Exhibit 10.31
 
2009 LONG-TERM INCENTIVE AWARD
 
Parameters Document
 

Objective The long-term incentive deferred cash award (LTI) is intended to
provide a “forward looking” incentive award to eligible officers and directors.
  Grant Date March 16, 2009   Performance Period LTI awards granted in March
2009 with performance measures covering the 2009 and 2010 performance period  
General Eligibility An employee who, as of the LTI grant date, is classified by
Freddie Mac (in its sole discretion) as either (i) an active, full-time or
part-time officer or director, or an officer or director on short term
disability and/or approved leaves of absence or (ii) is classified by Freddie
Mac as a LTI eligible non-officer in a market-priced position. However, Senior
Vice Presidents, Executive Vice Presidents, and the Chief Executive Officer are
not eligible to participate in this program until such time as Freddie Mac has
additional guidance from the Federal Housing Finance Agency on the application
of recent announcements by the U.S. Department of Treasury, as well the American
Recovery and Reinvestment Act’s restrictions on executive compensation.  
Aggregate Corporate LTI
Pool The corporate-wide aggregate value of the LTI grants is equal to the sum of
annualized LTI targets of employees eligible to participate in the LTI program.
Each Division’s share of the corporate-wide pool is equal to the aggregate value
of its eligible employees’ LTI targets as a percentage of the corporate LTI
pool, less the aggregate value of the LTI targets for Division employees who are
direct reports to the Chief Executive Officer, subject to any adjustment in the
allocation by the Chief Executive Officer.   Individual LTI Targets Officers:
LTI target is the employee’s target in effect on the date that the grant is
approved.     Directors: For non-market priced director-level employees, the LTI
target is the LTI target applicable to the position’s salary grade. For LTI
eligible employees in a market priced position, the LTI target generally is the
salary grade target that is closest to the median of the Estimated Market
Distribution1 of such position, subject to the protocol established by the Human
Resources Division for market-priced positions LTI eligibility and targets.  
LTI Grant Amount For LTI awards granted in 2009, an eligible employee’s grant
shall be equal to their LTI target, except (a) an employee who receives a
Business Results Rating (BRR) of 1 is not eligible to receive a LTI grant and an
employee who receives a BRR of 2 may, subject to the Division Head’s approval,
receive a LTI grant, which in most instances will be substantially below their
target, and (b) no more than 5% of the participants can receive between 100% and
150% of their LTI target but in no event can the aggregate amount exceed the
Aggregate Corporate LTI Pool approved by the Compensation Committee.   Vesting
and Payment
Amount Management shall provide a recommendation to the Compensation Committee
of Freddie Mac’s Board of Directors regarding the level of achievement of the
performance measure(s) described in Exhibit A (the “Performance Multiplier”)
prior

1  Estimated Market Distribution (EMD) is a range of market compensation (base
salary and bonus) unique to each job and is based on data representing the
median pay practice for a similar role in the comparative markets.

