Mortgage giant Freddie Mac (FRE) entered an indemnification
agreement with three executive officers, protecting the officers
from any liabilities and expenses in connection to any threatened
or pending lawsuits.
The agreement, announced Friday in a Securities and Exchange
Commission filing, is effective as of Sept. 6, 2008, two days
before Freddie and Fannie Mae (FNM) were seized by the government,
after they saw their portfolios suffer amid rising foreclosures and
exposure to subprime mortgages.
The obligations to the executives include any attorneys' fees
and will continue even after a director or officer has left the
company.
The executives include Michael Perlman, executive vice president
of operations and technology; Acting Chief Financial Officer David
B. Kellermann; and Michael C. May, senior vice president of
multifamily.
In the filing, Freddie said any liabilities or expenses incurred
due to willful misconduct or knowing violation of criminal law are
excepted from the agreement, Freddie said.
Shares of Freddie were up 3 cents, or 8.3%, to 39 cents in
after-hours trading. The company's stock has plummeted 99% from a
52-week high of $34.22 in March.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com
