AGREEMENT AND GENERAL RELEASE
CONFIDENTIAL
Exhibit 10.44
This AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and entered into by and between
Xxxxxx Xxxxxxxxxxxx (“you” or “Employee”) and Xxxxxx Mae (or “Company,” and collectively, the
“Parties”).
WHEREAS, on August 27, 2008, you resigned as the company’s Executive Vice President and Chief
Risk Officer, and agreed to remain with the Company as a senior advisor during a transition period
at your then current compensation.
WHEREAS, the Company ended its employment relationship with you, effective as of January 16,
2009 (“Termination Date”), and
WHEREAS, you and Xxxxxx Xxx have agreed upon the terms and conditions of your termination,
and further wish to resolve any and all existing and potential issues in any way relating to your
employment or the termination of such employment.
NOW, THEREFORE, in consideration of the mutual promises, covenants and undertakings as set
forth in this Agreement, the sufficiency of which the Parties acknowledge, the Parties agree as
follows:
1. Effective Date. You will have forty-five (45) calendar days from after the date you
receive this Agreement in which to consider and execute it (as so determined, the “Effective
Date”). This Agreement will become effective and enforceable on the Effective Date, unless you
timely revoke it in accordance with Paragraph 13.
2. Xxxxxx Mae Consideration. In exchange for your promises, covenants and undertakings made
in this Agreement, Xxxxxx Xxx will provide the following consideration to you:
(a) Within fifteen (15) business days of Xxxxxx Mae’s receipt of this executed Agreement,
Xxxxxx Xxx will pay you (gross) Three Hundred Twenty-one Thousand, Seven Hundred and Seven dollars
($321,707.00). Refer to Paragraph 15 below regarding deductions from the gross amount.
(b) If you elect to continue your medical and/or dental coverage under COBRA, Xxxxxx Xxx will
pay a portion of the premium for the period up to and including August 27, 2009, or until your
continuation coverage is discontinued, whichever comes first. During that period, you will pay the
portion of the premium in the amount that you would have paid as an active employee for the period
of coverage, and Xxxxxx Mae will pay the remainder of the premium. To activate coverage, you must
timely complete and return the COBRA forms, which have been/will be forwarded to you separately.
If you fail to timely complete and return the COBRA forms you may lose your eligibility for COBRA
coverage.
Xxxxxx Xxxxxxxxxxxx
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(c) Xxxxxx Mae will provide you with outplacement services from a firm chosen by Xxxxxx Xxx
valued at Eighteen Thousand Dollars ($18,000). Such outplacement services must be used on or
before August 27, 2009. You may not receive cash in lieu of such outplacement services.
3. Sufficient Consideration. You agree that, absent your entry into this Agreement, you
would not be entitled to the consideration set forth in Paragraph 2 of this Agreement. The
payments and other consideration to be provided to you under this Agreement are solely in exchange
for your promises in this Agreement, including your general release of claims, and represent
amounts and/or other consideration in excess of any amounts to which you are otherwise entitled.
4. Release of all Claims. You unconditionally release, waive, settle and forever discharge
any and all suits, actions, damages and claims, known and unknown (including, but not limited to,
claims for attorneys fees, expenses and/or costs) that you have or may have against Xxxxxx Mae,
including its conservator, FHFA, its directors, agents and employees (in their individual or
representative capacities), and any past, present or successor of the Xxxxxx Xxx pension or benefit
plans and its officers, directors, trustees, administrators, fiduciaries, agents or employees,
(collectively, the “Releasees”) for any actions, omissions or decisions, up to and including the
date you sign this Agreement, directly or indirectly relating to your employment with Xxxxxx Mae or
the termination of that employment. However, you do not waive any rights or claims that cannot be
waived under applicable law, and you do not waive any rights or claims associated with the
performance of the provisions of this Agreement or that arise after the execution of this
Agreement. You agree and understand that this release includes claims that you at present do not
know of or suspect to exist, even if you would not have entered into this Agreement had you known
of those claims. You agree and understand that this release means that you are giving up the right
to xxx Xxxxxx Xxx on any claim or cause of action released.
