exv10w20







 




    Exhibit
    10.20



 




    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    DIRECTORS NONQUALIFIED STOCK OPTION AGREEMENT



 



    This NONQUALIFIED STOCK OPTION AGREEMENT is dated
    September 8, 2006 (the “Grant Date”) between the
    Federal Home Loan Mortgage Corporation (the
    “Corporation”) and
                          
    (the “Grantee”), pursuant to the Federal Home Loan
    Mortgage Corporation 1995 Directors’ Stock Compensation
    Plan, as amended and restated effective May 14, 1998, and
    as may be subsequently amended (the “Plan”):



 



    1.  Grant.



 



    (a) Nonqualified Stock Option. The Corporation has
    granted to the Grantee a Nonqualified Stock Option (the
    “Option”) to purchase
                          
    (          ) shares
    of the Common Stock of the Corporation ($0.21 par value) at a
    purchase price of
    $           per
    share. The Option is subject to all applicable provisions of the
    Plan and to the terms and conditions set forth herein. The
    Option is not intended to constitute an incentive stock option
    within the meaning of Section 422 of the Internal Revenue
    Code of 1986, as amended.



 



    (b) Dividend Equivalents. The Corporation has not granted
    the Option with related dividend equivalent rights.



 



    (c) Coordination with Plan. All of the terms, conditions,
    and other provisions of the Plan are hereby incorporated by
    reference into this Directors Nonqualified Stock Option
    Agreement (the “Agreement”). Capitalized terms used in
    this Agreement but not defined herein shall have the same
    meanings as in the Plan. If there is any conflict between the
    provisions of this Agreement and the provisions of the Plan, the
    provisions of the Plan shall govern. The Grantee acknowledges
    receipt of a copy of the Plan and hereby agrees to be bound by
    the Plan (as presently in effect or hereafter amended) and this
    Agreement, and by all decisions and determinations of the
    Compensation and Human Resources Committee (the
    “Committee”) of the Board of Directors (the
    “Board”) thereunder.



 



    2.  Rights of Exercise.



 



    (a) Exercisability and Expiration Date. The Option may be
    exercised by the Grantee, to the extent it has vested as
    provided in clause (a)(ii) of this paragraph, in whole or
    in part, at any time or from time to time on or before the tenth
    anniversary of the Grant Date (the “Expiration Date”);
    provided, however, that the Option: (i) except as provided
    in Paragraph 2(c) below, may not be exercised unless the
    Grantee is at the time of exercise a Director of the Corporation
    and shall have been such continuously from the Grant Date to the
    date of such exercise; and (ii) shall become exercisable at
    the rate of 25 percent of the shares subject to the Option
    at the end of the Grantee’s term of office that commenced
    on the Grant Date, and an additional 25 percent at the end
    of each of the three succeeding terms of office thereafter;
    provided, however, that only whole shares shall vest, and
    fractional shares (if any) produced by application of the
    relevant percentage will be added to the number of shares
    produced by application of the relevant percentage in the next
    vesting period, and will vest when a whole number is attained.













 






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    (b) Form of Exercise. The Option shall be exercised by
    the Grantee giving notice of such exercise to the Corporation
    (or its designee) in such form as the Corporation may require in
    its sole discretion. Such notice shall specify the number of
    shares to be purchased and shall be accompanied by full payment
    of the purchase price of such shares (the “Exercise
    Price”). Payment of the Exercise Price shall be made
    (i) in cash, (ii) in shares of Common Stock of the
    Corporation having a “Fair Market Value” (as defined
    in the Plan) on the date of exercise at least equal to such
    purchase price, or (iii) in a combination of cash and
    shares of the Corporation’s Common Stock. In addition, such
    Exercise Price may be paid irrevocably by instructing such
    broker-dealer as may be designated by the Corporation to sell
    part or all of the shares to be purchased, simultaneously with
    such exercise or as soon as practicable thereafter, at the
    market in a broker’s transaction (within the meaning of
    section 4(4) of the Securities Act of 1933, as amended),
    the proceeds of which sale shall be at least equal to the
    Exercise Price for the shares to be purchased, plus applicable
    transaction costs, and to remit to the Corporation an amount
    equal to such Exercise Price.



 



    (c) Termination.



 



    (i) Death While on Board. In the event of the death of
    the Grantee while serving on the Board but prior to the
    Expiration Date, any restrictions on exercise otherwise
    applicable to the Option under Paragraph 2(a) shall lapse
    immediately and the Grantee’s Beneficiary shall have the
    right to exercise the unexercised portion of the Option during
    the one year period that begins as of the date of death;
    provided, however that at the end of such one year period, the
    Option shall cease to be exercisable.



