Exhibit 10.1
 
 
 
EXECUTIVE MANAGEMENT COMPENSATION PROGRAM
 
Program Description
 

                Objective     To provide a compensation structure that addresses
the Company’s and the Federal Housing Finance Agency’s (“FHFA”) shared interests
of motivating, retaining, and, in some instances, recruiting members of
Executive Management while Freddie Mac is in conservatorship.         Effective
Period     The Executive Management Compensation Program is intended to be
effective for calendar years 2009, 2010, and thereafter as long as Freddie Mac
remains in Conservatorship. The specific parameters of the Executive Management
Compensation Program may be amended from time to time by the Compensation
Committee of Freddie Mac’s Board of Directors (the “Committee”), if approved by
FHFA after consulting with the U.S. Department of the Treasury (“Treasury”), as
appropriate.         Covered Positions     Freddie Mac’s Chief Executive Officer
(“CEO”), Chief Operating Officer (“COO”), Chief Financial Officer (“CFO”),
Executive Vice Presidents (“EVPs”), and Senior Vice Presidents (“SVPs”),
collectively referred to as “Executive Management,” and, individually referred
to as a “Covered Officer.”         Covered Position
Participation
Requirement     Participation of a Covered Officer in the Executive Management
Compensation Program is contingent upon the Covered Officer agreeing to be bound
by the terms of a the Executive Management Compensation Recapture Policy (the
“Recapture Policy”) that has been approved by both the Committee and FHFA.      
  Composition of Total
Direct Compensation     The total direct compensation (“TDC”) shall be comprised
of two components, a “Base Salary” and a “Target Incentive Opportunity”.
Two-thirds (2/3) of the TDC amount shall be delivered in Base Salary and
one-third (1/3) of the TDC shall be delivered in a Target Incentive Opportunity.
The TDC for all participants will be approved by the Committee, FHFA, or the
CEO, as appropriate, as of the effective date of this program.               For
an employee hired or promoted into a Covered Officer position subsequent to
approval of the Executive Management Compensation Program, the Committee or the
CEO will recommend a TDC for such employee, which will be subject to approval by
FHFA after consulting with Treasury, as appropriate.         Adjustments to TDC
    The Committee or the CEO may recommend adjustments to TDC for Covered
Officers. Any such recommendations are subject to approval by FHFA after
consulting with Treasury, as appropriate. An approved adjustment to a Covered
Officer’s TDC shall become effective as of the date specified in the approval
document.         Base Salary     The Base Salary will consist of two
components. One component will be paid in cash on a semi-monthly basis during
each calendar year (the “Semi-Monthly Base Salary”) and the other component will
be earned on a semi-monthly basis during each calendar year, but subject to a
deferral and payment schedule (the “Deferred Base Salary”) as discussed below.  
            Effective Date for Base Salary               For each employee who
was a Covered Officer as of January 1, 2009, the Semi-Monthly Base Salary and
Deferred Base Salary will be effective retroactive to        

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                      January 1, 2009, subject to the exception provided in the
section “Semi-Monthly Base Salary” below. For an employee who is hired into a
Covered Officer position after January 1, 2009, the Semi-Monthly Base Salary and
Deferred Base Salary shall be pro-rated effective as of the date of hire. For an
employee who is promoted after January 1, 2009 into either a Covered Position or
a Covered Position with increased scope and responsibility, the Semi-Monthly
Base Salary and Deferred Base Salary shall be pro-rated effective as of the date
of promotion.         Semi-Monthly Base
Salary     Semi-Monthly Base Salary for any Covered Officer cannot exceed
$500,000, except for the CEO, COO, and CFO, or other exceptions as approved from
time to time by FHFA. In those instances, the Semi-Monthly Base Salary will be
the amount approved by FHFA after consultation with Treasury, as appropriate, as
of the Covered Officer’s date of hire or promotion.               For any
Covered Officer other than the CEO, COO, and CFO, with a Semi-Monthly Base
Salary greater than $500,000 immediately prior to the adoption of the Executive
Management Compensation Program, that Covered Officer’s Semi-Monthly Base Salary
will be reduced to $500,000 effective January 1, 2010.               Form of
Payout               Cash less applicable withholdings               Treatment
of Base Salary Under Freddie Mac’s Benefit Plans               Semi-Monthly Base
Salary will be considered compensation for purposes of the following Freddie Mac
retirement or executive benefit plans that take base salary into consideration:
the tax qualified Thrift/401(k) Savings Plan, the tax qualified Employees’
Pension Plan, the non-qualified Supplemental Executive Retirement Plan the
Executive Deferred Compensation Plan, and the following welfare benefit plans:
(1) the Flexible Benefits Plan (for purposes of calculating FlexDollars);
(2) the Group Term Life Insurance Plan; (3) the Group Universal Life Insurance
Program; (4) the Long-Term Disability Plan; (5) the Accidental Death and
Personal Loss Plan; and (6) the purchase and payout of vacation        

