Federal Home Loan Mortgage Corp 8-K, filed Feb 21, 2020
Federal Home Loan Mortgage Corp (FMCC)
About this 8-K
Federal Home Loan Mortgage Corp filed this 8-K on February 21, 2020, reporting on events of February 19, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
Freddie Mac
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation) has entered into a new compensation arrangement with Donald F. Kish in recognition of his service as interim Chief Financial Officer. The arrangement was approved by the Federal Housing Finance Agency (FHFA), as Conservator, on February 19, 2020. Pursuant to this arrangement, Mr. Kish will accrue a special award at a rate of $50,000 per month, beginning December 19, 2019 and continuing through the last business day prior to the date on which a permanent Chief Financial Officer commences employment at Freddie Mac (CFO Employment Date). The accrual amount will be pro-rated for any partial month of service by Mr. Kish as interim Chief Financial Officer. Mr. Kish will receive the award in two equal installments: the first shortly after the CFO Employment Date and the second approximately 60 days later. To be eligible to receive the award, Mr. Kish must remain an employee at the time each installment is payable, except in certain termination events including death, disability, and involuntary non-performance-based termination by Freddie Mac.
Other than as described above, the award does not affect Mr. Kish’s compensation arrangement as described in Freddie Mac’s Annual Report on Form 10-K filed on February 13, 2020.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The exhibits listed in the Exhibit Index below are being filed as part of this Current Report on Form 8-K.
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Exhibit Number
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Description of Exhibit
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| 10.1 |
Memorandum Agreement, dated February 19, 2020, between Freddie Mac and Donnie Kish †
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| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document)
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| † | This exhibit is a management contract or compensatory plan, contract, or arrangement. |
Freddie Mac Form 8-K
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FEDERAL HOME LOAN MORTGAGE CORPORATION |
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| By: |
/s/ David M. Brickman |
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| David M. Brickman |
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| Chief Executive Officer |
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Date: February 21, 2020
Freddie Mac Form 8-K
Exhibit 10.1
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| Confidential |
| Date | To | |
| February 19, 2020 | Donnie Kish | |
| From | ||
| David Brickman | ||
| Subject | ||
| Special Award for Your Service as Interim Chief Financial Officer | ||
This memorandum sets forth Freddie Mac’s agreement to provide to you a special award in recognition of your service as interim Chief Financial Officer (“CFO”) pursuant to the terms detailed below. This award has been approved by both the Compensation and Human Capital Committee and FHFA.
| I. | Terms of This Special Award |
You are eligible to receive a special award that will be calculated as follows:
| • | The award will accrue at a rate of $50,000 per month, beginning December 19, 2019 and continuing through the last business day prior to the date on which a permanent CFO commences employment at Freddie Mac (the “CFO Employment Date”). As a result, the total amount of the award will not be determined until a permanent CFO begins employment. |
| • | The amount accrued in a partial month will be pro-rated using our standard payroll methodology. |
| • | Payment of the total award will occur in two equal installments. Except as described below in “Treatment of Your Award in the Event of Termination of Employment,” your receipt of each installment is subject to the following conditions: |
| • | First Installment – Continued employment through the CFO Employment Date; and, |
| • | Second Installment – Continued employment through the 60th calendar day following the CFO Employment Date. |
| • | Payment will occur via your paycheck as soon as administratively possible following, as applicable, the CFO Employment Date and the 60th calendar day following the CFO Employment Date. |
| II. | Treatment of Your Special Award in the Event of Termination of Employment |
Severance Eligible Termination (Excluding Performance-Based): If Freddie Mac terminates your employment as a result of a severance eligible event (other than a performance-based termination) and you receive severance pay, all accrued and unpaid portions of the award will be paid via Payroll as soon as administratively possible after your termination date, subject to prior FHFA approval, as appropriate.
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Performance-Based Termination: If Freddie Mac terminates your employment based on management’s determination in its sole discretion that your job performance, attendance or conduct does not meet expectations for your role, or that it no longer maintains a high level of confidence in your decisions, judgment, and/or conduct, you forfeit all unpaid portions of the award.
Voluntary Termination (including Retirement) or Involuntary Termination for Cause: If you voluntarily terminate your employment for any reason other than death or disability or are involuntarily terminated due to the occurrence of one or more of the Forfeiture Events described in the Recapture and Forfeiture Agreement, all unpaid portions of the special award will be forfeited.
Death or Long-Term Disability: If your employment with Freddie Mac terminates due to either death or long-term disability, all accrued and unpaid portions of the special award will be paid via Payroll as soon as administratively possible after the date of death or termination.
Under no circumstances will you be you obligated to repay Freddie Mac any portion of the special award that you received prior to your termination date.
| III. | General |
Receipt of this award does not preclude you from receiving an award under any other element of Freddie Mac’s compensation program.
Amounts paid will not be considered compensation for purposes of the tax qualified Thrift/401(k) Savings Plan or the non-qualified Supplemental Executive Retirement Plan.
Freddie Mac reserves the right, subject to FHFA approval, to modify the terms and conditions set forth herein so long as such modifications reasonably and in good faith are not detrimental to the rights of the employee.
The provisions of this agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Virginia, without regard to its conflict-of-laws principles. Nothing in the agreement shall be construed or interpreted to be a contract of employment for any specified duration and you and Freddie Mac each have the right to terminate the employment relationship at any time for any lawful reason.
Confidential