FANNIE MAE PROFESSIONAL SERVICES AGREEMENT
Exhibit 10.23
XXXXXX XXX
PROFESSIONAL SERVICES AGREEMENT
PROFESSIONAL SERVICES AGREEMENT
THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”), entered into on February 7, 2000, but effective
as of January 1, 2000 (“Effective Date ”), is entered into by and between:
XXXXXX MAE
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XXXXX X. XXXXXXX | |
0000 Xxxxxxxxx Xxxxxx, X.X.
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0000 Xxxxxxxx Xxxxx, X.X. | |
Xxxxxxxxxx, X.X. 00000-0000
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Xxxxxxxxxx, X.X. 00000 | |
(hereinafter, “Xxxxxx Mae”)
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(hereinafter, “Contractor”) |
WHEREAS, Xxxxxx Xxx, recognizing Contractor’s unique skills, abilities and experience, desires
to retain Contractor’s professional services; and
WHEREAS, Contractor desires to perform professional services for Xxxxxx Mae, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
1. SERVICES
Contractor agrees to provide advisory services to the Chairman and Chief Executive Officer of
Xxxxxx Xxx on matters relating to Xxxxxx Mae’s corporate strategy, corporate finance, industry
relations, public policy and international securities distribution. Contractor further agrees to
continue his participation in leading cultural, philanthropic, educational and research
institutions so as to maintain and enhance Xxxxxx Mae’s visibility and leadership. Collectively,
the activities described in this Section 1 shall be deemed the “Services.”
2. COMPENSATION AND OTHER BENEFITS
(a) Compensation. Xxxxxx Mae shall pay Contractor no less than $375,000 per
year, payable on a monthly basis commencing on January 31, 2000. Contractor’s
annual compensation shall be increased (but in no case decreased) by any discretionary amounts
determined by Xxxxxx Xxx and, at the start of each calendar year after 2000, by the percentage
increase during the prior calendar year in the “Consumer Price Index for Urban Wage Earners and
Clerical Workers — All Items” compiled by the Bureau of Labor Statistics or any replacement index.
(b) Support Services and Reimbursement Arrangements. Contractor shall be provided with
the services of two Xxxxxx Mae employees as support staff, with the particular employees made
available being mutually agreed to by Xxxxxx Xxx and Contractor. On a monthly basis, Contractor
shall reimburse Xxxxxx Mae for all costs, including salary and benefits, for any services performed
for Contractor by such support staff that is unrelated to the Services. For purposes of such
reimbursement, Contractor, in good faith, shall allocate the services performed for Contractor by
such support staff between those related to the Services and those unrelated to the Services
(“Support Staff Reimbursement”). Contractor shall have access to a car and driver provided by
Xxxxxx Xxx on up to a one-half time basis, determined on a monthly basis. On a monthly basis,
pursuant to invoice by Xxxxxx Mae, Contractor will reimburse Xxxxxx Xxx, at Xxxxxx Mae’s cost, for
Contractor’s use of such car and driver (“Transportation Reimbursement” and, together with Support
Staff Reimbursement, “Contractor Staff Reimbursement”).
(c) Reimbursement of Expenses. On a monthly basis, pursuant to invoice by Contractor,
Xxxxxx Mae will reimburse Contractor for out-of-pocket travel and entertainment expenses (other
than Contractor Staff Reimbursement expenses) incurred by him in his performance of the Services.
Contractor will incur and request reimbursement for such expenses in accordance with the Xxxxxx Xxx
standards and
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procedures that applied to Contractor during his employment at Xxxxxx Mae. Contractor will bear all
other costs of providing the Services, including but not limited to rent and other office expenses,
phone charges, cost of the purchase, maintenance and operation of computers, fax machines and other
office equipment and tax and financial planning expenses. To the extent Xxxxxx Xxx furnishes
Contractor with office equipment, Contractor will reimburse Xxxxxx Mae at Xxxxxx Mae’s adjusted
book cost for such equipment.
