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Exhibit 10.2
INDEMNIFICATION AGREEMENT
("Agreement")
between
FEDERAL HOME LOAN MORTGAGE CORPORATION
("Freddie Mac") and ____________________
("Indemnitee")
WHEREAS, the
inability to attract and retain qualified persons as directors and
officers is detrimental to the best interests of Freddie
Mac’s stockholders and Freddie Mac should act to assure such
persons that there will be adequate certainty of protection through
insurance and indemnification against risks of claims and actions
against them arising out of their service to and activities on
behalf of Freddie Mac; and
WHEREAS, Freddie Mac
has adopted provisions in its Bylaws providing for indemnification
of its officers and directors against all liabilities reasonably
incurred in connection with proceedings in which they are involved
as a result of their service to Freddie Mac, except such
liabilities as are incurred because of the indemnitee’s
willful misconduct, knowing violation of criminal law or receipt of
an improper personal benefit, and Freddie Mac wishes to clarify and
enhance the rights and obligations of Freddie Mac and Indemnitee
with respect to indemnification; and
WHEREAS, Freddie Mac
has elected to follow the corporate governance practices and
procedures of the law of the Commonwealth of Virginia, including
without limitation the Virginia Stock Corporation Act, as the same
may be amended from time to time; and
WHEREAS, in order to
induce and encourage highly experienced and capable persons such as
Indemnitee to serve and continue to serve as directors and officers
of Freddie Mac and in any other capacity with respect to Freddie
Mac, and to otherwise promote the desirable end that such persons
will resist what they consider unjustified lawsuits and claims made
against them in connection with the performance of their duties to
Freddie Mac, with the knowledge that certain costs, judgments,
penalties, fines, liabilities and expenses incurred by them in
their defense of such litigation are to be borne by Freddie Mac and
they will receive the maximum protection against such risks and
liabilities as may be afforded under Freddie Mac’s bylaws and
applicable law; and
WHEREAS, Freddie Mac
desires to have Indemnitee serve or continue to serve as a director
or officer of Freddie Mac and in such other capacity with respect
to Freddie Mac as Freddie Mac may request, as the case may be, free
from undue concern for unpredictable, inappropriate or unreasonable
legal risks and personal liabilities by reason of Indemnitee acting
in accordance with the standards of Freddie Mac’s bylaws in
the performance of Indemnitee’s duties at Freddie Mac; and
Indemnitee desires so to serve or to continue so to serve Freddie
Mac, provided, and on the express condition, that he is furnished
with the indemnity set forth hereinafter;
WHEREAS, the Federal
Housing Finance Agency ("FHFA") was appointed conservator of
Freddie Mac on September 6, 2008;
Now, therefore, in
consideration of Indemnitee’s service or continued service as
a director or officer of Freddie Mac, the parties hereto agree as
follows:
1. Service
by Indemnitee . Indemnitee will serve or continue to serve as a
director or officer of Freddie Mac in good faith so long as
Indemnitee is duly elected or appointed and until such time as
Indemnitee is removed as permitted by law or tenders a resignation
in writing.
2.
Indemnification . Freddie Mac shall indemnify Indemnitee to
the fullest extent permitted by Freddie Mac’s Bylaws and
Virginia law in effect on the date hereof or as the Bylaws or such
law may from time to time be amended (but, in the case of any such
amendment, only to the extent that such amendment permits Freddie
Mac to provide broader indemnification rights than the Bylaws or
said law permitted Freddie Mac to provide prior to such amendment).
Without diminishing the scope of the indemnification provided by
this Section, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights
hereinafter set forth, except that no indemnification shall be paid
to Indemnitee:
(a) to the extent expressly prohibited by
Virginia law;
(b) for which payment is actually made to
Indemnitee or for Indemnitee’s benefit under a valid and
collectible insurance policy or under a valid and enforceable
indemnity clause, bylaw or agreement of Freddie Mac or any other
entity that Indemnitee serves at the request of Freddie Mac, except
in respect of any indemnity exceeding the payment under such
insurance, clause, bylaw or agreement;
(c) in connection with a Proceeding (or part
thereof) initiated by Indemnitee unless such Proceeding (or part
thereof) was authorized by the Board of Directors.
3. Action or
Proceedings Other than an Action by or in the Right of Freddie
Mac . Except as limited by Section 2 above, Indemnitee
shall be entitled to the indemnification rights provided in this
Section if Indemnitee is a party or is threatened to be made a
party to any Proceeding (other than an action by or in the name of
Freddie Mac) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of Freddie Mac, or is or was
serving at the request of Freddie Mac as a director, officer,
manager, partner, trustee, fiduciary, employee or agent of another
corporation, limited liability company, partnership, joint venture,
trust or other entity, including service with respect to an
employee benefit plan. Pursuant to this Section, Indemnitee shall
be indemnified against all Liabilities and Expenses actually and
reasonably incurred by Indemnitee in connection with such
Proceeding, except such Liabilities and Expenses as are incurred
because of Indemnitee’s willful misconduct or knowing
violation of the criminal law; provided, however, that Freddie Mac
may not indemnify Indemnitee in connection with any Proceeding
charging improper personal benefit to Indemnitee, whether or not
involving action in his official capacity, to the extent Indemnitee
was adjudged liable on the basis that personal benefit was
improperly received by Indemnitee.
