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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 17, 2009
FEDERAL HOME LOAN MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)
Freddie Mac
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Federally chartered
corporation
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000-53330
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52-0904874
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(State or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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8200 Jones Branch Drive
McLean, Virginia
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22102
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
(703) 903-2000
Not applicable
(Former name or former address, if changed since last
report)
Check the appropriate box below if the
Form 8-K
filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
o Soliciting
material pursuant to
Rule 14a-12
under the Exchange Act
(17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to
Rule 14d-2(b)
under the Exchange Act
(17 CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to
Rule 13e-4(c)
under the Exchange Act
(17 CFR 240.13e-4(c))
Item 5.02. Departure
of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On August 18, 2009, Freddie Mac (formally known as the
Federal Home Loan Mortgage Corporation) issued a press release
announcing that its board of directors has named Bruce M.
Witherell as the company’s chief operating officer,
effective September 14, 2009.
A copy of the press release is filed as Exhibit 99.1 to
this Report on
Form 8-K
and incorporated herein by reference.
Witherell, 49, joins Freddie Mac from PrimeStone
Partners, LLC, a private investment and advisory firm.
Previously, Witherell served as managing director and global
co-head of the residential mortgage business of Morgan Stanley,
a global financial services firm, from December 2006 to May
2008. Before his service at Morgan Stanley, he worked in various
roles at Lehman Brothers Holdings Inc., a global investment
bank, for 15 years, including as chief executive officer of
Lehman Brothers Bank and as chief executive officer of Aurora
Loan Services from 2003 to 2006.
Freddie Mac has entered into a Memorandum Agreement with
Witherell, which provides for his employment as chief operating
officer of Freddie Mac. A copy of the Memorandum Agreement is
filed as Exhibit 10.1 to this Report on
Form 8-K
and incorporated herein by reference. The Federal Housing
Finance Agency (“FHFA”), the company’s
conservator, has approved this Memorandum Agreement and
consulted with the U.S. Department of the Treasury
(“Treasury”).
The terms of his Memorandum Agreement provide Witherell with the
following during his employment with Freddie Mac:
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An annual base salary of no less than $700,000, which amount may
be increased in the discretion of Freddie Mac, subject to
approval by FHFA after consulting with Treasury;
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To the extent permitted by FHFA, in consultation with Treasury,
after receipt of clarification on the impact of recent
regulatory actions impacting Freddie Mac’s executive
compensation, a short-term and long-term incentive opportunity
that, when added to his base salary, would be consistent with
the level of compensation provided by Freddie Mac’s major
competitors;
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Relocation benefits consistent with Freddie Mac’s standard
executive relocation benefit as well as nine months temporary
lodging at a local apartment (in lieu of Freddie Mac’s
standard temporary living relocation benefit), reimbursement for
reasonable commuting and necessary living expenses, and
reimbursement for travel between the Washington, D.C. area
and New York for Witherell and his immediate family members for
the first nine months of his employment;
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The opportunity to participate in all employee benefit plans
offered to Freddie Mac’s senior executive officers,
including the company’s Supplemental Executive Retirement
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Plan, pursuant to the terms of these plans. For a description of
these plans see Freddie Mac’s
Form 10-K/A
filed April 30, 2009; and
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If Freddie Mac terminates Witherell’s employment for any
reason other than cause (as is defined in the Memorandum
Agreement), he will be eligible to receive severance pay (which
will generally be for no less than 12 months) and other
benefits pursuant to the terms of any then-applicable Freddie
Mac severance policy, subject to the approval of FHFA. In
addition, in the event that Freddie Mac terminates
Witherell’s employment for any reason or he voluntarily
terminates his employment, then Freddie Mac will provide him
with any earned but unpaid base salary through the date of
termination, any accrued but unpaid vacation through the date of
termination, and any reasonable business expenses incurred
through the date of termination. For a description of Freddie
Mac’s current officer severance policy, see Freddie
Mac’s
Form 10-K/A
filed April 30, 2009. Freddie Mac’s current officer
severance policy is filed as Exhibit 10.30 to Freddie
Mac’s Form 10 filed July 18, 2008.
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Witherell is subject to non-competition and non-solicitation of
employees restrictions for a period of two years and one year,
respectively, following any termination of his employment, and
he is also subject to certain restrictions with respect to
confidential information obtained during the course of his
employment.
Freddie Mac also has entered into a Recapture Agreement with
Witherell. A copy of the Recapture Agreement is filed as
Exhibit 10.2 to this Report on
Form 8-K
and incorporated herein by reference. The Recapture Agreement
provides for Freddie Mac’s recapture from Witherell of
Recapture Eligible Compensation (which, as defined in the
Recapture Agreement, varies depending on which Triggering Event
has occurred) if, at any time during Witherell’s employment
with Freddie Mac (or, under certain circumstances after
termination of his employment), the board of directors
determines and notifies Witherell in writing that any Triggering
Event (as defined in the Recapture Agreement) has occurred. The
Recapture Period (as defined in the Recapture Agreement) also
varies depending on which Triggering Event has occurred. In the
event that Witherell is terminated for cause (as defined in the
Recapture Agreement), he forfeits rights to any future payment
of annual short-term incentive, long-term incentive or severance
benefits that might otherwise have been due pursuant to the
terms of applicable plans or awards from the date of
Witherell’s termination forward. The board has discretion
to determine the appropriate amount required to be recaptured,
if any, upon a Triggering Event, which is intended to be the
compensation in excess of what Freddie Mac would have paid
Witherell had Freddie Mac taken into consideration the impact of
the Triggering Event at the time such compensation was awarded.
Freddie Mac also agreed to enter into an indemnification
agreement with Witherell. A copy of the form of indemnification
agreement is attached as Exhibit 10.2 to Freddie Mac’s
current report on
Form 8-K
filed on December 23, 2008 and is incorporated herein by
reference. For a description of this indemnification agreement,
see Freddie Mac’s
Form 10-K/A
filed April 30, 2009.
Item 9.01. Financial
Statements and Exhibits.
(d) Exhibits.
The following exhibits are being filed as part of this Report on
Form 8-K:
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10.1
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Memorandum Agreement, dated August 13, 2009, between
Freddie Mac and Bruce M. Witherell
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10.2
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Recapture Agreement, dated August 17, 2009, between Freddie
Mac and Bruce M. Witherell
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99.1
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Press release, dated August 18, 2009, issued by Freddie Mac
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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FEDERAL HOME LOAN MORTGAGE CORPORATION
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By:
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/s/ Charles
E. Haldeman, Jr.
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Charles E. Haldeman, Jr.
Chief Executive Officer
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Date: August 18,
2009