(d) Office Furniture. Xxxxxx Mae shall provide Contractor with such office furniture
previously used by him as Chairman of the Executive Committee during 1999 that is owned by Xxxxxx
Xxx as he chooses in exchange for a $2,000 contribution by Contractor to a charity of his choice.
(e) In-Kind Items. To the extent that Xxxxxx Mae is unable to provide Contractor with
any in-kind item required to be provided to him under this Agreement, Xxxxxx Xxx shall make a cash
payment to Contractor equal to the cost of obtaining such item from a third-party vendor.
(f) General Policy for Former Senior Executives. If Xxxxxx Mae adopts a general policy
of providing former senior executives with post-retirement office space, office support or like
items, Contractor, at his election, may elect to terminate this Agreement and receive such items
pursuant to such policy.
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3. OWNERSHIP RIGHTS; RIGHTS TO INNOVATIONS
(a) Innovations. The term “Innovation” shall mean computer software (including source
and object code), databases, documentation, reports, processes, procedures, improvements,
inventions, discoveries, concepts, know-how, ideas, designs, videos, methods, methodologies,
developments, drawings, notes and materials along with any modifications, improvements or
derivative works relating thereto, produced, created, conceived or worked on by Contractor, either
solely or jointly with others, which result from, relate to or are otherwise connected with the
Services rendered pursuant to this Agreement.
(b) Intellectual Property Rights. The term “Intellectual Property Rights” shall mean
all copyrights, patents, patent rights, trademarks, service marks, trade secrets and other
proprietary, intellectual, industrial and moral rights of whatever nature, including all
applications therefore.
(c) Exclusive Property Rights of Xxxxxx Xxx. All Innovations produced or created
pursuant to this Agreement, whether solely by Contractor, or jointly with others, shall belong
solely and exclusively to Xxxxxx Mae, which will possess all ownership rights in and to such
Innovations and all Intellectual Property Rights (as defined above)
associated therewith. Xxxxxx
Xxx (including its successors and assigns) shall have the right to obtain and to hold in its own
name all such patents, copyrights, registrations or such other Intellectual Property Rights and
protection as may be appropriate.
(d) Assignment. To effectuate the foregoing, it is expressly understood and
acknowledged that all Innovations shall be works made for hire under the U.S. copyright laws and
that all Intellectual Property Rights in and to each Innovation shall vest in Xxxxxx Mae on the
date such Innovation is created. In the event that, under applicable
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law, all Intellectual Property Rights do not vest in Xxxxxx Xxx, Contractor hereby irrevocably
transfers, conveys and assigns in perpetuity to Xxxxxx Mae (including its successors and assigns)
any and all present and future Intellectual Property Rights which such persons may have in or to
any Innovations. Contractor irrevocably waives all moral rights in, and all other Intellectual
Property Rights to, all Innovations.
(e) Assistance. Contractor agrees to execute applications, assignments and other
documents and to render all other reasonable assistance requested by Xxxxxx Xxx, at Xxxxxx Mae’s
expense, to enable Xxxxxx Mae to obtain, register and enforce domestic and foreign patents,
copyrights, trademarks and other Intellectual Property Rights for the Innovations. Notwithstanding
the foregoing, Contractor hereby irrevocably appoints Xxxxxx Xxx as 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.
(f) No License. Except to the extent necessary for Contractor to perform the Services,
no license to Contractor under any Intellectual Property Rights which is now or may hereafter be
owned by Xxxxxx Xxx is either granted or implied by this Agreement.
