UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9,
2012
FEDERAL HOME LOAN MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)
Freddie Mac
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Federally chartered
corporation
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001-34139
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52-0904874
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(State or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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8200 Jones Branch Drive
McLean, Virginia
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22102
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
(703) 903-2000
Not applicable
(Former name or former address, if changed since last
report)
Check the appropriate box below if the
Form 8-K
filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following
provisions
(see
General Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
o
Soliciting
material pursuant to
Rule 14a-12
under the Exchange Act
(17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to
Rule 14d-2(b)
under the Exchange Act
(17 CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to
Rule 13e-4(c)
under the Exchange Act
(17 CFR 240.13e-4(c))
Item 5.02. Departure
of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On May 10, 2012, Freddie Mac (formally known as the Federal
Home Loan Mortgage Corporation) issued a press release
announcing that its board of directors has appointed Donald H.
Layton as the companys chief executive officer, effective
May 21, 2012.
Layton, age 62, was also elected as a member of the board,
effective the date his employment commences. Layton will succeed
Charles E. Haldeman, Jr., who has served as chief executive
officer since August 2009. On May 9, 2012, Haldeman
notified the company of his resignation as chief executive
officer and as a member of Freddie Macs board of directors
effective May 21, 2012. Haldeman is expected to remain
employed by the company and serve in an advisory capacity until
June 30, 2012.
A copy of the press release is filed as Exhibit 99.1 to
this Report on
Form 8-K
and incorporated herein by reference.
Layton worked for nearly thirty years at JPMorgan
Chase & Co. (JPMorgan Chase) and its predecessors,
starting as a trainee and rising to vice chairman and a member
of the companys three-person Office of the Chairman,
retiring in 2004. In his career at JPMorgan Chase, Laytons
responsibilities spanned capital markets and investment banking,
consumer banking and operating services. From 2002 to 2004, he
was responsible for the companys Chase Financial Services
unit, which included the fourth largest mortgage firm in the
U.S. He was co-chief executive officer of J.P. Morgan,
the investment bank of JPMorgan Chase, overseeing the entire
range of the investment banks global activities, from 2000
to 2002. Prior to the merger of Chase Manhattan and
J.P. Morgan in 2000, Layton was responsible for
Chases worldwide capital markets and trading activities,
including foreign exchange, risk management products, emerging
markets, and fixed income, as well as its operating services
businesses. He additionally supervised the banks
investment portfolio for many years.
More recently, Layton served as chairman and chief executive
officer of online brokerage E*TRADE Financial Corporation. He
joined E*TRADE Financial Corporation as chairman in November
2007 and became chief executive officer in March 2008, retiring
in December 2009.
Layton also served as a senior advisor to the Securities
Industry and Financial Markets Association from 2006 to 2008 and
is chairman of the board of the Partnership for the Homeless, a
nonprofit dedicated to reducing homelessness in New York City.
He received simultaneous Bachelor and Master of Science degrees
in economics from the Massachusetts Institute of Technology and
also a Master of Business Administration from Harvard Business
School.
Layton had been a member of the board of directors of Assured
Guaranty Ltd. since May 2006 and a member of the board of
directors of the American International Group since April 2010,
but has resigned from both positions in connection with his
appointment as Freddie Macs chief executive officer.
Freddie Mac has entered into a Memorandum Agreement with Layton,
which provides for his employment as chief executive officer of
Freddie Mac. A copy of the Memorandum Agreement is filed as
Exhibit 10.1 to this Report on
Form 8-K
and incorporated herein by reference. The Federal Housing
Finance Agency (FHFA), the companys
conservator, has approved this Memorandum Agreement and
consulted with the U.S. Department of the Treasury
(Treasury).
The terms of his Memorandum Agreement provide Layton with the
following during his employment with Freddie Mac:
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An annual base salary of $600,000; and
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The opportunity to participate in all employee benefit plans
offered to Freddie Macs senior executive officers,
including the companys Supplemental Executive Retirement
Plan (SERP), pursuant to the terms of these plans.
For a description of these plans see Freddie Macs
Form 10-K
filed March 9, 2012.
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Freddie Mac also has entered into a Restrictive Covenant and
Confidentiality Agreement with Layton. A copy of the Restrictive
Covenant and Confidentiality Agreement is filed as
Exhibit 10.2 to this Report on
Form 8-K
and incorporated herein by reference. Layton is subject to
non-competition and non-solicitation of employees restrictions
for a period of two years and one year, respectively, following
any termination of his employment, and he is also subject to
certain restrictions with respect to confidential information
obtained during the course of his employment.
