Document:

exv10w1

 

    Exhibit
    10.1

 

     

	 	 	 
	
    Date
    
	
 
	
    To
    

	
    August 13, 2009
	
 
	
    Bruce M. Witherell

	
 
	
 
	
 

	
    From
    
	
 
	
 

	
    Charles E. Haldeman
	
 
	
 

	
 
	
 
	
 

	
    Subject
    
	
 
	
 

	
    Your Compensation as Chief Executive Officer

 

On behalf of the Compensation Committee (“Committee”) of Freddie Mac’s Board of Directors
(“Board”), this memorandum sets forth Freddie Mac’s agreement to employ you as its Chief
Operating Officer, effective no later than September 14, 2009, pursuant to the terms and
conditions set forth herein. The terms and conditions set forth herein supersede any previous
communications you may have had with Freddie Mac, the Federal Housing Finance Agency (“FHFA”),
or the Department of the Treasury.

 

As you are aware, there is substantial uncertainty regarding executive compensation practices
in the financial services industry as a result of numerous government actions and the recently
issued regulations. Our regulator, the FHFA, is working diligently with the Department of the
Treasury to provide us with guidance on the impact of the new regulations on Freddie Mac’s
compensation programs. Until FHFA and the Department of the Treasury are able to provide us
with greater clarity, we are not able to make an offer with respect to several elements of
what we would expect to comprise your total compensation package.

 

Nevertheless, we want to make you the offer outlined in this memorandum with the understanding
that once FHFA provides final guidance regarding the structure of executive compensation it is
our intention to structure a compensation package consistent with compensation being offered
to chief operating officers at our major competitors. The terms and conditions in this letter
have been approved by the Compensation Committee (the “Committee”) of Freddie Mac’s Board of
Directors and James D. Lockhart, the Federal Housing Finance Agency’s Director, who has also
consulted with the Department of the Treasury.

 

As Freddie Mac’s Chief Operating Officer, 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 as Chief Operating Officer, you agree to devote substantially your full
time, attention, and energies to Freddie Mac’s business, and to not be engaged in any

 

    Compensation Terms — August 13, 2009

    Page 2 of 17

 

    other business activity, whether or not such business activity
    is pursued for gain, profit, or other pecuniary advantage, other
    than service on outside Boards as approved by the Committee.
    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 Investments Policy.

 

    Please review and confirm that such terms and conditions conform
    to your understanding by returning to Paul George, Freddie
    Mac’s Executive Vice-President of Human Resources and
    Corporate Services, a signed copy of this memorandum.

 

		
	
    I.  
	
    Compensation

 

    Freddie Mac agrees to pay you the following:

 

    A. Base Salary

 

    Your annualized base salary shall be no less than $700,000 and
    will be paid subject to Freddie Mac’s executive
    compensation plans, practices and policies in effect as of the
    date of payment. Subject to approval by FHFA after consulting
    with the Department of the Treasury, the Committee has the
    discretion to determine whether to implement a salary increase.

 

    If you terminate your employment with Freddie Mac at any time
    for any reason, your salary will terminate as of the date your
    employment terminates.

 

    B. Additional Incentive Opportunity

 

    To the extent permitted by FHFA and after we receive
    clarification on the above referenced regulatory actions
    impacting executive compensation, we would propose to provide
    you with a short-term and long-term target incentive opportunity
    that when added to your base salary would be consistent with the
    level of compensation provided by our major competitors.

 

    Once established, your short-term target incentive opportunity
    for 2009 will be pro-rated based on your date of hire. Your
    long-term incentive opportunity for 2009 will be pro-rated based
    on the maximum number of whole months that you can work during
    the long-term incentive’s performance period(s).

 

    The actual dollar amount of the incentive opportunity you
    receive shall be determined in the sole discretion of the
    Committee, subject to approval by FHFA after consulting with the
    Department of the Treasury, as appropriate, and may be based on
    an assessment of performance against your individual objectives,
    as well as company and division performance against Freddie
    Mac’s annual corporate Scorecard.

 

    Compensation Terms — August 13, 2009

    Page 3 of 17

 

		
	
    II.  
	
    Relocation
    Benefit

 

    You shall receive the relocation benefit consistent with the
    Company’s executive relocation package.