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                Deferred Base Salary     The portion of Base Salary that is not
paid in Semi-Monthly Base Salary shall be delivered in the form of Deferred Base
Salary. The Deferred Base Salary, which is earned on a semi-monthly basis during
each calendar year, shall be deferred and paid according to the applicable
Approved Payment Schedule below.               Approved Payment Schedule:
Calendar Year 2009               Deferred Base Salary earned during each quarter
of 2009 will be paid on the last business day of the corresponding quarter of
2010, provided the Covered Officer is actively employed by the Company on such
payment date, or in the event that the Covered Officer dies, has a Long-Term
Disability or Retires in 2010. For clarity, the 2009 Deferred Base Salary will
not become non-forfeitable upon the Covered Officer’s death, Long-Term
Disability or Retirement, as provided below under “Treatment Upon Termination”
if such event occurs in 2009. The 2009 Deferred Base Salary will, however,
become non-forfeitable, subject to the Recapture Policy, if such event occurs in
2010.               Approved Payment Schedule: Calendar Year 2010 and Subsequent
Years               Fifty percent (50%) of Deferred Base Salary earned during
each quarter of a calendar year will be paid in a fixed amount on the last
business day of the corresponding quarter of the immediately following calendar
year.               The amount that will be paid for the remaining fifty percent
(50%) of Deferred Base Salary earned during each quarter of a calendar year will
be determined by the Committee’s approved Deferred Base Salary funding level.
The approved performance-based portion Deferred Base Salary funding level will
be determined by the Committee’s assessment of performance against the Corporate
Scorecard for the year in which the Deferred Base Salary is earned. The
performance-based portion of Deferred Base Salary funding level shall be equal
to the Committee’s approved short-term incentive (“STI”) funding level for the
STI plan applicable to employees at the level of Vice President and below for
the performance year in which the performance-based portion of Deferred Base
Salary is earned. It will be 0% if performance goals are not achieved, and in no
event can the performance-based portion of Deferred Base Salary funding level
exceed 125%. The STI funding level, expressed as a percentage, will be equal to
the amount of STI funds approved for distribution to employees at the level of
Vice President and below divided by the aggregate STI targets for those same
employees               The amount of the performance-based portion of Deferred
Base Salary that will be paid to a Covered Officer will be equal to the
performance-based portion of Deferred Base Salary earned multiplied by Deferred
Base Salary funding level.               For any Covered Officer for whom a
separate division scorecard is approved by a Board committee, the
performance-based portion of the Deferred Base Salary funding level will be
based on the appropriate Board committee’s assessment of performance against
such separate division scorecard.               The performance-based portion of
the Deferred Base Salary earned during each quarter of a calendar year will be
adjusted in a manner consistent with the approved
Deferred Base Salary funding level, and will be paid on the last business day of
the        

