has
    resulted in a written reprimand;

	 
	 	    • 
	
    Intentionally disclosing or intentionally misusing Confidential
    Information (as that term is defined in Freddie Mac policy, Code
    of Conduct, or applicable restrictive covenant
    and/or
    confidentiality agreement between the employee and Freddie Mac);

	 
	 	    • 
	
    Negligently disclosing or negligently misusing Confidential
    Information (as that term is defined in Freddie Mac policy, Code
    of Conduct, or applicable restrictive covenant
    and/or
    confidentiality agreement between the employee and Freddie Mac)
    resulting in a significant adverse impact on Freddie Mac or on
    the business of Freddie Mac; or

	 
	 	    • 
	
    A material breach of any provision of any written policy of
    Freddie Mac required by law or established to maintain
    compliance with applicable legal or regulatory requirements.




 


 


		
	    Policy
    3-254.1 dated August 17, 2009
    	     5
    














 






	 	 	 
	
    
	
 
	
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    Loss of
    Confidence



 



    Determination by senior executive management in its sole
    discretion that it no longer maintains a high level of
    confidence in an Eligible Officer’s decisions,
    judgment
    and/or
    conduct.



 




    Lump
    Sum



 



    The payment to a Severance Eligible Officer of the entire
    amount of Severance Pay in the form of a single payment,
    minus lawful deductions (rather than periodic payments over the
    span of the Severance Period).



 




    Notice



 



    Oral or written communication from business-area management or
    an HRBP to a Severance Eligible Officer about the
    termination of the officer’s employment, Separation
    Date, terms of the proffered agreement and release of
    claims, and expectations concerning
    his/her
    continued provision of services to Freddie Mac during the period
    between the Notice and the Separation Date.



 




    Notice
    Pay



 



    The dollar amount of pay based on the number of days of
    continued pay required by applicable federal
    and/or state
    law upon triggering events, such as group layoffs that occur
    within a legally defined period of time. Laws that would trigger
    Notice Pay include, but are not limited to, the federal
    Worker Adjustment and Retraining Notification (“WARN”)
    Act.



 




    Pay in
    Lieu of Notice



 



    If a Severance Eligible Officer does not receive
    two-weeks of advance Notice of
    his/her
    Separation Date from Freddie Mac, and does not execute an
    agreement and release of claims proffered by the company, then
    the employee will receive pay for the two-week period following
    the date of Notice, and will receive no Severance
    Pay.



 




    Position
    Elimination



 



    Loss of job due to company reorganization or job abolishment.



 




    Reduction
    in Force



 



    An elimination of a certain minimum number of jobs that occurs
    within a defined time-period and triggers a requirement to pay
    Notice Pay. Laws that would require Notice Pay
    include (but are not limited to) the federal WARN Act.



 




    Separation
    Date



 



    The last date on which a Severance Eligible Officer is
    considered an active employee with Freddie Mac; also known as
    the Termination Date.



 




    Severance
    Eligible Officer



 



    An Eligible Officer whose position is eliminated due to a
    Position Elimination, Reduction in Force, or
    Loss of Confidence.



 



    An Eligible Officer is not a Severance Eligible
    Officer if such employee:



 


			
	 	    • 
	
    at the time of Notice is classified as a temporary
    employee pursuant to
    Policy 3-221,
    Worker Classifications (as may be amended, replaced or
    redesignated from time to time);

	 
	 	    • 
	
    is terminated for engaging in Gross Misconduct;




 


 


		
	    Policy
    3-254.1 dated August 17, 2009
    	     6
    














 






	 	 	 
	
    
	
 
	
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	 	    • 
	
    is regularly scheduled to work fewer than twenty (20) hours
    per week as of
    his/her
    receipt of Notice;

	 
	 	    • 
	
    is on “Leave of Absence” status as defined in
    Policy 3-236,
    Other Excused Absences (as may be amended, replaced or
    redesignated from time to time) for thirty (30) or more
    calendar days as of
    his/her
    receipt of Notice unless otherwise provided by law;

	 
	 	    • 
	
    fails to provide services to Freddie Mac in accordance with the
    Notice;

	 
	 	    • 
	
    resigned employment as a result of a new assignment or reporting
    relationship;

	 
	 	    • 
	
    received a written offer of employment from a Successor, which
    is an entity that acquires (through consolidation,
    reorganization, transfer, sublease, assignment or otherwise) all
    or substantially all of the business or assets of any business
    unit of Freddie Mac, or an entity that contracts with Freddie
    Mac to perform activities of the business unit in which the
    employee is assigned contemporaneous with the commencement of
    the contractual relationship; or

	 
	 	    • 
	
    received a written offer of Comparable Employment from
    Freddie Mac.




 




    Severance
    Pay



 



    The dollar amount that will be paid to a Severance Eligible
    Officer pursuant to the terms of this Policy. Severance
    Pay is equal to the Severance Eligible Officer’s
    base salary (not including items such as overtime, bonus,
    retention payments,
    and/or
    commissions) as of the Separation Date that would
    normally be paid over the length of time designated as the
    Severance Period, minus lawful deductions. Alternatively,
    Severance Pay may be paid in the form of a Lump
    Sum.



 




    Severance
    Period



 



    The time period during which Severance Pay will be
    provided to a Severance Eligible Officer pursuant to the
    terms of this Policy. The length of the Severance Period
    is calculated based on the Severance Eligible
    Officer’s length of service from Last Start Date
    (i.e., most recent date of hire). (See Section IV
    above.) The Severance Period begins the day following the
    Separation Date. Freddie Mac has discretion to vary the
    length of the Severance Period.



 



    If the Severance Eligible Officer has a written agreement
    with Freddie Mac that provides for a Severance Period
    that is different than the Severance Period specified
    in Table A, then the Severance Period shall be as
    specified in the written agreement.



 




    Specified
    Employee



 



    A Severance Eligible Officer who is identified by Freddie
    Mac in its sole discretion as of the Separation Date as a
    “specified employee” as defined in Treas. Reg.
    § 1.409A-1(i),
    or any successor thereto, and whose Severance Pay is
    determined by Freddie Mac to be subject to section 409A of
    the Internal Revenue Code.



 


 


		
	    Policy
    3-254.1 dated August 17, 2009
    	     7