Freddie Mac will enter into an indemnification agreement with
Layton, effective as of the date of his appointment as the
companys chief executive officer. A copy of the form of
indemnification agreement is attached as Exhibit 10.54 to
Freddie Macs
Form 10-K
filed March 9, 2012 and is incorporated herein by
reference. For a description of this indemnification agreement
see Freddie Macs
Form 10-K
filed March 9, 2012.
Layton has vested but unexercised stock options of JPMorgan
Chase, which represent less than one percent of his net worth.
Layton also receives a pension from JPMorgan Chase in connection
with his retirement in 2004. The amount of Laytons pension
is fixed and does not depend in any way on JPMorgan Chases
revenues or profits. Layton also has a deferred compensation
balance under JPMorgan Chases Deferred Compensation Plan,
of which approximately 80% is payable in fifteen annual
installments beginning in January 2016 and earns a return based
upon a defined list of mutual funds that Layton designates; and
the remaining 20% is in a private equity balance
that is payable as proceeds are realized from the underlying
private equity transactions into which the funds were invested.
Laytons deferred compensation balance is less than ten
percent of his total net worth on an after-tax basis.
Freddie Mac has an extensive business relationship with JPMorgan
Chase (through its subsidiaries). Specifically, as of
December 31, 2011, JPMorgan Chase was Freddie Macs
second largest servicer, and serviced approximately
1.32 million loans for Freddie Mac that had an aggregate
unpaid principal balance of more than $211 billion. As of
March 31, 2012, JPMorgan Chase remains Freddie Macs
second largest servicer, and services approximately
1.28 million loans for Freddie Mac that have an aggregate
unpaid principal balance of more than $203 billion.
JPMorgan Chase sold approximately $40.2 billion in
single-family loans to Freddie Mac in 2011 and approximately
$7.92 billion in single-family loans to Freddie Mac in the
three months ended March 31, 2012.
JPMorgan Chase also is a significant capital markets,
derivatives and multifamily counterparty and is an underwriter
of our debt and mortgage securities. As of April 30, 2012,
JPMorgan Chase had an aggregate notional balance of
$1.5 billion of interest rate swaps with Freddie Mac and
was the companys counterparty in securities repurchase and
dollar roll transactions with a total unpaid principal balance
of $250 million. From January 2011 through April 30,
2012, JPMorgan Chase served as underwriter for
$11.6 billion of Freddie Macs debt securities and
$35.3 billion of Freddie Macs mortgage-related
securities.
In order to avoid potential conflicts of interest that might
arise as a result of Laytons deferred compensation
balance, vested but unexercised stock options and pension from
JPMorgan Chase, Layton has agreed to recuse himself in specified
circumstances from acting upon matters directly relating to
JPMorgan Chase that may be considered by Freddie Macs
board of directors or presented to him in his capacity as
Freddie Macs chief executive officer, including with
respect to certain matters as determined by the Non-Executive
Chairman and Audit Committee Chair.
Item 9.01. Financial
Statements and Exhibits.
(d) Exhibits.
The following exhibits are being filed as part of this Report on
Form 8-K:
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Exhibit Number
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Description of Exhibit
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10.1
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Memorandum Agreement, dated May 7, 2012, between Freddie
Mac and Donald H. Layton*
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10.2
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Restrictive Covenant and Confidentiality Agreement, dated
May 7, 2012, between Freddie Mac and Donald H. Layton*
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99.1
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Press Release, dated May 10, 2012, issued by Freddie Mac
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*
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This exhibit is a management contract or compensatory plan or
arrangement.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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FEDERAL HOME LOAN MORTGAGE CORPORATION
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By:
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/s/ Charles
E. Haldeman, Jr.
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Charles E. Haldeman, Jr.
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Chief Executive Officer
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Date:
May 10, 2012
EXHIBIT
INDEX
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*
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This exhibit is a management contract or compensatory plan or
arrangement.
