exv10w16







 




    Exhibit
    10.16



 




    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    EMPLOYEE STOCK PURCHASE PLAN



 




    As
    Amended and Restated



 




    Effective
    January 1, 2005













 







    TABLE OF
    CONTENTS



 


	 	 	 	 	 
	
 
	
 
	
 
	
 
	

    Page



	 

	

    ARTICLE I  Establishment of the Plan


	
 
	
    1

	

    1.1


	
 
	

    Purpose


	
 
	
    1

	

    1.2


	
 
	

    Effective Date


	
 
	
    1

	

    1.3


	
 
	

    Name


	
 
	
    1

	

    ARTICLE II  Definitions


	
 
	
    1

	

    2.1


	
 
	

    Board


	
 
	
    1

	

    2.2


	
 
	

    Compensation


	
 
	
    1

	

    2.3


	
 
	

    Committee


	
 
	
    1

	

    2.4


	
 
	

    Custodian


	
 
	
    2

	

    2.5


	
 
	

    Eligible Employee


	
 
	
    2

	

    2.6


	
 
	

    Employee


	
 
	
    2

	

    2.7


	
 
	

    Fair Market Value


	
 
	
    2

	

    2.8


	
 
	

    Holding Period


	
 
	
    2

	

    2.9


	
 
	

    Interest


	
 
	
    2

	

    2.10


	
 
	

    Offering


	
 
	
    2

	

    2.11


	
 
	

    Offering Period


	
 
	
    2

	

    2.12


	
 
	

    Option


	
 
	
    2

	

    2.13


	
 
	

    Option Grant Date


	
 
	
    2

	

    2.14


	
 
	

    Participant


	
 
	
    2

	

    2.15


	
 
	

    Participant Account


	
 
	
    3

	

    2.16


	
 
	

    Participant Share Account


	
 
	
    3

	

    2.17


	
 
	

    Plan Administrator


	
 
	
    3

	

    2.18


	
 
	

    Purchase Date


	
 
	
    3

	

    2.19


	
 
	

    Purchase Price


	
 
	
    3

	

    ARTICLE III  Eligibility


	
 
	
    3

	

    3.1


	
 
	

    Generally


	
 
	
    3

	

    3.2


	
 
	

    Limitations


	
 
	
    3

	

    ARTICLE IV  Offering


	
 
	
    4

	

    4.1


	
 
	

    Committee Discretion


	
 
	
    4

	

    4.2


	
 
	

    Changing the Terms and Conditions


	
 
	
    4

	

    ARTICLE V  Participation


	
 
	
    4

	

    5.1


	
 
	

    Generally


	
 
	
    4

	

    5.2


	
 
	

    Grant of Option to Eligible Employees


	
 
	
    4

	

    5.3


	
 
	

    Payroll Deductions


	
 
	
    5

	

    5.4


	
 
	

    Lump Sum Payments


	
 
	
    5

	

    ARTICLE VI  Purchase of Stock


	
 
	
    5

	

    6.1


	
 
	

    Participant Account; Exercise of Option on Purchase Date


	
 
	
    5

	

    6.2


	
 
	

    Excess Payments


	
 
	
    6

	

    6.3


	
 
	

    Limitation


	
 
	
    6

	

    ARTICLE VII  Withdrawal, Employment Termination and
    Leave of Absence


	
 
	
    6

	

    7.1


	
 
	

    Withdrawal


	
 
	
    6

	

    7.2


	
 
	

    Employment Termination


	
 
	
    7

	

    7.3


	
 
	

    Leave of Absence


	
 
	
    7

	

    ARTICLE VIII  Stock


	
 
	
    7

	

    8.1


	
 
	

    Generally


	
 
	
    7

	

    8.2


	
 
	

    Stockholder Rights


	
 
	
    7

	

    8.3


	
 
	

    Transfer and Forfeiture


	
 
	
    7

	

    8.4


	
 
	

    Removing Shares From the Participant Share Account


	
 
	
    7

	

    8.5


	
 
	

    Dividends


	
 
	
    8



















 





	 	 	 	 	 
	
 
	
 
	
 
	
 
	

    Page



	 

	

    ARTICLE IX  Administration


	
 
	
    8

	

    9.1


	
 
	

    Generally


	
 
	
    8

	

    9.2


	
 
	

