Freddie Mac 2011 Annual Report Download - page 359

For RSUs, the value shown in the table is calculated on a grant-by-grant basis by multiplying the number of unvested
RSUs by the closing price of our common stock on December 30, 2011. No value is included in the tables for stock
options because the exercise prices for all such options held by Named Executive Officers are substantially higher than
the closing price of our common stock on December 30, 2011.
Potential Payments to Current Named Executive Officers
The Executive Compensation Program addresses the treatment of Semi-Monthly Base Salary, Deferred Base Salary,
and the Target Opportunity upon various termination events. In order to be eligible to receive any portion of a Target
Opportunity installment payment, a Covered Officer must have been employed for a minimum of four whole calendar
months during the performance year to which the award applies.
Additionally, none of the Covered Officers are guaranteed termination benefits upon any type of termination event
other than death or disability and the actual payment of any level of termination benefits is subject to FHFA review and
approval at the time of payment. The discussion that follows describes the termination benefits, if any, provided upon
various types of termination events.
•Death. Any earned but unpaid Deferred Base Salary or Target Opportunity installments will be paid as soon as
administratively possible in the event of death. If, at the time of death, the funding level has not been determined,
the award will remain outstanding until such determination is made. Payment will occur as soon as administratively
possible following the determination of the funding level.
•Disability. Treatment upon a Long-Term Disability (as defined in the Executive Compensation Program) is the
same as upon death, except that payment of any Deferred Base Salary will occur in accordance with the approved
payment schedule and not as soon as administratively possible following termination of employment.
•Retirement. Treatment upon an eligible Retirement (as defined in the Executive Compensation Program) is the
same as upon Long-Term Disability, except that only a pro-rata portion of a Target Opportunity installment
payment will occur based on the number of whole months worked in the performance year during which the
officer retires. No information is provided in the table below with respect to a termination of employment on
account of a retirement because none of the Named Executive Officers was retirement-eligible under the Executive
Compensation Program as of December 31, 2011.
•Voluntary or For Cause. The Named Executive Officers are not entitled to any termination benefits in the event
of a voluntary termination or a termination for cause and all earned but unpaid Deferred Base Salary and the
unpaid portion of any outstanding Target Opportunity awards are forfeited.
•Involuntary Termination Without Cause. The Named Executive Officers are not entitled to any termination
benefits in the event of an involuntary termination without cause unless the Compensation Committee recommends
that the Named Executive Officer receive termination benefits and the Committee’s recommendation is approved
by FHFA after consulting with Treasury, as appropriate. In determining whether to recommend payment of
termination benefits and the amount of such benefits, the Compensation Committee will take into account one or
more factors that it determines are relevant, including:
• The facts and circumstances associated with the termination;
• The performance and contributions of the Named Executive Officer during his or her tenure with us;
• The amount of earned but unpaid Deferred Base Salary as of the date of termination; and
• Our need to provide reasonable and competitive termination benefits in order to attract and retain high caliber
executives during conservatorship.
Under interim guidance from FHFA, the amount of any termination benefits recommended by the Compensation
Committee in the event of an involuntary termination without cause may not exceed $1 million and must also be limited
to the greater of:
• 100% of the Named Executive Officer’s earned but unpaid Deferred Base Salary as of the date of termination;
or,
• 2/3rds of the Named Executive Officer’s earned but unpaid Deferred Base Salary as of the date of termination
plus a supplemental amount not to exceed 2/3rds of the Named Executive Officer’s Semi-Monthly Base
Salary.
The following table describes the potential payments as of December 31, 2011 upon termination of the Named
Executive Officers employed as of that date that results from death or disability. There are no payments or benefits
354 Freddie Mac