Document:

ecol_10q-ex1056.htm

    EXHIBIT
10.56

    

    AMERICAN
ECOLOGY CORPORATION

    2009
Executive Management Incentive Bonus Plan

    

    
      	
               
      

            	
              1.

            	
              Purpose
      of the Plan

            

    

    
      	
               
      

            	
              The
      purpose of the American Ecology Corporation 2009 Executive Management
      Incentive Bonus Plan (“Plan”) is to provide certain of its key senior
      management employees, for the 2009 fiscal year, with incentive
      compensation consistent with the interests of American Ecology Corporation
      stockholders.

            

    

    

    
      	
               
      

            	
              2.

            	
              Eligibility

            

    

    
      	
               
      

            	
              Eligibility
      in the Plan is limited to Board approved and designated senior management
      employees of the Company and its subsidiaries (the “Company”). For
      purposes of the Plan, the Compensation Committee of the Company’s Board of
      Directors is the Plan
Administrator.

            

    

    

    
      	
               
      

            	
              A
      listing of employees approved by the Board of Directors (“Participants”)
      with their respective Initial Base Percentage (“IBP”) and Excess
      Percentage (“EP”) shall be maintained and administered by the Chief
      Financial Officer (“CFO”) under the direction of the Plan Administrator
      and is attached as Exhibit A. Participation
      in the Plan supersedes any prior agreements relating to the subject matter
      hereof, either written or verbal.

            

    

    

    
      	
               
      

            	
              Except
      in the event of the Participant’s death, to be eligible for the maximum
      incentive award (a “Bonus Award”) under the Plan, a Participant must have
      been employed on a full-time basis by the Company for the entire 12 months
      of 2009 (the “Performance Period”) and must be employed on the last day of
      the Performance Period and at the date of such payment. Plan Participants
      whose employment with the Company began during the Performance Period may
      be eligible for a Bonus Award on a pro rata basis. Plan Participants whose
      employment with the Company has been terminated, for any reason whatsoever
      (except for death), prior to the payment of any Bonus Award, shall not be
      eligible to receive any payment
hereunder.

            

    

    

    
      	
               
      

            	
              3.

            	
              Participant
      Groups

            

    

    
      	
               
      

            	
              The
      Plan provides for four Participant categories in
  2009.

            

    

    

    
      	
               
      

            	
              A)

            	
              Chief Executive Officer
      (“CEO) - Fifty percent (50%) of the Bonus Award shall be based on
      the Company achieving operating income objectives, taking into account the
      cost of such Bonus Award. Up to an additional fifty percent (50%) shall be
      awarded, with the approval of the Board of Directors, for achieving annual
      priorities, updating and implementing Company initiatives and out year
      strategic plans, and implementing processes to ensure tracking and
      achievement of Board-adopted
objectives.

            

    

    

    
      	
               
      

            	
              B)

            	
              Corporate Officers -
      This category includes the President and Chief Operating Officer and the
      four Corporate Vice Presidents and their Bonus Awards shall be based on
      the following criteria:

            

    

    

    
      	
               
      

            	
              i.

            	
              President and Chief Operating
      Officer (“COO”) - Fifty percent (50%) of the Bonus Award shall be
      based on the Company achieving operating income objectives, taking into
      account the cost of such Bonus Award. Up to an additional fifty percent
      (50%) shall be awarded, at the discretion of the CEO, for management of
      site efforts to achieve annual priorities, management of Company resources
      and completion of approved capital projects within budget and on schedule,
      effective management of health and safety programs, transportation
      arrangements, teamwork, development of out year plans for operating
      facility permit expansions and investments in operating facility plant and
      equipment, driving the overall sales and marketing effort to meet
      established territory targets, protecting existing business, team work,
      investor relations, business development, market development planning for
      out year growth and other evaluative
factors.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              

                ii.

              

            	
              Vice President and Chief
      Financial Officer (“CFO”). Fifty percent (50%) of the Bonus Awards
      shall be based on the Company achieving operating income objectives,
      taking into account the cost of such Bonus Awards. Up to an additional
      fifty percent (50%) shall be awarded, at the discretion of the CEO, for
      compliance with federal securities regulations including financial
      reporting requirements and compliance and internal control requirements,
      investor relations, business development and financing initiatives,
      development of out year capital structure and finance plans, team work,
      and other evaluative factors.

            

    

    

    
      	
               
      

            	
              iii.