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Exhibit 10.1
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Corporate
Headquarters
8250 Jones Branch Drive
McLean, VA 22102
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Memorandum
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Date
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To
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May 7, 2012
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Donald H. Layton
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From
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Anthony A. Williams
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Subject
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Your Compensation as Chief Executive Officer of the Federal Home
Loan Mortgage Corporation (Freddie Mac)
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On behalf of the Compensation Committee (Committee)
of Freddie Macs Board of Directors (Board),
this memorandum sets forth the terms of Freddie Macs
agreement (the Agreement) to employ you as its Chief
Executive Officer, effective May 21, 2012, pursuant to the
terms and conditions set forth herein. The terms and conditions
set forth herein have been developed in conjunction with and are
subject to approval by the Federal Housing Finance Agency
(FHFA), the United States Department of Treasury
(Treasury), the Board, and the Committee. To the
extent that any required approval is not obtained, this
Agreement shall be null and void in all respects and you shall
have no further obligations under this Agreement, the
Restrictive Covenant and Confidentiality Agreement (the
Restrictive Covenant Agreement) or any other plan,
policy or program of Freddie Mac.
Please review and confirm that such terms and conditions conform
to your understanding by returning to Keith Green, Freddie
Macs Senior Vice-President of Human Resources, a signed
copy of this Agreement.
As Freddie Macs Chief Executive Officer, you shall be the
highest-ranking officer of Freddie Mac and shall 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 consistent with your
position as the Board may from time to time reasonably assign to
you. In addition, for so long as you remain Chief Executive
Officer, the Board shall nominate you to serve on the Board as a
director of Freddie Mac.
During your employment as Chief Executive Officer, you agree to
devote substantially all your full time, attention, and energies
to Freddie Macs 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 service on outside private or not-for-profit boards that:
(i) have been previously disclosed to Freddie Mac prior to
the date of this Agreement and approved by the Committee, and
(ii) are approved by the Committee after the date of this
Agreement from time to time. This restriction shall not prevent
you from making investments of your assets in such form or
manner as you desire, consistent with Freddie Macs
Personal Securities
Compensation Terms Donald H. Layton May 7,
2012
Page 2 of 4
Investments Policy and the Restrictive Covenant Agreement you
are required to sign pursuant to Section IV below. You
agree to resign as a member of the boards of directors of
American International Group, Assured Guaranty, Ltd., KLS
Diversified Asset Management LP, and Open Models Valuation
Company, effective prior to beginning employment with Freddie
Mac, but conditioned on the effectiveness of this Agreement.
I. Compensation
Your annualized base salary shall be $600,000. You will not
participate in the Companys executive management
compensation programs.
Base salary will be paid on a semi-monthly basis.
If you terminate your employment with Freddie Mac at any time
for any reason, your base salary will terminate effective as of
the date your employment terminates.
II. Benefits
You will be eligible to participate in all employee benefit
plans offered to Freddie Macs 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 currently
include the following:
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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.
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Income Protection We provide short- and long-term
disability income protection, life insurance, accidental death
and personal loss insurance, and business travel accident
coverage.
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Thrift/401(k) Savings Plan You will be able to
contribute on a pre-tax and after-tax basis and Freddie Mac will
begin matching a portion of your contributions, up to
6 percent of pay, after one year of service. This plan also
includes a Company annual discretionary contribution, which is
based on Company performance and a defined formula with a
three-year vesting schedule and is in addition to the matching
contribution.
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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.
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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
by logging on to
http://netbenefits.fidelity.com.
Shortly after your start date, you will
Compensation Terms Donald H. Layton May 7,
2012
Page 3 of 4
receive an email from the Freddie Mac Benefits
Center instructing you to log on to the Fidelity
NetBenefits website to make your benefits elections.
Note that you will
not
receive any information at your
home address. Your enrollment window is 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. Termination
of Board Membership
Your termination of employment for any reason (including
resignation) shall be deemed to be the termination of your
membership on the Board as of the same effective date.
IV. Restrictive
Covenant Agreement
The terms of compensation provided in this Agreement 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 Agreement. The
Restrictive Covenant Agreement will become effective upon the
effectiveness of this Agreement.
V. FHFAs
Review and Approval Authority
The terms and conditions of your compensation have been approved
by the Committee but require final approval by FHFA in
consultation with Treasury as required under the terms of the
Companys Preferred Stock Agreement. Notwithstanding such
approval and any provision of this Agreement, 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 FHFAs 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. Reservation
of Rights
This Agreement is not intended, nor shall it be interpreted, to
constitute a contract of employment for a specified duration.
