exv10w46







 




    Exhibit
    10.46



 




    [Freddie
    Mac letterhead]



 




    July 8,
    2004
    



 




    Patricia L.
    Cook

    3 Red Fox Lane

    Upper Brookville, New York 11545
    



 


 




    Dear
    Ms. Cook:
    



 



    I am pleased to offer to you the position of Freddie Mac’s
    Executive Vice President, Investments, reporting to me. Should
    you accept this offer, you will begin your employment with
    Freddie Mac on a mutually agreed upon date. The actual start
    date shall be referred to as the “Employment Date.”
    This offer of employment expires as of Monday July 12, 2004.



 



    This offer of employment is expressly contingent upon:



 


			
	 	    • 
	
    Your execution of the attached “Restrictive Covenant and
    Confidentiality Agreement;” and

	 
	 	    • 
	
    Your demonstration of compliance on your Employment Date with
    the work eligibility requirements if the Immigration Reform and
    Control Act.




 



    In addition, Freddie Mac must be completely satisfied with your
    references and the results of your credit and criminal
    background check, to which you have already consented.



 



    This terms and conditions set forth in this letter supersede any
    previous communication you have had with Freddie Mac
    and/or its
    agents concerning the terms and conditions of your employment
    with Freddie Mac. Freddie Mac agrees to employ you pursuant to,
    and you agree to accept as conditions of employment, the terms
    and conditions set forth in this Letter Agreement
    (“Agreement” or “Letter Agreement”), the
    enclosed Restrictive Covenant Agreement and the enclosed Code of
    Conduct.



 




    I.  Base
    Salary



 



    Your annualized base salary will be $600,000 (which is
    approximately $50,000 per month). You will be eligible for a
    salary review and a potential merit increase in 2005 that takes
    into consideration, among other things, your performance based
    upon performance criteria that I establish with your input.
    Freddie Mac has the sole discretion and absolute authority in
    determining whether, and to what extent performance against
    criteria has been achieved with respect to any particular
    period, and whether to implement a salary adjustment.













 







    Patricia L.
    Cook

    Page 2

    July 8, 2004
    



 




    II.  Short
    Term and Long Term Performance-Based Incentives



 



    During the Term you will be eligible for consideration for a
    discretionary short-term performance-based incentive bonus
    subject to corporate executive compensation plans, practices and
    policies in effect as of the date of payment. However, assuming
    continued employment in the above-specified position through the
    bonus payment date, your actual bonus for the 2004 performance
    period (payable in 2005) will be no less than $1,000,000.
    Thereafter, your target bonus will be one hundred and
    sixty-seven percent (167%) of your bonus eligible earnings
    (currently defined as base salary) and the maximum short-term
    incentive bonus payable will be 200% of your target incentive.
    Freddie Mac currently pays such bonuses in cash.



 



    You will also be eligible for consideration for a discretionary
    long-term performance-based incentive award. Such awards
    currently are made in a combination of restricted stock units
    and stock options. Assuming continued employment in the
    above-specified position through the actual grant date, the
    amount of your initial long-term incentive award will be 250% of
    your base salary or $1,500,000. Sixty-six and two thirds percent
    of your first such award (currently anticipated to be no earlier
    than in July 2004) will be paid in the form of restricted
    stock units and thirty-three and one-third percent of such award
    will be paid in the form of stock options. Such stock option
    award will ratably vest and the restrictions on such restricted
    stock unit grant will ratably lapse twenty-five percent (25%) on
    the anniversary of the Grant Date over four years. All other
    aspects of the award, including the number of units
    and/or
    shares subject to the grants and other details, shall be subject
    to the corporate plans, practices and policies in effect at that
    time.



 



    Thereafter, any annual long-term incentive compensation award
    you receive pursuant to current long-term incentive compensation
    plans and practices will not exceed two hundred and fifty
    percent (250%) of your base salary and will be made pursuant to
    corporate plans, practices and policies in effect at that time,
    which currently provide that awards are paid fifty percent (50%)
    in the form of restricted stock units and fifty percent (50%) in
    the form of stock options. Nothing in the plans and practices
    generally applicable to all employees precludes the Board of
    Directors from approving special or one-time incentive
    compensation awards in recognition of extraordinary
    contributions or accomplishments.



