Freddie Mac 2014 Annual Report Download - page 273

268 Freddie Mac
the occurrence of a for cause termination. See “Compensation Discussion and Analysis — Written Agreements Relating to Our
NEOs' Employment — Recapture and Forfeiture Agreement.”
Each of our NEOs is subject to a restrictive covenant and confidentiality agreement with us. Each agreement provides
that the NEO will not seek employment with designated competitors that involves performing similar duties for a specified
period immediately following termination of employment, regardless of whether the executive’s employment is terminated by
the executive, by us, or by mutual agreement. The specified period is twenty-four months for Mr. Layton and twelve months for
the other NEOs. During the twelve-month period immediately following termination, each NEO agrees not to solicit or recruit
any of our managerial employees. The agreements also provide for the confidentiality of information that constitutes trade
secrets or proprietary or other confidential information.
The table below does not include vested balances in the Thrift/401(k) SERP Benefit, SERP II or vested benefits in the
Pension SERP Benefit. All NEOs are fully vested in their account balances. Amounts shown in the table also do not include
certain items available to all employees generally upon a termination event.
There were no outstanding RSUs held by NEOs as of December 31, 2014, and Mr. Weiss is the only NEO holding stock
options. No value is included in the table for stock options, because the exercise prices for all such options outstanding are
substantially higher than the closing price of our common stock on December 31, 2014.
Potential Payments Under the 2014 EMCP
The 2014 EMCP addresses the treatment of Base Salary and Deferred Salary upon various termination events.
Base Salary ceases upon an NEO’s termination of employment, regardless of the termination reason. An NEO generally
does not need to be employed by us on the payment date to receive payments of Deferred Salary (including related interest) that
are unpaid at the time of termination of employment. The discussion that follows describes the effect of various termination
events upon unpaid Deferred Salary.
• Forfeiture Event — All earned but unpaid Fixed and At-Risk Deferred Salary (including related interest) is subject to
forfeiture upon the occurrence of a Forfeiture Event, as described above under “— Recapture and Forfeiture
Agreement.”
• Death — All earned but unpaid Fixed and At-Risk Deferred Salary (including related interest) is paid in full as soon as
administratively possible, but not later than 90 calendar days after the date of death. Any earned but unpaid At-Risk
Deferred Salary is not subject to reduction based on corporate and individual performance if the reduction has not
been determined as of the date of death.
• Long-Term Disability — All earned but unpaid Fixed and At-Risk Deferred Salary (including related interest) is paid
in full in accordance with the Approved Payment Schedule. Any earned but unpaid At-Risk Deferred Salary is not
subject to reduction based on corporate and individual performance if the reduction has not been determined as of the
termination date.
• Any Other Reason (including, but not limited to, voluntary termination, retirement, and involuntary termination for
any reason other than a Forfeiture Event) — All earned but unpaid Deferred Salary (including related interest) is paid
in accordance with the Approved Payment Schedule, and earned but unpaid At-Risk Deferred Salary remains subject
to the performance assessment and reduction process. Except in the case of retirement, the amount of earned but
unpaid Fixed Deferred Salary will be reduced by 2% for each full or partial month by which the NEO’s termination
precedes January 31 of the second calendar year following the calendar year in which the Fixed Deferred Salary is
earned. No such reduction is applicable if an NEO retires, which is deemed to have occurred upon a voluntary
termination of employment after attaining or exceeding 65 years of age, without regard to length of service.
Table of Contents