            	
              Vice President of
      Operations. Fifty percent (50%) of the Bonus Award shall be based
      on the Company achieving operating income objectives, taking into account
      the cost of such Bonus Awards. Up to an additional fifty percent (50%)
      shall be awarded, at the discretion of the President and COO for
      management of site efforts to achieve annual priorities, management of
      Company resources and completion of approved capital projects within
      budget and on schedule, effective management of health and safety
      programs, transportations arrangements, teamwork, and development of out
      year plans for operating facility permit expansions and investments in
      operating facility plant and
equipment.

            

    

    

    
      	
               
      

            	
              

                iv.

              

            	
              Vice President and Chief
      Information Officer. Fifty percent (50%) of the Bonus Award shall
      be based on the Company achieving operating income objectives, taking into
      account the cost of such Bonus Awards. Up to an additional fifty percent
      (50%) shall be awarded, at the discretion of the CEO, for achieving
      priorities for support on potential acquisitions, new information systems
      development and implementation, servicing ongoing Information Technology
      needs, developing out year information system and technology plans to
      support strategic plans, teamwork, support for the Company’s operating
      facilities and other evaluative factors.

            
	 	 	 
	 	      
              v.

            	      
              Vice President and
      Controller. Fifty percent
      (50%) of the Bonus Award shall be based on the Company achieving operating
      income objectives, taking into account the cost of such Bonus Awards. Up
      to an additional fifty percent (50%) shall be awarded, at the discretion
      of the CFO, for compliance with federal securities regulations including
      financial reporting requirements and compliance, internal control
      requirements, financing initiatives, acquisition integration, team work
      and other evaluative
factors.

            

    

     

    
      	
               
      

            	
              C)

            	
              Corporate Officer - Vice
      President of Sales and Marketing - Fifty percent (50%) of the Bonus
      Award shall be based on the Company achieving operating income objectives,
      taking into account the cost of such Bonus Award. Up to an additional
      fifty percent (50%) shall be awarded, at the discretion of the President
      and COO, for driving the overall sales and marketing effort to meet
      established territory targets, protecting existing business, team work,
      business development assessment, market development planning for out year
      growth and other evaluative
factors.

            

    

    

    
      	
               
      

            	
              D)

            	
              Operating Facility
      Management - This category includes three operating facility
      General Managers. Twenty-five percent (25%) of the Bonus Awards shall be
      based upon achievement of Company operating income objectives, taking into
      account the cost of such bonuses and twenty-five percent (25%) shall be
      based on Site operating income. Up to an additional fifty percent (50%)
      shall be awarded, at the discretion of the President and COO, based on
      achieving established annual priorities, regulatory compliance, health and
      safety program effectiveness, effective use of Company resources,
      completion of approved capital projects within budget and on schedule,
      development of recommendations for out year permit expansions and
      investments in operating facility plant and equipment, team work and other
      evaluative factors.

            

    

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Bonus
Awards

    

    
      	
               
      

            	
              A)

            	
              Cash
      award at target
      performance:

            

    

    

    
      	
               
      

            	
              i.

            	
              Chief Executive Officer:
      Seventy-five percent (75%) of Participant’s base
      salary.

            

    

    

    
      	
               
      

            	
              ii.

            	
              President and Chief Operating
      Officer:  Forty percent (40%) of Participant’s base
      salary.

            

    

    

    
      	
               
      

            	
              iii.

            	
              Corporate
      Officers:  Thirty-five percent (35%) of Participants’ base
      salary for the Vice President and Chief Financial Officer, Vice President
      of Operations, Vice President and Chief Information Office, and Vice
      President and Controller.

            

    

    

    
      	
               
      

            	
              iv.

            	
              Corporate Officer - Vice
      President of Sales and Marketing: Twenty-five percent (25%) of
      Participant’s base salary.

            

    

    

    
      	
               
      

            	
              v.

            	
              Operating Facility
      Management:  Thirty-five percent (35%) of Participants’
      base salary.

            

    

    

    Eight and two-tenths percent
(8.2%) growth in operating income over actual 2008 results will serve as the
target performance goal.

    

    
      	
               
      

            	
              B)

            	
              Additional
      cash award:

            

    

    

    
      	
               
      

            	
              i.

            	
              In
      the event the Company exceeds the target performance goal, the Chief
      Executive Officer will be eligible for an additional bonus payment
      calculated by multiplying his base salary by 2.5% for every 1% increase
      over the target performance goal.

            

    

    

    
      	
               
      

            	
              ii.

