Freddie Mac 2015 Annual Report Download - page 385

Certain Relationships and Related Transactions
Freddie Mac 2015 Form 10-K 383
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
POLICY GOVERNING RELATED PERSON
TRANSACTIONS
The Board has adopted a written policy governing the approval of related person transactions. This policy
sets forth procedures for the review and approval or ratification of transactions involving related persons.
Under the policy, “related person” means any person who is, or was at any time since the beginning of our
last completed fiscal year, a director, a director nominee, an executive officer, or an immediate family
member of any of the foregoing persons.
Under authority delegated by the Board, our General Counsel and the Nominating and Governance
Committee (or its Chair under certain circumstances), each an Authorized Approver, are responsible for
applying the Related Person Transactions Policy. Transactions covered by the Related Person
Transactions Policy consist of any transaction, arrangement, or relationship or series of similar
transactions, arrangements, or relationships, in which:
• The aggregate amount involved exceeded or is expected to exceed $120,000;
• We were or are expected to be a participant; and
• Any related person had or will have a direct or indirect material interest.
The Related Person Transactions Policy includes a list of categories of transactions identified by the
Board as having no significant potential for an actual conflict of interest or the appearance of a conflict or
improper benefit to a related person, and thus such transactions are not considered potential related
person transactions subject to review.
Our Legal Division assesses whether any proposed transaction involving a related person is covered by
the Related Person Transactions Policy. If so, the transaction is reviewed by the appropriate Authorized
Approver. In consultation with the Chair of the Nominating and Governance Committee, the General
Counsel may refer any proposed transaction to the Nominating and Governance Committee for review
and approval.
If possible, approval of a related person transaction is obtained prior to the effectiveness or
consummation of the transaction. If advance approval of a related person transaction by the appropriate
Authorized Approver is not feasible or otherwise not obtained, then the transaction is considered promptly
by the appropriate Authorized Approver to determine whether ratification is warranted.
In determining whether to approve or ratify a related person transaction covered by the Related Person
Transactions Policy, the appropriate Authorized Approver reviews and considers all relevant information,
which may include:
• The nature of the related person’s interest in the transaction;
• The approximate total dollar value of, and extent of the related person’s interest in, the transaction;
• Whether the transaction was or would be undertaken in the ordinary course of our business;