    Sale of Shares


	
 
	
    8

	

    9.3


	
 
	

    Expenses


	
 
	
    8

	

    9.4


	
 
	

    Custodian


	
 
	
    8

	

    ARTICLE X  Miscellaneous


	
 
	
    9

	

    10.1


	
 
	

    Transferability


	
 
	
    9

	

    10.2


	
 
	

    Change in Capitalization


	
 
	
    9

	

    10.3


	
 
	

    Amendment or Termination


	
 
	
    9

	

    10.4


	
 
	

    No Right to Continued Employment


	
 
	
    10

	

    10.5


	
 
	

    Taxes


	
 
	
    10

	

    10.6


	
 
	

    Nonexclusivity of the Plan


	
 
	
    10

	

    10.7


	
 
	

    Stockholder Approval


	
 
	
    10

	

    10.8


	
 
	

    Equal Rights and Privileges


	
 
	
    10

	

    10.9


	
 
	

    Controlling Law


	
 
	
    10



















 





 




    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    EMPLOYEE STOCK PURCHASE PLAN

    (Amended and Restated as of January 1, 2005)



 




    ARTICLE
    I

    Establishment of the Plan



 



    1.1 Purpose.  This document constitutes a
    restatement of the employee stock purchase plan (the
    “Plan”) of the Federal Home Loan Mortgage Corporation
    (the “Corporation”) as originally adopted effective as
    of July 1, 1989, and as subsequently restated effective as
    of January 1, 1995. The purpose of the Plan is to allow
    employees to share in the growth of the Corporation through
    ownership of shares of the Corporation’s voting Common
    Stock, par value $0.21 per share (the “Common Stock”).
    It is the intention of the Corporation that the Plan qualify as
    an “employee stock purchase plan” within the meaning
    of Section 423 of the Internal Revenue Code of 1986, as
    amended (the “Code”). The Plan shall be interpreted in
    a manner consistent with that section of the Code.



 



    1.2 Effective Date.  The Plan as restated
    herein shall be effective as of January 1, 2005 and shall
    apply to Offerings on and after such date; provided, however,
    that the terms of participation in any Offering that commenced
    before January 1, 2005 but which ends on or after that date
    will be governed by the Plan provisions as in effect at the
    commencement of such Offering, except that shares delivered in
    such Offering shall count against the limit set forth in
    Section 8.1 and the Plan shall remain continuously in
    effect through such Offering Period in accordance with
    Section 10.3.



 



    1.3 Name.  The name of the Plan is the
    Federal Home Loan Mortgage Corporation Employee Stock Purchase
    Plan.



 




    ARTICLE
    II

    Definitions



 



    2.1 Board.  The Corporation’s Board
    of Directors.



 



    2.2 Compensation.  The non-deferred cash
    remuneration paid by the Corporation to an Employee, including
    salary, overtime pay, shift differentials, vacation pay, bonuses
    and commissions plus the amount of any elective deferrals under
    the Corporation’s Thrift/401(k) Savings Plan, the amount of
    any salary reduction amounts under the Corporation’s
    cafeteria plan, and amounts attributable to qualified
    transportation fringes that are excluded from gross income under
    Section 132(f)(4) of the Code; provided, however, that the
    Committee or Plan Administrator may include or exclude specific
    types of remuneration from Compensation for administrative
    convenience or otherwise to further the purposes of the Plan,
    subject to Section 10.8.



 



    2.3 Committee.  The Compensation and Human
    Resources Committee of the Board of Directors of the
    Corporation, or such other Board committee as may be designated
    by the Board to administer the Plan; provided, however, that the
    Committee shall at all times consist of two or more directors,
    each of whom is not an employee of the Corporation or any
    Affiliate. The full Board may perform any function of the
    Committee hereunder, in which case the term
    “Committee” shall refer to the Board.




    

    1








 






    2.4. Custodian.  UBS Financial Services,
    Inc., Smith Barney Inc. or other custodian as may be appointed
    by the Plan Administrator.



 



    2.5 Eligible Employee.  An Employee who
    has met the eligibility requirements under Article III,
    except as may be limited under Sections 7.2 and 7.3.