 



    (ii) Disability. In the event that the Grantee ceases to
    be a member of the Board prior to the Expiration Date by reason
    of Disability (as defined in the Plan), any restrictions on the
    exercise otherwise applicable to the Option under
    Paragraph 2(a) shall lapse immediately and the Grantee
    shall have the right to exercise the unexercised portion of the
    Option at any time prior to the Expiration Date.



 



    (iii) Retirement and Early Retirement. In the event the
    Grantee ceases to be a member of the Board prior to the
    Expiration Date by reason of “Retirement” or
    “Early Retirement” (as defined in the Plan), any
    restrictions on exercise otherwise applicable to the Option
    under Paragraph 2(a)(i) shall lapse immediately but
    restrictions on exercise under paragraph 2(a)(ii) (if any)
    shall continue, and the Grantee may exercise such Option in
    accordance with Paragraph 2(a)(ii) at any time prior to the
    Expiration Date.



 



    (iv) Other Terminations. In the event that the
    Grantee’s membership on the Board terminates prior to the
    Expiration Date for any reason other than death, Disability,
    Early Retirement or Retirement, the portion of the Option which,
    as of the date of termination, remains subject to the exercise
    restrictions shall be forfeited, and the Grantee shall have
    three months after the date of termination in which to exercise
    any portion of the Option which, as of the date of termination,
    was exercisable, during which three month period the
    restrictions on exercise under Paragraph 2(a)(i) shall not
    apply.









 






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    (v) Death After Leaving Board. In the event of the death
    of the Grantee after the Grantee’s membership on the Board
    has ceased at a time that any portion of the Option remains
    exercisable under clauses (ii), (iii) or (iv) of this
    Paragraph 2(c), any restrictions on exercise otherwise
    applicable to such portion of the Option under
    Paragraph 2(a) shall lapse immediately and the
    Grantee’s Beneficiary shall have the right to exercise the
    unexercised portion of the Option during the one year period
    that begins as of the date of death; provided, however, that at
    the end of such one year period, the Option shall cease to be
    exercisable (the provisions of clauses (ii) and
    (iii) notwithstanding).



 



    The foregoing notwithstanding, nothing contained in this
    Paragraph 2(c) shall be deemed to permit the exercise of
    any portion of the Option after the Expiration Date.



 



    3.  Miscellaneous.



 



    (a) Limitations on Transfer. Except as otherwise provided
    herein, neither the Option nor any of the Grantee’s rights
    or interests therein shall be assignable or transferable by the
    Grantee other than by will or the laws of descent and
    distribution or to a designated Beneficiary in the event of the
    Grantee’s death. Except as otherwise provided herein,
    during the lifetime of the Grantee the Option shall be
    exercisable only by the Grantee (or his guardian or legal
    representative). The Option shall not be pledged or encumbered
    in any way and shall not be subject to execution, attachment or
    similar legal process. Other provisions of this Agreement
    notwithstanding, the portion of the Option which is not at that
    time subject to risk of forfeiture upon termination of service
    of the Grantee to the Corporation shall be transferable, solely
    for estate-planning purposes, if and to the extent that rules
    adopted by the Committee and then in effect (“Rules”)
    permit such transfers, and subject to the terms and conditions
    set forth in such Rules.



 



    (b) Adjustments. In the event of any change in the Common
    Stock of the Corporation by reason of any recapitalization,
    reorganization, merger, consolidation, spin-off, combination,
    repurchase or exchange of shares, stock dividend, or other
    similar corporate transaction or event that affects the Common
    Stock such that the Board determines that an adjustment to the
    Option is appropriate, then the Board will adjust the terms of
    the Option in a manner that is equitable to prevent substantial
    dilution or enlargement of the rights of the Grantee. Any such
    adjustment shall be effective and binding for all purposes under
    the Option when the Board gives notice of such adjustment to the
    Grantee.



 



    (c) No Stockholder Rights. The Grantee shall have no
    rights as a stockholder of the Corporation with respect to any
    shares of Common Stock subject to the Option prior to the valid
    exercise of the Option.



 



    (d) Legal Effect. This Agreement shall be legally binding
    when executed by the Corporation and delivered to the Grantee.



 



    (e) General. This Agreement shall be binding upon the
    heirs, executors, administrators and successors of the parties.
    This Agreement constitutes the entire agreement between the
    parties with respect to the Option, and supersedes any prior
    agreements or documents









 






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    with respect to the Option. No amendment, alteration,
    suspension, discontinuation or termination of this Agreement
    which may impose any additional obligation upon the Corporation
    or impair the rights of the Grantee with respect to the Option
    shall be valid unless in each instance such amendment,
    alteration, suspension, discontinuation or termination is
    expressed in a written instrument duly executed in the name and
    on behalf of the Corporation and by the Grantee.



 



    FEDERAL HOME LOAN




    MORTGAGE CORPORATION




    By:



 



    /s/  Paul
    G. George








    Paul G. George




    Executive Vice President — Human Resources