4. PROPRIETARY INFORMATION
(a) Proprietary Information. “Proprietary Information” shall mean, (i) information
disclosed by or on behalf of either party relating to product development strategy and activity,
corporate assessments and strategic plans, financial and statistical information, corporate
developments, accounting information, software, systems, processes, formulae, inventions,
discoveries, technical know-how, procedures, pricing, marketing strategies, policies, guidelines,
practices, suppliers, prospects, customers, disputes or litigation, (ii) other confidential,
proprietary or trade secret information
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disclosed by or on behalf of such person or entity that is identified in writing as such at the
time of its disclosure, (iii) all other confidential, proprietary or trade secret information
disclosed by or on behalf of such person or entity, which a reasonable person employed in the
mortgage industry would recognize as such, (iv) information relating to such person’s or entity’s
employees, contractors or customers which, if released, would cause an unlawful or actionable
invasion of privacy, and (v) compilations or summaries of information or data that is itself
Proprietary Information. Without limiting the generality of the foregoing, Contractor acknowledges
and agrees that (x) any computer software and programs (including object and source codes),
computer software and data base technologies, systems, structures and architectures provided to
Contractor by or on behalf of Xxxxxx Mae and (y) all Innovations (as defined above) are the
Proprietary Information of Xxxxxx Xxx. The terms of this Agreement (as well as all information
regarding the negotiation of this Agreement) shall be the Proprietary
Information of both parties.
(b) Protection. All Proprietary Information disclosed by one party to the
other in the course of performing under this Agreement or to which the other gains access in
connection with this Agreement shall be deemed to be the property of the disclosing party, or
the appropriate third-party owner, as the case may be. The receiving party agrees to (i) receive
such Proprietary Information in confidence, (ii) use reasonable efforts to maintain the
confidentiality of such Proprietary Information and not disclose such Proprietary Information to
third parties (except for the receiving party’s employees, agents and subcontractors who have a
need to know, are under a duty of nondisclosure with respect to such information, and are acting
for the sole benefit of the receiving
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party), which efforts shall accord such Proprietary Information at least the same level of
protection against unauthorized use and disclosure that the receiving party customarily accords to
the receiving party’s own information of a similar nature, but in no event less than a reasonable
standard of care, (iii) use or permit the use of such Proprietary Information solely in accordance
with the terms of this Agreement, and (iv) promptly notify the disclosing party in writing of any
loss or unauthorized use, disclosure or access of the disclosing party’s Proprietary Information of
which the receiving party becomes aware. Neither party shall take any physical or electronic forms
of Proprietary Information from the other’s offices (or make copies of such Proprietary
Information) without the other party’s written permission. Each party agrees to abide by and
reproduce and include any restrictive legend or proprietary rights notice that appears in or on any
Proprietary Information of the other party (or other third-party owner) that such party is
authorized to reproduce. Each party also agrees not to remove, alter, cover or distort any
trademark, trade name, copyright or other proprietary rights notices, legends, symbols or labels
appearing on or in any Proprietary Information of the other party (or other third-party owner).
(c) Exclusions. The restrictions on use and disclosure set forth above shall not
apply when, and to the extent that, the receiving party can demonstrate that the Proprietary
Information: (i) is or becomes generally available to the public through no fault of the receiving
party (or anyone acting on such party’s behalf); (ii) was previously rightfully known to the
receiving party free of any obligation to keep it confidential, (iii) is subsequently disclosed to
the receiving party by a third party who may rightfully transfer and disclose such information
without restriction and free of any obligation to
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keep it confidential; (iv) is independently developed by the receiving party or a third party
without reference to the disclosed Proprietary Information; or (v) is required to be disclosed by
the receiving party as a matter of law or compulsory process, provided that in the case of this
paragraph (v), the receiving party uses all reasonable efforts to provide the disclosing party with
at least 10 days’ prior notice of such disclosure and the receiving party discloses only that
portion of the Proprietary Information that is legally required to be furnished pursuant to the
opinion of legal counsel of the receiving party. Notwithstanding the foregoing, neither party shall
disclose, or permit the disclosure of, the terms or conditions of this Agreement without the prior
written consent of the other party, except (A) as provided in subparagraph (v) above, (B) to the
extent necessary to permit the exercise of rights or the performance of obligations under this
Agreement, or (C) to seek advice from attorneys, accountants or other professional advisors.
