RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
Exhibit 10.48
In exchange for the mutual promises and consideration set forth
below, this Restrictive Covenant and Confidentiality Agreement
(“Agreement”) is entered into by and between the
Federal Home Loan Mortgage Corporation (“Xxxxxxx Mac”
or “Company”) and Xxxxxxxx X. Xxxx
(“Executive”), effective as of this 15th day of June,
2004.
I. Definitions
The following terms shall have the meanings indicated when used
in this Agreement.
A. Competitor: The following entities, and
their respective parents, successors, subsidiaries, and
affiliates are competitors: (i) Xxxxxx Xxx (ii) all
Federal Home Loan Banks (including the Office of Finance); and
(iii) such other entities to which Executive and the
Company may agree in writing from
time-to-time.
B. Confidential Information: Information or
materials in written, oral, magnetic, digital, computer,
photographic, optical, electronic, or other form, whether now
existing or developed or created during the period of
Executive’s employment with Xxxxxxx Mac, that constitutes
trade secrets and/or proprietary or confidential information.
This information includes, but is not limited to: (i) all
information marked Proprietary or Confidential;
(ii) information concerning the components, capabilities,
and attributes of Xxxxxxx Mac’s business plans, methods,
and strategies; (iii) information relating to tactics,
plans, or strategies concerning shareholders, investors,
pricing, investment, marketing, sales, trading, funding,
hedging, modeling, sales and risk management;
(iv) financial or tax information and analyses, including
but not limited to, information concerning Xxxxxxx Mac’s
capital structure and tax or financial planning;
(v) confidential information about Xxxxxxx Mac’s
customers, borrowers, employees, or others; (vi) pricing
and quoting information, policies, procedures, and practices;
(vii) confidential customer lists; (viii) proprietary
algorithms; (ix) confidential contract terms;
(x) confidential information concerning Xxxxxxx Mac’s
policies, procedures, and practices or the way in which Xxxxxxx
Mac does business; (xi) proprietary or confidential data
bases, including their structure and content;
(xii) proprietary Xxxxxxx Mac business software, including
its design, specifications and documentation;
(xiii) information about Xxxxxxx Mac products, programs,
and services which has not yet been made public;
(xiv) confidential information about Xxxxxxx Mac’s
dealings with third parties, including dealers, customers,
vendors, and regulators; and/or (xv) confidential
information belonging to third parties to which Executive
received access in connection with Executive’s employment
with Xxxxxxx Mac. Confidential Information does not include
general skills, experience, or knowledge acquired in connection
with Executive’s employment with Xxxxxxx Mac that otherwise
are generally known to the public or within the industry or
trade in which Xxxxxxx Mac operates.
X. Xxxxxxxxx: Cash compensation paid pursuant
to Xxxxxxx Mac’s Severance Policy.
X. Xxxxxxxxx Policy: Xxxxxxx Mac
Policy 3-254.1
(Severance — Officers), or any subsequent and
superceding severance policy.
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II. Non-Competition
Executive recognizes that as a result of Executive’s
employment with Xxxxxxx Mac, Executive has access to and
knowledge of critically sensitive Confidential Information, the
improper disclosure or use of which would result in grave
competitive harm to Xxxxxxx Mac. Therefore, Executive agrees
that neither during Executive’s employment with Xxxxxxx
Mac, nor for the twelve (12) months immediately following
termination of Executive’s employment for any reason, will
Executive consider offers of employment from, seek or accept
employment with, or otherwise directly or indirectly provide
professional services to any Competitor. Executive acknowledges
and agrees that this covenant has unique, substantial and
immeasurable value to Xxxxxxx Mac, that Executive has sufficient
skills to provide a livelihood for Executive while this covenant
remains in force, and that this covenant will not interfere with
Executive’s ability to work consistent with
Executive’s experience, training and education. This
non-competition covenant applies regardless of whether
Executive’s employment is terminated by Executive, by
Xxxxxxx Mac, or by a joint decision.
III. Non-Solicitation
and Non-Recruitment
During Executive’s employment with Xxxxxxx Mac and for a
period of twelve (12) months after Executive’s
termination date, Executive will not solicit or recruit, attempt
to solicit or recruit or assist another in soliciting or
recruiting any Xxxxxxx Mac managerial employee (including
manager-level, Executive-level, or officer-level employee) with
whom Executive worked, or any employee whom Executive directly
or indirectly supervised at Xxxxxxx Mac, to leave the
employee’s employment with Xxxxxxx Mac for purposes of
employment or for the rendering of professional services. This
prohibition against solicitation does not apply if Xxxxxxx Mac
has notified the employee being solicited or recruited that
his/her employment with the Company will be terminated pursuant
to a corporate reorganization or
reduction-in-force.