 

    In lieu of the
    90-day
    temporary living program provided under our standard executive
    relocation benefits, you will be provided with no more than nine
    months of temporary lodging for you and your family at a local
    apartment and reimbursement for reasonable commuting and
    necessary living expenses.

 

    In addition to the benefits provided under our standard
    executive relocation program, you will be reimbursed for travel
    to/from the Washington D.C. area and your current residence
    during the temporary lodging period. Each member of your
    immediate family may make a single trip every three weeks during
    the temporary living period to/from the Washington D.C.
    area and your current residence for which you will be reimbursed.

 

    The Company will not provide a
    gross-up of
    any relocation expenses regardless of whether the benefit is
    provided on an exception basis or pursuant to the Company’s
    normal executive relocation benefit.

 

		
	
    III.  
	
    Other
    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 benefit plans consist of
    the following:

 

			
	 	    • 
	
    Health and Welfare — Competitive and flexible medical
    benefits program for you and your eligible dependants with
    several options to choose from. Dental and vision coverage for
    you and your dependants that covers a wide variety of services.

	 
	 	    • 
	
    Thrift/401(k) Savings Plan — You will be able to
    contribute on a pre-tax basis and Freddie Mac will begin
    matching a portion of your contributions — based on
    years of service — up to 6% of pay. This plan also
    includes a Company annual discretionary contribution called the
    “Basic Contribution”, which is in addition to the
    matching contribution and is based on a defined formula with a
    five year vesting schedule.

	 
	 	    • 
	
    Pension Plan — Provides benefits based on a formula
    that takes into account your age, salary, and years of service.
    The formula is, in summary, 1% x Highest Average Monthly Pay for
    a Consecutive 36 Month Period x Years of Service. You will vest
    in this benefit after five-years of service. Benefits are
    normally paid out in the form of a monthly annuity beginning at
    age 65.

	 
	 	    • 
	
    Supplemental Executive Retirement Plan (SERP) — An
    unfunded non-qualified plan for officers intended to make up for
    employer provided contributions
    and/or
    benefits under

 

    Compensation Terms — August 13, 2009

    Page 4 of 17

 

			
	 	       
	
    the Pension Plan and Thrift/401(k) Savings Plan that are capped
    due to Internal Revenue Code limitations.

 

			
	 	    •  
	
    Income Protection — Provides short-term disability and
    long-term disability income protection, life insurance,
    accidental death and personal loss insurance, and business
    travel accident coverage.

 

    Under a separate cover we are sending details of our employee
    benefit plans. As a new employee, when you first become eligible
    for benefits, you may select the plans that best meet your needs
    and those of your family by logging on to
    http://netbenefits.fidelity.com.
    Shortly after your start date, you will receive an email from
    the “Benefits Center” instructing you to log on to
    Fidelity NetBenefits to make your benefits elections.

 

    You will not receive any information at your home address. Your
    enrollment window is 30 days. During Orientation, our
    flexible benefits program and information about enrollment, will
    be explained in greater detail. Please visit our new hire
    website, Step Inside,
    http://www.freddiemac.com/careers/stepinside/,
    for information about working at Freddie Mac.

 

		
	
    IV.  
	
    Vacation

 

    As an officer, you are eligible to accrue up to 20 days of
    core vacation during your first calendar year of employment.
    This equates to 6.46 hours each pay period; you begin
    accruing vacation starting your first complete pay period.

 

    Starting in 2010 (your second calendar year of employment), you
    will have the opportunity to continue to accrue 20 days
    vacation during each calendar year. You will be provided more
    information following your start of employment.

 

		
	
    V.  
	
    Compensation
    In the Event of Termination

 

    In the event that Freddie Mac terminates your employment for
    reasons other than “Cause” (as defined in Attachment A
    hereto), then Freddie Mac will provide you with severance pay
    and other benefits in an amount equal to that provided to
    Freddie Mac’s senior executive officers pursuant to the
    terms of an applicable severance policy in effect as of the date
    of your termination of employment.