            	
              In
      the event the Company exceeds the target performance goal, the President
      and Chief Operating Officer, the Vice President and Chief Financial
      Officer, Vice President of Operations, Vice President and Chief
      Information Office, Vice President and Controller, Vice President of Sales
      and Marketing and the three Operating Facility General Managers will be
      eligible for an additional bonus payment calculated by multiplying their
      respective salaries by 1% for every 1% increase over the target
      performance goal.

            

    

    

    Any and
all Bonus Awards shall be based on the availability of the Company’s final
audited financial statements for the Performance Period, prepared in accordance
with generally accepted accounting principles. For purposes of the Plan,
“Operating Income” is defined as Gross Profit less Selling, General and
Administrative Expenses after any accrual for Bonus Awards.

    

    The
Company shall pay Bonus Awards, if any, to Plan Participants upon certification
by the CEO and/or CFO that such payments are authorized by the Plan
Administrator and all applicable criteria contained herein have been met. All
Bonus Award payments shall be made within a reasonable time after approval and
availability of the Company’s final audited financial statements for the
Performance period.

    

    
      	
               
      

            	
              4.

            	
              Procedure

            

    

    
      	
               
      

            	
              The
      Plan Administrator shall have full power, discretion and authority to
      administer and interpret the Plan, including the calculation and
      verification of all Bonus Awards, and to establish rules and procedures
      for its administration, as the Plan Administrator deems necessary and
      appropriate. Any interpretation of the plan or other act of the Plan
      Administrator in administering the Plan shall be final and binding on all
      Plan Participants. No member of the Plan Administrator or the Board of
      Directors shall be liable for any action, interpretation or construction
      made in good faith with respect to the Plan. No member of the Plan
      Administrator shall participate in the Plan. The Company shall indemnify,
      to the fullest extent permitted by law, each member of the Board who
      becomes liable in any civil action or proceeding with respect to decisions
      made relating to the Plan. The CEO shall provide the Plan Administrator
      with a year-end report of Participants in the Plan and their respective
      annual salaries and recommendations for evaluative factor Bonus Awards for
      all participants other than himself, along with any other information that
      the Plan Administrator may request.  The Plan Administrator
      shall determine any evaluative factor Bonus Award for the
    CEO.

            

    

    

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              A
      Plan Participant may be removed from the Plan, with no right to any Bonus
      Award under the Plan, if it is determined in the discretion of the Plan
      Administrator that any of the following have
  occurred:

            

    

    

    
      	
               
      

            	
              A)

            	
              Insubordination, misconduct,
      malfeasance, or any formal disciplinary action taken by the Company
      during the performance year or prior to
payment.

            

    

    

    
      	
               
      

            	
              B)

            	
              Disability. Should a
      Participant not be actively at work for an extended period of time due to
      an illness or injury, in such a way as to qualify for long-term disability
      benefits, he/she may not receive a
bonus.

            

    

    

    
      	
               
      

            	
              C)

            	
              Demotion. If a Plan
      Participant is removed from the Participant group that made him or her an
      eligible Participant under the Plan at any time during the Performance
      Period, then such employee shall be deemed to be ineligible for
      participation in the Plan and shall not receive any Bonus Award under the
      Plan.

            

    

    

    
      	
               
      

            	
              5.

            	
              Miscellaneous
      Provisions.

            

    

    

    
      	
               
      

            	
              A)

            	
              Employment Rights. The
      Plan does not constitute a contract of employment and participation in the
      Plan will not give a Participant the right to continue in the employ of
      the Company on a full-time, part-time or other basis or alter their
      at-will employment status. Participation in the
      Plan will not give any Participant any right or claim to any benefit under
      the Plan, unless such right or claim has specifically been granted by the
      Plan Administrator under the terms of the
Plan.

            

    

    

    
      	
               
      

            	
              B)

            	
              Plan Administrator’s Final
      Decision. Any interpretation of the Plan and any decision on any
      matter pertaining to the Plan that is made by the Plan Administrator in
      its discretion in good faith shall be binding on all
    persons.

            

    

    

    
      	
               
      

            	
              C)

            	
              Governing Law. Except
      to the extent superseded by the laws of the United States, the laws of the
      State of Idaho, without regard to its conflicts of laws principles, shall
      govern in all matters relating to the
Plan.

