Freddie Mac 2010 Annual Report Download - page 313

under the Recapture Policy, are described below under “Recapture Policy.” The non-competition and non-solicitation
provisions included in the restrictive covenant agreement are described in “Potential Payments Upon Termination of
Employment or Change-in-Control.”
Other Executive Compensation Considerations
Perquisites
We believe that perquisites should be a minimal part of the compensation package for our Named Executive Officers.
We provide certain perquisites because we believe there is a business-related benefit, including that the perquisites assist in
attracting and retaining executive talent. Shortly after being placed in conservatorship, and following a thorough review of
competitive market practices, we eliminated a number of perquisites we previously offered and determined that only certain
perquisites are appropriate. Accordingly, only the following perquisites were provided to the Named Executive Officers
during 2010:
•Personal Financial Planning. Reimbursement for assistance with personal financial planning, tax planning, and/or
estate planning, up to an annual maximum benefit that varies by position; and
•Relocation Benefits. Under our relocation program, we provide assistance in finding a new home and selling an
existing home, which may involve the purchase of the Named Executive Officer’s existing home. We also pay the cost
of packing and transporting household goods, provide temporary lodging, reimburse certain travel expenses, and
provide a one-time payment to cover miscellaneous expenses.
Although available, none of the Named Executive Officers received either of the following perquisites during 2010:
(a) reimbursement of up to $700 of expenses associated with a comprehensive annual physical exam that are not otherwise
covered by the Named Executive Officer’s medical insurance; and (b) reimbursement of business-related spousal travel
expenses.
Total annual perquisites for any Named Executive Officer cannot exceed $25,000 without FHFA approval and none of
the perquisites include a gross-up for taxes due on the perquisite itself.
Supplemental Executive Retirement Plan
Our Named Executive Officers are eligible to participate in our Supplemental Executive Retirement Plan, or “SERP.”
The SERP is designed to provide participants with the full amount of benefits to which they would have been entitled under
our Pension Plan and Thrift/401(k) Savings Plan if those plans: (a) were not subject to certain limits on compensation that
can be taken into account under the Internal Revenue Code; and (b) did not exclude from “compensation” amounts deferred
under our Executive Deferred Compensation Plan and the Mandatory Executive Deferred Base Salary Plan. Effective
January 1, 2010, the SERP was amended at the direction of FHFA to provide that the maximum covered compensation for
purposes of the SERP, relative to a Covered Officer, may not exceed two times the Covered Officer’s Semi-Monthly Base
Salary. A copy of the amendment to the SERP is filed as Exhibit 10.3 to the Form 8-K filed on December 24, 2009.
We provide a SERP because it helps us to remain competitive with the companies with which we compete for talent and
thereby assists in attracting and retaining executive talent. For additional information regarding this benefit see
“Compensation Tables” below.
Recapture Policy
The Recapture Policy provides that certain compensation paid under the Executive Compensation Program will be
subject to recapture if any of the following events occur subsequent to the date that the Named Executive Officer agreed to
the terms of the Recapture Policy.
•Payment Based on Materially Inaccurate Information — If the Named Executive Officer obtains a bonus or incentive
payment based on materially inaccurate financial statements or performance metrics.
•Termination for Cause — If the Named Executive Officer’s employment is terminated for cause, as defined in the
Recapture Policy.
•Subsequent Determination of Cause — If, within two years of the termination of the Named Executive Officer’s
employment, the Board makes a determination in good faith that circumstances existed at the time of the Named
Executive Officer’s termination that would have justified a termination for cause and that actions taken by the Named
Executive Officer resulted in material business or reputational harm to us.
The additional event listed below is applicable only to Messrs. Haldeman and Kari.
•Accounting Restatement Resulting from the Executive’s Misconduct — If misconduct by the CEO and/or the CFO
necessitates the preparation of an accounting restatement due to material non-compliance with financial reporting
requirements.
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