Freddie Mac 2015 Annual Report Download - page 369

Executive Compensation Compensation Discussion and Analysis
Freddie Mac 2015 Form 10-K 367
company has also agreed that Mr. Hutchins may, subject to Mr. Layton’s approval, take additional days off
from time to time as unpaid leave. Copies of Mr. Hutchins’ letter agreement and restrictive covenant and
confidentiality agreement are filed as Exhibits 10.32 and 10.33, respectively, to this Form 10-K.
MR. LOWMAN
We entered into a letter agreement and a restrictive covenant and confidentiality agreement with Mr.
Lowman in connection with his employment as our EVP - Single-Family Business. The terms of Mr.
Lowman’s letter agreement provide him with an annual Target TDC opportunity of $3,000,000, consisting
of Base Salary of $500,000 and Deferred Salary of $2,500,000; and the opportunity to participate in all
employee benefit plans offered to Freddie Mac’s executive officers pursuant to the terms of these plans.
Copies of Mr. Lowman’s letter agreement and restrictive covenant and confidentiality agreement are filed
as Exhibits 10.48 and 10.49, respectively, to our Form 10-K for the fiscal year ended December 31, 2013
filed on February 27, 2014.
MR. MCDAVID
We entered into a letter agreement and a restrictive covenant and confidentiality agreement with Mr.
McDavid in connection with his employment as our EVP - General Counsel and Corporate Secretary. The
terms of Mr. McDavid’s letter agreement provide him with an annual Target TDC opportunity of
$2,600,000, which consists of Base Salary of $500,000 and Deferred Salary of $2,100,000; and the
opportunity to participate in all employee benefit plans offered to Freddie Mac’s executive officers
pursuant to the terms of these plans. Copies of Mr. McDavid’s letter agreement and restrictive covenant
and confidentiality agreement were filed as Exhibits 10.1 and 10.2, respectively, to our Current Report on
Form 8-K filed on July 9, 2012.
RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENTS
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.
RECAPTURE AND FORFEITURE AGREEMENT
Freddie Mac has adopted, with the approval of FHFA, the Recapture and Forfeiture Agreement (the
“Recapture Agreement”). In order to participate in the 2015 EMCP, each of our NEOs has entered into a
Recapture Agreement. Mr. Layton’s Recapture Agreement applies only to the Deferred Salary he earned
from July 1, 2015 through November 24, 2015.
The Recapture Agreement provides for the recapture and/or forfeiture of Deferred Salary (including
related interest) earned, paid, or to be paid pursuant to the terms of the 2015 EMCP if, after providing the
required notice, our Board of Directors, in the good faith exercise of its sole discretion, determines that a
Forfeiture Event has occurred. The Forfeiture Events and the Deferred Salary subject to recapture and/or
forfeiture are described below.