 



    2.6 Employee.  Any person employed by the
    Corporation on a full- or part-time regular basis as defined in
    Freddie Mac Corporate Policy
    No. 3-221,
    except that any person whose customary employment is either less
    than 20 hours per week or less than 5 months in any
    calendar year shall not be deemed an Employee. For this purpose,
    a person on approved paid or approved unpaid leave for
    90 days or less or who has a statutory or contractual right
    of continued employment upon the expiration of a leave of
    greater than 90 days shall be deemed to be an Employee.



 



    2.7 Fair Market Value.  As of any given
    date, the average of the high and the low sale prices of a share
    of Common Stock reported for composite transactions in New York
    Stock Exchange listed securities in print or electronically by
    The Wall Street Journal or by another recognized provider
    designated by the Committee, or, if no such prices are reported
    for such date, on the most recent trading day prior to such date
    for which such prices were reported; provided, however, that the
    Committee may in good faith, establish alternative methods or
    procedures for determining Fair Market Value.



 



    2.8 Holding Period.  The period of time,
    if any, following the Purchase Date during which Common Stock
    may not be sold, certificated, pledged, or otherwise transferred
    from the Participant Share Account. A Holding Period may be
    established by the Committee, in its discretion, with respect to
    any Offering, and may apply to all or a designated portion of
    the shares of Common Stock purchased by each Participant in the
    Offering, subject to Section 10.8.



 



    2.9 Interest.  Interest may be credited on
    payroll deductions accumulated in each Participant Account and
    on any Interest previously credited thereon periodically (or on
    the dates otherwise specified in Sections 6.2, 7.1 and 7.2)
    and on the Purchase Date, if so determined by the Committee.
    Interest shall not be credited on any lump sum payments tendered
    pursuant to Section 5.4, unless otherwise determined by the
    Committee. The rate of such Interest, if any, and the periodic
    crediting dates shall be set by the Committee pursuant to
    Section 4.1.



 



    2.10 Offering.  The opportunity extended
    to Eligible Employees to purchase Common Stock at the end of a
    specified Offering Period through participation in the Plan.



 



    2.11 Offering Period.  The period of time
    established by the Committee from time to time for an Offering,
    extending from the Option Grant Date for a specified period;
    provided, however, that under no circumstances shall any
    Offering Period exceed 27 months or such other period as
    may be required under Code section 423(b)(7).



 



    2.12 Option.  The conditional right of an
    Eligible Employee to purchase a specified dollar amount of
    shares or specified number of shares of Common Stock under the
    Plan in a specified Offering.



 



    2.13 Option Grant Date.  The first day of
    the Offering Period on which the New York Stock Exchange is
    open, which shall be deemed to be the day on which an Option is
    granted to a Participant.



 



    2.14 Participant.  An Eligible Employee
    who has been granted an Option in a given Offering and has taken
    any other required steps to participate in, and not withdrawn
    from, such Offering.




    

    2








 






    2.15 Participant Account.  An account
    established and maintained by the Corporation in the name of
    each Participant, to hold the Participant’s payroll
    deductions and any Interest accumulated thereon, together with
    lump sum payments tendered in accordance with Section 5.4.



 



    2.16 Participant Share Account.  An
    account established and maintained by the Custodian in which the
    shares of Common Stock purchased pursuant to this Plan and
    shares purchased by the reinvestment of dividends on such shares
    are held. This account may hold other shares of Common Stock
    acquired through the Corporation’s compensation programs or
    may be a subaccount under another account established in
    connection with the Corporation’s compensation programs, to
    the extent permitted by the Custodian and agreed to by the Plan
    Administrator in writing.



 



    2.17 Plan Administrator.  The Senior Vice
    President, Human Resources, or other person or committee as
    designated by the Committee.



 



    2.18 Purchase Date.  The last day of an
    Offering Period on which the New York Stock Exchange is open.



 



    2.19 Purchase Price.  The exercise price
    of each Option established by the Committee with respect to a
    particular Offering; provided, however, that such price shall
    not be less than the lesser of: (i) eighty-five percent
    (85%) of the Fair Market Value of the Common Stock on the Option
    Grant Date or (ii) eighty-five percent (85%) of the Fair
    Market Value of the Common Stock on the Purchase Date. Subject
    to the foregoing, the Committee may establish the Purchase Price
    with reference to the Fair Market Value of Common Stock (or a
    specified percentage thereof) on one or more specified dates
    during the Offering Period, but it need not be established with
    reference to Fair Market Value on both the Grant Date and the
    Purchase Date.



