INDEMNIFICATION AGREEMENT
Exhibit 10.60
Agreement
dated ,
,
between the Federal Home Loan Mortgage Corporation, a
corporation organized and existing under the laws of the United
States (the “Corporation”), and
,
(the “Indemnitee”), a member of the Board of Directors
of the Corporation.
WHEREAS, persons have become reluctant to serve publicly-held
corporations as directors, or in other capacities, unless they
are provided with additional protection from the risk of claims
and actions against them arising out of their service to and
activities on behalf of such corporations; and
WHEREAS, the current uncertainty as to the availability of
adequate insurance and the uncertainties related to
indemnification have increased the difficulty of attracting and
retaining such persons; and
WHEREAS, the Board of Directors of the Corporation (the
“Board”) has determined that the inability to attract
and retain such persons would be detrimental to the best
interests of the Corporation’s stockholders and that such
persons should be assured that they will have sufficient
protection in the future; and
WHEREAS, the Corporation desires to obligate itself
contractually to indemnify such persons in accordance with the
terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Corporation and the Indemnitee
hereby agree as follows:
Section 1.
Definitions.
For purposes of this Agreement:
(a) “Change of Control” means a change in control
of the Corporation of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange
Act of 1934 (the “’34 Act”), if the Corporation
were subject to such reporting requirement; provided a Change of
Control shall be deemed to have occurred if (i) any
“person” (as such term is used in Sections 13(d)
and 14(d) of the ’34 Act) is or becomes the
“beneficial owner” (as defined in
Rule 13d-3
under the ’34 Act) of securities of the Corporation
representing 20% or more of the voting power of the
Corporation’s then outstanding shares of voting common
stock without the prior approval of at least two-thirds of the
members of the Board in office immediately prior to such
person’s attaining such percentage interest; (ii) the
Corporation is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board elected by the
stockholders in office immediately prior to such transaction or
event constitute less than a majority of the members of the
Board elected by the stockholders thereafter; or
(iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the
members of the Board elected by the stockholders (including for
this purpose any new director whose nomination for election by
the Corporation’s stockholders was approved by a vote of at
least two-thirds of the directors elected by the stockholders
then still in office who were
directors at the beginning of such period) cease for any reason
to constitute at least a majority of the members of the Board
elected by the stockholders. References to sections of the
’34 Act or to the rules or regulations promulgated
thereunder shall be deemed to refer to any successor provisions
or any other provisions with substantially the same import.
(b) “Corporate Status” means the status of a
person who is or was a director, officer or employee of the
Corporation or who is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise of the
Corporation.
(c) “Disinterested Director” means a director of
the Corporation who is not and was not a party to the Proceeding
in respect of which indemnification is sought by the Indemnitee.
(d) “Expenses” means all reasonable
attorneys’ fees, retainers, court costs, transcript costs,
fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses
of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) “Independent Counsel” means a law firm, or a
member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five
years has been, retained to represent (i) the Corporation
or the Indemnitee in any matter material to either such party,
or (ii) any other party to the Proceeding giving rise to a
claim for indemnification pursuant to this Agreement.
Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the
Corporation or the Indemnitee in an action to determine the
Indemnitee’s rights in this Agreement.
(f) “Proceeding” means any action, suit,
arbitration, alternative dispute resolution mechanism,
investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative, and
whether formal or informal.
Section 2.
Indemnification —
Proceedings.
The Indemnitee shall be entitled to the rights of
indemnification provided in this Agreement if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending, or completed Proceeding, as follows:
2.1. Proceedings — General. The
Indemnitee shall be indemnified against all liabilities
(including the obligation to pay a judgment (and interest
thereon), settlement, penalty or fine, including any excise tax
with respect to an employee benefit plan) and Expenses
reasonably incurred or suffered by the Indemnitee or on his
behalf in connection with any such Proceeding, except such
liabilities or Expenses as are incurred because of the
Indemnitee’s willful misconduct or knowing violation of the
criminal law, or are incurred in connection with a Proceeding
charging personal benefit to the Indemnitee, whether or not
involving action in the
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Indemnitee’s official capacity, to the extent the
Indemnitee was adjudged liable on the basis that personal
benefit was improperly received by the Indemnitee. The
Indemnitee shall notify the Corporation in writing within thirty
days after being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to
any Proceeding or matter which may be subject to indemnification
or advancement of Expenses covered by this Agreement.
