Exhibit 10.4
 
Executive Management Compensation Recapture Policy
 

                        Officers Subject to
Recapture     This Recapture Policy is applicable to any Senior Vice President
or Executive Vice President, Chief Operating Officer, or Chief Executive Officer
who is eligible for participation in the Senior Executive Management
Compensation Program.             Effective Date     Notwithstanding any other
provision of this Recapture Policy, this policy shall not apply to Triggering
Events that occur, or to compensation paid, prior to the date you execute and
agree to the terms of this Executive Management Compensation Recapture Policy.  
          Triggering Event     The recapture will be triggered if, at any time
during the executive’s employment with Freddie Mac (or, under certain
circumstances after termination of the executive’s employment, as described
below), the Board provides the Notice Requirements set forth below and
subsequently determines in good faith and notifies you in writing that any of
the following (“Triggering Events”) occurred:                             1.  
The executive has obtained a legally binding right to bonus or incentive payment
based on materially inaccurate financial statements (which includes, but is not
limited to, statements of earnings, revenues, or gains) or any other materially
inaccurate performance metric criteria.                             2.   The
executive’s employment with Freddie Mac is terminated for “cause” under
subclauses (i) or (iii) as defined below or, within two years of the termination
of the executive’s employment at Freddie Mac, the Board in good faith makes a
determination that circumstances existed at the time of the executive’s
termination that would have justified termination for cause under subclauses (i)
or (iii) or the executive was later convicted of or pleaded nolo contendere to a
felony committed before the termination date and such felony resulted in
material business or reputational harm to Freddie Mac.                  
          3.   The executive’s employment with Freddie Mac is terminated for
“cause” under subclause (ii) as defined below, or within two years of the
termination of the executive’s employment at Freddie Mac, the Board makes a
determination in good faith that circumstances existed at the time of the
executive’s termination that would have justified a termination for cause under
subclause (ii) as defined below and that actions of the executive resulted in
material business or reputational harm to Freddie Mac.                   In
determining whether Triggering Event 2 has occurred, the Board will not consider
any act or failure to act by the executive to be “willful” unless it is done, or
omitted to be done, by the executive in bad faith or without reasonable belief
that the executive’s action or omission was in the best interests of Freddie
Mac.             Definition of Cause     For purposes of this Recapture Policy,
“cause” shall mean the occurrence of one or more of the following:              
              (i)   The executive is convicted of or pleads nolo contendere to a
charge of a felony;                             (ii)   In carrying out his
duties, the executive engages in conduct that            

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                              constitutes gross neglect or gross misconduct that
is materially harmful to Freddie Mac; or,                             (iii)  
Any willful misconduct on the executive’s part that is materially harmful to
Freddie Mac.                   In each case, “cause” shall not exist unless and
until Freddie Mac shall have provided the Notice Requirements set forth below  
          Notice
Requirements     The Board shall make a determination under this policy as to
the occurrence of a Triggering Event, the existence of “cause”, or the amount of
recapture only after first providing to the executive:                  
          (i)   reasonable notice setting forth Freddie Mac’s intention to make
such a determination;                             (ii)   where remedial action
is appropriate and feasible, a reasonable opportunity for the executive to take
such action;                             (iii)   an opportunity for the
executive, together with the executive’s counsel, to be heard before the Board;
and a copy of a resolution duly adopted by a majority of the entire Board of
Directors at a meeting of the Board of Directors called and held for such
purpose finding that in the good faith opinion of the Board such determination
is appropriate.             Recapture Period               1.   In the case of
the first Triggering Event, compensation subject to recapture may include
Recapture Eligible Compensation (as defined below) paid to the Executive for up
to two years prior to the Triggering Event.                             2.   In
the case of the second Triggering Event, compensation subject to recapture may
include Recapture Eligible Compensation paid to the Executive for up to two
years prior to the date that the executive is terminated or subsequent to the
termination of employment.                             3.   In the case of the
third Triggering Event, compensation subject to recapture may include Recapture
Eligible Compensation paid to the Executive at the time of termination of
employment or subsequent to the date of termination.             Compensation
Subject to
Recapture     For purposes of this Recapture Policy, “Recapture Eligible
Compensation” shall consist of the following:                             1.  
In the case of the first Triggering Event, Recapture Eligible Compensation
consists of Deferred Base Salary, Target Incentive Opportunity payments and any
equity awards that vest after the Effective Date.                             2.
  In the case of the second and third Triggering Events, Recapture Eligible
Compensation consists of Deferred Base Salary, Target Incentive Opportunity
payments, any equity awards that vest after the Effective Date and any severance
benefits paid.                   In the event that the executive is terminated
for cause under any of the subclauses (i), (ii) or (iii) specified in the
Definition of Cause above, the executive forfeits rights to any future payment
of Deferred Base Salary, Target Incentive Opportunity payments, equity awards
that vest after the Effective Date or severance benefits that might otherwise
have been due pursuant to the terms of applicable plans or awards from the date
of executive’s            

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                              termination forward.                   The
foregoing recaptures shall occur notwithstanding the terms of any applicable
plan, agreement or award to the contrary.                   With respect to any
recapture of compensation:                             •   A recapture of
Deferred Base Salary, Target Incentive Opportunity payments, equity awards that
vest after the Effective Date, or other cash paid, for such compensation that
the Board determines in good faith is subject to repayment, would require the
executive to repay the gross amount of the compensation previously paid.
Additionally, any further obligation of Freddie Mac to make payments under such
plans could be cancelled.                     A recapture of equity awards that
vest after the Effective Date, for such awards that the Board determines in good
faith, would require the executive to forfeit the relevant shares. Additionally,
any unvested and/or unexercised stock-based awards could be cancelled. As to any
shares the executive has sold by the time of recapture, the recapture shall
require the repayment of the net proceeds realized upon such sale.      
              Semi-Monthly Base Salary, and any remaining portion of a
Conservatorship Retention Award that was approved prior to the adoption of this
Recapture Policy are not subject to recapture.                     The
executive’s assets acquired prior to employment by Freddie Mac or acquired from
sources other than Freddie Mac directly are not subject to recapture under this
policy. The right to recapture is not retroactive prior to the date that the
executive became subject to this policy.             Amount to be
Recaptured     After providing the Notice Requirements, the Board has discretion
to determine in good faith the appropriate amount required to be recaptured, if
any, upon a Triggering Event, which is intended to be the compensation in excess
of what Freddie Mac would have paid the executive had Freddie Mac taken into
consideration the impact of the Triggering Event at the time such compensation
was awarded.                   Any disputes between the executive and Freddie
Mac concerning the occurrence of a Triggering Event or the amount subject to
recapture shall be determined exclusively in accordance with the substantive
laws of the Commonwealth of Virginia, excluding provisions of the Virginia law
concerning choice-of-law that would result in the law of any state other than
Virginia being applied.                   This Recapture Policy does not affect
any of FHFA’s authorities.            

 
I agree to the terms of this Recapture Policy.

             
 
           
By:
      Date:                  
 
                               
Officer Title
       

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