            

    

    

    
      	
               
      

            	
              D)

            	
              Interests Not
      Transferable. Any interest of a Participant under the Plan may not
      be voluntarily sold, transferred, alienated, assigned or encumbered, other
      than by will or pursuant to the laws of descent and distribution.
      Notwithstanding the foregoing, if a Plan Participant dies during the
      Performance Period, or prior to payment of the Bonus Award, then a pro
      rata portion of the Bonus Award  that would otherwise be paid to
      such deceased Participant if such Participant were to remain in the active
      employment of the Company until the date of Payment of such Bonus Award
      shall be paid to the deceased Participant’s beneficiary, as designated in
      writing by such Participant; provided however, that if the deceased
      Participant has not designated a beneficiary then such amount shall be
      payable to the deceased Participant’s estate.  Payment to a
      Participant’s estate or beneficiary pursuant to this Section 5(d) shall be
      made in 2010.

            

    

    

    
      	
               
      

            	
              E)

            	
              Severability. In the
      event any provision of the Plan shall be held to be illegal or invalid for
      any reason, such illegality or invalidity shall not affect the remaining
      parts of the Plan, and the Plan shall be construed and enforced as if such
      illegal or invalid provisions had never been contained in the
      Plan.

            

    

    

    
      	
               
      

            	
              F)

            	
              Withholding. The Company will
      withhold from any amounts payable under the Plan applicable withholding
      including federal, state, city and local taxes, FICA and Medicare as shall
      be legally required. Additionally, the Company will withhold from any
      amounts payable under the Plan, the applicable contribution for the
      Participant’s 401(k) Savings and Retirement Plan as defined in the 401(K)
      Plan description protected under
ERISA.

            

    

    

    
      	
               
      

            	
              G)

            	
              Effect on Other Plans or
      Agreements. Payments or benefits provided to a Plan Participant
      under any stock, deferred compensation, savings, retirements or other
      employee benefit plan are governed solely by the terms of each of such
      plans.

            

    

    

    Effective
Date

    This Plan
is effective as of January 1, 2009.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    AMERICAN
ECOLOGY CORPORATION

    2009
Executive Management Incentive Bonus Plan

    

    

    ELIGIBLE
PARTICIPANTS

    

    Chief
Executive Officer:

    Stephen
A. Romano – IBP – 75%, EP – 2.5%

    

    Corporate
Officers:

    James R.
Baumgardner – President and COO – IBP – 40%, EP – 1%

    Jeffrey
R. Feeler – Vice President and CFO – IBP – 35%, EP – 1%

    Simon G.
Bell – Vice President, Hazardous Waste Operations – IBP – 35%, EP –
1%

    John M.
Cooper – Vice President and Chief Information Officer – IBP – 35%, EP –
1%

    Eric L.
Gerratt – Vice President and Controller – IBP – 35%, EP – 1%

    

    Corporate
Officer – Vice President of Sales and Marketing:

    Steve D.
Welling – Vice President, Sales and Marketing – IBP – 25%, EP – 1%

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    EXHIBIT
A

    BENEFICIARY
DESIGNATION FORM

    

    I hereby
designate the following person or persons as Beneficiary to receive any
management incentive bonus payments due under the 2009 Executive Management
Incentive Bonus Plan, effective January 1, 2009, in the event of my death,
reserving the full right to revoke or modify this designation, or any
modification thereof, at any time by a further written designation:

    

    Primary
Beneficiary

    

    

    
      	
              
    	 
      	
              
    	 
      	
              
    
	
              Name
      of Individual

            	 
      	
              Relationship
      to Me

            	 
      	
              Birth
      Date (if minor)

            

    

    

    
      	 
      

              
    
	
              Address

            

    

    

    
      	 
      

              
    	 
      	 
      

              
    
	
              Name
      of Trust

            	 
      	
              Date
      of Trust

            

    

    

    
      	 
      

              
    
	
              Trustee

            

    

    

    Provided,
however, that if such Primary Beneficiary shall not survive me by at least sixty
(60) days, the following shall be the Beneficiary:

    

    Contingent
Beneficiary

    
      

      
        	
                
    	 
      	
                
    	 
      	
                
    
	
                Name
      of Individual

              	 
      	
                Relationship
      to Me

              	 
      	
                Birth
      Date (if minor)

              

      

       

      
        	 
      

                
    
	
                Address

              

      

    

    

    This
beneficiary designation shall not affect any other beneficiary designation form
that I may have on file with the Company regarding benefits other than that
referred to above.