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  to the first and the second anniversary of the grant date and, except as set
forth below under “Treatment of Award Upon Termination,” upon the Compensation
Committee’s approval an employee’s right to payment of that portion of the LTI
award shall vest.     Based on Performance Multiplier, the LTI actual dollar
amount of the LTI grant paid can range from 0% – 120% of the grant as determined
on each of the 1st and 2nd anniversary of the grant date.     Performance
Measure(s) and Performance Multiplier — See Exhibit A.   Payment Timing Any
award to be paid shall be paid as soon as administratively practicable on or
about the 1st and 2nd anniversary of grant date.   Form of Payout Cash less
applicable withholding.   Treatment of Award
Upon Termination Voluntary Termination or Non-Severance Eligible Termination: If
an employee voluntarily terminates their employment or if Freddie Mac terminates
employment and the employee does not receive severance, any unvested or unpaid
portion of the award is forfeited.     Death and Long-Term Disability: If an
employee’s employment is terminated due to either death or long-term disability,
any vested but unpaid portion of the LTI award will be paid as soon as
administratively possible. The amount paid will be based on the Performance
Multiplier.     Any unvested portion of the LTI award will remain outstanding
until the Compensation Committee approves the Performance Multiplier. Upon such
approval, the employee’s right to receive any such award shall vest and the
unpaid portion of the LTI award will be paid as soon as administratively
possible. The amount paid will be based the Performance Multiplier.    
Retirement or Severance Eligible Termination: If an employee is terminated by
Freddie Mac due to a severance eligible event and receives severance pay or if
an employee terminates employment due to retirement (either (i) age/years of
service of 62/5 or (ii) sum of age and years of service equal no less than 70,
with minimum age of 55) any vested but unpaid portion of the LTI award will be
paid as soon as administratively possible. The amount paid will be based on the
Performance Multiplier.     Any unvested portion of the LTI award will remain
outstanding until the Compensation Committee approves the Performance
Multiplier. Upon such approval, the employee’s right to receive a pro-rata
payment shall vest. The pro rata payment shall be based on the following
methodology:     Step 1. The number of whole months worked in the performance
year     Step 2. Divided by twelve     Step 3. Multiplied by the employee’s
portion of LTI grant scheduled to vest and be paid for that performance year and
the Performance Multiplier   Additional Forfeiture
Provision Upon a “Forfeiture Event” (as defined below), any unvested or any
unpaid LTI award will be cancelled and the employee or former employee will be
required to immediately repay Freddie Mac the gross value of any LTI award
payment that

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  was made within 12 months prior to the Forfeiture Event     A Forfeiture Event
shall mean the employee or former employee directly or indirectly seeking or
accepting employment with, or providing professional services to, a “Competitor”
in violation of any non-competition covenant agreement between the employee and
Freddie Mac in effect as of the date the employee receives an LTI grant.  
Regulatory Approval and
Reservation of Rights Notwithstanding the terms set forth above, with respect to
certain designated officers Freddie Mac’s Conservator is required to approve the
actual payment of compensation, including payment of this LTI grant. As a
consequence, such officer’s right to payment of the LTI grant set forth herein
is conditioned on the Conservator’s approval after Compensation Committee’s
determination of the Performance Multiplier.     Amounts paid pursuant to this
plan will not be considered compensation for purposes of the tax qualified
Thrift/401(k) Savings Plan, the tax qualified Employees’ Pension Plan and the
non-qualified Supplemental Executive Retirement Plan.     Nothing in this
program is intended to create a contract to employ any employee for any
particular term or period of time or otherwise abrogate Freddie Mac’s or the
employee’s right to terminate the employment relationship at any time for any
lawful reason.     Freddie Mac reserves the right to modify the terms and
conditions set forth herein at anytime for any reason at the corporation’s sole
discretion.     The terms of this plan are subject to and shall be construed in
accordance with applicable law and any regulation, guidance or interpretation
issued by the Federal Housing Finance Agency or the U.S. Department of Treasury.

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Exhibit A:
 
2009 Long-Term Incentive Award Performance Measures and Performance Multiplier
 
Performance Measures
 
Corporate Performance Measures:  Freddie Mac’s ability to remediate the subset
of the ninety-seven matters requiring attention or other concerns identified at
the Conservatorship date by the Federal Housing Finance Agency (FHFA) (together,
“MRAs”) planned for 2009 or earlier completion will determine the LTI value that
is ultimately delivered to recipients of the 2009 LTI grant (which will be
granted in March 2009). The LTI grant is scheduled to vest 50% on each of the
first and second anniversaries of the grant date. The value that a participant
ultimately receives at each vest date is calibrated based on Freddie Mac’s
performance against the performance objectives for each vesting cycle
(identified below). This calibration is applied consistently to all employees
(regardless of level) who receive an LTI grant.
 
Business Infrastructure Performance Measures:  In addition to the Corporate
Performance Measures, a limited number of officer- and non-officer-level
employees who are accountable for business infrastructure objectives will have
performance measures based on successful completion of specific deliverables for
business infrastructure objectives.
 