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                      corresponding quarter in the immediately following
calendar year.               Form of Payout       Cash less applicable
withholdings.               Treatment Under Freddie Mac’s Benefit Plans        
      Deferred Base Salary will be considered compensation for purposes of the
Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan
(Thrift 401(k) and Pension SERP) when paid to an active Covered Officer, subject
to the maximum described in “Impact on Freddie Mac’s Supplemental Executive
Retirement Plan.”               Deferred Base Salary will not be considered
compensation for purposes of any of Freddie Mac’s tax qualified retirement or
executive benefit or welfare plans.         Target Incentive
Opportunity     For each performance year, every Covered Officer will be
provided an annual Target Incentive Opportunity, which will be equal to 1/3 of
TDC.               Effective Date for 2009 Target Incentive Opportunity        
      For each employee who was in a Covered Officer position on January 1,
2009, the 2009 Target Incentive Opportunity will be effective retroactive to
January 1, 2009 and will be equal to 1/3 of their TDC (i.e., the 2009 Target
Incentive Opportunity will not be pro-rated).               For an employee who
was hired into a Covered Officer position after January 1, 2009, the 2009 Target
Incentive Opportunity shall be pro-rated based on their date of hire. For an
employee who is promoted after January 1, 2009 into either a Covered Position or
a Covered Position with increased scope and responsibility, the 2009 Target
Incentive Opportunity shall be pro-rated effective as of the date of promotion.
              Effective Date for Target Incentive Opportunity in 2010 and
Subsequent Years               For each employee who is in a Covered Officer
position as of January 1 of any calendar year, the Target Incentive Opportunity
will be effective on January 1 of that calendar year and will be equal to 1/3 of
their TDC.               For an employee who is hired into a Covered Officer
position after January 1 of any calendar year, the Target Incentive Opportunity
for that calendar year shall be pro-rated based on the date of promotion or
hire. For an employee who is promoted after January 1 of any calendar year into
either a Covered Position or a Covered Position with increased scope and
responsibility, the Target Incentive Opportunity shall be pro-rated effective as
of the date of promotion.               Target Incentive Opportunity Payouts    
          A Covered Officer will be eligible to be paid 50% of their annual
Target Incentive Opportunity no later than March 15 of the calendar year
immediately following the performance year (the “First Incentive Opportunity
Payment”), and the remaining 50% no later than March 15 of the second calendar
year immediately following the        

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                      performance year (the “Second Incentive Opportunity
Payment”).               The amount of the annual Target Incentive Opportunity
that is actually paid will be determined by the Committee’s approved long-term
incentive (“LTI”) funding level (i.e., for the LTI plan applicable to employees
at the level of Vice President and below) for the LTI grant made in the same
calendar year of the Covered Officer’s annual Target Incentive Opportunity. The
approved LTI funding level, expressed as a percentage, is determined by the
level of achievement against the LTI program objectives and will be equal to the
amount of LTI funds approved for distribution to employees at the level of Vice
President and below divided by the aggregate LTI targets for those same
employees. The LTI funding level can range from 0% up to a maximum of 120%.    
                    First Incentive Opportunity Payment — The amount actually
paid will be equal 50% of the Covered Officer’s annual Target Incentive
Opportunity multiplied by the approved LTI funding level for the first vesting.
                        Second Incentive Opportunity Payment — The amount
actually paid will be equal to 50% of the Covered Officer’s annual Target
Incentive Opportunity multiplied by the approved LTI funding level for the
second vesting.               For Covered Officers who are members of the
Freddie Mac Management Committee on the date the Committee approves the LTI
funding level, the amount of the Target Incentive Opportunity that is paid is
also subject to an assessment of division and/or individual performance as
determined by the CEO, for Covered Officers other than the CEO. For the CEO,
Freddie Mac’s Board of Directors conducts the assessment. This assessment can
result in an increase or decrease to the amount payable of up to 25%. However,
in no event can the aggregate amount paid to the Covered Officers who are
members of the Management Committee for any First or Second Incentive
Opportunity Payment exceed the aggregate Target Incentive Opportunities for
those Covered Officers multiplied by the LTI funding level.               Form
of Payout               Cash less applicable withholdings              
Treatment Under Freddie Mac’s Benefit Plans               The Target Incentive
Opportunity will not be considered compensation for purposes of any Freddie Mac
retirement benefit or welfare plans.         Impact on Freddie Mac’s
Supplemental Executive
Retirement Plan     The Supplemental Executive Retirement Plan (“SERP”) shall be
modified effective January 1, 2010 to provide that the maximum covered
compensation, for purposes of the plan, relative to Covered Officer only, may
not exceed two times the Covered Officer’s Semi-Monthly Base Salary. It is the
intent of Freddie Mac and FHFA that, upon the conclusion of Conservatorship, the
definition of “compensation” for purposes of accruals under the SERP will revert
to the definition of “compensation” in place prior to the amendment to the SERP
made to conform its terms to this Executive Management Compensation Program.    
   