 




    III.  One-Time
    Sign-On Cash Bonus



 



    Subject to your beginning employment with Freddie Mac, you will
    receive a one-time sign-on cash bonus of $2,000,000. This cash
    bonus will be paid to you in your first full semi-monthly
    paycheck, and will be subject to such withholdings as Freddie
    Mac determines are required by law. This sign-on bonus is
    subject to
    repayment-in-full
    in the event that, prior to the first anniversary of your
    Employment Date, you terminate your employment with Freddie Mac
    for any reason or Freddie Mac terminates your employment for
    violating any standard of conduct, attendance or behavior
    embodied in













 







    Patricia L.
    Cook

    Page 3

    July 8, 2004
    



 



    Exhibit A to Freddie Mac
    Policy 3-214
    (as may be modified from time to time), the most recent copy of
    which is enclosed herewith.



 




    IV.  One-Time
    Sign-On Grant of Restricted Stock Units



 



    Subject to your beginning employment with Freddie Mac, you also
    will receive a one-time restricted stock unit grant with a total
    dollar value of $750,000. This grant will be subject to the
    terms of Freddie Mac’s 1995 Stock Compensation Plan
    (“Plan”) or any successor plan thereto in effect at
    the time of such grant, the applicable resolution of the
    Compensation and Human Resources Committee and any grant
    agreement that Freddie Mac provides to you. The number of
    restricted stock units subject to this grant will be calculated
    by dividing $750,000 by the fair market value (as defined in the
    Plan) of a share of Freddie Mac common stock on the date the
    Committee designates as the grant date (the “Grant
    Date”).



 



    The restrictions on the restricted stock units subject to this
    one-time grant will lapse pursuant to the following schedule:
    thirty-three percent (33%) on the first anniversary of the Grant
    Date; thirty-three percent (33%) on the second anniversary of
    the Grant Date; and thirty-four percent (34%) on the third
    anniversary of the Grant Date. In the event that your employment
    with Freddie Mac terminates for any reason (other than
    Disability or Death as defined in the Plan) prior to the lapse
    of restrictions, you will forfeit all the units.



 




    V.  Employment-At-Will;
    Termination of Employment Payment



 



    Except as set forth in Paragraphs I, II, III, IV
    and this Paragraph V as pertains to a term of compensation
    set forth therein, this Letter Agreement does not set forth any
    express or implied contractual obligation on the part of either
    Freddie Mac or you to continue employment for a specified or
    agreed upon duration and Freddie Mac retains the right to change
    any other terms and conditions of your employment, including any
    benefits offered, at any time in its sole discretion. Freddie
    Mac and you each retain the right to terminate your employment
    at any time for any reason with or without cause.



 



    In the event Freddie Mac terminates your employment prior to the
    second anniversary of the Employment Date for any reason other
    than “Gross Misconduct” as such term is defined in
    Policy 3-254.1 —
    Officer Severance (as it may be modified or amended from time to
    time in Freddie Mac’s sole discretion), Freddie Mac agrees
    to pay you in cash an amount equal to the sum of $3,800,000
    minus $133,333.33 per month for each whole month worked
    beginning on your Employment Date and ending the day prior to
    the second anniversary of your Employment Date.



 



    In the event Freddie Mac terminates your employment on or after
    the second anniversary of the Employment Date but prior to your
    sixty-second (62) birthday for any reason other than
    “Gross Misconduct” as such term is defined
    Policy 3-254.1 —
    Officer Severance (as













 







    Patricia L.
    Cook

    Page 4

    July 8, 2004
    



 



    it may be modified or amended from time to time in Freddie
    Mac’s sole discretion), Freddie Mac agrees to pay you in
    cash an amount equal to $600,000.



 



    Any such payment, minus lawful deductions, shall be made in one
    lump sum within thirty (30) days after the termination
    date. The payment, if any, shall be in addition to any amounts
    that may be due you pursuant to the terms of any applicable
    restrictive covenant agreement
    and/or
    corporate severance policy.