 

    In the event that Freddie Mac terminates your employment for any
    reason or you voluntarily terminate your employment, then
    Freddie Mac will provide you with any earned but unpaid base
    salary (that is paid semi-monthly in cash) through the date of
    termination, any accrued but unpaid vacation through the date of
    termination, and any reasonable business expenses incurred
    through the date of termination.

 

    In the event that any compensation or benefit to be provided
    pursuant to the terms of this Paragraph V constitutes
    nonqualified deferred compensation subject to section 409A
    of the Internal Revenue Code, then any payment of such
    compensation or benefit shall be delayed

 

    Compensation Terms — August 13, 2009

    Page 5 of 17

 

    to the extent necessary to comply with Internal Revenue Code
    section
    409A(a)(2)(B)(i)
    and accompanying Treasury regulations and other applicable
    Treasury or Internal Revenue Service guidance.

 

    Your employment shall be deemed terminated within the meaning of
    Paragraph V in the event you for any reason other than
    “Cause” (as defined in Attachment A hereto) no longer
    serve as the Chief Operating Officer, your responsibilities as
    Chief Operating Officer are materially diminished, or your base
    salary is reduced.

 

		
	
    VI.  
	
    Restrictive
    Covenant Agreement

 

    The terms of compensation provided in this memorandum are
    contingent on your agreement to be bound by the terms of the
    enclosed Restrictive Covenant Agreement, which you must sign and
    return together with a signed copy of this memorandum. It is
    included as Attachment B.

 

		
	
    VII.  
	
    Recapture
    Agreement

 

    The terms of compensation provided in this memorandum are
    contingent on your agreement to be bound by the terms of the
    enclosed Recapture Agreement, which you must sign and return
    together with a signed copy of this memorandum. It is included
    as Attachment C.

 

		
	
    VIII.  
	
    Escrow
    Agreement

 

    You acknowledge that payments of compensation and benefits,
    including any termination of employment payment pursuant to
    Paragraph V, are subject to escrow in the event prior to
    the first anniversary of the termination of your employment for
    any reason FHFA files a Notice of Charges alleging misconduct by
    you that was knowing and caused or would be likely to cause a
    substantial loss to Freddie Mac and directs the company to
    escrow compensation and benefits that otherwise may be paid to
    you. In the event it is subsequently determined that no
    misconduct occurred, the amount placed in escrow shall be paid
    to you, plus reasonable interest for the period of escrow.

 

		
	
    IX.  
	
    Indemnification
    Agreement

 

    Freddie Mac agrees to enter into an indemnification agreement
    with you that has terms and conditions consistent with those
    provided to all other executive officers of the Company.

 

		
	
    X.  
	
    Assignment
    by Freddie Mac

 

    This Agreement is binding upon and shall inure to the benefit of
    the Company’s successors and assigns. The Company may
    assign this Agreement in connection with a merger,
    consolidation, assignment, sale, operation of law, or other
    disposition of substantially all of its

 

    Compensation Terms — August 13, 2009

    Page 6 of 17

 

    assets or business, without the consent of Employee, provided
    the assignee acknowledges that the Agreement is binding upon it.
    This Agreement may not be assigned by Employee.

 

		
	
    XI.  
	
    FHFA
    Approval

 

    Notwithstanding FHFA’s approval of the terms and conditions
    of compensation provided herein, including compensation to be
    paid to you in the event of the termination of your employment,
    you acknowledge and understand that such approval is subject to
    reassessment. If a severance triggering event were to occur, any
    future payout would be subject to the review and approval of the
    Director of the FHFA at that time.

 

		
	
    XII.  
	
    Reservation
    of Rights

 

    This memorandum is not intended, nor shall it be interpreted, to
    constitute a contract of employment for a specified duration,
    and each of you and Freddie Mac retain the discretion to
    terminate the employment relationship at any time for any lawful
    reason.

 

    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/  Charles
    E. Haldeman

	
 
	
    August 17, 2009

	
 
	
 
	
 

	
    Charles E. Haldeman
	
 
	
    Date

	
    Chief Executive Officer
	
 
	
 

 

    I agree to the terms of this memorandum, which includes
    Attachments A, B, and C.