2.2. Successful Defense of
Proceedings. Notwithstanding any other provision
of this Agreement, to the extent the Indemnitee is, by reason of
his Corporate Status, a party to, and is successful, on the
merits or otherwise, in any Proceeding, the Indemnitee shall be
indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If the
Indemnitee is not wholly successful in such Proceeding, but is
successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in the Proceeding, the
Corporation shall indemnify the Indemnitee against all Expenses
actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved claim, issue or
matter. For the purposes of this Section 2.2, and without
limiting the generality of the foregoing, the termination of any
claim, issue or matter in the Proceeding by dismissal, with or
without prejudice, shall be deemed to be a successful result as
to such claim, issue or matter.
2.3. Proceedings Initiated by the
Indemnitee. Except as provided in
Section 6.1 of this Agreement, the Corporation shall
indemnify the Indemnitee in connection with a Proceeding (or
part thereof) initiated by the Indemnitee only if the Proceeding
(or part thereof) was authorized by the Board.
2.4. Retention of Counsel in
Proceedings. The Indemnitee shall be entitled to
select counsel to defend the Indemnitee in any threatened,
pending or completed Proceeding, subject to the approval by a
majority of the Disinterested Directors of the full Board, by a
majority of the Disinterested Directors of a committee selected
by the Board, by outside counsel representing the Corporation in
the Proceeding or by the General Counsel of the Corporation,
which approval may not be withheld unreasonably.
Section 3.
Advancement of
Expenses.
The Corporation shall advance all Expenses incurred by or on
behalf of the Indemnitee in connection with any Proceeding for
which the Indemnitee would be entitled to indemnification
pursuant to the terms of Section 2.1 of this Agreement
within twenty days after the receipt by the Corporation of a
statement or statements from the Indemnitee requesting such
advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by or
on behalf of the Indemnitee and shall include or be preceded by
(a) a written statement by the Indemnitee of the
Indemnitee’s good faith belief that the Indemnitee has met
the standard of conduct required for indemnification pursuant to
the terms of Section 2.1 of this Agreement and (b) a
written undertaking by or on behalf of the Indemnitee to repay
any Expenses advanced if it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified against such
Expenses.
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Section 4. Procedure
for Determination of Entitlement to
Indemnification.
4.1. Written Requests. To obtain
indemnification under this Agreement in connection with any
Proceeding, the Indemnitee shall submit to the Secretary of the
Corporation a written request, including such documentation and
information as is reasonably available to the Indemnitee and is
reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification. The Secretary of the
Corporation shall, promptly upon receipt of any such request for
indemnification, advise the Board in writing that the Indemnitee
has requested indemnification.
4.2. Determination of Entitlement; Authorization
of Payments. Upon written request by the
Indemnitee for indemnification as provided in Section 4.1
of this Agreement, a determination with respect to the
Indemnitee’s entitlement thereto shall be made, as follows:
(a) if there has not been a Change of Control of the
Corporation, the full Board shall elect one of the following
methods to determine whether the Indemnitee shall be entitled to
indemnification under this Agreement (and directors who are not
Disinterested Directors may participate in such election):
(i) by a majority vote of a quorum of the Board consisting
of Disinterested Directors,
(ii) by a majority vote of a committee (consisting of two
or more Disinterested Directors) selected by the Board,
(iii) by a written opinion of Independent Counsel,
(A) selected by the Board or a committee in the manner
prescribed by Subsections (a)(i) and (ii) of this
Section 4.2 or (B) if a quorum of the Board cannot be
obtained in the manner prescribed by Subsection (a)(i) of this
Section 4.2 and a committee cannot be selected in the
manner prescribed by Subsection (a)(ii) of this Section 4.2,
selected by a majority vote of the full Board (and directors who
are not Disinterested Directors may participate in such
selection), a copy of which written opinion shall be delivered
to the Indemnitee, or
(iv) by a majority vote of the stockholders of the
Corporation, excluding any shares owned by or voted under the
control of any director who is not a Disinterested Director; or,
(b) if there has been a Change of Control of the
Corporation, Independent Counsel, selected in the manner
provided in Subsection (a)(iii) of this Section 4.2, shall
determine whether the Indemnitee shall be entitled to
indemnification under this Agreement by written opinion, a copy
of which shall be delivered to the Indemnitee, provided that, if
the Indemnitee so requests, such determination shall be made by
the
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Board, in the manner provided in
Subsection (a)(i)
of this Section 4.2, or a committee selected by the Board,
in the manner provided in
Subsection (a)(ii)
of this Section 4.2.