5. Release Includes All Claims Under Federal, State, Local and Common Law.
(a) You agree that your general release of Xxxxxx Mae and the Releasees as set forth in
Paragraph 4 of this Agreement is comprehensive and includes all claims and potential claims to the
maximum extent permitted by law, and includes, but is not limited to: (i) claims under any federal
statute, ordinance, regulation or executive order, as amended, including, but not limited to, the
Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
42 U.S.C. Section 1981, the Equal Pay Act, the Federal Age Discrimination in Employment Act of
1967, the Older Workers Benefits Protection Act of 1990, the Americans with Disabilities Act, the
Fair Labor Standards Act of 1938, the Xxxxxxxx-Xxxxx Act of 2002 and all other federal
whistleblower protection statutes, the Employee Retirement Income Security Act of 1974, the
Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993, the Worker Adjustment and
Retraining Notification Act, Executive Order 11246, the Occupational Safety and Health Act of
1970, and the National Labor Relations Act; (ii) any claims under any state or local statute,
ordinance or regulation, as amended, including, but not limited to, the District of Columbia Human
Rights Act, the District of Columbia Family and Medical Leave Act, the Virginia Human Rights Law,
the Maryland Fair Employment Practices Act, and any workers’ compensation claims; and (iii) any
claims under common law, including, but not limited to, claims for breach of contract, wrongful
discharge and tort and any claims for equitable relief.
Xxxxxx Xxxxxxxxxxxx
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(b) You represent and reaffirm that you knowingly and voluntarily waive any rights and claims
under the Federal Age Discrimination in Employment Act of 1967, as amended, and under the other
specific statutes and laws stated above.
(c) You further affirm that you have reported to Xxxxxx Mae’s Office of Investigations any
conduct or action by Xxxxxx Xxx or its employees or agents which you believe may violate any of
these laws or which you believe may violate any other rights you may have. You also represent that
you have not suffered any work-related injury for which you have not already filed a claim, and
that you have fully complied with your reporting obligations under Xxxxxx Mae’s Code of Conduct and
Fraud Risk Management Policy (including any amended version of these policies in effect during your
employment).
(d) You further agree that you will not engage in any activity that is in any way detrimental
to Xxxxxx Xxx. Detrimental activities include, but are not limited to, acts of disloyalty or
dishonesty, making disparaging statements about Xxxxxx Mae or any of its officers, directors, or
employees, and breaches of any fiduciary obligation to Xxxxxx Xxx. You also agree not to make any
statement (written or oral) concerning your employment with or termination from the Company to any
third party that would tend to disparage, denigrate, ridicule, or otherwise impugn Xxxxxx Mae’s
reputation.
6. No Complaints or Charges. You represent that you have not filed any complaints or
charges against Xxxxxx Xxx or any of the other Releasees with any federal, state, local court,
administrative agency or arbitration forum. You waive any and all rights to recover in any
lawsuit, judicial action or administrative or other proceeding relating to Xxxxxx Mae brought on
your behalf by the U.S. Equal Employment Opportunity Commission, the U.S. Department of Labor, the
Office of Federal Contract Compliance Programs, the District of Columbia Commission on Human
Rights, the District of Columbia Office of Human Rights, or any other federal, state or local
administrative or fair employment rights enforcement agency. You agree that if any administrative
agency or court maintains or assumes jurisdiction of any charge or complaint against any of the
Releasees on your behalf, you will promptly request that agency or court to withdraw from the
matter. By entering into this Agreement, you further withdraw any pending complaints and charges
initiated by you in Xxxxxx Mae’s Office of Investigations.
7. Cooperation. You agree that you will fully cooperate with any investigation conducted
by Xxxxxx Mae, by its auditor, by the Federal Housing Finance Agency (“FHFA”), or by any federal,
state or local government authority relating to Xxxxxx Xxx. Nothing contained in this Agreement
precludes you from communicating or cooperating with any federal, state or local governmental
authority or from taking any action required or by law. Xxxxxx Mae agrees that it will not
construe any assertion of privilege applicable to you individually as failure to cooperate. You
understand that Xxxxxx Mae’s privileges may only be asserted or waived by Xxxxxx Mae.
Xxxxxx Xxxxxxxxxxxx
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8. Non-Competition. Consistent with Section 3.6 of your Agreement on Ideas, Inventions and
Confidential Information, you agree that, for a period of twelve (12) months immediately following
the Termination Date (the “Restricted Period”), you will not solicit or accept employment or act in
any way, directly or indirectly, to solicit or obtain employment or work (including work as a
consultant, advisor or employee) for Xxxxxxx Mac. You acknowledge that these restrictions are
necessary to preserve the confidential and proprietary information that you have acquired in the
course of your employment with Xxxxxx Xxx and that these restrictions do not improperly inhibit
your right or ability to earn a living.
