exv10w9







 




    Exhibit 10.9



 




    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    GLOBAL AMENDMENT TO AFFECTED STOCK OPTIONS UNDER

    NONQUALIFIED STOCK OPTION AGREEMENTS

    AND SEPARATE GRANT OF DIVIDEND EQUIVALENT RIGHTS



 



    WHEREAS, the Compensation and Human Resources Committee
    (including its predecessor committees) (the
    “Committee”) of the Federal Home Loan Mortgage
    Corporation (the “Corporation”) approved grants of
    nonqualified stock options with related dividend equivalent
    rights to certain employees under the Federal Home Loan Mortgage
    Corporation 1995 Stock Compensation Plan (the “1995
    Plan”) and the Federal Home Loan Mortgage Corporation 2004
    Stock Compensation Plan (the “2004 Plan”);



 



    WHEREAS, section 409A of the Internal Revenue Code and related
    regulatory guidance would result in certain unforeseeable
    negative tax consequences to the grantees of such nonqualified
    stock options (or portions thereof) that were not fully vested
    as of December 31, 2004 (including stock options issued in
    2005) (“Affected Stock Options”), absent amendment to
    such options;



 



    WHEREAS, Affected Stock Options generally include portions of
    options granted in 2000, 2001, 2002 and 2003 and all options
    granted in 2004 and 2005; and



 



    WHEREAS, the Committee authorized the Chief Executive Officer
    and the Executive Vice President — Human Resources to
    modify the terms of the Affected Stock Options to remove the
    existing provisions regarding dividend equivalents, and to
    replace them with a right that is “explicitly set forth as
    a separate arrangement” within the meaning of Proposed
    Treasury Regulation
    § 1.409A-1(b)(5)(iii)(E),
    such right to provide for the distribution, as soon as
    practical, of a dollar amount equal to the dividend equivalents
    accrued through the date of such distribution, and, as regards
    future dividend equivalents, for distribution of those amounts
    as soon as practical to the extent that they would otherwise
    have accrued.



 



    NOW, THEREFORE, BE IT RESOLVED that pursuant to Section 8.4
    of the 1995 Plan and Section 9.4 of the 2004 Plan and
    applicable provisions of outstanding option agreements, the
    nonqualified stock option agreements that include an Affected
    Stock Option are hereby amended as set forth in
    paragraphs 1, 2 and 3 below (as applicable), effective
    December 31, 2005:



 


			
	 	    1.  
	
    As to the Affected Stock Options granted in 2003 or earlier,
    Section 1(b) is amended to add the following at the end
    thereof:














 





			
	 	
	
    The foregoing provision and other provisions of this Agreement
    notwithstanding (including Sections 3(a) and 4), no
    Dividend Equivalents are granted or will be credited under this
    Agreement as to that portion of the Option that was not vested
    and exercisable at December 31, 2004 (“Affected Stock
    Options”). The bookkeeping account described in
    Section 3(a)(i) will be adjusted to cancel any amounts
    credited as Dividend Equivalents on such Affected Stock Options
    prior to December 31, 2005. With respect to such Affected
    Stock Options, references to Dividend Equivalents in any other
    provision of this Agreement shall be understood to refer to a
    dollar amount equal to zero. Affected Stock Options will remain
    subject to adjustment in accordance with Section 5(c)
    (ordinary cash dividends do not trigger such adjustments,
    however). The terms of this Section 1(b) are intended to
    meet the requirements of Proposed Treasury Regulation
    § 1.409A-1(b)(5)(iii)(E)
    with respect to Affected Stock Options.




 


			
	 	    2.  
	
    As to Affected Stock Options granted in 2004 or 2005,
    Section 1(b) is amended to read as follows:




 


			
	 	    (b) 
	
    Dividend Equivalents. No right of the Grantee to receive from
    the Corporation amounts equivalent to dividends on Common Stock
    (“Dividend Equivalents”) is granted under this
    Agreement. References to Dividend Equivalents in any other
    provision of this Agreement shall be disregarded or understood
    to refer to a dollar amount equal to zero, as the context may
    require. The bookkeeping account maintained under this Agreement
    for Dividend Equivalents on and before December 31, 2005
    will be cancelled. The Option will remain subject to adjustment
    in accordance with Section 5(c) (ordinary cash dividends do
    not trigger such adjustments, however). The terms of this
    Section 1(b) are intended to meet the requirements of
    Proposed Treasury Regulation
    § 1.409A-1(b)(5)(iii)(E).




 


			
	 	    3.  
	
    As to Affected Stock Options granted in 2004 or 2005,
    Section 3 is amended by deleting it and inserting in its
    stead the term “[Reserved.]”




 



    BE IT FURTHER RESOLVED that the Corporation hereby grants to the
    Grantee whose Options have been amended hereby the following
    rights to payments relating to dividends. These rights are an
    arrangement separate from those Options:



 


			
	 	    A.  
	
    Dividends Accrued at December 31, 2005. The
    Corporation shall pay in cash to the Grantee, no later than
    March 15, 2006, an amount equal to the bookkeeping account
    balance that is cancelled as a result of the amendments to
    Grantee’s Option(s) under the preceding resolution
    (paragraphs 1 and 2).




 


			
	 	    B.  
	
    Relating to Cash Dividends after December 31, 2005.
    If the Corporation declares and pays a cash dividend or
    distribution on Common Stock, other than an extraordinary
    dividend, and the record date of which occurs while all or a
    portion of Grantee’s Affected Stock Option remains
    outstanding, then an amount of cash shall be paid to





    

    2








 






    Grantee, as promptly as practicable after the payment date for
    such dividend or distribution (and in no event more than
    60 days thereafter), equal to the number of shares subject
    to the outstanding Affected Stock Option on such record date
    multiplied by the amount of cash actually paid as a dividend or
    distribution on each outstanding share of Common Stock at such
    payment date. This right will not apply in the case of any
    extraordinary dividend or distribution or non-cash dividend or
    distribution. This right is separate from the Affected Stock
    Option, and no amount is payable hereunder solely due to the
    exercise or expiration of the Affected Stock Option or in
    respect of the period following the latest record date preceding
    the exercise or expiration of the Affected Stock Option.



 


			
	 	    C.  
	
    Dividend equivalents payable and paid to Grantee under A and B
    above are non-forfeitable.




 


			
	 	    D.  
	
    Withholding. Amounts payable under A and B above shall be
    reduced by the amount of all Federal, state, local and other
    taxes that may be required to be withheld by the Corporation
    with respect to such payment.




 



    BE IT FURTHER RESOLVED that the nonqualified stock options (or
    portions thereof) that were fully vested as of December 31,
    2004 (i.e., options other than Affected Stock Options) are not
    modified or otherwise affected by the amendments set forth
    above, and the separate rights to dividend equivalents and
    related rights granted under the immediately preceding
    resolution do not apply to such options (or portions thereof).



 



    IN WITNESS WHEREOF, the Corporation has caused this Global
    Amendment to be executed by its duly authorized officer,
    effective as of the 31st day of December 2005.



 



    FEDERAL HOME LOAN




    MORTGAGE CORPORATION



 


			
	 	    By: 
	
    /s/  Paul
    G. George









    Paul G. George




    Executive Vice President




    Human Resources




    ATTEST:



 



              




    /s/  Stacy
    Papadopoulos








    Assistant Secretary




    

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