If it is determined that the Indemnitee is entitled to
indemnification, then, absent an intentional misstatement by the
Indemnitee of a material fact, or an intentional omission of a
material fact necessary to make the Indemnitee’s request
for indemnification (and all documentation and information
supplied in connection therewith) not materially misleading,
payment to the Indemnitee shall be made within ten days after
such determination.
Notwithstanding anything to the contrary contained herein, in
the event Independent Counsel shall have made a determination
with respect to the Indemnitee’s entitlement to
indemnification as provided in this Section 4.2, the
authorization of the amount of liabilities and Expenses payable
hereunder (i) shall be determined by the Board, in the
manner provided in Subsection (a)(i) of this Section 4.2,
or a committee selected by the Board, in the manner provided in
Subsection (a)(ii) of this Section 4.2, or, (ii) if a
quorum of the Board cannot be obtained under Subsection (a)(i)
of this Section 4.2 and a committee cannot be selected
under Subsection (a)(ii) of this Section 4.2, shall be
determined by a majority vote of the full Board (and directors
who are not Disinterested Directors may participate in such
determination). The Indemnitee shall cooperate with the person,
persons or entity making the determination with respect to the
Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to the Indemnitee and reasonably necessary
to such determination. Any costs or expenses incurred by the
Indemnitee in cooperating with the person, persons or entity
making such determination shall be borne by the Corporation
(irrespective of the determination as to the Indemnitee’s
entitlement to indemnification), and the Corporation shall
indemnify and hold the Indemnitee harmless from such costs or
expenses.
4.3. Selection of Independent
Counsel. The Corporation shall give written
notice to the Indemnitee advising the Indemnitee of the identity
of any Independent Counsel selected. The Indemnitee, within
seven days after such written notice of selection shall have
been given, may deliver to the Corporation a written objection
to such selection. Such objection may be asserted only on the
ground that Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in
Section 1 of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion. If
such written objection is made, either the Corporation or the
Indemnitee may petition the United States District Court for the
district within which the Corporation’s principal office is
located or the court where the Proceeding in respect of which
indemnification is sought by the Indemnitee is pending, if any,
for resolution of the objection
and/or for
the appointment as Independent Counsel of a person selected by
such court or by such other person as the court shall designate,
and the person with respect to whom an objection is so resolved
or the person so appointed shall act as Independent Counsel
under Section 4.2 of this Agreement. The Corporation shall
pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with
its actions pursuant to this Agreement, and the Corporation
shall pay all reasonable fees and expenses incident to the
procedures of this Section 4.3.
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Section 5.
Presumptions and Effect of Certain
Proceedings.
5.1. Presumptions as to Entitlement to
Indemnification. If the person, persons or entity empowered or
selected under Section 4.2 of this Agreement to determine
whether the Indemnitee is entitled to indemnification shall not
have made a determination within ninety days after receipt by
the Corporation of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed
to have been made, and the Indemnitee shall be entitled to such
indemnification, absent (a) an intentional misstatement by
the Indemnitee of a material fact, or an intentional omission of
a material fact necessary to make the Indemnitee’s request
for indemnification (and all documentation and information
supplied in connection therewith) not materially misleading or
(b) prohibition of such indemnification under applicable
law. Notwithstanding the foregoing, the provisions of this
Section 5.1 set forth above shall not apply (i) if the
determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 4.2 of this Agreement
and if (A) within twenty days after receipt by the
Corporation of the request for such determination the Board has
resolved to submit such determination to the stockholders for
their consideration at an annual meeting to be held within
eighty days after such determination is made at such meeting, or
(B) a special meeting of stockholders is called within
twenty days after such receipt for the purpose of making such
determination, such meeting is held for such purpose within
eighty days after having been so called and such determination
is made at such meeting, or (ii) if the determination of
entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 4.2 of this Agreement.