9. Confidentiality. You and your heirs, assigns and attorneys agree to keep confidential
and not to disclose any of the terms, conditions, amounts or any other details of this Agreement or
any Confidential Information (as described in Xxxxxx Mae’s Confidential Information Policy)
relating to your employment at Xxxxxx Xxx to any person or entity. However, you may make
disclosure relating to this Agreement to the following individuals, provided that they also agree
to keep the terms and conditions of this Agreement confidential: (i) to your attorney or other
representative consulted by you to understand the interpretation, application or legal effect of
this Agreement; (ii) to your accountants or financial advisors for the purpose of obtaining
financial and/or tax advice pertaining to this Agreement; (iii) to your family or (iv) to the
extent that such disclosure is required by law. You shall instruct those to whom you provide
information about this Agreement pursuant to subparts (i)-(iv) of this Paragraph that they are
obligated to keep it confidential, except as required by law. In the event that you receive a
request for disclosure of Confidential Information other than as set forth in subparts (i)-(iv),
you shall promptly notify Xxxxxx Mae and shall cooperate fully with Xxxxxx Xxx in responding or
objecting to such request. As set forth in Paragraph 7 of this Agreement, this undertaking does
not preclude you from fully cooperating with any action or investigation brought by a governmental
authority.
10. Rehire. If after the execution of this Agreement Xxxxxx Mae rehires you, you agree
that you will return to Xxxxxx Xxx all of the lump sum amount paid to you under Paragraph 2, except
for an amount equal to your base pay for the number of weeks elapsed between the Termination Date
and your rehire. In the event that you are rehired, neither the return of a portion of the
severance payment nor the fact of your rehire will impair or in any way affect the validity or
enforceability of this Agreement. You also agree that you will not seek to do work for Xxxxxx Xxx
as a contractor, consultant, or vendor for a period of six (6) months after your Termination Date.
However, you are not prohibited from seeking or accepting employment with a company that does
business with Xxxxxx Mae.
Xxxxxx Xxxxxxxxxxxx
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11. Work Products and Confidential Information.
(a) Return of Company Property. You represent and affirm that you have transferred to
your manager, or his/her designee, all documents, files, and other work product that have not
previously been relinquished, that are under your control and that have been or are generated or
acquired by you in connection with and during the period of your employment by the Company. You
acknowledge that you will not receive the consideration in Paragraph 2 unless you have returned all
Company property.
(b) Continuing Obligations Under the Code. You acknowledge that you remain bound to
the terms and conditions of the Code of Conduct, the Confidential Information Policy, and the
Intellectual Property Policy (collectively, “the Code”) applicable to all current and former Xxxxxx
Mae employees. You acknowledge your obligations under the Code: (i) to assign to Xxxxxx Xxx any
intellectual property rights that you may have in any Xxxxxx Mae Intellectual Property, as defined
in the Code, including but not limited to, any work products and innovations that relate to Xxxxxx
Mae’s business and made or conceived by you, either alone or with others, during the course of your
employment with Xxxxxx Mae; (ii) to execute all applicable documents that Xxxxxx Xxx requires to
obtain, establish, or enforce Xxxxxx Mae’s rights in Xxxxxx Xxx Intellectual Property; and (iii)
that your obligation to do so will continue beyond the voluntary or involuntary termination of
employment or contract service with Xxxxxx Mae. Notwithstanding the foregoing, you hereby
irrevocably appoint Xxxxxx Xxx as your attorney in fact (coupled with an interest) to execute any
such instruments. The foregoing powers of attorney and the obligations to assist and execute shall
survive termination of this Agreement for any reason.
(c) Other Continuing Obligations Under Federal and State Law. You acknowledge your
obligations pertaining to Xxxxxx Mae’s confidential and/or proprietary information and trade
secrets (collectively “Xxxxxx Mae Confidential Information” as defined in the Code) under federal
and applicable state laws and the Code, under which, you may not: (i) disclose Confidential
Information to third parties, (ii) remove Confidential Information from Xxxxxx Mae’s premises
(including by electronic forwarding outside of Xxxxxx Mae’s networks), or (iii) copy or duplicate
Confidential Information. Xxxxxx Xxx does not consent, either expressly or by implication, to the
disclosure or use, directly or indirectly, by you of any Confidential Information without the prior
written consent of the Executive Vice President and General Counsel. Inappropriate disclosure or
misappropriation of Confidential Information is actionable and could subject you and any parties
involved to civil money damages, including punitive damages. If Xxxxxx Mae becomes aware of any
improper use and/or disclosure of its Confidential Information or Intellectual Property, it will
take immediate legal action to protect its rights against all parties involved. Disclosure of the
terms, conditions or other details of this Agreement is governed exclusively by Paragraphs 9 and 11
of this Agreement.
