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): October 24, 2013
Federal Home Loan Mortgage Corporation
(Exact name of registrant as specified in its charter)
Freddie Mac
| Federally chartered corporation | 001-34139 | 52-0904874 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
8200 Jones Branch Drive McLean, Virginia |
22102-3110 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s 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):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | 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 October 24, 2013, Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation) received a directive from the Federal Housing Finance Agency (“FHFA”), the company’s conservator, to terminate the company’s tax-qualified defined benefit plan and certain non-qualified retirement plans as discussed below. Participants in these plans include certain of our named executive officers.
FHFA has directed us to take the following actions:
| • | Terminate, the Federal Home Loan Mortgage Corporation Employees’ Pension Plan (“Pension Plan”). |
| ¡ | There will be no accruals under the Pension Plan after December 31, 2013. |
| ¡ | Participants who have not yet commenced payments will be able to elect how distributions will be made; |
| • | Terminate the pension component of the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (“SERP”). |
| ¡ | There will be no accruals under the pension component of the SERP after December 31, 2013. |
| ¡ | Participants will be paid out in a lump sum. These payments are expected to occur in October 2014; and |
| • | Terminate the pre-2005 Thrift/401(k) component of the SERP, effective December 31, 2013. |
| ¡ | Participants will be paid out in a lump sum. These payments are expected to occur in October 2014. |
A description of the Pension Plan and SERP is included in our annual report on Form 10-K for the year ended December 31, 2012.
In connection with this FHFA directive, Freddie Mac amended the SERP effective October 24, 2013. The principal changes to the SERP under the amendment are discussed above. A copy of the amendment to the SERP is filed as Exhibit 10.1 to this Report on Form 8-K.
Additionally, on October 24, 2013 FHFA approved termination of the 2012 Executive Management Compensation Program for Virginia-Based Covered Officers, 2012 Executive Management Compensation Program for Non-Virginia-Based Covered Officers, 2013 Executive Management Compensation Program for Virginia-Based Covered Officers and 2013 Executive Management Compensation Program for Non-Virginia-Based Covered Officers (collectively, “EMCP Programs”). Participants in these programs include certain of our named executive
officers. These programs are required to be terminated under Internal Revenue Service rules because of the termination of the pension component of the SERP. Amounts outstanding as of December 31, 2013 will be paid out according to the schedules applicable under the program document under which the amounts were awarded. A description of the EMCP Programs is included in our annual report on Form 10-K for the year ended December 31, 2012. Freddie Mac expects to establish replacement programs for Virginia-based and Non-Virginia-based Covered Officers (as defined in the EMCP Programs) for 2014.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is being filed as part of this Report on Form 8-K:
|
Exhibit Number |
Description of Exhibit |
|
|
10.1 |
Fifth Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as Amended and Restated January 1, 2008) |
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.
| FEDERAL HOME LOAN MORTGAGE CORPORATION | ||||
| By: | /s/ Donald H. Layton | |||
| Donald H. Layton | ||||
| Chief Executive Officer | ||||
Date: October 25, 2013
EXHIBIT INDEX
|
Exhibit Number |
Description of Exhibit |
|
|
10.1 |
Fifth Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as Amended and Restated January 1, 2008) |
Exhibit 10.1
FIFTH AMENDMENT TO THE
FEDERAL HOME LOAN MORTGAGE CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(as Amended and Restated January 1, 2008)
FIFTH AMENDMENT to the FEDERAL HOME LOAN MORTGAGE CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the “SERP”) by the FEDERAL HOME LOAN MORTGAGE CORPORATION (the “Corporation”), a corporation organized and existing under the laws of the United States of America.