5.2. Effect of Certain
Proceedings. The termination of any Proceeding or
of any claim, issue or matter therein, by settlement, judgment,
order or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as
otherwise expressly provided in this Agreement) of itself
adversely affect the right of the Indemnitee to indemnification
or create a presumption that the Indemnitee did not meet the
standard of conduct required for indemnification pursuant to the
terms of Section 2.1 of this Agreement.
5.3. Presumptions — Change of
Control. If a Change of Control shall have
occurred, in making a determination with respect to entitlement
to indemnification under this Agreement, the Board, committee or
stockholders (but not Independent Counsel) making such
determination shall presume that the Indemnitee is entitled to
indemnification under this Agreement if the Indemnitee has
submitted a request for indemnification in accordance with the
terms of Section 4.1 of this Agreement, and the Corporation
shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of
any determination contrary to that presumption.
Section 6.
Remedies of the
Indemnitee.
6.1 Remedies. In the event that
(a) payment of indemnification is not made pursuant to
Section 2.2 of this Agreement within ninety days after
receipt by the Corporation of a written request therefor,
(b) advancement of Expenses is not made pursuant to
Section 3 of this Agreement within twenty days after
receipt by the Corporation of a written request therefor,
(c) a determination is made pursuant to Section 4 of
this Agreement that the
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Indemnitee is not entitled to indemnification under this
Agreement, (d) a determination is not made pursuant to
Section 4 of this Agreement with respect to the
Indemnitee’s entitlement to indemnification within ninety
days after receipt by the Corporation of a written request
therefor (or such longer period of time as may be set forth for
a determination by the stockholders or by Independent Counsel as
set forth in Section 5.1 of this Agreement), or
(e) payment of indemnification is not made within ten days
after a determination has been made pursuant to Section 4
of this Agreement or deemed to have been made pursuant to
Section 5 of this Agreement that the Indemnitee is entitled
to indemnification, the Indemnitee shall be entitled to an
adjudication in the United States District Court for the
district within which the Corporation’s principal office is
located or the court where the Proceeding in respect of which
indemnification is sought by the Indemnitee is pending, if any,
of his entitlement to such indemnification or advancement of
Expenses. Alternatively, the Indemnitee, at his option, may seek
an award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association.
The Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within one hundred
eighty days following the date on which the Indemnitee first has
the right to commence such proceeding pursuant to this
Section 6.1. The Corporation shall not oppose the
Indemnitee’s right to seek any such adjudication or award
in arbitration.
6.2. Presumptions in Judicial or Arbitration
Proceedings. If a determination shall have been
made pursuant to Section 4 of this Agreement that the
Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to Section 6.1
of this Agreement shall be conducted in all respects as a
de novo trial or arbitration on the merits, and
the Indemnitee shall not be prejudiced by reason of the prior
adverse determination.
6.3. Corporation Bound by
Determinations. If a determination shall have
been made pursuant to Section 4 of this Agreement or deemed
to have been made pursuant to Section 5 of this Agreement
that the Indemnitee is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial
proceeding or arbitration commenced pursuant to Section 6.1
of this Agreement, absent (a) an intentional misstatement
by the Indemnitee of a material fact, or an intentional omission
of a material fact necessary to make the Indemnitee’s
request for indemnification (and all documentation and
information supplied in connection therewith) not materially
misleading in connection with the request for indemnification,
or (b) prohibition of such indemnification under applicable
law.