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                Treatment Upon
Termination:
 
Semi-Monthly Base
Salary     Under all termination events except death, Semi-Monthly Base Salary
will terminate as of the date employment terminates. In the event of death,
Semi-Monthly Base Salary will terminate at the end of the month in which the
death occurs.         Treatment Upon
Termination:
 
Deferred Base Salary     Death: If a Covered Officer’s employment is terminated
due to death, any unpaid Deferred Base Salary will be paid as soon as
administratively possible. If, at the time of the Covered Officer’s death, the
Deferred Base Salary funding level has not been determined, the
performance-based portion of Deferred Base Salary will remain outstanding until
such determination is made. The actual amount paid for the performance-based
portion will be determined by the approved Deferred Base Salary funding level.  
            The date on which the Committee approves the Deferred Base Salary
funding level is referred to as the “Deferred Base Salary Determination Date.”
Payment of any performance-based Deferred Base Salary will occur as soon as
administratively possible after the Deferred Base Salary Determination Date.    
          Long-Term Disability: If a Covered Officer’s employment is terminated
due to Long-Term Disability, the Covered Officer’s right to receive any unpaid
Deferred Base Salary will become non-forfeitable, subject to the Recapture
Policy, but will be paid no earlier than as called for in the Approved Payment
Schedule above. The actual amount paid for the performance-based portion of
Deferred Base Salary earned will be determined by the approved Deferred Base
Salary funding level.               Retirement: If a Covered Officer terminates
employment due to retirement (as defined in Definitions), the Covered Officer’s
right to receive any unpaid Deferred Base Salary will become non-forfeitable,
subject to the Recapture Policy, and the Deferred Base Salary will be paid no
earlier than as called for in the Approved Payment Schedule above. The actual
amount paid for the performance-based portion of Deferred Base Salary will be
determined by the approved Deferred Base Salary funding level.              
Involuntary Termination: If a Covered Officer is involuntarily terminated, any
unpaid Deferred Base Salary will be forfeited unless the Committee recommends
that the Covered Officer receive either all or a portion of the unpaid Deferred
Base Salary and the Committee’s recommendation is approved by FHFA after
consulting with Treasury, as appropriate.               Voluntary Termination:
If a Covered Officer voluntarily terminates employment, any unpaid Deferred Base
Salary will be forfeited.         Treatment Upon
Termination:
 
Target Incentive
Opportunity     Minimum Service Required: In order to be eligible to receive any
portion of an annual Target Incentive Opportunity upon termination, a Covered
Officer must have been employed for a minimum of four (4) whole calendar months
during the performance year for which the incentive is being earned.       Death
and Long-Term Disability: If a Covered Officer’s employment is terminated due to
either death or Long-Term Disability, any earned but unpaid portion of the
Target Incentive Opportunity will be paid as soon as administratively possible  
     