     

    
 

    
      
        
Date

    

    

    
      
Name

    

    

    
      
Signature

     

     

     

    6exv10w69

 

    Exhibit
    10.69

 

	 	 	 	 	 	 	 
	
       
	
 
	
    Margaret A. Colon

    Senior Vice President

    Chief Administrative Officer

    Corporate Strategy and Administration
	
 
	
    Tel: (703) 918-5210

    Fax: (703) 918-5324

    margaret_colon@freddiemac.com
	
 
	
    8250 Jones Branch Drive

    MS A38

    McLean, VA 22102-3110

	
 
	
 
	
 
	
 
	
 
	
 
	
 

 

    July 28, 2005
    

 

 

    Mr. Paul
    G. George
    

    2862 Fairmont Road

    Winston-Salem, NC 27106

 

 

    Dear
    Mr. George:
    

 

    I am pleased to offer to you the position of Freddie Mac’s
    Executive Vice President, Human Resources, reporting to Richard
    Syron, Freddie Mac’s Chairman and Chief Executive Officer.
    Should you accept this offer, you will begin your employment
    with Freddie Mac no later than September 1, 2005. The
    actual start date is referred to as the “Employment
    Date.”

 

    This offer of employment is expressly contingent upon:

 

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

	 
	 	    • 
	
    Your ability to verify your eligibility to work in the United
    States within 3 days of your Employment Date, in compliance
    with the requirements of the Immigration Reform and Control
    Act; and

	 
	 	    • 
	
    Approval of the terms of this offer by Freddie Mac’s
    Compensation and Human Resources Committee of the Board of
    Directors.

 

    This letter supersedes any previous communication you have had
    with Freddie Mac or anyone acting on its behalf concerning the
    terms and conditions of your employment with Freddie Mac.

 

    I.  Base
    Salary

 

    Beginning on your Employment Date, your annualized base salary
    will be $500,000 (which is approximately $41,667 per month). The
    Corporation’s pay dates are the
    15th and

    the last working day of each month. All employees receive
    performance evaluations in accordance with Freddie Mac’s
    corporate merit review program. 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.

 

    II.  Short-Term
    and Long-Term Performance-Based Incentives

 

    You will be eligible for consideration for a discretionary
    short-term performance-based incentive bonus which, if received,
    will be based on Freddie Mac’s assessment of your
    performance against objectives, as well as the performance of
    the company and your division, and your performance relative to
    others. Your target bonus for 2005 performance (payable in
    2006) is equal to 100% of your bonus eligible earnings with
    a guaranteed minimum of $200,000. Under the current terms of

 

    Mr. Paul George — Offer Letter

    July 27, 2005

    Page 2 of 4

 

    the company’s bonus program, you could receive a bonus
    ranging from 0% to 200% of your target. Although Freddie Mac
    currently pays such bonuses in cash, any such payment, if made,
    shall be subject to corporate executive compensation plans,
    practices, and policies in effect as of the date of payment.

 

    You also will be eligible in 2006 for consideration for a
    long-term performance-based incentive award. Although such
    awards currently are made in a combination of restricted stock
    units and stock options and your target amount for this
    incentive is 250% of your base salary, all aspects of this
    award, including vesting schedule, the number of units
    and/or
    shares subject to the grants, shall be subject to the corporate
    plans, practices, and policies in effect at the time of the
    grant.

 

    III.  One-Time
    Sign-On Cash Bonus

 

    Subject to your beginning employment with Freddie Mac, you will
    receive a one-time sign-on bonus in cash of $250,000. 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. You will be required to
    repay this sign-on bonus 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 a “Loss of Confidence”
    (as such term is defined in Freddie Mac
    Policy 3-254.1 –
    Officer Severance), or for violating any standard of conduct,
    attendance, or behavior detailed in Exhibit A to Freddie
    Mac Policy
    3-214
    (Progressive Discipline). These policies, like all Freddie Mac
    policies, may be modified from time-to-time, and the policy in
    effect at the time of any event triggering termination will
    govern. The most recent copy of each policy is enclosed for your
    review.

 

    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
    long-term
    incentive grant of restricted stock units with a total dollar
    value of $1 million. You will be awarded this grant at the
    next meeting of the Compensation and Human Resources Committee.
    The number of units you receive will be calculated by dividing
    $1 million by the [Fair Market Value] (as defined in
    Freddie Mac’s 2004 Stock Compensation Plan) of a share of
    Freddie Mac common stock on the date the Compensation and Human
    Resources Committee designates as the grant date (the
    “Grant Date”).