 



    The terms of the termination of employment payment referenced
    in this Paragraph V are contingent upon the approval of
    Freddie Mac’s regulator, the Office of Federal Housing
    Enterprise Oversight.



 



    VI.  Other Benefits



 



    You will be eligible to participate in all employee benefit
    plans pursuant to the terms of those plans (as may be modified
    or terminated from time to time).



 



    In your first calendar year of employment you will accrue
    vacation at a rate of fifteen days annually, which will be
    prorated based on your Employment Date. We currently provide
    10 days of vacation to full-time employees in their second
    calendar year of employment, with an option to purchase up to
    15 additional days on a pre-tax basis through our cafeteria
    plan, for a combined maximum of 25 days starting in your
    second calendar year of employment. Freddie Mac provides pre-tax
    dollars to subsidize the purchase of five of these additional
    days in the second year of employment. Of course, Freddie
    Mac’s vacation policy and cafeteria plan may change from
    time to time.



 




    VII.  Relocation
    Assistance



 



    Your relocation information will follow under separate cover
    from Emily Stover, Relocation Program Manager. Should you have
    any questions regarding those benefits, please call Emily at
    (703) 918-5776.



 




    VIII.  Confidentiality



 



    Subject to Paragraph IV (D) of the enclosed
    “Restrictive Covenant and Confidentiality Agreement”,
    you agree that prior to, during and after the cessation of your
    employment for any reason, you will not disclose either the
    existence of or any information about this letter to any person
    other than your attorney, accountant, tax advisor or members of
    your immediate family, and then only if they agree to keep such
    information confidential. Please also note that your continuing
    obligation to treat as confidential certain information that you
    use, receive or access during the course of your employment is
    covered in the attached “Restrictive Covenant and
    Confidentiality Agreement.”













 







    Patricia L.
    Cook

    Page 5

    July 8, 2004
    



 




    IX.  Code
    of Conduct and Investment Limitations Policy



 



    As a Freddie Mac employee you will be subject to Freddie
    Mac’s Code of Conduct (“Code”) and to Corporate
    Policy 1-906,
    Investment Limitations Policy (“Policy”) that, among
    other things, limit the investment activities of Freddie Mac
    employees. We expect that you will fully comply with the Code
    and the Policy, copies of which are enclosed for your review.



 



    You should consult with Freddie Mac’s Chief Compliance
    Officer as soon as practical about any investments that you or a
    “covered household member,” as that term in defined in
    the Policy, may have that may be prohibited by the Policy. You
    also should disclose any other matter or situation that may
    create a conflict of interest as such term is defined in the
    Code.



 



    In addition, please provide copies of any employment,
    confidentiality or stock grant agreements to which you may be
    currently subject so that we can ensure that your employment by
    Freddie Mac and conduct as a Freddie Mac employee, are not
    inconsistent with any of their terms.



 




    X.  Other
    Matters



 



    This letter will be governed by and construed in accordance with
    the laws of the Commonwealth of Virginia, without regard to its
    conflict-of-laws provisions.



 



    By signing and returning a copy of this Letter Agreement and the
    enclosed “Restrictive Covenant and Confidentiality
    Agreement,” you acknowledge that you have read, understand
    and agree to be bound by its terms, that you have been given an
    opportunity for your legal, tax
    and/or
    financial advisors to review this Letter Agreement and enclosed
    Restrictive Covenant Agreement, and that the provisions are
    reasonable.



 



    On your first day of work (or soon thereafter), you will be
    invited to attend a mandatory new employee orientation and a new
    officer briefing.



 



    We are delighted that you have decided to join Freddie Mac and
    look forward to your becoming a valuable member of the team.



 




    Sincerely,
    



 



    /s/  R.
    F. Syron








    Richard Syron



 


	 	 	 	 	 
	

    Signed and Agreed to:


	
 
	
    /s/  Patricia
    L. Cook

	
 
	
    July 8, 2004

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
    Patricia L. Cook
	
 
	
    June   , 2004









 



    cc: Michael Hager, SVP — Human Resources