Document:

FMCC-2013.12.31-EX 10.48 (1)

Exhibit 10.48
 

	
		
	Date
	To

	April 7, 2013
	David B. Lowman

	 
	 

	From
	 

	Donald H. Layton
	 

	 
	 

	
	
	Subject

	Your Compensation as Executive Vice President – Single-Family Business

	 

On behalf of the Compensation Committee (the “Committee”) of Freddie Mac’s Board of Directors (the “Board”), this memorandum sets forth Freddie Mac’s agreement to employ you as its Executive Vice President – Single-Family Business, effective May 20, 2013, pursuant to the terms and conditions set forth herein.  The terms and conditions set forth herein have been approved by the Committee and the Federal Housing Finance Agency (“FHFA”) and supersede any previous communications you may have had with Freddie Mac, FHFA, or the United States Department of Treasury (“Treasury”).

As Freddie Mac’s Executive Vice President – Single-Family Business, you shall report to me, Freddie Mac’s Chief Executive Officer, or my successor, and have the same status, privileges, and responsibilities normally inherent in such capacity in corporations of similar size and character.  You shall also perform such additional duties as the Board may from time to time reasonably assign to you.

During your employment, you agree to devote substantially all of your time, attention, and energies to Freddie Mac’s business, and to not be engaged in any other business activity, whether or not such business activity is pursued for gain, profit, or other pecuniary advantage, other than for service on outside boards in accordance with our Outside Employment and Other Outside Activities Policy.  This restriction shall not prevent you from devoting a reasonable amount of time to charitable or public interest activities or from making passive investments of your assets in such form or manner as you desire, consistent with Freddie Mac’s Personal 
Securities Investment policy, and except as provided herein.  

Please review and confirm that such terms and conditions conform to your understanding by returning to Scott Coolidge, Freddie Mac’s Senior Vice President – Human Resources, a signed copy of this letter.

Compensation Terms – David B. Lowman – April 7, 2013 
Page 2 of 5 

		
	I.
	Compensation

Your compensation is governed by the 2013 Executive Management Compensation Program (“2013 EMCP”).  To participate in the 2013 EMCP, you must agree to the terms of the 2013 EMCP Program Document and a Recapture and Forfeiture Agreement, both of which will be provided for your review after these documents are finalized.  The 2013 EMCP Program Document will outline the terms and conditions of our compensation program for senior executives, while the Recapture and Forfeiture Agreement will describe the circumstances under which certain compensation is subject to forfeiture and repayment.  In the event that you do not agree to the terms of either or both documents, you will be paid only Base Salary
 
Your target total direct compensation (“Target TDC”) will be $3,000,000, which will be pro-rated in the first calendar year of employment based on your agreed upon hire date.  Your Target TDC will consist of two components – Base Salary and Deferred Salary – which are summarized below.

Base Salary – Base Salary is paid in cash.  The annualized amount of your Base Salary is $500,000.  

Deferred Salary – Deferred Salary is earned on a semi-monthly basis.  The amount earned in each quarter is paid in cash on the last business day of the corresponding quarter of the following calendar year.  The annualized amount of your Deferred Salary is $2,500,000 and is comprised of the following two components:

		
	•
	At-Risk Deferred Salary – This portion of your Deferred Salary is equal to thirty percent (30%) of your Target TDC, or $900,000, up to half of which may be reduced based on the company’s performance against objectives established by FHFA and up to half of which may be reduced based on performance against objectives established by Freddie Mac and your individual performance.

		
	•
	Fixed Deferred Salary – This portion of your Deferred Salary is equal to your Target TDC less your Base Salary and At-Risk Deferred Salary, and is equal to $1,600,000.

Compensation Terms – David B. Lowman – April 7, 2013 
Page 3 of 5 

Cash Award – In consideration of your accepting this offer and beginning employment with Freddie Mac, you will receive a cash award in the amount of $150,000.  You will receive this cash award on the same date on which you receive your first payment of Base Salary.  The cash award is not considered “compensation” for purposes of our tax qualified Thrift/401(k) Savings Plan and our non-qualified Supplemental Executive Retirement Plan.

The cash award is subject to repayment if your employment terminates prior to the one-year anniversary of your date of hire for either of the following reasons:
		
	•
	You voluntarily resign employment; or,

		
	•
	We terminate your employment due to the occurrence of any of the Forfeiture Events described in the Recapture and Forfeiture Agreement that you will be required to sign in order to participate in the 2013 EMCP.