Xxxxxx Xxxxxxxxxxxx
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12. Reasonable Period to Consider. You acknowledge that you have been given a period of at
least forty-five (45) calendar days to consider this Agreement, which period of time is sufficient
and satisfies any notification requirements that may exist. You have also been advised in writing
to consult with an attorney before executing this Agreement and that you have had a full and fair
opportunity to do so. Further, you understand that Xxxxxx Mae is not responsible for any expenses
you may incur in consulting an attorney. You also acknowledge receipt of the attached Statutory
Disclosures chart. By signing this Agreement, you confirm that these charts and other information
provided to you about the severance program are understandable to you.
13. Revocation. You may revoke your acceptance of this Agreement within seven (7) calendar
days following the date of execution only by providing written notice to Xxxxxxxxx X. Xxxx, Xxxxxx
Mae’s Senior Vice President and Chief Human Resources Officer at 0000 Xxxxxxxxx Xxxxxx, XX,
Xxxxxxxxxx, XX 00000, or by email to Xxxxxxxxx_X_Xxxx@xxxxxxxxx.xxx.. If you timely revoke your
execution of this Agreement, the Agreement will be null and void, and you will not receive the
consideration set forth in Paragraph 2 of this Agreement, and your employment will still terminate
and remain terminated. If mailing a revocation notice, it must be post-marked no later than the
seventh (7th) calendar day after you sign the Agreement.
14. FHFA Approval Required. The terms of this Agreement have been reviewed and approved by
the Director of FHFA.
15. Miscellaneous. The following provisions also apply:
(a) You represent that you have not assigned or transferred, or purported to assign or
transfer, to any person or entity, any claim related to Xxxxxx Mae or the Releasees, or any portion
thereof or interest therein. You understand that the rights and benefits of this Agreement are
personal to you, and are not subject to voluntary or involuntary assignment or transfer, except as
provided in the Employee Benefits Plans.
(b) The failure of either Party to insist upon strict compliance by the other Party with any
term, covenant or condition of this Agreement shall not be deemed a waiver of such terms or
conditions. Further, no waiver or relinquishment or failure to insist upon strict compliance of
any right or power under this Agreement shall be deemed a waiver or relinquishment of such right or
power at any other time.
Xxxxxx Xxxxxxxxxxxx
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(c) The lump sum payments described in Paragraph 2 will be made after legally required
deductions. Further, all lump sum payments made under this Agreement will be taxed at the IRS
supplemental rate. You further understand that Xxxxxx Mae’s practice is to prospectively allocate
such severance benefits over a period of time after your last working day, which may result in your
disqualification for unemployment benefits.
(d) If you are a Specified Employee (i.e., one of Xxxxxx Mae’s 50 most highly compensated
officers), payments of nonqualified deferred compensation that are not exempt from Section 409A of
the Internal Revenue Code (“Section 409A”) and that are made account of your separation from
service are required to be delayed six months and one day following your separation from service.
Payments from the Elective Deferred Compensation Plan are considered non-exempt, nonqualified
deferred compensation and therefore subject to the six month and one day delay in payment under
Section 409A. You are hereby advised to consult with a tax or financial advisor if you have any
questions related to Section 409A.
(e) Any controversy, dispute or claim arising out of or relating to this Agreement, breach
thereof, or any of the circumstances relating to any matter not released pursuant to Paragraphs 4
and 5 above, shall first be addressed through good faith negotiation. If the dispute cannot be
settled through negotiation, the Parties agree to mutually binding arbitration administered by
JAMS, or its successor, pursuant to its Employment Arbitration Rules & Procedures and subject to
JAMS’ Policy on Employment Arbitration Minimum Standards of Procedural Fairness. Judgment on the
Award may be entered in any court having jurisdiction.
(f) The laws of the District of Columbia shall govern this Agreement. Should any part, term
or provision of this Agreement be declared or be determined by any arbitrator to be illegal or
invalid, that part, term or provision will be deemed modified to the extent necessary to be valid
and enforceable. Should such modification not be possible, any illegal or invalid part, term or
provision will be deemed not to be a part of this Agreement and the validity of the remaining
parts, terms and provisions will not be affected.