 

 

	 	 	 
	
    /s/  Bruce
    M. Witherell

	
 
	
    August 17, 2009

	
 
	
 
	
 

	
    Bruce M. Witherell
	
 
	
    Date

 

 

    Attachments
    

 

    Compensation Terms — August 13, 2009

    Page 7 of 17

 

    ATTACHMENT
    A

    TO

    August 13, 2009 MEMORANDUM TO BRUCE M. WITHERELL

 

    Definition
    of “Cause”
    

 

 

    For the purposes of the memorandum agreement, “Cause”
shall mean the occurrence of one or more of the following:

 

    (i) You commit a felony or any crime involving moral
    turpitude;

 

    (ii) In carrying out your duties, you engage in conduct
    that constitutes gross neglect or gross misconduct or any
    material violation of applicable Freddie Mac rule or policy,
    including any policy relating to investment by Freddie Mac
    employees in securities, the violation of which amounts to gross
    neglect or gross misconduct;

 

    (iii) You materially breach any provision of this
    memorandum agreement; or

 

    (iv) Any other willful or malicious misconduct on your part
    that is substantially injurious to Freddie Mac.

 

    In each case, “Cause” shall not exist unless and until
    Freddie Mac has delivered to you a copy of a resolution duly
    adopted by a majority of the entire Board of Directors at a
    meeting of the Board of Directors called and held for such
    purpose (after reasonable notice to you and an opportunity for
    you, together with counsel, to be heard before the Board of
    Directors), finding that in the good faith opinion of the Board
    an event set forth in subclauses (i), (ii), (iii) or
    (iv) has occurred.

 

    In the case of an event set forth in subclauses (ii) or
    (iii), if Freddie Mac in its sole discretion determines that
    remedial action is appropriate and feasible, Freddie Mac will
    provide you with a reasonable opportunity to take such action
    (i.e., not to be unreasonably withheld), and “Cause”
    shall not exist if you make a good faith effort to remedy the
    event.

 

    During the period commencing on the date Freddie Mac notifies
    you that it intends to call a meeting of the Board of Directors
    to terminate your employment for “Cause” pursuant to
    this memorandum agreement, Freddie Mac may reduce your
    responsibilities and duties and any such reduction or
    diminishment in your responsibilities and duties during such
    period shall not constitute the termination of your employment.

 

    Compensation Terms — August 13, 2009

    Page 8 of 17

 

    Attachment
    B

 

    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 Bruce M. Witherell
    (“Executive”), effective on the date the Executive
    assigns a personal signature to this agreement.

 

		
	
    I.      
	
    Definitions

 

    The following terms shall have the meanings indicated when used
    in this Agreement.

 

    A.      Prohibited
    Competition: Considering offers of employment from, seeking
    or accepting employment with, directly or indirectly providing
    professional services to, becoming a director of, or being an
    investor (representing more than a five (5) percent equity
    interest) in, (i) Fannie Mae (ii) all Federal Home
    Loan Banks (including the Office of Finance); and
    (iii) such other entities to which the 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.

 

    Compensation Terms — August 13, 2009

    Page 9 of 17

 

    C.      Severance: Cash
    compensation paid pursuant to Freddie Mac’s Severance
    Policy.

 

    D.      Severance Policy:
    Freddie Mac Policy 3-254.1 (Severance — Officers), or
    any subsequent and superceding severance policy.

 

    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 during Executive’s employment with Freddie Mac and for
    twenty-four (24) months immediately following termination
    of Executive’s employment for any reason, Executive shall
    not engage in Prohibited Competition. 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.

 

    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 of employment for any reason, Executive shall not
    directly or indirectly, on his own behalf of or on behalf of any
    other person, corporation, partnership, firm, financial
    institution or other business entity, recruit or solicit or
    attempt to recruit or solicit or assist another to recruit or
    solicit any person (who at such time is employed as a Freddie
    Mac officer (or equivalent) to cease their employment
    relationship with Freddie Mac for the purpose of their being
    employed by or providing professional services to any other
    entity or person; provided that this section shall not be
    construed as a prohibition on the ability of Executive to
    provide a reference to any person or entity with which Executive
    has no affiliation provide the Freddie Mac employee has notified
    Freddie Mac of their intent to terminated their employment with
    Freddie Mac.