IV. Treatment
of Confidential Information
A. Non-Disclosure. Executive recognizes that
Xxxxxxx Mac is engaged in an extremely competitive business and
that, in the course of performing Executive’s job duties,
Executive will have access to and gain knowledge about
Confidential Information. Executive further recognizes the
importance of carefully protecting this Confidential Information
in order for Xxxxxxx Mac to compete successfully. Therefore,
Executive agrees that Executive will neither divulge
Confidential Information to any persons, including to other
Xxxxxxx Mac employees who do not have a Xxxxxxx Mac
business-related need to know, nor make use of the Confidential
Information for the Executive’s own benefit or for the
benefit of anyone else other than Xxxxxxx Mac. Executive further
agrees to take all reasonable precautions to prevent the
disclosure of Confidential Information to unauthorized persons
or entities, and to comply with all Company policies,
procedures, and instructions regarding the treatment of such
information.
B. Return of Materials. Executive agrees that
upon termination of Executive’s employment with Xxxxxxx Mac
for any reason whatsoever, Executive will deliver to
Executive’s immediate supervisor all tangible materials
embodying Confidential Information, including, but not limited
to, any documentation, records, listings, notes, files, data,
sketches, memoranda, models, accounts, reference materials,
samples, machine-readable media, computer disks, tapes, and
equipment which in any way relate to Confidential Information,
whether developed by Executive or not. Executive further agrees
not to retain any copies of any materials embodying Confidential
Information.
C. Post-Termination Obligations. Executive
agrees that after the termination of Executive’s employment
for any reason, Executive will not use in any way whatsoever,
nor disclose any Confidential Information learned or obtained in
connection with Executive’s employment with Xxxxxxx Mac
without first obtaining the written permission of the Executive
Vice President of Human Resources of Xxxxxxx Mac. Executive
further agrees that, in order to assure the continued
confidentiality of the Confidential Information, Xxxxxxx Mac may
correspond with Executive’s future employers to advise them
generally of Executive’s exposure to and knowledge of
Confidential Information, and Executive’s obligations and
responsibilities regarding the Confidential Information.
Executive understands and agrees that any such contact may
include a request for assurance and confirmation from such
employer(s) that Executive will not disclose Confidential
Information to such employer(s), nor will such employer(s)
permit any use whatsoever of the Confidential Information. To
enable Xxxxxxx Mac to monitor compliance with the obligations
imposed by this Agreement, Executive further agrees to inform in
writing Xxxxxxx Mac’s Executive Vice President of Human
Resources of the identity of Executive’s subsequent
employer(s) and Executive’s prospective job title and
responsibilities prior to beginning employment. Executive
agrees that this notice requirement shall remain in effect for
twelve (12) months following the termination of
Executive’s Xxxxxxx Mac employment.
D. Ability to Enforce Agreement and Assist
Government Investigations. Nothing in this Agreement
prohibits or otherwise restricts you from: (1) making any
disclosure of information required by law; (2) assisting
any regulatory or law enforcement agency or legislative body to
the extent you maintain a legal right to do so notwithstanding
this Agreement; (3) filing, testifying, participating in or
otherwise assisting in a proceeding relating to the alleged
violation of any federal, state, or local law, regulation, or
rule, to the extent you maintain a legal right to do so
notwithstanding this Agreement; or (4) filing, testifying,
participating in or otherwise assisting the Securities and
Exchange Commission or any other proper authority in a
proceeding relating to allegations of fraud.
V. Consideration
Given to Executive
In exchange for agreeing to be bound by the terms, conditions,
and restrictions stated in this Agreement, Xxxxxxx Mac will
provide the Executive with the following consideration, each of
which itself is adequate consideration for Executive’s
agreement to be bound by the provisions of this Agreement:
A. Employment. Executive will be employed by
Xxxxxxx Mac as Executive Vice-President — Investments.
X. Xxxxxxxxx. Executive acknowledges that
under Xxxxxxx Mac’s Severance Policy, Executive may be
eligible to receive Severance upon termination of employment,
the duration of which is within the discretion of Xxxxxxx Mac.
In the event the Executive’s employment is terminated and
the circumstances of the termination qualify the Executive for
Severance under the Severance Policy, then the Executive shall
receive Severance for twelve (12) months following
termination. If at the time this Agreement is entered into,
Executive occupies a
position that is an “executive officer” of Xxxxxxx
Mac, as determined by the Office of Federal Housing Enterprise
Oversight (“OFHEO”) under section 1303(7) of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 and under OFHEO’s executive compensation regulation
(66 Federal Register 47550 (2001)), then
Executive acknowledges that receipt of the twelve
(12) months severance under this paragraph is contingent
upon any legally required approval from the Director of OFHEO.
If such approval is not received, then Executive will not be
eligible for Severance. The Severance guarantee provided by this
Paragraph V(B) is in place of, and not in addition to,
Severance to which Executive would otherwise be entitled under
any other agreement between Executive and Xxxxxxx Mac.
VI. Reservation
of Rights
Executive agrees that nothing in this Agreement constitutes a
contract or commitment by Xxxxxxx Mac to continue
Executive’s employment in any job position for any period
of time, nor does anything in this Agreement limit in any way
Xxxxxxx Mac’s right to terminate Executive’s
employment at any time for any reason.
