RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
Exhibit 10.2
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Corporate
Headquarters 0000 Xxxxx Xxxxxx Xxxxx XxXxxx, XX 00000 |
Tel:
(000) 000-0000 xxx.XxxxxxxXxx.xxx |
RESTRICTIVE
COVENANT AND CONFIDENTIALITY AGREEMENT
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 Xxxxxx X. Xxxxxx
(“Executive” or “you”), effective as of
May 21, 2012. To the extent that any required approval of
this Agreement or the employment agreement of which this
Agreement forms a part is not obtained, this Agreement shall be
null and void in all respects and you shall have no further
obligations under this Agreement, the employment agreement or
any other plan, policy or program of Xxxxxxx Mac.
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I.
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Definitions |
The following terms shall have the meanings indicated when used
in this Agreement.
A. Prohibited
Competition: Considering offers of employment from,
seeking or accepting employment with, directly or indirectly
providing professional services to, becoming a director of, or
being an investor (representing more than a five
(5) percent equity interest) in, (i) Xxxxxx Mae
(ii) all Federal Home Loan Banks (including the Office of
Finance); and (iii) such other entities to which the
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.
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II.
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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 during
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Executive’s employment with Xxxxxxx Mac and for twenty-four
(24) months immediately following termination of
Executive’s employment for any reason, Executive shall not
engage in Prohibited Competition. 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.
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III.
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Non-Solicitation and Non-Recruitment |
During Executive’s employment with Xxxxxxx Mac and for a
period of twelve (12) months after Executive’s
termination of employment for any reason, Executive shall not
directly or indirectly, on his own behalf of or on behalf of any
other person, corporation, partnership, firm, financial
institution or other business entity, recruit or solicit or
attempt to recruit or solicit or assist another to recruit or
solicit any person (who at such time is employed as a Xxxxxxx
Mac officer (or equivalent)) to cease their employment
relationship with Xxxxxxx Mac for the purpose of their being
employed by or providing professional services to any other
entity or person; provided that this section shall not be
construed as a prohibition on the ability of Executive to
provide a reference to any person or entity with which Executive
has no affiliation provided the Xxxxxxx Mac employee has
notified Xxxxxxx Mac of his or her intent to terminate their
employment with Xxxxxxx Mac.
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IV.
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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 Xxxxxxx Mac’s General
Counsel 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 Senior 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
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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 Senior 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; (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, (5) enforcing any rights or defending
any claims hereunder or under the employment agreement or any
plan or program of Xxxxxxx Mac, or (6) making any
disclosure with the prior written consent of the Board.
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V.
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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, which
itself is adequate consideration for Executive’s agreement
to be bound by the provisions of this Agreement:
| • | Compensation. Xxxxxxx Mac has agreed to hire and to compensate Executive as its Chief Executive Officer pursuant to the terms and conditions set forth in the May 7, 2012 memorandum between Executive and Xxxxxxx Mac. |
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VI.
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Compliance with the Code of Conduct and Corporate Policies, Including Personal Securities Investments Policy |
As a Xxxxxxx Mac employee, Executive will be subject to Xxxxxxx
Mac’s Code of Conduct (“Code”) and to Corporate
Policy 3-206, Personal Securities Investments Policy
(“Policy”) that, among other things, limit the
investment activities of Xxxxxxx Mac employees. Executive agrees
to fully comply with the Code and the Policy.
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VII.
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Absence of Any Conflict of Interest |
Other than as disclosed in the Executive’s D&O
Questionnaire that was previously provided to you,
(i) 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; and
(ii) 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 of Chief Executive
Officer of Xxxxxxx Mac and 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.
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VIII.
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Effect of Termination of Employment |
In the event that your employment terminates for any reason, you
agree that you shall be deemed to have resigned, effective as of
the date of such termination of employment with Xxxxxxx Mac, as
a member of
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Xxxxxxx Mac’s Board of Directors and from all positions,
titles, duties, authorities and responsibilities arising out of
or relating to your employment or such Board membership,
including any directorships or fiduciary positions to which you
were serving at the request of, or appointment by, Xxxxxxx Mac.
You also agree that you will execute any such documents and take
any such further steps as Xxxxxxx Mac’s Board of Directors
reasonably may ask of you to effectuate such resignations.
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IX.
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Reservation of Rights |
This Agreement in not intended, nor shall it be interpreted, to
constitute a contract of employment for a specified duration.
Your employment is “at-will” and each of you and
Xxxxxxx Mac retain the discretion to terminate the employment
relationship at any time for any lawful reason with or without
notice.
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X.
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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
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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:
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/s/ Xxxxxx X. Xxxxxx | Date: | May 7, 2012 | |||||||||
| Xxxxxx X. Xxxxxx |