Performance Calibration for 1st LTI Vesting — Portion Scheduled to Vest in March
2010
 
Corporate Performance Measures:  Based on the company’s remediation of MRAs that
are scheduled to be remediated prior to January 1, 2010. The LTI grant date
value that actually vests and is paid can range from 0% – 120% (i.e., the
Corporate Performance Measure Multiplier) as illustrated in Chart A.
 
The Corporate Performance Measure Multiplier is applied consistently to all
employees (regardless of level) who are recipients of the 2009 LTI grant. Once
an assessment of performance is made, it applies to the 50% of the LTI grant
date value (i.e., the portion scheduled to vest and be paid in March 2010).
Note: For those employees who also have the Business Infrastructure Performance
Measure, the Corporate Performance Measure will only be applied to 25% of the
LTI grant date value and the additional 25% of the LTI grant date value
scheduled to vest and be paid in March 2010 will be based on performance against
the Business Infrastructure Performance Measure).
 
Each of the MRAs scheduled to be remediated prior to January 1, 2010 has been
classified into one of five categories and each category has been assigned a
weighting/prioritization percentage (Column A), with the sum of all categories
equaling 120%.
 
The maximum Corporate Performance Measure Multiplier is equal to the sum of the
Performance Multiplier Contribution Percentage for each MRA category (Column C),
which is equal to the actual percentage of MRAs remediated prior to January 1,
2010 that were scheduled to be remediated prior to January 1, 2010 (Column B)
multiplied by the category’s weighting/prioritization percentage (Column A).
 
As part of their assessment of performance, the Compensation Committee of the
Freddie Mac Board of Directors reserves the right to adjust the Performance
Multiplier Contribution Percentage upward for any category (to a maximum of the
category’s weighting/prioritization percentage) based on a review of factors
they deem appropriate, which may include completion status of MRAs that are not
remediated, progress made toward remediating MRAs, scope/difficulty of
remediating MRAs, and internal/external factors influencing the remediation of
MRAs.

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Chart A: 2009 Corporate Performance Measures
                                              (A)     (B)     (C) = (A) x (B)  
                                     
Matters Requiring Attention
Categories
    Category
Weighting/
Prioritization     Multiplied by:
Percentage of Matters Requiring Attention
remediated prior to January 1, 2010 that were
scheduled to be remediated prior to January 1, 2010     Equals:
Performance Multiplier
Contribution Percentage                                        
Credit Risk Management and
Governance/Loan Loss Reserves
    35%     X%
(To Be Determined)     X%
(To Be Determined)                                        
Internal Controls (including End-To-End,
Internal Audit, Contingency Planning)
    25%     X%
(To Be Determined)     X%
(To Be Determined)                                        
Models and Model Governance
    20%     X%
(To Be Determined)     X%
(To Be Determined)                                        
Accounting/Accounting
Policy/Forecasting
    20%     X%
(To Be Determined)     X%
(To Be Determined)                                        
Board Governance and Others
    20%     X%
(To Be Determined)     X%
(To Be Determined)                            
Total:
Percentage of the 2009 LTI grant date value scheduled to vest in March 2010
that actually vests and is paid (Maximum Performance Multiplier of 120%)
    X%
(To Be Determined)                    

 
No payment will be made if the sum of the Performance Multiplier Contribution
Percentages is less than 50%.
 
Business Infrastructure Performance Measures:  Based on the company’s successful
completion of deliverables prior to January 1, 2010 for infrastructure
objectives identified in Chart B. The LTI grant date value that actually vests
and is paid can range from 0% – 120% (i.e., the Business Infrastructure
Performance Measure Multiplier).
 
The Business Infrastructure Performance Measure Multiplier is applied
consistently to all employees (regardless of level) who are recipients of the
2009 LTI grant and are also subject to this performance measure. Once an
assessment of performance is made, it applies to the 25% of the LTI grant date
value (i.e., the portion scheduled to vest and be paid in March 2010).
 