Your employment is at-will and each of 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 Macs
satisfaction in its sole discretion with your references and the
results of your background checks and drug test.
During the course of your review of this Agreement, Freddie Mac
expects that you have had the opportunity to consult and receive
assistance from appropriate advisors, including legal, tax, and
financial advisors.
Compensation Terms Donald H. Layton May 7,
2012
Page 4 of 4
This Agreement 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.
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/s/ Anthony A. Williams
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May 7, 2012
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Anthony A. Williams
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Date
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Chairman, Compensation Committee
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I agree to the terms of this Agreement.
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/s/ Donald H. Layton
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May 7, 2012
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Donald H. Layton
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Date
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Exhibit 10.2
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Corporate
Headquarters
8250 Jones Branch Drive
McLean, VA 22102
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Tel:
(703) 918-5000
www.FreddieMac.com
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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 Donald H. Layton
(Executive or you), effective as of
May 21, 2012. To the extent that any required approval of
this Agreement or the employment agreement of which this
Agreement forms a part is not obtained, this Agreement shall be
null and void in all respects and you shall have no further
obligations under this Agreement, the employment agreement or
any other plan, policy or program of Freddie Mac.
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 Executives 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 Macs 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 Macs
capital structure and tax or financial planning;
(v) confidential information about Freddie Macs
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 Macs
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 Macs
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 Executives employment
with Freddie Mac. Confidential Information does not include
general skills, experience, or knowledge acquired in connection
with Executives employment with Freddie Mac that otherwise
are generally known to the public or within the industry or
trade in which Freddie Mac operates.
Executive recognizes that as a result of Executives
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
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Executives employment with Freddie Mac and for twenty-four
(24) months immediately following termination of
Executives 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
Executives ability to work consistent with
Executives experience, training and education. This
non-competition covenant applies regardless of whether
Executives employment is terminated by Executive, by
Freddie Mac, or by a joint decision.
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III.
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Non-Solicitation and Non-Recruitment
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During Executives employment with Freddie Mac and for a
period of twelve (12) months after Executives
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 provided the Freddie Mac employee has
notified Freddie Mac of his or her intent to terminate their
employment with Freddie Mac.
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IV.
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Treatment of Confidential Information
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A.
Non-Disclosure.
Executive
recognizes that Freddie Mac is engaged in an extremely
competitive business and that, in the course of performing
Executives 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 Executives 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
Executives employment with Freddie Mac for any reason
whatsoever, Executive will deliver to Freddie Macs General
Counsel 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 Executives employment for any reason,
Executive will not use in any way whatsoever, nor disclose any
Confidential Information learned or obtained in connection with
Executives employment with Freddie Mac without first
obtaining the written permission of the Senior 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
Executives future employers to advise them generally of
Executives exposure to and knowledge of Confidential
Information, and Executives 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
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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
Macs Senior Vice President of Human Resources of the
identity of Executives subsequent employer(s) and
Executives 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 Executives 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; (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, (5) enforcing any rights or defending
any claims hereunder or under the employment agreement or any
plan or program of Freddie Mac, or (6) making any
disclosure with the prior written consent of the Board.
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V.
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Consideration Given to Executive
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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, which
itself is adequate consideration for Executives agreement
to be bound by the provisions of this Agreement:
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Compensation.
Freddie Mac has agreed to hire and to
compensate Executive as its Chief Executive Officer pursuant to
the terms and conditions set forth in the May 7, 2012
memorandum between Executive and Freddie Mac.
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VI.
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Compliance with the Code of Conduct and Corporate Policies,
Including Personal Securities Investments Policy
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As a Freddie Mac employee, Executive will be subject to Freddie
Macs 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.
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VII.
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Absence of Any Conflict of Interest
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Other than as disclosed in the Executives D&O
Questionnaire that was previously provided to you,
(i) Executive represents that Executive does not have any
confidential information, trade secrets or other proprietary
information that Executive obtained as the result of
Executives employment with another employer that Executive
will be using in Executives position at Freddie Mac; and
(ii) 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 Executives ability to
perform the duties and responsibilities of Chief Executive
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
Executives employment with Freddie Mac is not inconsistent
with any of its terms.
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VIII.
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Effect of Termination of Employment
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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, as
a member of
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Freddie Macs Board of Directors and from all positions,
titles, duties, authorities and responsibilities arising out of
or relating to your employment or such Board membership,
including any directorships or fiduciary positions to which you
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 Macs Board of Directors
reasonably may ask of you to effectuate such resignations.