 




    ARTICLE
    III

    Eligibility



 



    3.1 Generally.  Provided that the Employee
    shall have timely enrolled in the manner specified by the
    Committee by the applicable deadline(s), an Employee shall be
    eligible to participate in the Plan for a given Offering if he
    or she (i) is an Employee on the Option Grant Date, and
    (ii) continuously meets any other eligibility requirements
    under the Plan or specified by the Plan Administrator through
    the Purchase Date for that Offering.



 



    3.2 Limitations.  Other provisions of the
    Plan notwithstanding, no Employee may be granted an Option if
    and to the extent that (i), immediately after the Option is
    granted, such Employee would own stock representing five percent
    (5%) or more of the total combined value or voting power of all
    classes of the stock of the Corporation, determined in
    accordance with Code Sections 423(b)(3) and 424(d); or
    (ii) such Option would permit the Employee’s rights to
    purchase stock under all of the Corporation’s plans subject
    to Code Section 423 to accrue at a rate which exceeds the
    fair market value dollar limit of such stock (currently $25,000)
    for the calendar year determined in accordance with Code
    Section 423(b)(8).




    

    3








 







    ARTICLE
    IV

    Offering



 



    4.1 Committee Discretion.  The Committee
    shall establish the terms and conditions of each Offering in
    accordance with the applicable terms of the Plan, including:



 



    (a) the Offering Period(s);



 



    (b) the maximum Fair Market Value or other dollar limit on
    shares, or the maximum number of shares, that may be subject to
    the Option granted to each Participant; provided, however, that
    such maximum limit shall be established so as not to exceed the
    limit under Section 3.2;



 



    (c) the formula for determination of the Purchase Price;



 



    (d) the forms of payment that will be made available to pay
    for Common Stock purchased upon exercise of the Option;



 



    (e) the Holding Period, if any;



 



    (f) the rate of Interest and times at which Interest will
    be credited, if any; and



 



    (g) whether to permit excess payments under Section 6.2 to
    be carried forward to a subsequent Offering Period.



 



    Any determination under the Plan within the discretion of the
    Plan Administrator may instead be made by the Committee. Unless
    otherwise specified by the Committee, the Plan Administrator
    shall retain discretion to thereafter change such determination.



 



    4.2 Changing the Terms and
    Conditions.  Once the terms and conditions in
    Section 4.1 are established by the Committee with respect
    to a particular Offering, they shall remain in effect with
    respect to subsequent Offerings unless expressly changed by the
    Committee.



 




    ARTICLE
    V

    Participation



 



    5.1 Generally.  An Eligible Employee may
    elect to participate in an Offering by completing any enrollment
    procedures required by the Committee or the Plan Administrator
    by the applicable deadline(s). Such election shall be in such
    manner or form, and subject to such rules and limitations, as
    may be specified by the Committee or the Plan Administrator. The
    Plan Administrator may require any or all of such elections to
    be made by a specified date or dates before the Offering Period,
    or may permit such elections to be made by a specified date or
    dates prior to and including the Purchase Date.



 



    5.2 Grant of Option to Eligible
    Employees.  Upon the Option Grant Date, each
    Eligible Employee shall be granted an Option to purchase a
    specified dollar amount or number of shares not exceeding the
    maximum limit on shares permitted to be purchased under
    Section 4.1(b). The grant of the Option may be made subject
    to requirements imposed by the Plan Administrator or the
    Committee that the Eligible Employee elect to participate in the
    Offering, and may be conditioned upon such election.




    

    4








 






    5.3 Payroll Deductions.  To the extent
    that the Committee has authorized payroll deductions with
    respect to the Offering, then:



 



    (a) Effective Date. An electing Participant’s
    payroll deductions shall become effective as soon as
    administratively feasible during the Offering Period.



 



    (b) Adoption of Administrative Rules. The Committee
    or Plan Administrator may adopt rules that require a Participant
    to accumulate in his or her Participant Account, through any
    combination of payroll deductions and/or lump sum payments under
    Section 5.4, an amount sufficient to pay the Purchase Price
    of the full Option or a specified portion thereof by the
    Purchase Date. Such rules will specify whether any failure to
    accumulate such amount (i) may be deemed an election to
    withdraw from the Offering, in which case the balance in the
    Participant Account shall be refunded as provided by
    Section 7.1, (ii) shall be deemed an election to
    exercise the Option to the extent of such balance as provided by
    Section 6.1, or (iii) shall have other specified
    consequences. The rules will also describe whether, and to what
    extent, Participants will be allowed to adjust their payroll
    deductions during the Offering Period, and the process for
    cessation of contributions described in Section 5.3(c).