The amount to be repaid will be $12,500 (1/12th of the amount of the cash award) for each full month by which your termination precedes the one-year anniversary of your date of hire. 

		
	II.
	Benefits

You will be eligible to participate in all employee benefit plans offered to Freddie Mac’s senior executive officers (as may be modified or terminated from time to time by Freddie Mac in its sole discretion) pursuant to the terms set forth in the applicable plan.  In summary, our current benefit plans consist of the following:

		
	•
	Healthcare Coverage– We offer a competitive healthcare program that provides medical, dental and vision coverage for you and your eligible dependents with several options to choose from. 

		
	•
	Income Protection – We provide short- and long-term disability income protection, life insurance, accidental death and personal loss insurance, and business travel accident insurance.

		
	•
	Vacation - As an officer, you will accrue 20 days of vacation annually.  This equates to 6.46 hours each semi-monthly pay period.  You begin accruing vacation starting with your first full pay period.  Beginning in your second calendar year of employment you have the option to purchase up to five (5) additional days of vacation.

		
	•
	Thrift/401(k) Savings Plan – You will be able to contribute to our Thrift/401(k) Savings Plan on a pre-tax and/or after-tax basis.  Freddie Mac will begin matching a portion of your contributions after one year of service at up to six percent of pay.  This plan also includes an annual company discretionary contribution that is based on company performance.  This contribution, which is in addition to the matching contribution, is determined using a defined formula and is subject to a three-year vesting schedule.

		
	•
	Supplemental Executive Retirement Plan (SERP) – The SERP is an unfunded nonqualified plan for officers intended to make up for employer-provided contributions under the Thrift/401(k) Savings Plan that are capped due to Internal Revenue Code limitations. 

Compensation Terms – David B. Lowman – April 7, 2013 
Page 4 of 5 

Under separate cover, we are sending details of our employee benefit plans.  As a new employee, you may select the benefit plans that best meet your needs by logging on to Fidelity’s NetBenefits website at http://netbenefits.fidelity.com.  Shortly after your start date, you will receive an email from the Freddie Mac Benefits Center instructing you to log on to NetBenefits to make your elections.  

Note that you will not receive any information at your home address.  Your enrollment window is open for 30 days following your hire date.  During orientation, our benefit plans and information about enrollment will be explained in greater detail.  Please visit our new employee website, http://www.freddiemac.com/careers/newemployee/, for information about working at Freddie Mac.

		
	III.
	Personal Securities investments

You agree that following the vesting of your rights in certain shares of JPMorgan Chase & Co. common stock on January 20, 2014, you will act in good faith, considering relevant market conditions, to reduce your ownership interest in JPMorgan Chase & Co. to less than 5% of your household's Simplified Net Worth (as that term is defined in Freddie Mac's Personal Securities Investments Policy, a copy of which is attached).

		
	IV.
	Restrictive Covenant and Confidentiality Agreement

The terms of your compensation provided in this letter are also contingent upon your agreement to be bound by the terms of the enclosed Restrictive Covenant and Confidentiality Agreement, which you must sign and return together with a signed copy of this letter.

		
	V.
	FHFA’s Review and Approval Authority

The terms and conditions of your compensation have been reviewed and approved by FHFA in consultation with Treasury as required under the terms of the company’s Preferred Stock Agreement. Notwithstanding such approval and any provision of this letter, you acknowledge and understand that any compensation paid or to be paid during or after your employment remains subject to any withholding, escrow or prohibition consistent with FHFA’s authority pursuant to the Federal Home Loan Corporation Act, as amended, or the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended.

		
	VI.
	Reservations of Rights:

This letter is not intended, nor shall it be interpreted, to constitute a contract of employment for a specified duration.  Your employment is at-will and both you and Freddie Mac retain the discretion to terminate the employment relationship at any time for any lawful reason with or without notice.

This offer of employment is contingent upon Freddie Mac’s satisfaction in its sole discretion with your references and the results of your background checks and drug test.

Compensation Terms – David B. Lowman – April 7, 2013 
Page 5 of 5 

During the course of your review of this memorandum, Freddie Mac expects that you have had the opportunity to consult and receive assistance from appropriate advisors, including legal, tax, and financial advisors.

This memorandum shall be construed, and the rights and obligations herein determined, exclusively in accordance with the substantive law of the Commonwealth of Virginia, excluding provisions of Virginia law concerning choice-of-law that would result in the law of any state other than Virginia being applied.