The other 25% of the LTI grant date value, which is scheduled to vest and be
paid in March 2010, will be based on the Corporate Performance Measure.
Successful completion of the Business Infrastructure Performance Measures is not
a prerequisite for vesting and payment of the portion of the LTI grant date
value calibrated against the Corporate Performance Measures, and vice versa.
 
Each of the deliverables scheduled to be successfully completed prior to
January 1, 2010 has been assigned a weighting/prioritization percentage (Column
A), with the sum of all categories equaling 120%.

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The maximum Performance Multiplier is equal to the sum of the Performance
Multiplier Contribution Percentage for each 2009 Deliverable (Column C), which
is equal to 100% (if the deliverable is complete) or 0% (if the deliverable is
not complete) (Column B) multiplied by the deliverable’s
weighting/prioritization percentage (Column A).
 

                                         
Chart B: 2009 Business Infrastructure Performance Measures1
                                              (A)     (B)     (C) = (A) x (B)  
                                     
2009 Deliverables
    Category
Weighting/
Prioritization     Multiplied by:
Percentage Complete (100% if complete and
0% if not complete)     Equals:
Performance Multiplier
Contribution Percentage                                        
A Financial Data Warehouse which will evolve to be the single source for
financial reporting and initially used to generate selected financial reports
    30%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Business process models encompassing loan purchasing, servicing, securitization,
and accounting for Single Family core products
    25%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
System tested end-to-end software solution, including major wrapped components
from the existing legacy systems, for the Single Family line of business
    25%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Data models in a data dictionary
    25%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Define the redesigned financial close model, including rationalizing controls
    5%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
User acceptance test plan that validates the new platform’s ability to meet
business requirements
    5%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Migration strategy that will define the transition for the current state to the
new platform and processes; including Sarbanes-Oxley 404 compliance
    5%     xx%
(To Be Determined)     xx%
(To Be Determined)                            
Total:
Percentage of the 2009 LTI award scheduled to vest in March 2010 that actually
vests and is paid (Maximum Performance Multiplier of 120%)
    xx%
(To Be Determined)                    

1  All 2009 Deliverables are specific to the Single Family Strategic Technology
Initiative

 
No payment will be made if the sum of the Performance Multiplier Contribution
Percentages is less than 50%.

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Performance Calibration for 2nd LTI Vesting — Portion Scheduled to Vest in March
2011:
 
Corporate Performance Measures:  Based on (i) the company’s performance against
MRAs that have target completion dates in 2010 and (ii) avoidance of any repeat
MRAs that are identical to MRAs that were remediated in 2009. The LTI value can
range from 0% — 120% (i.e., the Corporate Performance Measure Multiplier), as
illustrated in Chart C.
 
For the 2010 performance period, the Compensation Committee of the Freddie Mac’s
Board of Directors reserves the right to include an additional Corporate
Performance Measure pertaining to the company’s financial performance.
 
The Corporate Performance Measure Multiplier is applied consistently to all
employees (regardless of level) who are recipients of the 2009 LTI grant. Once
an assessment of performance is made, it applies to the 50% of the LTI grant
date value (i.e., the portion scheduled to vest and be paid in March 2011).
Note: For those employees who also have the Business Infrastructure Performance
Measure, the Corporate Performance Measure will only be applied to 25% of the
LTI grant date value and the additional 25% of the LTI grant date value
scheduled to vest and be paid in March 2011 will be based on performance against
the Business Infrastructure Performance Measure.
 