5. TERM AND TERMINATION
(a) Term. This Agreement shall commence on the Effective Date and shall initially
continue and remain in force for three (3) years (the “Initial Term”). The Initial Term shall be
extended automatically for one additional day for each day that elapses during the Term (each an
“Extension,” and the Initial Term, as so extended, the “Term”). Xxxxxx Mae, for any reason, may
eliminate any further Extension of the then-existing Term by providing a written notice of such
elimination to Contractor. Xxxxxx Xxx may terminate the Term immediately for Cause, as more fully
described in Section 5(b)(i). Contractor may terminate the Term on written notice to Xxxxxx Mae at
any time.
(b) Termination.
(i) Xxxxxx Xxx may terminate this Agreement prior to the expiration of its Term for Cause,
which shall mean that Contractor has materially breached this
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Agreement by engaging in dishonest or fraudulent actions or willful misconduct that is materially
injurious to the business of Xxxxxx Mae. Notwithstanding the foregoing, this Agreement shall not be
deemed to have been terminated for Cause without (x) reasonable notice from Xxxxxx Xxx to
Contractor setting forth the reasons for Xxxxxx Mae’s intention to terminate for Cause, (y) an
opportunity for Contractor, together with his counsel, to be heard before the Chairman and Chief
Executive Officer of Xxxxxx Xxx and (z) delivery to Contractor of a notice of termination from the
Chairman and Chief Executive Officer stating his good faith opinion that Contractor was guilty of
the conduct set forth in this Section 5(b)(i) and specifying the particulars thereof in detail. No
act or failure to act will be considered ‘willful’ unless it is done, or omitted to be done, by
Contractor in bad faith or without reasonable belief that his action of omission was in, or not
opposed to, the best interests of Xxxxxx Mae.
(ii) This Agreement will terminate on the death of Contractor In the event that, during the
Term of this Agreement, Contractor is prevented from performing his duties hereunder by reason of
serious illness or incapacity, Xxxxxx Xxx shall have the right, on 60 days’ prior written notice to
Contractor, to terminate this Agreement.
(c) Return of Property Upon Termination. Contractor or his personal representative
shall deliver to Xxxxxx Mae, within 10 days of termination of this Agreement or, in the case of
termination by death, within a reasonable time, all (i) work in progress under this Agreement, (ii)
Xxxxxx Xxx property and (iii) materials containing or embodying Proprietary Information and
Innovations. Contractor will make or retain no partial or entire copies of any of the foregoing and
will destroy all computer files containing such data and materials. Xxxxxx Mae shall deliver all
Contractor property to
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Contractor or his personal representative within 10 days of termination of this Agreement.
6. NON-COMPETITION
Considering the highly confidential and proprietary nature of Xxxxxx Mae’s information to
which Contractor is likely to have access hereunder and the highly competitive marketplace in which
Xxxxxx Mae participates, Contractor agrees that until one year after the termination of this
Agreement, he will not knowingly provide services to the detriment of Xxxxxx Xxx that are directly
or indirectly for the benefit of any entity (or affiliate of an entity) engaged directly or
indirectly in competition with Xxxxxx Mae, including without limitation the Federal Home Loan
Mortgage Corporation (“Xxxxxxx Mac”). In the event Contractor is uncertain as to whether an entity
engages in competition with Xxxxxx Mae, he shall seek a determination by Chairman and Chief
Executive Office of Xxxxxx Xxx, whose decision shall be binding. The foregoing obligation is in
addition to, and not in substitution for, Contractor’s obligations (a) hereunder to maintain Xxxxxx
Mae Proprietary Information in confidence and (b) under the Agreement on Ideas, Inventions and
Confidential Information executed by Xxxxxx Xxx and Contractor when he was an employee of Xxxxxx
Mae.