 

		
	
    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

 

    Compensation Terms — August 13, 2009

    Page 10 of 17

 

    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 Executive Vice President
    of Human Resources of Freddie Mac. 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 Executive 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.

 

    Compensation Terms — August 13, 2009

    Page 11 of 17

 

		
	
    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 the following consideration, each of
    which itself is adequate consideration for Executive’s
    agreement to be bound by the provisions of this Agreement:

 

    A.      Compensation Agreement.
    Freddie Mac has agreed to compensate Executive as Chief
    Operating Officer pursuant to the terms and conditions set forth
    in the August 13, 2009 memorandum agreement between
    Executive and Freddie Mac.

 

    B.      Severance. In the
    event the Executive’s employment is terminated pursuant to
    circumstances that qualify the Executive for Severance, then the
    Executive shall receive Severance and other benefits in an
    amount equal to that provided to Freddie Mac’s senior
    executive officers pursuant to the terms of an applicable
    severance policy in effect as of the date of Executive’s
    termination of employment provided, that Executive shall receive
    Severance of no less than twelve (12) months.
    Executive’s receipt of Severance is contingent on any
    legally required approval from the Director of the Federal
    Housing Finance Agency.

 

		
	
    VI.      
	
    Compliance
    with the Code of Conduct and Corporate Policies

 

    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.

 

    VII.      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 of Chief Operating Officer of
    Freddie Mac and that Executive has provided Freddie Mac with
    copies of any such agreements or limitations so that Freddie Mac
    can make an independent judgment that Executive’s
    employment with Freddie Mac is not inconsistent with any of its
    terms.

 

    Executive further agrees to be bound by, and comply fully with,
    his/her
    obligations under the Personal Securities Investments Policy.
    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

 

    Compensation Terms — August 13, 2009

    Page 12 of 17

 

    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.

 

    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.      Affect
    of Termination of Employment

 

    In the event that your employment terminates for any reason, you
    agree that you shall be deemed to have resigned, effective as of
    the date of such termination of employment with Freddie Mac and
    from all positions, titles, duties, authorities and
    responsibilities arising out of or relating to your employment,
    including any directorships or fiduciary positions to which your
    were serving at the request of, or appointment by, Freddie Mac.
    You also agree that you will execute any such documents and take
    any such further steps as Freddie Mac’s Board of Directors
    reasonably may ask of you to effectuate such resignations.

 

		
	
    IX.      
	
    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.

 

		
	
    X.      
	
    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.

 

    Compensation Terms — August 13, 2009

    Page 13 of 17

 

    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.

 

    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:
	
 
	
        

	
 
	
    Date:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
    Bruce M. Witherell
	
 
	
 
	
 
	
 

 

    Compensation Terms — August 13, 2009

    Page 14 of 17

 

Attachment C

Recapture Agreement

	Triggering
Event	 	The recapture will be triggered if, at any time
during the executive’s employment with Freddie
Mac (or, under certain circumstances after
termination of the executive’s employment, as
described below), the Board determines and
notifies you in writing that any of the following
(“Triggering Events”) occurred:
	 
	 	 	1.	 	The executive has obtained a legally binding
right to bonus or incentive payment based on
materially inaccurate financial statements (which
includes, but is not limited to, statements of
earnings, revenues, or gains) or any other
materially inaccurate performance metric
criteria.
	 
	 	 	2.	 	The executive’s employment with Freddie Mac is
terminated for “cause” under subclauses (i) or
(iv) as defined below or, within two years of the
termination of the executive’s employment at
Freddie Mac, the Board makes a determination that
circumstances existed at the time of the
executive’s termination that would have justified
termination for cause under subclauses (i) or
(iv) or the executive was later convicted of or
pleaded nolo contendere to a felony committed
before the termination date and such felony
resulted in material business or reputational
harm to Freddie Mac.
	 
	 	 	3.	 	The executive’s employment with Freddie Mac is
terminated for “cause” under subclauses (ii) or
(iii) as defined below, or within two years of
the termination of the executive’s employment at
Freddie Mac, the Board makes a determination that
circumstances existed at the time of the
executive’s termination that would have justified
a termination for cause under subclauses (ii) or
(iii) as defined below and that actions of the
executive resulted in material business or reputational harm to Freddie Mac.
	 