                                                                 
Chart C: 2010 Corporate Performance Measures
                                                               
Performance Level
    Below Threshold     Threshold     Below Plan     On Plan     Above Plan    
                                                           
Percentage of Matters Requiring Attention remediated during 2010 that were
scheduled to be remediated during 2010
    Less than 70%     70%     80%     90%     100%                              
                                 
Equals:
MRA Performance Multiplier
    0%     50%     75%     100%     120%                                        
Less:
Repeat Identical Matters Requiring Attention Identified
    5% reduction for each Repeat Identical Matters Requiring Attention
Identified                                                                
Equals:
Performance Multiplier (final) — Percentage of the 2009 LTI award scheduled to
vest in March 2011 that actually vests and is paid
    xx%
(To Be Determined)     xx%
(To Be Determined)     xx%
(To Be Determined)     xx%
(To Be Determined)     xx%
(To Be Determined)                                

 
No payment will be made if either the Performance Multiplier (final) is less
than 50% or there are more than ten Repeat Identical Matters Requiring
Attention.
 
In the likely event that actual performance results in a value that is between
two Performance Levels (e.g., greater than On Plan, but less than Above Plan),
linear interpolation will be used to determine the appropriate Performance
Multiplier. Specifically, a calculation will be performed to determine how far
above or below (expressed in percentage terms) our actual performance is from
the closest Performance Level. This

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percentage will then be used to adjust (either up or down) the Performance
Multiplier of the closest Performance Level, which will result in the actual
Performance Multiplier used to determine the LTI value delivered to LTI
recipients.
 
Business Infrastructure Performance Measures:  Based on the company’s successful
completion of deliverables prior to January 1, 2011 for infrastructure
objectives identified in Chart D. The LTI grant date value that actually vests
and is paid can range from 0% — 120% (i.e., the Business Infrastructure
Performance Measure Multiplier).
 
For the 2010 performance period, the Compensation Committee of the Freddie Mac’s
Board of Directors reserves the right to change or include additional Business
Infrastructure Performance Measures.
 
The Business Infrastructure Performance Measure Multiplier is applied
consistently to all employees (regardless of level) who are recipients of the
2009 LTI grant and are also subject to this performance measure. Once an
assessment of performance is made, it applies to the 25% of the LTI grant date
value (i.e., the portion scheduled to vest and be paid in March 2011). The other
25% of the LTI grant date value scheduled to vest and be paid in March 2011 will
be based on the Corporate Performance Measure. Successful completion of the
Business Infrastructure Performance Measures is not a prerequisite for vesting
and payment of the portion of the LTI grant date value calibrated against the
Corporate Performance Measures, and vice versa.
 
Each of the deliverables scheduled to be successfully completed prior to
January 1, 2011 has been assigned a weighting/prioritization percentage
(Column A), with the sum of all categories equaling 120%.
 
The maximum Performance Multiplier is equal to the sum of the Performance
Multiplier Contribution Percentage for each 2009 Deliverable (Column C), which
is equal to 100% (if the deliverable is complete) or 0% (if the deliverable is
not complete) (Column B) multiplied by the deliverable’s
weighting/prioritization percentage (Column A).
 

                                         
Chart D: 2010 Business Infrastructure Performance Measures2
                                              (A)     (B)     (C) = (A) x (B)  
                                     
2010 Deliverables
    Category
Weighting/
Prioritization     Multiplied by:
Percentage Complete (100% if complete and
0% if not complete)     Equals:
Performance Multiplier
Contribution Percentage                                        
Selected products will be purchased, serviced, and accounted for in the new
platform
    30%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Platform is completed and operationally ready to support the full Single Family
line of business by early 2011
    25%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
The Financial Data Warehouse is the primary source of financial reports for new
business
    25%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Organization has the structure and processes in place to support the new
platform
    15%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Key controls will be tested for operational effectiveness and to maintain
Sarbanes-Oxley 404 compliance
    15%     xx%
(To Be Determined)     xx%
(To Be Determined)                                        
Plan to retire legacy systems and databases defined
    10%     xx%
(To Be Determined)     xx%
(To Be Determined)                            
Total:
Percentage of the 2009 LTI grant scheduled to vest in March 2011 that actually
vests and is paid (Maximum Performance Multiplier of 120%)
    xx%
(To Be Determined)                    

2  All 2010 Deliverables are specific to the Single Family Strategic Technology
Initiative

 
No payment will be made if the sum of the sum of Performance Multiplier
Contribution Percentages is less than 50%.