VII. Compliance
with the Code of Conduct and Corporate Policies
Executive understands that, among other things, Xxxxxxx
Mac’s Code of Conduct (“Code”) restrict the ways
in which Xxxxxxx Mac employees may interact either as employees
or in their personal activities with companies that either
compete with Xxxxxxx Mac in the mortgage industry or that do
business or would like to do business with Xxxxxxx Mac
(including as a supplier). The Code and Xxxxxxx Mac’s
Investment Limitations Policy may restrict Executive’s
ability to trade, and own financial interests, in certain public
and private entities.
Executive has received a copy of the company’s Investment
Limitations Policy (the “Policy”) and hereby
represents that she will consult as soon as practical with
Xxxxxxx Mac’s Chief Compliance Officer about whether she or
any “covered household member,” as that term is
defined in the Policy, holds financial interests that are
prohibited under that Policy. Executive further agrees to be
bound by, and comply fully with, her obligations under the
Investment Limitations Policy. Executive also will disclose any
other situation that appears to be a conflict of interest under
the Code, a copy of which Executive has received and reviewed
prior to Executive’s execution of this Agreement.
VIII. Absence
of Any Conflict of Interest
Executive represents that Executive does not have any
confidential information, trade secrets or other proprietary
information that Executive obtained as the result of
Executive’s employment with another employer that Executive
will be using in Executive’s position at Xxxxxxx Mac.
Executive also represents that Executive is not subject to any
employment, confidentiality or stock grant agreements, or any
other restrictions or limitations imposed by a prior employer,
which would affect Executive’s ability to perform the
duties and responsibilities for Xxxxxxx Mac in the job position
offered, and further represents that Executive has provided
Xxxxxxx Mac with copies of any such agreements or limitations so
that Xxxxxxx Mac can make an independent judgment that
Executive’s employment with Xxxxxxx Mac is not inconsistent
with any of its terms.
IX. Enforcement
A. Executive acknowledges that Executive may be
subject to discipline, up to and including termination of
employment, for Executive’s breach or threat of breach of
any provision of this Agreement.
B. Executive agrees that irreparable injury will
result to Xxxxxxx Mac’s business interests in the event of
breach or threatened breach of this Agreement, the full extent
of Xxxxxxx Mac’s damages
will be impossible to ascertain, and monetary damages will not
be an adequate remedy for Xxxxxxx Mac. Therefore, Executive
agrees that in the event of a breach or threat of breach of any
provision(s) of this Agreement, Xxxxxxx Mac, in addition to any
other relief available, shall be entitled to temporary,
preliminary, and permanent equitable relief to restrain any such
breach or threat of breach by Executive and all persons acting
for and/or in concert with Executive, without the necessity of
posting bond or security, which Executive expressly waives.
C. Executive agrees that each of Executive’s
obligations specified in this Agreement is a separate and
independent covenant, and that all of Executive’s
obligations set forth herein shall survive any termination, for
any reason, of Executive’s Xxxxxxx Mac employment. To the
extent that any provision of this Agreement is determined by a
court of competent jurisdiction to be unenforceable because it
is overbroad, that provision shall be limited and enforced to
the extent permitted by applicable law. Should any provision of
this Agreement be declared or determined by any court of
competent jurisdiction to be unenforceable or invalid under
applicable law, the validity of the remaining obligations will
not be affected thereby and only the unenforceable or invalid
obligation will be deemed not to be a part of this Agreement.
D. This Agreement is governed by, and will be
construed in accordance with, the laws of the Commonwealth of
Virginia, without regard to its or any other jurisdiction’s
conflict-of-law
provisions. Executive agrees that any action related to or
arising out of this Agreement shall be brought exclusively in
the United States District Court for the Eastern District of
Virginia, and Executive hereby irrevocably consents to personal
jurisdiction and venue in such court and to service of process
by United States Mail or express courier service in any such
action.
E. If any dispute(s) arise(s) between Xxxxxxx Mac and
Executive with respect to any matter which is the subject of
this Agreement, the prevailing party in such dispute(s) shall be
entitled to recover from the other party all of its costs and
expenses, including its reasonable attorneys’ fees.
Executive has been advised to discuss all aspects of this
Agreement with Executive’s private attorney. Executive
acknowledges that Executive has carefully read and understands
the terms and provisions of this Agreement and that they are
reasonable. Executive signs this Agreement voluntarily and
accepts all obligations contained in this Agreement in exchange
for the consideration to be given to Executive as outlined
above, which Executive acknowledges is adequate and
satisfactory, and which Executive further acknowledges Xxxxxxx
Mac is not otherwise obligated to provide to Executive. Neither
Xxxxxxx Mac nor its agents, representatives, directors, officers
or employees have made any representations to Executive
concerning the terms or effects of this Agreement, other than
those contained in this Agreement.
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By:
/s/ Xxxxxxxx
X. Xxxx Xxxxxxxx
X. Xxxx
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Date: June 15, 2004
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By:
/s/ Xxxxxxx
X. Xxxxx |
Date: June 18, 2004
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