/s/ Donald H. Layton__________________            4/10/13_________
Donald H. Layton                            Date
Chief Executive Officer

I agree to the terms of this Agreement. 

/s/ David B. Lowman__________________            4-9-2013_______ 
David B. Lowman                                      DateFMCC-2013.12.31-EX 10.49 (1)

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Exhibit 10.49

RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
In exchange for the mutual promises and consideration set forth below, this Restrictive Covenant and Confidentiality Agreement (“Agreement”) is entered into by and between the Federal Home Loan Mortgage Corporation (“Freddie Mac” or “Company”) and David B. Lowman (“Executive” or “you”), effective on the date the Executive assigns a personal signature to page 5 of this Agreement.
I.    Definitions
The following terms shall have the meanings indicated when used in this Agreement.
A.    Competitor:  The following entities, and their respective parents, successors, subsidiaries, and affiliates are competitors:  (i) Fannie Mae (ii) all Federal Home Loan Banks (including the Office of Finance); and (iii) such other entities to which Executive and the Company may agree in writing from time-to-time.
B.    Confidential Information:  Information or materials in written, oral, magnetic, digital, computer, photographic, optical, electronic, or other form, whether now existing or developed or created during the period of Executive’s employment with Freddie Mac, that constitutes trade secrets and/or proprietary or confidential information.  This information includes, but is not limited to:  (i) all information marked Proprietary or Confidential; (ii) information concerning the components, capabilities, and attributes of Freddie Mac’s business plans, methods, and strategies; (iii) information relating to tactics, plans, or strategies concerning shareholders, investors, pricing, investment, marketing, sales, trading, funding, hedging, modeling, sales and risk management; (iv) financial or tax information and analyses, including but not limited to, information concerning Freddie Mac’s capital structure and tax or financial planning; (v) confidential information about Freddie Mac’s customers, borrowers, employees, or others; (vi) pricing and quoting information, policies, procedures, and practices; (vii) confidential customer lists; (viii) proprietary algorithms; (ix) confidential contract terms; (x) confidential information concerning Freddie Mac’s policies, procedures, and practices or the way in which Freddie Mac does business; (xi) proprietary or confidential data bases, including their structure and content; (xii) proprietary Freddie Mac business software, including its design, specifications and documentation; (xiii) information about Freddie Mac products, programs, and services which has not yet been made public; (xiv) confidential information about Freddie Mac’s dealings with third parties, including dealers, customers, vendors, and regulators; and/or (xv) confidential information belonging to third parties to which Executive received access in connection with Executive’s employment with Freddie Mac.  Confidential Information does not include general skills, experience, or knowledge acquired in connection with Executive’s employment with Freddie Mac that otherwise are generally known to the public or within the industry or trade in which Freddie Mac operates.
II.    Non-Competition
Executive recognizes that as a result of Executive’s employment with Freddie Mac, Executive has access to and knowledge of critically sensitive Confidential Information, the improper disclosure or use of which would result in grave competitive harm to Freddie Mac.  Therefore, Executive agrees that neither during Executive’s employment with Freddie Mac, nor for the twelve (12) months immediately following termination of Executive’s employment for any reason, will Executive consider offers of employment from, seek or accept employment with, or otherwise directly or indirectly provide professional services to any Competitor, if the Executive will be rendering duties, responsibilities or services for the Competitor that are of the type and nature rendered or performed by you during the past two years of your 

