Freddie Mac 2015 Annual Report Download - page 379

Executive Compensation 2015 Compensation Information for NEOs
Freddie Mac 2015 Form 10-K 377
POTENTIAL PAYMENTS UPON TERMINATION OF
EMPLOYMENT
We have entered into various agreements in connection with the employment of the NEOs that call for us
to pay compensation to our NEOs in the event of a termination of employment. The actual payment of any
level of termination benefits is subject to FHFA review and approval. For more information, see “— Written
Agreements Relating to NEO Employment.”
In addition, the 2015 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 following table 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
“— Written Agreements Relating to NEO Employment — 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 62 years of age, without regard to length of
service, or attaining or exceeding 55 years of age with 10 or more years of service.
The table below describes the compensation and benefits that would have been payable to each NEO
had the officer terminated his employment under various circumstances as of December 31, 2015.
The table below does not address changes in control, as we are not obligated to provide any additional
compensation to our NEOs in connection with a change in control. The table also does not address
potential payments upon a termination for cause, which is a termination resulting from the occurrence of
an event or conduct described in the Recapture Agreement. All earned but unpaid Deferred Salary is
subject to forfeiture upon the occurrence of such a termination. However, the amount of compensation, if
any, to be recaptured and/or forfeited is determined by the Board of Directors, which can only occur