4. Indemnity
in Proceedings by or in the Name of Freddie Mac . Except as
limited by Section 2 above, Indemnitee shall be entitled to
the indemnification rights provided in this Section if Indemnitee
was or is a party or is threatened to be made a party to any
Proceeding brought by or in the name of Freddie Mac to procure a
judgment in its favor by reason of the fact
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that Indemnitee is or was a director, officer,
employee or agent of Freddie Mac. Pursuant to this Section,
Indemnitee shall be indemnified against all Liabilities and
Expenses actually and reasonably incurred by Indemnitee in
connection with such Proceeding, except such Liabilities and
Expenses as are incurred because of Indemnitee’s willful
misconduct or knowing violation of the criminal law; provided,
however, that Freddie Mac may not indemnify Indemnitee in
connection with any Proceeding charging improper personal benefit
to Indemnitee, whether or not involving action in his official
capacity, to the extent Indemnitee was adjudged liable on the basis
that personal benefit was improperly received by Indemnitee.
5.
Indemnification for Costs, Charges and Expenses of Successful
Party . Notwithstanding the limitations of Sections 3 and
4 above, Freddie Mac shall indemnify Indemnitee who entirely
prevails, on the merits or otherwise, in the defense of any
Proceeding to which Indemnitee was a party because he is or was
director, officer, employee or agent of Freddie Mac or was serving
at the request of Freddie Mac as a director, officer, manager,
partner, trustee, fiduciary, employee or agent of another
corporation, limited liability company, partnership, joint venture,
trust or other entity, including service with respect to an
employee benefit plan, against Expenses incurred by Indemnitee in
connection with the Proceeding.
6. Partial
Indemnification . If Indemnitee is entitled under any provision
of this Agreement to indemnification by Freddie Mac for some or a
portion of the Liabilities or Expenses actually and reasonably
incurred in connection with any action, suit or proceeding
(including an action, suit or proceeding brought by or on behalf of
Freddie Mac), but not, however, for all of the total amount
thereof, Freddie Mac shall nevertheless indemnify Indemnitee for
the portion of such Liabilities and Expenses actually and
reasonably incurred to which Indemnitee is entitled.
7.
Indemnification for Expenses of a Witness . Notwithstanding
any other provision of this Agreement, to the maximum extent
permitted by applicable law, Indemnitee shall be entitled to
indemnification against all Expenses actually and reasonably
incurred or suffered by Indemnitee or on Indemnitee’s behalf
if Indemnitee appears as a witness or otherwise incurs legal
expenses as a result of or related to Indemnitee’s service as
a director, officer, employee or agent of Freddie Mac, in any
threatened, pending or completed Proceeding to which Indemnitee
neither is, nor is threatened to be made, a party; provided,
however, that no such indemnification will be provided with respect
to Expenses incurred in obtaining legal advice regarding
Indemnitee’s willful misconduct, knowing violation of the
criminal law or receipt of improper personal benefits.
8.
Determination of Entitlement to Indemnification . Upon
written request by Indemnitee for indemnification pursuant to
Sections 3, 4, 5, 6 or 7, the entitlement of Indemnitee to
indemnification, to the extent not provided pursuant to the terms
of this Agreement, shall be determined by the following person or
persons who shall be empowered to make such determination:
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(ii) by a majority vote of a committee duly designated by the
Board of Directors (in which designation directors who are parties
may participate), consisting solely of two or more directors not at
the time parties to the proceeding; (iii) by Special Legal
Counsel (as defined below) (1) selected by the Board of
Directors or its committee in a manner prescribed in subsection
(i) or (ii) hereof, or (2) if a quorum of the
Board
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of Directors cannot be obtained under subsection
(i) hereof and a committee cannot be designated under
subsection (ii) hereof, selected by a majority vote of the
full Board of Directors (in which selection directors who are
parties may participate); or (iv) by the stockholders,
provided, however, that shares owned by or voted under the control
of directors who are at the time parties to the proceeding may not
be voted on the determination. Upon failure of the Board of
Directors or committee designated by the Board of Directors, as
applicable, so to select such Special Legal Counsel, or upon
failure of Indemnitee so to approve, such Special Legal Counsel
shall be selected upon application to a court of competent
jurisdiction. Authorization of indemnification and evaluation as to
reasonableness of Expenses shall be made in the same manner as the
determination that indemnification is permissible, as provided in
this Section 8, provided however, that, if the determination
is made by Special Legal Counsel, authorization of indemnification
and evaluation as to the reasonableness of Expenses shall be made
by those entitled under subsection (iii) hereof to select such
Special Legal Counsel.
Such
determination of entitlement to indemnification shall be made not
later than 90 calendar days after receipt by Freddie Mac of a
written request for indemnification. Such request shall include
documentation or information which is necessary for such
determination and which is reasonably available to Indemnitee. Any
Expenses incurred by Indemnitee in connection with a request for
indemnification or payment of Expenses hereunder, under any other
agreement, any provision of Freddie Mac’s Bylaws or any
directors’ and officers’ liability insurance, shall be
borne by Freddie Mac. Freddie Mac hereby indemnifies Indemnitee for
any such Expense and agrees to hold Indemnitee harmless therefrom
irrespective of the outcome of the determination of
Indemnitee’s entitlement to indemnification. If the person
making such determination shall determine that Indemnitee is
entitled to indemnification as to part (but not all) of the
application for indemnification, such person shall reasonably
prorate such partial indemnification among the claims, issues or
matters at issue at the time of the determination.
9.
Presumptions and Effect of Certain Proceedings . The
Corporate Secretary of Freddie Mac shall, promptly upon receipt of
Indemnitee’s request for indemnification, advise in writing
the Board of Directors or such other person or persons empowered to
make the determination as provided in Section 8 that
Indemnitee has made such request for indemnification. The Corporate
Secretary of Freddie Mac shall also promptly notify the Conservator
that such a request has been made. Upon making such request for
indemnification, Indemnitee shall be presumed to be entitled to
indemnification hereunder and Freddie Mac shall have the burden of
proof in making any determination contrary to such presumption. The
termination of any Proceeding described in Sections 3 or 4 by
judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall no
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