 

    The restrictions applicable to this one-time restricted stock
    units will lapse pursuant to the following schedule: 25% on the
    first anniversary of the Grant Date; 25% on the second
    anniversary of the Grant Date; 25% on the third anniversary of
    the Grant Date; and 25% on the fourth anniversary of the Grant
    Date. The grant will be subject to the terms of the 2004 Stock
    Compensation Plan, the resolution approving the grant, and the
    grant agreement. Included in the grant agreement will be a
    provision concerning repayment/forfeiture of the stock grant in
    the event you violate the provisions of the Restrictive Covenant
    and Confidentiality Agreement.

 

    V.  Other
    Benefits

 

    You will be eligible to participate in all employee benefits
    plans pursuant to the terms of those plans (as may be modified
    or terminated from time to time by Freddie Mac in its sole
    discretion).

 

    Mr. Paul George — Offer Letter

    July 27, 2005

    Page 3 of 4

 

    In your first calendar year of employment, you will accrue
    vacation at the 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. For 2005, a total of 10 leave days will be
    provided to you (4 vacation days accrued based upon your
    start date and 6 discretionary leave days). Of course,
    Freddie Mac’s vacation policy and cafeteria plan may change
    from time to time.

 

    VI.  Relocation
    Assistance

 

    Freddie Mac will provide you with relocation assistance, subject
    to the terms of Freddie Mac’s relocation agreement that you
    will be requested to sign. As part of this assistance, Freddie
    Mac will provide to you up to 120 days of temporary
    housing, and two trips per month for you and your spouse for the
    first four months to facilitate your search for a house. More
    details concerning your relocation assistance will follow under
    separate cover from Emily Stover, Relocation Program Manager.
    Should you have questions regarding those benefits, please call
    Emily at
    (703) 918-5776.

 

    VII.  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 the existence
    of 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.”

 

    VIII.  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 Freddie
    Mac’s Investment Limitations Policy, dated April 8,
    2004, 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 possible about any investments that you or a
    “covered household member” may have that may be
    prohibited by the Investment Limitations Policy. “Covered
    household member” is defined in 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, prior to beginning employment, please provide to
    Freddie Mac’s Human Resources Division copies of any
    employment, confidentiality or stock grant agreements to which
    you may be currently subject and that may affect your future
    employment, solicitation, or recruiting activities, so that we
    can ensure that your employment with Freddie Mac and conduct as
    a Freddie Mac employee are not inconsistent with any of their
    terms.

 

    Mr. Paul George — Offer Letter

    July 27, 2005

    Page 4 of 4

 

		
	
    IX.  
	
    Employment-At-Will

 

    Except as set forth in Paragraph III regarding the terms
    and conditions of your one-time sign-on cash bonus, in
    Paragraph IV regarding the terms of your one-time sign-on
    grant of restricted stock units, and Paragraph X regarding
    the applicability of the law of the Commonwealth of Virginia,
    nothing in this letter sets forth any express or implied
    contractual obligations on the part of either Freddie Mac or you
    to continue employment for a specified or
    agreed-upon
    duration. 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 you terminate
    your employment with Freddie Mac at any time for any reason,
    your salary will terminate as of the date of your termination.
    If Freddie Mac terminates your employment, your salary will
    cease as of the date of your termination and you will be
    entitled to cash severance (if any) in accordance with the terms
    of the attached “Restrictive Covenant and Confidentiality
    Agreement”

 

		
	
    X.  
	
    Other
    Matters

 

    Your employment, this letter, and the matters addressed in it,
    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 and the enclosed
    “Restrictive Covenant and Confidentiality Agreement,”
    you acknowledge that you have been given an opportunity for your
    legal, tax,
    and/or
    financial advisors to review this letter and enclosed
    Restrictive Covenant and Confidentiality Agreement, and that the
    provisions are reasonable.

 

    On your first day of work (or soon thereafter), you will be
    invited to attend an orientation on applicable benefits and
    compensation programs.

 

    Please return to me, one executed copy of this letter. 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/  Margaret
    A.
    Colon

    

    Margaret A. Colon

    SVP, Chief Administrative Officer

 

	 	 	 	 	 
	

    Signed and Agreed to:

	
 
	
    /s/  Paul
    G. George

	
 
	
    July 29, 2005

	
 
	
 
	
    
	
 
	
    

	
 
	
 
	
 
	
 
	
    Date

	

    Enclosures

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