RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
Exhibit
10.7
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 Xxxxxxx X. Xxxxxxxx
(“Executive”), effective as of July 20, 2009.
| I. | 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 Xxx (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.
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.
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 during 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.
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 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 provide the Xxxxxxx Mac employee has notified
Xxxxxxx Mac of their intent to terminated their employment with
Xxxxxxx Mac.
| IV. | Treatment of Confidential Information |
A. Non-Disclosure.
Executive recognizes that Xxxxxxx Mac is engaged in an extremely
competitive business and that, in the course of performing
Executive’s job duties, Executive will have access to and
gain knowledge about Confidential Information. Executive further
recognizes the importance of carefully protecting this
Confidential Information in order for Xxxxxxx Mac to compete
successfully. Therefore, Executive agrees that Executive will
neither divulge Confidential Information to any persons,
including to other Xxxxxxx Mac employees who do not have a
Xxxxxxx Mac business-related need to know, nor make use of the
Confidential Information for the Executive’s own benefit or
for the benefit of anyone else other
than Xxxxxxx Mac. Executive further agrees to take all
reasonable precautions to prevent the disclosure of Confidential
Information to unauthorized persons or entities, and to comply
with all Company policies, procedures, and instructions
regarding the treatment of such information.
B. Return of
Materials. Executive agrees that upon termination of
Executive’s employment with Xxxxxxx Mac for any reason
whatsoever, Executive will deliver to Executive’s immediate
supervisor all tangible materials embodying Confidential
Information, including, but not limited to, any documentation,
records, listings, notes, files, data, sketches, memoranda,
models, accounts, reference materials, samples, machine-readable
media, computer disks, tapes, and equipment which in any way
relate to Confidential Information, whether developed by
Executive or not. Executive further agrees not to retain any
copies of any materials embodying Confidential Information.
C. Post-Termination
Obligations. Executive agrees that after the termination of
Executive’s employment for any reason, Executive will not
use in any way whatsoever, nor disclose any Confidential
Information learned or obtained in connection with
Executive’s employment with Xxxxxxx Mac without first
obtaining the written permission of the Executive Vice President
of Human Resources of Xxxxxxx Mac. Executive further agrees
that, in order to assure the continued confidentiality of the
Confidential Information, Xxxxxxx Mac may correspond with
Executive’s future employers to advise them generally of
Executive’s exposure to and knowledge of Confidential
Information, and Executive’s obligations and
responsibilities regarding the Confidential Information.
Executive understands and agrees that any such contact may
include a request for assurance and confirmation from such
employer(s) that Executive will not disclose Confidential
Information to such employer(s), nor will such employer(s)
permit any use whatsoever of the Confidential Information. To
enable Xxxxxxx Mac to monitor compliance with the obligations
imposed by this Agreement, Executive further agrees to inform in
writing Xxxxxxx Mac’s Executive Vice President of Human
Resources of the identity of Executive’s subsequent
employer(s) and Executive’s prospective job title and
responsibilities prior to beginning employment. Executive agrees
that this notice requirement shall remain in effect for twelve
(12) months following the termination of Executive’s
Xxxxxxx Mac employment.
D. Ability to Enforce
Agreement and Assist Government Investigations. Nothing in
this Agreement prohibits or otherwise restricts you from:
(1) making any disclosure of information required by law;
(2) assisting any regulatory or law enforcement agency or
legislative body to the extent you maintain a legal right to do
so notwithstanding this Agreement; (3) filing, testifying,
participating in or otherwise assisting in a proceeding relating
to the alleged violation of any federal, state, or local law,
regulation, or rule, to the extent you maintain a legal right to
do so notwithstanding this Agreement; or (4) filing,
testifying, participating in or otherwise assisting the
Securities and Exchange Commission or any other proper authority
in a proceeding relating to allegations of fraud.
| V. | Consideration Given to Executive |
In exchange for agreeing to be bound by the terms, conditions,
and restrictions stated in this Agreement, Xxxxxxx Mac will
provide the Executive with the following consideration, each of
which itself is adequate consideration for Executive’s
agreement to be bound by the provisions of this Agreement:
A. Compensation Agreement.
Xxxxxxx Mac has agreed to compensate Executive as Chief
Executive Officer pursuant to the terms and conditions set forth
in the July 20, 2009 memorandum agreement between Executive
and Xxxxxxx Mac.
