RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
Exhibit
10.50
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 Xxxxx X. Xxxxx
(“Executive”), effective on the date the Executive
assigns a personal signature to page 6 of this Agreement.
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, if the Executive will
be render duties, responsibilities or services for the
Competitor that are of the type and nature rendered or performed
by you during the past two years of your employment with Xxxxxxx
Mac. 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
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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 Senior Vice President, Business Unit Chief
Financial Officer.
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
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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.
C. Cash Sign-On Payment. Executive will
receive a one-time cash sign-on payment in the amount of
$100,000.00 minus legally required and/or other lawful
deductions. This payment is subject to the terms and conditions
set forth in the Cash Sign-On Agreement the Executive executed
as a condition of receiving such payment.
D. Restricted Stock Unit Grant Sign-On.
Executive will receive a one-time restricted stock unit
grant with a total dollar value of $150,000.00, which is subject
to the terms of Xxxxxxx Mac’s 2004 Stock Compensation Plan,
applicable resolutions of the Compensation and Human Resources
Committee of the Board of Directors and the grant agreement
provided to the Executive.
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 &
Procedures
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, copies of which are enclosed for
Executive’s review.
Executive further agrees to be bound by, and comply fully with,
his/her
obligations under the Personal Securities Investments Policy.
Executive agrees to consult with Xxxxxxx Mac’s Chief
Compliance Officer as soon as practical prior to beginning
employment about any investments that Executive or a
“covered household member,” as that term is defined in
the Policy, may have that may be prohibited by the Policy.
Executive also agrees to disclose prior to beginning employment
any other matter or situation that may create a conflict of
interest as such term is defined in the Code.
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In addition, prior to beginning employment, Executive agrees to
disclose to Xxxxxxx Mac’s Human Resources Division the
terms of any employment, confidentiality or stock grant
agreements to which Executive may currently be subject that may
affect Executive’s future employment or recruiting
activities so that Xxxxxxx Mac may ensure that Executive’s
employment by Xxxxxxx Mac and conduct as a Xxxxxxx Mac employee
are not inconsistent with any of their terms.
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
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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/ Xxxxx X.
Xxxxx Xxxxx X.
Xxxxx
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Date: 12/19/07
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