7. LEGAL FEES AND INDEMNIFICATION
(a) Legal Fees. Xxxxxx Xxx shall pay Contractor’s reasonable legal fees and
disbursements incurred in the negotiation of this Agreement or in defending (or participating in)
any challenge to (or investigation of) this Agreement by any third party.
(b) Indemnification. Xxxxxx Mae shall exonerate, indemnify, hold harmless and defend
Contractor (and make advances of expenses in connection therewith) for
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actions taken or omitted pursuant to this Agreement to the same extent as for actions taken or
omitted when he was Chairman and Chief Executive Officer of Xxxxxx Xxx.
8. GENERAL TERMS AND CONDITIONS
(a) Independent Contractor. During the term of this Agreement, Contractor shall at all
times be and act as an independent contractor, and not as an employee of Xxxxxx Mae. Contractor
shall not represent otherwise to any third party. Except by reason of his prior employment by
Xxxxxx Xxx, Contractor will not participate in any employee benefit program offered now or in the
future by Xxxxxx Mae to its employees. In making payments to Contractor of the compensation
described above, Contractor will not withhold taxes of any kind, including income taxes, FICA, FUTA
or other statutory withholding or employment taxes applicable to employees. To the extent required
by law, Xxxxxx Xxx will report to the Internal Revenue Service and other taxing authorities all
payments made to Contractor. In consultation with Xxxxxx Mae, Contractor, as an independent
contractor, will be responsible for filing all lobbying disclosure or other forms, if any, required
to be filed by law as a result of the Services performed by Contractor.
(b) Effect on Other Benefits. This Agreement shall not affect Contractor’s rights to
payments under Xxxxxx Mae’s Executive Pension Plan or to any other benefits payable to Contractor
by reason of his prior employment by Xxxxxx Mae.
(c) Assignment. This Agreement may not be assigned by Contractor by operation of law
or otherwise.
(d) Taxation. Xxxxxx Xxx is exempt from all state and local taxes, except
certain taxes on real property, pursuant to Section 309(c)(2) of the Federal National Mortgage
Association Charter Act, 12 U.S.C. § 1723a(c)(2). Xxxxxx Mae will not be
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responsible for any such taxes paid by Contractor on its behalf, and Contractor will not xxxx or
charge Xxxxxx Mae for said taxes.
(e) Force Majeure. Neither party shall be responsible for delays or failure of
performance resulting from acts beyond the reasonable control of such party (such as acts of God,
riots, acts of war and epidemics, power failures, earthquakes or other disasters) providing such
delay or failure of performance could not have been prevented by reasonable precautions and cannot
reasonably be circumvented by such party through the use of alternate sources, workaround plans or
other means.
(f) No Implied Waiver. No term, provision or clause of this Agreement shall be deemed
waived and no breach excused unless such waiver or consent shall be in writing and executed by a
duly authorized representative of the party to be bound thereby. Any consent by any party to, or
waiver of, a breach by the other, expressed or implied, shall not constitute a consent to, waiver
of or excuse for any other different or subsequent breach.
(g) Governing Law; Severability. This Agreement shall be governed by and construed in
accordance with the laws of the District of Columbia, without reference to or application of its,
or any otherwise applicable, conflicts of law principles. In the event that any provision of this
Agreement shall be invalid and legally unenforceable, the parties shall replace that provision with
one that most nearly reflects their original intentions and is valid and enforceable under
applicable law, and the same shall not affect in any respect whatsoever the validity and
enforceability of the remainder of this Agreement.
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(h) Jurisdiction and Venue. Any and all disputes between the parties that cannot
be settled by mutual agreement shall be resolved solely and exclusively in the courts located
within the District of Columbia, and Contractor hereby consents to the jurisdiction of such courts
and irrevocably waives any objections thereto, including without limitation, on the basis of
improper venue or forum non conveniens.