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employment with Freddie Mac.  Executive acknowledges and agrees that this covenant has unique, substantial and immeasurable value to Freddie Mac, that Executive has sufficient skills to provide a livelihood for Executive while this covenant remains in force, and that this covenant will not interfere with Executive’s ability to work consistent with Executive’s experience, training and education.  This non-competition covenant applies regardless of whether Executive’s employment is terminated by Executive, by Freddie Mac, or by a joint decision. 
If Executive is a licensed lawyer, this non-competition covenant shall be interpreted in a manner consistent with any rule applicable to a licensed legal professional in the jurisdiction(s) of the Executive’s licensure or registration that concerns the Executive’s employment as counsel with, or provision of legal services to, a Competitor.
III.    Non-Solicitation and Non-Recruitment
During Executive’s employment with Freddie Mac and for a period of twelve (12) months after Executive’s termination date, Executive will not solicit or recruit, attempt to solicit or recruit or assist another in soliciting or recruiting any Freddie Mac managerial employee (including manager-level, Executive-level, or officer-level employee) with whom Executive worked, or any employee whom Executive directly or indirectly supervised at Freddie Mac, to leave the employee’s employment with Freddie Mac for purposes of employment or for the rendering of professional services.  This prohibition against solicitation does not apply if Freddie Mac has notified the employee being solicited or recruited that his/her employment with the Company will be terminated pursuant to a corporate reorganization or reduction-in-force.
If Employee is a licensed lawyer, this non-solicitation covenant shall be interpreted in a manner consistent with any rule applicable to a licensed legal professional in the jurisdiction(s) of Employee’s licensure or registration.
IV.    Treatment of Confidential Information
A.    Non-Disclosure.  Executive recognizes that Freddie Mac is engaged in an extremely competitive business and that, in the course of performing Executive’s job duties, Executive will have access to and gain knowledge about Confidential Information.  Executive further recognizes the importance of carefully protecting this Confidential Information in order for Freddie Mac to compete successfully.  Therefore, Executive agrees that Executive will neither divulge Confidential Information to any persons, including to other Freddie Mac employees who do not have a Freddie Mac business-related need to know, nor make use of the Confidential Information for the Executive’s own benefit or for the benefit of anyone else other than Freddie Mac.  Executive further agrees to take all reasonable precautions to prevent the disclosure of Confidential Information to unauthorized persons or entities, and to comply with all Company policies, procedures, and instructions regarding the treatment of such information.
B.    Return of Materials.  Executive agrees that upon termination of Executive’s employment with Freddie Mac for any reason whatsoever, Executive will deliver to Executive’s immediate supervisor all tangible materials embodying Confidential Information, including, but not limited to, any documentation, records, listings, notes, files, data, sketches, memoranda, models, accounts, reference materials, samples, machine-readable media, computer disks, tapes, and equipment which in any way relate to Confidential Information, whether developed by Executive or not.  Executive further agrees not to retain any copies of any materials embodying Confidential Information.
C.    Post-Termination Obligations.  Executive agrees that after the termination of Executive’s employment for any reason, Executive will not use in any way whatsoever, nor disclose any Confidential Information learned or obtained in connection with Executive’s employment with Freddie Mac without first obtaining the written permission of the Senior Vice President of Human Resources of Freddie Mac.  

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Executive further agrees that, in order to assure the continued confidentiality of the Confidential Information, Freddie Mac may correspond with Executive’s future employers to advise them generally of Executive’s exposure to and knowledge of Confidential Information, and Executive’s obligations and responsibilities regarding the Confidential Information.  Executive understands and agrees that any such contact may include a request for assurance and confirmation from such employer(s) that Executive will not disclose Confidential Information to such employer(s), nor will such employer(s) permit any use whatsoever of the Confidential Information.  To enable Freddie Mac to monitor compliance with the obligations imposed by this Agreement, Executive further agrees to inform in writing Freddie Mac’s Senior Vice President of Human Resources of the identity of Executive’s subsequent employer(s) and Executive’s prospective job title and responsibilities prior to beginning employment.  Executive agrees that this notice requirement shall remain in effect for twelve (12) months following the termination of Executive’s Freddie Mac employment.
D.    Ability to Enforce Agreement and Assist Government Investigations.  Nothing in this Agreement prohibits or otherwise restricts you from:  (1) making any disclosure of information required by law; (2) assisting any regulatory or law enforcement agency or legislative body to the extent you maintain a legal right to do so notwithstanding this Agreement; (3) filing, testifying, participating in or otherwise assisting in a proceeding relating to the alleged violation of any federal, state, or local law, regulation, or rule, to the extent you maintain a legal right to do so notwithstanding this Agreement; or (4) filing, testifying, participating in or otherwise assisting the Securities and Exchange Commission or any other proper authority in a proceeding relating to allegations of fraud.

V.    Consideration Given to Executive
In exchange for agreeing to be bound by the terms, conditions, and restrictions stated in this Agreement, Freddie Mac will provide the Executive with employment as Executive Vice President – Single Family Business, which itself is adequate consideration for Executive’s agreement to be bound by the provisions of this Agreement.

VI.    Reservation of Rights
Executive agrees that nothing in this Agreement constitutes a contract or commitment by Freddie Mac to continue Executive’s employment in any job position for any period of time, nor does anything in this Agreement limit in any way Freddie Mac’s right to terminate Executive’s employment at any time for any reason.

