exv10w19







 




    Exhibit
    10.19



 




    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    DIRECTOR’S NONQUALIFIED STOCK OPTION AGREEMENT



 



    NONQUALIFIED STOCK OPTION AGREEMENT 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.



 



    (b) 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 become exercisable as provided in
    clause (a)(ii) of this paragraph, in whole or in part, at
    any time within a period beginning on the Date of Grant (as
    defined on the last page of this Agreement) and ending on
    July 14, 2015 (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 Date of Grant 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 July 15, 2005, and an additional
    25 percent at the end of each of the three succeeding terms
    of office thereafter.



 



    (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













 






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    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. Dividend Equivalents.



 



    (a) Generally.  Upon exercise of the
    Option (in whole or in part), or, to the extent that the Option
    is not exercised, upon the Expiration Date, the Grantee (or the
    person or persons who acquired the right to exercise the Option
    upon the Grantee’s death) shall be entitled to receive
    Dividend Equivalents from the Corporation with respect to which
    the Option is exercised or has expired, the record dates for
    which dividends have occurred during the period the Option was
    outstanding. Such Dividend Equivalents shall be subject to all
    terms and conditions (including forfeitures) otherwise
    applicable to the Option. Payment of such amounts shall be made
    in cash.



 



    (i) Relating to Cash Dividends.  If the
    Corporation declares and pays any cash dividend or distribution
    on Common Stock, the record date of which occurs while all or a
    portion of the Option remains outstanding, the Corporation shall
    credit to a bookkeeping account maintained on behalf of the
    Grantee, as promptly as practicable after the payment date of
    such dividend or distribution, a cash amount equal to the amount
    of cash actually paid as a dividend or distribution per share of
    Common Stock multiplied by the number of shares subject to the
    Option on such record date.



 



    (ii) Relating to Extraordinary Stock Dividends, Stock
    Splits, and Other Extraordinary Dividends Resulting in
    Adjustments to Options.  If the Corporation
    declares and pays a dividend or distribution in the form of
    Common Stock payable on Common Stock, or if there occurs a
    forward stock split of the Common Stock, or if there occurs
    another extraordinary dividend resulting in an adjustment under
    Paragraph 4(b) hereof, the record date of which occurs
    while all or a portion of the Option remains outstanding, the
    Corporation shall not credit any dividend equivalents to the
    Grantee’s bookkeeping account in connection therewith,
    except as otherwise determined by the Committee in accordance
    with Paragraph 4(b).



 



    (b) Forfeiture.  In the event any portion
    of the Option is forfeited, the Dividend Equivalents theretofore
    credited to the Grantee’s bookkeeping account in respect to
    that portion of the Option shall likewise be forfeited.









 






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    4. 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. In addition, each agreement evidencing
    an option granted to the Grantee under the Plan (as amended and
    restated) and outstanding at the Date of Grant of the Option is
    hereby amended by inserting the preceding sentence as additional
    text at the end of any provision setting forth limitations on
    transferability.



 



    (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 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









 






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    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.



 



    Date of Grant: July 15, 2005



 



    FEDERAL HOME LOAN




    MORTGAGE CORPORATION




    By:



 



    /s/  Margaret
    A. Colon








    Margaret A. Colon




    Senior Vice President &




    Chief Administrative Officer