	Definition of Cause	 	For purposes of this Recapture Agreement, “cause” shall mean the occurrence of one or more of the following:
	 
	 	 	 	 	(i) The executive is convicted of or pleads nolo
contendere to a charge of a felony or any crime
involving moral turpitude;
	 
	 	 	 	 	(ii) In carrying out his duties, the executive
engages in conduct that constitutes gross neglect
or gross misconduct or any material violation of
applicable Freddie Mac rule or policy, including
any

 

 

    Compensation Terms — August 13, 2009

    Page 15 of 17

 

	 
	 	 	 	 	policy relating to investment by Freddie Mac
employees in securities, the violation of which
amounts to gross neglect or gross misconduct;
	 
	 	 	 	 	(iii) The executive materially breaches any
provision of the Memorandum Agreement dated
August 13, 2009 from Charles E. Haldeman to the
executive; or
	 
	 	 	 	 	(iv) Any other willful or malicious misconduct on
the executive’s part that is substantially
injurious to Freddie Mac.
	 
	 	 	•	In each case, “cause” shall not exist unless
and until Freddie Mac shall have provided: (i) 
reasonable notice to the executive setting forth
Freddie Mac’s intention to make a determination
that an event set forth in subclauses (i), (ii),
(iii) or (iv) has occurred; (ii) where remedial
action is appropriate and feasible, a reasonable
opportunity for the executive to take such
action; (iii) an opportunity for the executive,
together with the executive’s counsel, to be
heard before the Board; and (iv) executive with a
copy of a resolution duly adopted by a majority
of the entire Board of Directors at a meeting of
the Board of Directors called and held for such
purpose finding that in the good faith opinion of
the Board an event set forth in subclauses (i),
(ii), (iii) or (iv) has occurred. No act or
failure to act by the executive will be
considered “willful” unless it is done, or
omitted to be done, by the executive in bad faith
or without reasonable belief that the executive’s
action or omission was in the best interests of Freddie Mac.

 

 

    Compensation Terms — August 13, 2009

    Page 16 of 17

 

	Recapture Period
	 	1.	 	In the case of the first Triggering Event,
compensation subject to recapture may include
Recapture Eligible Compensation (as defined
below) paid to the Executive for up to two years
prior to the Triggering Event.
	 
	 	 	2.	 	In the case of the second Triggering Event,
compensation subject to recapture may include
Recapture Eligible Compensation paid to the
Executive for up to two years prior to the date
that the executive is terminated or subsequent to
the termination of employment.
	 
	 	 	3.	 	In the case of the third Triggering Event,
compensation subject to recapture may include
Recapture Eligible Compensation paid to the
Executive at the time of termination of
employment or subsequent to the date of
termination.
	 
	 
	Compensation
Subject to
Recapture
	 	For purposes of this Recapture Agreement, “Recapture Eligible Compensation” shall consist of the following:
	 
	 	 	1.	 	In the case of the first Triggering Event,
Recapture Eligible Compensation consists of the
annual short-term incentive (“STI”) (i.e., the
annual bonus) and the annual long-term incentives
(“LTI”).
	 
	 	 	2.	 	In the case of the second and third Triggering
Events, Recapture Eligible Compensation consists
of the annual STI, the annual LTI and any
severance benefits paid.

	 
	 	 	In the event that the executive is terminated for
cause under any of the subclauses (i), (ii),
(iii) or (iv) specified in the Definition of
Cause above, the executive forfeits rights to any
future payment of annual STI, LTI or severance
benefits that might otherwise have been due
pursuant to the terms of applicable plans or
awards from the date of executive’s termination
forward.
	 
	 	 	With respect to any recapture of compensation:
	 
	 	 	•	 	A recapture of STI or other cash paid, for such
compensation that the Board determines is subject
to repayment, would require the executive to
repay the gross amount of the compensation
previously paid. Additionally, any further
obligation of Freddie Mac to make payments under
such plans could be cancelled.

 

 

    Compensation Terms — August 13, 2009

    Page 17 of 17

 

	 
	 	 	•	 	A recapture of LTI or other stock-based award
granted, for such awards that the Board
determines, would require the executive to repay
Freddie Mac the full fair market value of the
award(s) based upon vesting date. Additionally,
any unvested and/or unexercised stock-based
awards could be cancelled.
	 