(g) Except as provided otherwise in sub-paragraph (h) below regarding other written agreements
between the Parties, this Agreement supersedes any prior written or oral employment agreement
between you and Xxxxxx Mae, and any such agreement is terminated effective upon execution of this
Agreement. You and Xxxxxx Xxx understand and agree that the terms and conditions of this Agreement
constitute your full and complete understandings, agreements and promises to each other, and that
there are no oral or written understandings, agreements, promises or inducements made or offered
with respect to the subject matter covered in this Agreement other than those set forth in writing
in this Agreement, and this Agreement merges and supersedes any and all prior agreements,
understandings and representations on the subject matter covered herein. No modification of this
Agreement shall be valid unless in writing and signed by each of the Parties.
Xxxxxx Xxxxxxxxxxxx
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(h) The terms of the following types of prior written agreement(s) between the Parties
(if any) shall remain in effect following the execution of this Agreement: any Indemnification
Agreement, any Agreement on Ideas, Inventions and Confidential Information, any Director and
Officer Insurance applicable to you and in effect during your employment, and any written
agreements obligating you to repay Xxxxxx Xxx if your employment terminates involuntarily,
including agreements to repay loans, overpayments, sign-on bonuses, retention bonuses, special
awards and relocation costs. In the event of a conflict between the terms of this Agreement and
the terms of any other surviving written agreement between the parties, this Agreement shall
prevail. There are no oral agreements between the Parties that will remain in effect after
execution of this Agreement.
(i) After your Effective Date you will no longer be subject to the requirements of Xxxxxx
Mae’s Xxxxxxx Xxxxxxx Policy, including, if applicable, any quarterly blackout periods prohibiting
certain employees from trading in Xxxxxx Mae securities. However, after your Effective Date you
will continue to be subject to the prohibition, under the federal securities laws, against buying
or selling Xxxxxx Xxx securities (including taking a cash distribution in the Employee Stock
Ownership Plan (ESOP) or making a new election to receive dividends in stock) while you are aware
of material nonpublic information obtained from Xxxxxx Mae or any party associated with Xxxxxx Xxx.
You further acknowledge that the federal securities laws prohibit you from sharing material
nonpublic information about Xxxxxx Mae to any person who might trade on the information.
(j) You and Xxxxxx Xxx agree that the terms, conditions and details of this Agreement are
unique and are addressed to the specific circumstances of your relationship and shall in no event
provide a precedent, policy or practice for treatment of other employees of Xxxxxx Mae in the
future. By entering into this Agreement, the Company is not admitting to have violated any of your
rights, or to have violated any of the duties or obligations owed to you, or to have engaged in any
conduct in violation of the common law or the above-referenced statutes, ordinances, executive
orders or regulations. You agree that except as necessary to enforce this Agreement, or as
otherwise required by law, neither this Agreement nor any of its terms shall be offered as evidence
in any action or proceeding or utilized in any other matter whatsoever as an admission or
concession of liability or wrongdoing of any nature by the Company.
(k) This Agreement will be binding on you and Xxxxxx Xxx and upon your respective heirs,
representatives, executors, trustees, directors, employees, successors and assigns, and will run to
the benefit of you, Xxxxxx Mae and each of the Releasees and the Parties’ respective heirs,
administrators, representatives, executors, trustees, directors, employees, successors and assigns.
(l) In the event of your death, your estate or beneficiaries will receive benefits to the
extent provided under Xxxxxx Mae’s benefit plans.
Xxxxxx Xxxxxxxxxxxx
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16. Execution. You acknowledge and agree that your decision to enter into this Agreement
is wholly knowing, voluntary and absent any pressure or undue influence by Xxxxxx Xxx. You further
acknowledge that you have carefully read and fully understand all of the provisions of this
Agreement, that you have had an opportunity to review it with your attorney, and that you intend to
be legally bound by this Agreement. You represent that you have not made any alterations or
changes to this Agreement as presented to you and that you intend to be legally bound by it. If you
have made any alterations or changes to the Agreement, it will become null and void and your
employment will remain terminated as of the Termination Date.
PLEASE READ CAREFULLY. THIS AGREEMENT AND GENERAL RELEASE CONTAINS A RELEASE OF KNOWN AND UNKNOWN
CLAIMS.
Signed:
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/s/ Xxxxxx Xxxxxxxxxxxx
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February 13, 2009
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| Date | ||||||||
XXXXXX XXX: |
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Signed:
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/s/ Xxxxxxx X. Xxxxxxx, Xx.
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February 18, 2009
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| President and Chief Executive Officer | Date | |||||||