X. Xxxxxxxxx. In the
event the Executive’s employment is terminated pursuant to
circumstances that qualify the Executive for Severance, then the
Executive shall receive Severance and other benefits in an
amount equal to that provided to Xxxxxxx Mac’s senior
executive officers pursuant to the terms of an applicable
severance policy in effect as of the date of Executive’s
termination of employment. Executive’s receipt of Severance
is contingent on any legally required approval from the Director
of the Federal Housing Finance Agency.
| VI. | Compliance with the Code of Conduct and Corporate Policies |
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.
VII. 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 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.
VIII. Affect
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 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 your 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.
| IX. | 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.
| X. | Enforcement |
A. Executive acknowledges
that Executive may be subject to discipline, up to and including
termination of employment, for Executive’s breach or threat
of breach of any provision of this Agreement.
B. Executive agrees that
irreparable injury will result to Xxxxxxx Mac’s business
interests in the event of breach or threatened breach of this
Agreement, the full extent of Xxxxxxx Mac’s damages will be
impossible to ascertain, and monetary damages will not be an
adequate remedy for Xxxxxxx Mac. Therefore, Executive agrees
that in the event of a breach or threat of breach of any
provision(s) of this Agreement, Xxxxxxx Mac, in addition to any
other relief available, shall be entitled to temporary,
preliminary, and permanent equitable relief to restrain any such
breach or threat of breach by Executive and all persons acting
for and/or
in concert with Executive, without the necessity of posting bond
or security, which Executive expressly waives.
C. Executive agrees that each
of Executive’s obligations specified in this Agreement is a
separate and independent covenant, and that all of
Executive’s obligations set forth herein shall survive any
termination, for any reason, of Executive’s Xxxxxxx Mac
employment. To the extent that any provision of this Agreement
is determined by a court of competent jurisdiction to be
unenforceable because it is overbroad, that provision shall be
limited and enforced to the extent permitted by applicable law.
Should any provision of this Agreement be declared or determined
by any court of competent jurisdiction to be unenforceable or
invalid under applicable law, the validity of the remaining
obligations will not be affected thereby and only the
unenforceable or invalid obligation will be deemed not to be a
part of this Agreement.
D. This Agreement is governed
by, and will be construed in accordance with, the laws of the
Commonwealth of Virginia, without regard to its or any other
jurisdiction’s conflict-of-law provisions. Executive agrees
that any action related to or arising out of this Agreement
shall be brought exclusively in the United States District Court
for the Eastern District of Virginia, and Executive hereby
irrevocably consents to personal jurisdiction and venue in such
court and to service of process by United States Mail or express
courier service in any such action.
E. If any dispute(s) arise(s)
between Xxxxxxx Mac and Executive with respect to any matter
which is the subject of this Agreement, the prevailing party in
such dispute(s) shall be entitled to recover from the other
party all of its costs and expenses, including its reasonable
attorneys’ fees.
Executive has been advised to discuss all aspects of this
Agreement with Executive’s private attorney. Executive
acknowledges that Executive has carefully read and understands
the terms and provisions of this Agreement and that they are
reasonable. Executive signs this Agreement voluntarily and
accepts all obligations contained in this Agreement in exchange
for the consideration to be given to Executive as outlined
above, which Executive acknowledges is adequate and
satisfactory, and which Executive further acknowledges Xxxxxxx
Mac is not otherwise obligated to provide to Executive. Neither
Xxxxxxx Mac nor its agents, representatives, directors, officers
or employees have made any representations to Executive
concerning the terms or effects of this Agreement, other than
those contained in this Agreement.
| By: |
/s/ Xxxxxxx Xxxxx Xxxxxxxx, Xx.
|
Date: | 7/21/09 | |||
| Xxxxxxx X. Xxxxxxxx |