	 	 	•	 	Base salary paid prior to the date of the
Triggering Event is not subject to recapture.
	 
	 	 	•	 	The executive’s assets acquired prior to
employment by Freddie Mac or acquired from
sources other than Freddie Mac directly are not
subject to recapture under this agreement. The
right to recapture is not retroactive prior to
the date of employment.
	 
	Amount to
be
Recaptured 	 	The Board has discretion to determine the
appropriate amount required to be recaptured, if
any, upon a Triggering Event, which is intended
to be the compensation in excess of what Freddie
Mac would have paid the executive had Freddie Mac
taken into consideration the impact of the
Triggering Event at the time such compensation
was awarded.
	 
	 	 	Any disputes between the executive and Freddie
Mac concerning the occurrence of a Triggering
Event or the amount subject to recapture shall be
determined exclusively in accordance with the
substantive laws of the Commonwealth of Virginia,
excluding provisions of the Virginia law
concerning choice-of-law that would result in the
law of any state other than Virginia being
applied.

I agree to the terms of this Recapture Agreement

	 	 	 	 	 	 	 	 
	 	By:  	
 	 	 	Date:  	
 	 
	 	  	Bruce M. Witherellexv10w2

 

 

    Exhibit
    10.2

Attachment C

Recapture Agreement

	Triggering
Event	 	The recapture will be triggered if, at any time
during the executive’s employment with Freddie
Mac (or, under certain circumstances after
termination of the executive’s employment, as
described below), the Board determines and
notifies you in writing that any of the following
(“Triggering Events”) occurred:
	 
	 	 	1.	 	The executive has obtained a legally binding
right to bonus or incentive payment based on
materially inaccurate financial statements (which
includes, but is not limited to, statements of
earnings, revenues, or gains) or any other
materially inaccurate performance metric
criteria.
	 
	 	 	2.	 	The executive’s employment with Freddie Mac is
terminated for “cause” under subclauses (i) or
(iv) as defined below or, within two years of the
termination of the executive’s employment at
Freddie Mac, the Board makes a determination that
circumstances existed at the time of the
executive’s termination that would have justified
termination for cause under subclauses (i) or
(iv) or the executive was later convicted of or
pleaded nolo contendere to a felony committed
before the termination date and such felony
resulted in material business or reputational
harm to Freddie Mac.
	 
	 	 	3.	 	The executive’s employment with Freddie Mac is
terminated for “cause” under subclauses (ii) or
(iii) as defined below, or within two years of
the termination of the executive’s employment at
Freddie Mac, the Board makes a determination that
circumstances existed at the time of the
executive’s termination that would have justified
a termination for cause under subclauses (ii) or
(iii) as defined below and that actions of the
executive resulted in material business or reputational harm to Freddie Mac.
	 
	Definition of Cause	 	For purposes of this Recapture Agreement, “cause” shall mean the occurrence of one or more of the following:
	 
	 	 	 	 	(i) The executive is convicted of or pleads nolo
contendere to a charge of a felony or any crime
involving moral turpitude;
	 
	 	 	 	 	(ii) In carrying out his duties, the executive
engages in conduct that constitutes gross neglect
or gross misconduct or any material violation of
applicable Freddie Mac rule or policy, including
any

 

 

    Recapture Agreement

    Page 2 of 4

 

	 
	 	 	 	 	policy relating to investment by Freddie Mac
employees in securities, the violation of which
amounts to gross neglect or gross misconduct;
	 
	 	 	 	 	(iii) The executive materially breaches any
provision of the Memorandum Agreement dated
August 13, 2009 from Charles E. Haldeman to the
executive; or
	 
	 	 	 	 	(iv) Any other willful or malicious misconduct on
the executive’s part that is substantially
injurious to Freddie Mac.
	 