6.4. Corporation Bound by Procedures and
Presumptions. The Corporation shall be precluded
from asserting in any judicial proceeding or arbitration
commenced pursuant to Section 6.1 of this Agreement that
the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or
before any such arbitrator that the Corporation is bound by all
the provisions of this Agreement.
6.5. Indemnification if Indemnitee Prevails in
Judicial or Arbitration Proceedings. In the event
the Indemnitee, pursuant to Section 6.1 of this Agreement,
seeks a judicial adjudication, or an award in arbitration, of
the Indemnitee’s rights under, or to recover damages for
breach of, this Agreement, the Indemnitee shall be entitled to
recover from the
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Corporation, and shall be indemnified by the Corporation
against, any and all expenses (of the kinds described in the
definition of Expenses) actually and reasonably incurred by him
in such judicial adjudication or arbitration, but only if the
Indemnitee prevails therein. If it shall be determined in such
judicial adjudication or arbitration that the Indemnitee is
entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the expenses incurred by the
Indemnitee in connection with such judicial adjudication or
arbitration shall be prorated.
Section 7.
Non-Exclusivity; Insurance;
Subrogation.
7.1. Non-Exclusivity. The rights of
indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be deemed exclusive of any
other rights to which the Indemnitee may at any time be entitled
under applicable law (including the Corporation’s enabling
legislation), the Bylaws of the Corporation, any agreement, vote
of stockholders, resolution of directors, or otherwise.
7.2. Insurance. To the extent that
the Corporation maintains an insurance policy or policies
providing liability insurance for directors, officers or
employees of the Corporation, or directors, officers, partners,
trustees, employees or agents of another corporation,
partnership, joint venture, trust, employee benefit plan or
other enterprise which such person serves at the request of the
Corporation, the Indemnitee shall be covered by such policy or
policies in accordance with its or their terms to the maximum
extent of the coverage available for any such director, officer
or employee under such policy or policies.
7.3. Subrogation by the
Corporation. In the event of any payment under
this Agreement, the Corporation shall be subrogated to the
extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of
such documents as are necessary to enable the Corporation to
bring suit to enforce such rights.
7.4. Limitation on Liability. The
Corporation shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to
the extent that the Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or
otherwise.
Section 8.
Termination.
This Agreement shall be terminable by the Board upon sixty days
prior written notice to the Indemnitee in the event the Board
shall have determined it to be advisable for the Corporation to
terminate all current indemnification agreements with directors.
Such termination shall in no event affect the Indemnitee’s
rights of indemnification provided in this Agreement for
liabilities and Expenses in connection with Proceedings arising
out of or relating to any action taken or omitted to be taken by
the Indemnitee prior to the date this Agreement shall have been
terminated in accordance with the terms of this Section 8.
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Section 9.
Notices.
All notices, requests, demands and other communications
hereunder shall be in writing, and shall be deemed to have been
duly given, if delivered by hand, or, if mailed by certified or
registered mail with postage postpaid, on the third business day
after the date on which it is so mailed:
If to the Indemnitee, to:
If to the Corporation to:
Executive Vice President,
General Counsel & Secretary
Federal Home Loan Mortgage Corporation
0000 Xxxxx Xxxxxx Xxxxx, XX 200
XxXxxx, Xxxxxxxx 00000
General Counsel & Secretary
Federal Home Loan Mortgage Corporation
0000 Xxxxx Xxxxxx Xxxxx, XX 200
XxXxxx, Xxxxxxxx 00000
or to such other address as may have been furnished by one party
to the other.
Section 10.
Governing
Law.
This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by
the laws of the United States, provided that the law of the
Commonwealth of Virginia shall serve as the federal rule of
decision in all instances except where such law is inconsistent
with the Corporation’s enabling legislation or its public
purposes.
Section 11.
Miscellaneous.
11.1. Severability. If any
provision of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever, the validity,
legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby,
and, to the fullest extent possible, the provisions of this
Agreement shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or
unenforceable.
11.2 Modification and Waiver. No
modification or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions
(whether or not similar), nor shall such waiver constitute a
continuing waiver.
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11.3 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
Member, Board of Directors of
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