(i) Injunctive Relief. Contractor understands and agrees that Xxxxxx Xxx will suffer
irreparable harm in the event that Contractor breaches any of the obligations imposed by Section 3
(Ownership Rights; Rights to Innovations), Section 4 (Proprietary Information) or Section 6
(Non-Competition), of this Agreement and that monetary damages will be inadequate to compensate
Xxxxxx Mae for any such breach.
Accordingly, Contractor agrees that, in the event of a breach or
threatened breach of any of such provisions, Xxxxxx Xxx, in addition to and not in limitation of
any other rights, remedies or damages available to Xxxxxx Mae at law or in equity, shall be
entitled to preliminary and permanent injunctive relief in order to prevent or restrain any such
breach without the necessity of proving damages or irreparable harm, or posting bond. In the event
of any violation of Section 6 (Non-Competition), the time period therein shall be extended for the
period of breach (but not more than an additional 12 months).
(j) Notice. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been received by a party when
actually received in the case of hand delivery (against a signed receipt) or overnight delivery, or
five days after mailing by first-class mail, postage paid, to the other party at the address shown
on page one hereof, or to such other address as a party may designate by appropriate notice in
writing.
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(k) Examination of Books and Records. Xxxxxx Xxx shall have the right to examine
Contractor’s books, records and other documentation, in each case to the extent relating to the
Services (for billing or other reasonable purposes). Contractor shall make such information
available to Xxxxxx Mae during normal business hours upon reasonable notice to Contractor.
(1) Code of Business Conduct. Contractor shall comply with Xxxxxx Mae’s Code of
Business Conduct (“Code”), as the same may be amended from time to time, for the duration of this
Agreement. A copy of the Code is attached hereto as Schedule A. Contractor shall execute the
compliance certification form attached hereto as Schedule B (Code of Business Contract Compliance
Certification), and such certification shall be incorporated herein and made a part of this
Agreement. If at any time Contractor believes that he has not complied with the Code or become
aware of an incident of non-compliance, Contractor shall promptly notify Xxxxxx Mae, in writing,
directing its notice to the Office of Corporate Justice and
Employment Practices at 0000 Xxxxxxxxx
Xxxxxx, X. X., Xxxxxxxxxx, X.X. 00000; or via facsimile at (000) 000-0000.
(m) Survival. The terms of Section 3 (Ownership Rights; Rights to
Innovations), Section 4 (Proprietary Information), Section 6 (Non-Competition) and Section 7
(Legal Fees and Indemnification), as well as any other provisions which contemplates performance
or observance subsequent to any termination or expiration of this Agreement, shall survive
termination or expiration of this Agreement for any reason and shall continue in full force and
effect.
(n) Amendment. This Agreement may be amended only by a writing executed by both
parties.
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(o) Construction. No provision of this Agreement shall be interpreted or
construed against any party because that party or its legal representative drafted that provision.
The captions and headings of the Sections of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement. Unless the context of this Agreement
clearly requires otherwise: (i) references to the plural include the singular, the singular the
plural, and the part the whole, (ii) references to one gender include all genders, (iii) “or” has
the inclusive meaning frequently identified with the phrase “and/or,” (iv) “including” has the
inclusive meaning frequently identified with the phrase “including but not limited to” or
“including without limitation,” (v) references to “hereunder,” “herein” or “hereof relate to this
Agreement as a whole, and (vi) the terms “dollars” and
“$” refer to United States dollars. Any
accounting term used herein without specific definition shall have the meaning ascribed thereto by
U.S. generally accepted accounting practices. Section, subsection, paragraph, subparagraph, exhibit
and schedule references are to this Agreement as originally executed unless otherwise specified.
Any reference herein to any statute, rule, regulation or agreement, including this Agreement, shall
be deemed to include such statute, rule, regulation or agreement as it may be modified, varied,
amended or supplemented from time to time. Any reference herein to any person shall be deemed to
include the heirs, personal representatives, successors and permitted assigns of such person.