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                      following the date of death or the first day of Long-Term
Disability. The actual amount that is paid will be determined by the approved
LTI funding level.               If, at the time of the Covered Officer’s death
or Long-Term Disability, the LTI funding level has not been determined, the
award will remain outstanding until such determination is made. As soon as
administratively possible after the LTI Payment Determination Date (which is the
date on which the Committee approves the LTI funding level), but no later than
March 15 of the calendar year following each calendar year performance period,
the Covered Officer, or the Covered Officer’s beneficiary(ies), will receive all
unpaid portions of their Target Incentive Opportunity determined by the approved
LTI funding level.               The actual amount paid will also be subject to
an assessment of division and/or individual performance as described above if
the Covered Officer was a member of the Management Committee on the date of
death or immediately prior to the first day of Long-Term Disability.            
  Retirement: If a Covered Officer terminates employment due to Retirement (as
defined in Definitions), any earned but unpaid portion of the Target Incentive
Opportunity will be paid as soon as administratively possible. The actual amount
paid will be determined by the approved LTI funding level.               If, at
the time of the Covered Officer’s termination, performance against the
performance measure(s) has not been determined, the Target Incentive Opportunity
will remain outstanding until the LTI Payment Determination Date. As soon as
administratively possible after the LTI Determination Date, but no later than
March 15 of the calendar year following each calendar year performance period,
the Covered Officer’s right to receive a pro-rata payment shall become
non-forfeitable, subject to the Recapture Policy. The Covered Officer is
eligible to receive a pro-rata payment for the performance year in which the
Covered Officer was employed. If the Covered Officer is employed for less than
four (4) whole calendar months during a performance year, the Covered Officer
will forfeit the Target Incentive Opportunity payment for that performance year.
The pro-rata payment shall be calculated using the following methodology:      
                  Step 1. The number of whole months employed during the
applicable
          performance year (minimum of four months required)              
          Step 2. Divided by twelve (12), the number of whole months in the
performance
          year                         Step 3. Multiplied by 50% of the Covered
Officer’s annual Target Incentive
          Opportunity and adjusted for the approved LTI funding level for the
Incentive
          Opportunity payment.               The above formula will be applied
separately to each of the of the performance years for which a Covered Officer
is eligible for a pro-rata payment of the Target Incentive Opportunity.        
      The actual amount paid will also be subject to an assessment of division
and/or individual performance as described above if the Covered Officer was a
member of        

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                      the Management Committee on the date of Retirement.      
        Involuntary Termination: If a Covered Officer is involuntarily
terminated, any unpaid portion of the Target Incentive Opportunity will be
forfeited unless the Committee recommends that the Covered Officer receive
either all or a portion of the unpaid Target Incentive Opportunity and the
Committee’s recommendation is approved by FHFA after consulting with Treasury,
as appropriate.               Voluntary Termination: If a Covered Officer
voluntarily terminates employment, any unpaid portion of the Target Incentive
Opportunity will be forfeited.         Additional Forfeiture
Provision     Upon a “Forfeiture Event” (as defined in Definitions), any
unearned or any unpaid Total Incentive Opportunity will be cancelled and the
Covered Officer or former Covered Officer will be required to immediately repay
Freddie Mac the gross value of the Target Incentive Opportunity that was paid
during the 12 month period immediately prior to the Forfeiture Event.          
    In the event that a repayment is triggered under a current or former Covered
Officer’s Recapture Policy, any earned but unpaid amounts that are subject to
recapture under the terms of the Recapture Policy will be forfeited.        
Regulatory Approval and
Reservation of Rights     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 terms of this program are subject to and shall
be construed in accordance with applicable law and any applicable regulation,
guidance or interpretation issued by FHFA or Treasury.         Definitions    
Forfeiture Event: A Forfeiture Event shall mean the Covered Officer or former
Covered Officer directly or indirectly seeks or accepts employment with, or
provides professional services to, a “Competitor” in violation of any
non-competition covenant agreement between the Covered Officer and Freddie Mac
in effect as of the date the Covered Officer receives a Target Incentive
Opportunity.               Long-Term Disability: A Long-Term Disability shall be
as defined in Freddie Mac’s Long-Term Disability Plan.               Retirement:
A Covered Officer is eligible to retire when s/he has attained or exceeded the
Normal Retirement Age in the Freddie Mac Employees’ Pension Plan, which is
currently 65 years of age.