VII.    Compliance with the Code of Conduct and Corporate Policies & Procedures, Including Personal Securities Investments Policy
As a Freddie Mac employee, Executive will be subject to Freddie Mac’s Code of Conduct (“Code”) and to Corporate Policy 3-206, Personal Securities Investments Policy (“Policy”) that, among other things, limit the investment activities of Freddie Mac employees. Executive agrees to fully comply with the Code and the Policy, copies of which are enclosed for Executive’s review. 
Executive agrees to consult with Freddie Mac’s Chief Compliance Officer as soon as practical prior to beginning employment about any investments that Executive or a “covered household member,” as that term is defined in the Policy, may have that may be prohibited by the Policy. Executive also agrees to disclose prior to beginning employment any other matter or situation that may create a conflict of interest as such term is defined in the Code.  

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In addition, prior to beginning employment, Executive agrees to disclose to Freddie Mac's Human Resources Division the terms of any employment, confidentiality or stock grant agreements to which Executive may currently be subject that may affect Executive’s future employment or recruiting activities so that Freddie Mac may ensure that Executive’s employment by Freddie Mac and conduct as a Freddie Mac employee are not inconsistent with any of their terms. 

VIII.    Absence of Any Conflict of Interest
Executive represents that Executive does not have any confidential information, trade secrets or other proprietary information that Executive obtained as the result of Executive’s employment with another employer that Executive will be using in Executive’s position at Freddie Mac.  Executive also represents that Executive is not subject to any employment, confidentiality or stock grant agreements, or any other restrictions or limitations imposed by a prior employer, which would affect Executive’s ability to perform the duties and responsibilities for Freddie Mac in the job position offered, and further represents that Executive has provided Freddie Mac with copies of any non-competition, non-solicitation or similar agreements or limitations that have not expired, so that Freddie Mac can make an independent judgment that Executive’s employment with Freddie Mac is not inconsistent with any of its terms.

IX.    Enforcement
A.Executive acknowledges that Executive may be subject to discipline, up to and including termination of employment, for Executive’s breach or threat of breach of any provision of this Agreement.
B.Executive agrees that irreparable injury will result to Freddie Mac’s business interests in the event of breach or threatened breach of this Agreement, the full extent of Freddie Mac’s damages will be impossible to ascertain, and monetary damages will not be an adequate remedy for Freddie Mac.  Therefore, Executive agrees that in the event of a breach or threat of breach of any provision(s) of this Agreement, Freddie Mac, in addition to any other relief available, shall be entitled to temporary, preliminary, and permanent equitable relief to restrain any such breach or threat of breach by Executive and all persons acting for and/or in concert with Executive, without the necessity of posting bond or security, which Executive expressly waives.
C.Executive agrees that each of Executive’s obligations specified in this Agreement is a separate and independent covenant, and that all of Executive’s obligations set forth herein shall survive any termination, for any reason, of Executive’s Freddie Mac employment.  To the extent that any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable because it is overbroad, that provision shall be limited and enforced to the extent permitted by applicable law.  Should any provision of this Agreement be declared or determined by any court of competent jurisdiction to be unenforceable or invalid under applicable law, the validity of the remaining obligations will not be affected thereby and only the unenforceable or invalid obligation will be deemed not to be a part of this Agreement.  
D.    This Agreement is governed by, and will be construed in accordance with, the laws of the Commonwealth of Virginia, without regard to its or any other jurisdiction’s conflict-of-law provisions.  Executive agrees that any action related to or arising out of this Agreement shall be brought exclusively in the United States District Court for the Eastern District of Virginia, and Executive hereby irrevocably consents to personal jurisdiction and venue in such court and to service of process by United States Mail or express courier service in any such action.

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E.    If any dispute(s) arise(s) between Freddie Mac and Executive with respect to any matter which is the subject of this Agreement, the prevailing party in such dispute(s) shall be entitled to recover from the other party all of its costs and expenses, including its reasonable attorneys’ fees.
Executive has been advised to discuss all aspects of this Agreement with Executive’s private attorney.   Executive acknowledges that Executive has carefully read and understands the terms and provisions of this Agreement and that they are reasonable.  Executive signs this Agreement voluntarily and accepts all obligations contained in this Agreement in exchange for the consideration to be given to Executive as outlined above, which Executive acknowledges is adequate and satisfactory, and which Executive further acknowledges Freddie Mac is not otherwise obligated to provide to Executive.  Neither Freddie Mac nor its agents, representatives, directors, officers or employees have made any representations to Executive concerning the terms or effects of this Agreement, other than those contained in this Agreement.

By: /s/ David B. Lowman_________________     Date: 4/9/2013             
David B. Lowman

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