(p) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which taken together shall constitute a
single agreement.
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(q) Entire Agreement. This Agreement, together with any exhibits, addenda,
schedules and amendments relating hereto, sets forth the entire understanding between Xxxxxx Xxx
and Contractor with respect to the Services. There are no promises, commitments, representations or
warranties relied upon by either party which are not contained herein.
(r) Facsimiles. The parties acknowledge and agree that copies of executed
documents received via facsimile shall be deemed to be originals for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
Agreed to and Accepted by:
XXXXXX MAE | ||||||
/s/ Xxxxx X. Xxxxxxx | ||||||
By:
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/s/ Xxxxxx X. Xxxxx | Date : 2-8-00 | ||||
Xxxxxx
X. Xxxxx, |
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Senior
Vice President, |
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Human
Resources |
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Date:
February 7, 2000 |
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PERSEUS
0000 Xxxxxxxxxxxx Xxxxxx, XX, Xxxxx 000 Xxxxxxxxxx, XX 00000-0000
Telephone: 000 000 0000 Facsimile: 202 429 0588
Telephone: 000 000 0000 Facsimile: 202 429 0588
April 18, 2005
Xx. Xxxxxxx X. Xxxxxx
Chairman of the Board of Directors
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Chairman of the Board of Directors
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Dear Xxxxx:
I have been very pleased to have been able to advise Xxxxxx Mae on a wide range of issues since my
years as an employee came to an end in 1999. I believe this continued association has gone well
beyond what would be expected of a retired CEO.
I have watched closely the many tough decisions that the company has confronted recently involving
capital, real estate, expenses, and even the suspension of management bonuses. I also noted that
the press has reported that the company is reducing expenditures for lobbyists and consultants. I
have concluded that, in the context of my ongoing advisory assistance, I should do my part to
assist in Xxxxxx Mae’s efforts to reduce expenditures at this difficult time.
Therefore, I am voluntarily taking the following steps with respect to my consulting agreement with
the company in order to reduce and streamline our relationship:
§ | A temporary reduction of my consulting payments to $300,000 per year, which is a 30.2% reduction from what I am currently being paid, until the company files its restated financial statements with the SEC. | ||
§ | A reduction in the notice period for termination under the consulting agreement from three years to two years, to provide greater flexibility for the company. | ||
§ | Termination of all of the administrative support and automobile transportation which the company provides to me, including support subject to my reimbursement. |
Transition arrangements for the Xxxxxx Mae personnel will have to be worked out with the Xxxxxx Xxx
Human Resources Department. Whether the relevant employees decide to return to traditional Xxxxxx
Mae positions, or to terminate Xxxxxx Xxx employment and work with me, my goal would be to complete
the transition in forty-five days and in any event by June 30, 2005.
Under my consulting agreement, I have no obligation to take any of the above-described actions. As
you know, the consulting agreement does not provide for Company amendments except by mutual
agreement, which this letter represents.
We both acknowledge that I may serve on the board of directors of enterprises that have business
with Xxxxxx Mae. Consistent with my past approach, I agree that I will recuse myself from the
deliberations of any such board that relate to Xxxxxx Xxx business, and in the case of any such
enterprise I will not advise with respect to, or otherwise assist or participate in, any such
dealings. Xxxxxx Mae agrees that the term “Services” as used in my consulting agreement does not
include any services that pertain to the business (i) of any enterprise as to which I am a member
of the board of directors or similar body, or (ii) for which I serve as an advisor.
I believe Xxxxxx Mae’s role in the American housing financial system is absolutely vital, and I
look forward to continuing to be of assistance to the board and to management and to fulfilling
my obligations under the consulting agreement.
Sincerely,
/s/ Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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ACKNOWLEDGED AND AGREED: |
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/s/ Xxxxxxx X. Xxxxxx |
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Xxxxxxx X. Xxxxxx |
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Chairman of the Board of Directors |
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Xxxxxx Mae |