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IX.
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Reservation of Rights
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This Agreement in not intended, nor shall it be interpreted, to
constitute a contract of employment for a specified duration.
Your employment is at-will and each of you and
Freddie Mac retain the discretion to terminate the employment
relationship at any time for any lawful reason with or without
notice.
A. Executive
acknowledges that Executive may be subject to discipline, up to
and including termination of employment, for Executives
breach or threat of breach of any provision of this Agreement.
B. Executive
agrees that irreparable injury will result to Freddie Macs
business interests in the event of breach or threatened breach
of this Agreement, the full extent of Freddie Macs 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 Executives obligations specified in
this Agreement is a separate and independent covenant, and that
all of Executives obligations set forth herein shall
survive any termination, for any reason, of Executives
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 jurisdictions 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 Executives 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
5
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.
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By:
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/s/ Donald H. Layton
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Date:
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May 7, 2012
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Donald H. Layton
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Exhibit 99.1
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News Release
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FOR
IMMEDIATE RELEASE
May 10, 2012
MEDIA CONTACT: Doug Duvall
703-903-2476
INVESTOR CONTACT: Linda Eddy
703-903-3883
DONALD H.
LAYTON NAMED CEO OF FREDDIE MAC
McLEAN, Va.
Freddie Mac (OTC: FMCC) today
announced that its Board of Directors has appointed Donald H.
Layton as chief executive officer and has elected him as a
member of the Board of Directors. Layton will join the company
on May 21, 2012.
Layton will assume leadership of Freddie Mac after a long career
in banking and financial services. He worked for nearly
30 years at JPMorgan Chase and its predecessors, starting
as a trainee and rising to vice chairman and a member of the
three-person Office of the Chairman, retiring in 2004. More
recently, he served as chairman & CEO of E*TRADE
Financial, which he shepherded through the recent financial
crisis. Additionally, he has been a member of the boards of
several financial services firms and was a senior adviser to an
industry association.
Don brings strong executive leadership and a deep
understanding of financial markets at a pivotal time for Freddie
Mac, said Christopher S. Lynch, Freddie Macs
non-executive chairman. His operating experience,
analytical rigor and boundless energy make Don the right leader
to continue our important work of supporting the nations
housing market and helping Americas families, and to guide
Freddie Mac in helping build a stronger framework for the future
of housing finance.
Layton, 62, will succeed Charles E. Ed
Haldeman, Jr. Haldeman has served as CEO since August 2009,
and announced in October 2011 that he would be stepping down
this year.
Im pleased that the Board was able to attract a
private sector leader of Dons caliber, said
Haldeman. His capital markets and banking background
coupled with his ability to manage large, complex organizations
will serve him well as he leads Freddie Macs 5,000
dedicated employees going forward.
In his career at JPMorgan Chase, Mr. Laytons
responsibilities spanned capital markets and investment banking,
consumer banking and operating services. From 2002 to 2004, he
was responsible for the companys Chase Financial Services
unit, which included the fourth largest mortgage firm in the
U.S. He was Co-Chief Executive Officer of J.P. Morgan,
the investment bank of J.P. Morgan Chase & Co.,
overseeing the entire range of the investment banks global
activities, from 2000 to 2002. Prior to the merger of Chase
Manhattan and J.P. Morgan in 2000, Mr. Layton was
responsible for Chases worldwide capital markets and
trading activities, including foreign exchange, risk management
products, emerging markets, and fixed income, as well as its
operating services businesses. He additionally supervised the
banks investment portfolio for many years.
Layton has also served as a senior advisor to the Securities
Industry and Financial Markets Association from 2006 to 2008 and
is chairman of the board of the Partnership for the Homeless, a
nonprofit dedicated to reducing homelessness in New York City.
He received simultaneous Bachelor and Master of Science degrees
in economics from the Massachusetts Institute of Technology and
also a Master of Business Administration from Harvard Business
School.
Freddie Mac was established by Congress in 1970 to provide
liquidity, stability and affordability to the nations
residential mortgage markets. Freddie Mac supports communities
across the nation by providing mortgage capital to lenders.
Today, Freddie Mac makes home possible for one in four
homebuyers and is one of the largest sources of financing for
multifamily housing.
www.FreddieMac.com
Twitter:
@FreddieMac
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