W I T N E S S E T H:
WHEREAS, the SERP was restated effective January 1, 2008, and subsequently amended;
WHEREAS , in a directive dated October 24, 2013 the Federal Housing Finance Agency (“FHFA”) directed the Corporation to take certain actions with respect to the SERP, including to take irrevocable action on October 24, 2013, effective December 31, 2013 (the “Proposed Termination Date”), to cease Pension SERP accruals and to terminate the Pension SERP Benefit, Thrift/401(k) Benefit Pre-2005 Accruals, and the Supplemental Retirement Benefit, necessitating acceleration of the payment of benefits in connection with such termination;
WHEREAS , in compliance with that directive the Corporation is amending the SERP to reflect that directive and its impacts;
WHEREAS , Section 8.1 of the SERP permits the Corporation to amend the SERP, and Section 8.2 of the SERP permits the Corporation to terminate the SERP and accelerate the payment of benefits in connection with such termination;
WHEREAS , Sections 8.1 and 8.2 of the SERP as it was written on October 3, 2004 permitted the Corporation to amend the SERP and to terminate the SERP and accelerate the payment of benefits in connection with such termination; and
WHEREAS , the appropriate officer of the Corporation has been duly authorized to execute this amendment.
NOW, THEREFORE , the SERP is hereby amended as set forth below effective as of October 24, 2013:
| 1. | To renumber the existing section 1.3 ( Effective Date ) as section 1.4, and add a new section 1.3 as follows: |
| 1.3 | Termination of Pension SERP Benefit, Thrift/401(k) Benefit Pre-2005 Accruals and Supplemental Retirement Benefit . |
(a) Suspension of Pension SERP Benefit Accruals . As required by the directive issued by the Federal Housing Finance Agency on October 24, 2013, Pension SERP Benefit accruals shall cease effective December 31, 2013. No Executive shall accrue any Pension SERP Benefit or Supplemental Retirement Benefit after that date.
(b) Termination of Pension SERP Benefit, Thrift/401(k) Benefit Pre-2005 Accruals and Supplemental Retirement Benefit . The Pension SERP Benefit, Thrift/401(k) SERP Benefit Pre-2005 Accruals and Supplemental Retirement Benefit are terminated as of 11:59:59 p.m. on December 31, 2013 (the “December 31 st Termination”). Pension SERP Benefits (for clarity, both the Pre-2005 Accruals and 2005 and Later Accruals), Thrift/401(k) SERP Benefit Pre-2005 Accruals and Supplemental Retirement Benefits otherwise payable in the normal course (i.e., not as a result of the December 31 st Termination) shall be distributed as scheduled, and shall be suspended as administratively necessary (as determined by the Vice President – Compensation & Benefits) to effectuate the December 31 st Termination as of a date reasonably near the date of final benefit settlement.
(c) Final Settlement of Pension SERP Benefit, Thrift/401(k) SERP Benefit Pre-2005 Accruals and Supplemental Retirement Benefit Liabilities . The final benefit settlement shall occur on a date not less than 12 months but not more than 24 months after October 24, 2013. In preparation for the final benefit settlement, the Vice President-Compensation & Benefits may, in his sole discretion, suspend Pension SERP, Thrift/401(k) SERP Benefit Pre-2005 Accruals and Supplemental Retirement Benefits being paid in the normal course under Article VI and Appendix 1 and consistent with section 1.3(b), and shall settle all outstanding Pension SERP and Supplemental Retirement obligations in the form of lump sum payments to each Participant with a vested right to such benefits, notwithstanding the provisions of Article VI and Appendix 1, or the resolutions establishing the Supplemental Retirement Benefit.
| 2. | To revise the introductory paragraph to Section 8.2 ( Termination ) to read as follows: |
| 8.2. | Termination . The Corporation, acting through its Board or the Board’s designee, may at any time terminate this Plan, in whole or in part, by an instrument in writing executed by the Board or its designee; provided however that; |
IN WITNESS WHEREOF , the Corporation has caused this FIFTH AMENDMENT to the FEDERAL HOME LOAN MORTGAGE CORPORATION
2
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN to be executed by its duly authorized officer this 25th day of October, 2013.
|
FEDERAL HOME LOAN MORTGAGE CORPORATION
|
||
|
By: |
/s/ Daniel Scheinkman | |
|
Daniel Scheinkman Vice President - Compensation and Benefits |
||
|
ATTEST:
|
|
/s/ Alicia S. Myara |
|
Alicia S. Myara Assistant Secretary |
3