	 	 	•	In each case, “cause” shall not exist unless
and until Freddie Mac shall have provided: (i) 
reasonable notice to the executive setting forth
Freddie Mac’s intention to make a determination
that an event set forth in subclauses (i), (ii),
(iii) or (iv) has occurred; (ii) where remedial
action is appropriate and feasible, a reasonable
opportunity for the executive to take such
action; (iii) an opportunity for the executive,
together with the executive’s counsel, to be
heard before the Board; and (iv) executive with a
copy of a resolution duly adopted by a majority
of the entire Board of Directors at a meeting of
the Board of Directors called and held for such
purpose finding that in the good faith opinion of
the Board an event set forth in subclauses (i),
(ii), (iii) or (iv) has occurred. No act or
failure to act by the executive will be
considered “willful” unless it is done, or
omitted to be done, by the executive in bad faith
or without reasonable belief that the executive’s
action or omission was in the best interests of Freddie Mac.

 

 

    Recapture Agreement

    Page 3 of 4

 

	Recapture Period
	 	1.	 	In the case of the first Triggering Event,
compensation subject to recapture may include
Recapture Eligible Compensation (as defined
below) paid to the Executive for up to two years
prior to the Triggering Event.
	 
	 	 	2.	 	In the case of the second Triggering Event,
compensation subject to recapture may include
Recapture Eligible Compensation paid to the
Executive for up to two years prior to the date
that the executive is terminated or subsequent to
the termination of employment.
	 
	 	 	3.	 	In the case of the third Triggering Event,
compensation subject to recapture may include
Recapture Eligible Compensation paid to the
Executive at the time of termination of
employment or subsequent to the date of
termination.
	 
	 
	Compensation
Subject to
Recapture
	 	For purposes of this Recapture Agreement, “Recapture Eligible Compensation” shall consist of the following:
	 
	 	 	1.	 	In the case of the first Triggering Event,
Recapture Eligible Compensation consists of the
annual short-term incentive (“STI”) (i.e., the
annual bonus) and the annual long-term incentives
(“LTI”).
	 
	 	 	2.	 	In the case of the second and third Triggering
Events, Recapture Eligible Compensation consists
of the annual STI, the annual LTI and any
severance benefits paid.

	 
	 	 	In the event that the executive is terminated for
cause under any of the subclauses (i), (ii),
(iii) or (iv) specified in the Definition of
Cause above, the executive forfeits rights to any
future payment of annual STI, LTI or severance
benefits that might otherwise have been due
pursuant to the terms of applicable plans or
awards from the date of executive’s termination
forward.
	 
	 	 	With respect to any recapture of compensation:
	 
	 	 	•	 	A recapture of STI or other cash paid, for such
compensation that the Board determines is subject
to repayment, would require the executive to
repay the gross amount of the compensation
previously paid. Additionally, any further
obligation of Freddie Mac to make payments under
such plans could be cancelled.

 

 

    Recapture Agreement

    Page 4 of 4

 

	 
	 	 	•	 	A recapture of LTI or other stock-based award
granted, for such awards that the Board
determines, would require the executive to repay
Freddie Mac the full fair market value of the
award(s) based upon vesting date. Additionally,
any unvested and/or unexercised stock-based
awards could be cancelled.
	 
	 	 	•	 	Base salary paid prior to the date of the
Triggering Event is not subject to recapture.
	 
	 	 	•	 	The executive’s assets acquired prior to
employment by Freddie Mac or acquired from
sources other than Freddie Mac directly are not
subject to recapture under this agreement. The
right to recapture is not retroactive prior to
the date of employment.
	 
	Amount to
be
Recaptured 	 	The Board has discretion to determine the
appropriate amount required to be recaptured, if
any, upon a Triggering Event, which is intended
to be the compensation in excess of what Freddie
Mac would have paid the executive had Freddie Mac
taken into consideration the impact of the
Triggering Event at the time such compensation
was awarded.
	 
	 	 	Any disputes between the executive and Freddie
Mac concerning the occurrence of a Triggering
Event or the amount subject to recapture shall be
determined exclusively in accordance with the
substantive laws of the Commonwealth of Virginia,
excluding provisions of the Virginia law
concerning choice-of-law that would result in the
law of any state other than Virginia being
applied.

I agree to the terms of this Recapture Agreement

	 	 	 	 	 	 	 	 
	 	By:  	
/s/ Bruce M. Witherell	 	 	Date:  	
August 17, 2009	 
	 	  	Bruce M. Witherell

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