 



    (c) Cessation and Resumption of Payroll Deductions.
    A Participant may instruct the Corporation to cease payroll
    deductions, which shall be effective on the first payroll date
    occurring at least fifteen (15) days (or such other period
    as specified by the Plan Administrator) after the Corporation
    receives notice (consistent with the administrative rules
    described in Section 5.3(b)) to cease deductions. Notice
    shall be provided by the Participant in a manner consistent with
    the procedures specified by the Plan Administrator. A
    Participant who has ceased payroll deductions may elect to:
    (i) withdraw from the Offering in accordance with
    Section 7.1; or (ii) have his or her Participant
    Account maintained through the Purchase Date (or such earlier
    date as the Plan Administrator may specify), at which time the
    amounts in the Participant Account will, to the extent permitted
    under the administrative rules described in Section 5.3(b),
    be used to pay the Purchase Price upon exercise of the Option
    (in full or in part). If the Participant has not withdrawn from
    the Offering, the Plan Administrator may determine to permit
    such a Participant to resume payroll deductions, subject to
    Section 10.8.



 



    (d) Participant Deduction Authorization. The
    election for payroll deductions shall authorize deductions by
    the Corporation from Compensation.



 



    (e) Interest. Interest, if any, credited to a
    Participant Account may not be applied to pay the Purchase
    Price, but may be withdrawn from the Account in accordance with
    such rules as the Plan Administrator may specify.



 



    5.4 Lump Sum Payments.  To the extent that
    the Committee authorizes lump sum payments, a Participant who
    elects to pay the Purchase Price (or any portion thereof) by
    lump sum may tender such payment to the Corporation in a manner
    and at such time as may be specified by the Plan Administrator,
    provided that such time is not later than the Purchase Date.



 




    ARTICLE
    VI

    Purchase of Stock



 



    6.1 Participant Account; Exercise of Option on Purchase
    Date.  Any amounts withheld as payroll deductions
    from a Participant’s Compensation during an Offering Period
    shall be reflected in a




    

    5








 






    Participant Account, to which balance shall be added any lump
    sum payment amounts tendered by the Participant under
    Section 5.4 (to the extent permitted by the terms of a
    particular Offering). Except as may be limited under rules
    adopted by the Plan Administrator, if a Participant has not
    withdrawn from participation in an Offering on the Purchase
    Date, the Participant’s Option shall be exercised
    automatically by applying all amounts accumulated in the
    Participant Account (other than Interest, if paid) to the
    purchase of Common Stock at the Purchase Price, subject to
    applicable limitations under Section 4.1(b). The
    Corporation or its designee shall allocate such shares purchased
    to the Participant Share Accounts. The foregoing
    notwithstanding, the Committee may provide for the automatic
    cancellation of an Offering based on specified circumstances
    arising at or before the Purchase Date, including the case in
    which the Purchase Price would equal or exceed the Fair Market
    Value of Common Stock at the Purchase Date.



 



    6.2 Excess Payments.  Except as described
    herein, in the event that the sum of a Participant’s
    accumulated payroll deductions and any lump sum payment tendered
    under Section 5.4 exceeds the amount applied to the
    purchase of Common Stock on the Purchase Date under
    Section 6.1, the excess over the aggregate Purchase Price
    of Common Stock shall be refunded to the Participant within
    sixty (60) days of the Purchase Date. Such refund shall be
    entitled to Interest through the Purchase Date, if and to the
    extent authorized by the Committee, in accordance with the rules
    then in effect under the Plan. The Committee may, in
    establishing the terms of an Offering as described in Section
    4.1, provide that such excess amounts accumulated in the
    Participant Accounts will be applied for the purchase of shares
    in a subsequent Offering Period.



 



    6.3 Limitation.  If on any Purchase Date
    the total number of shares to be purchased would cause the
    aggregate number of shares delivered under the Plan to exceed
    the total number of shares available for delivery under
    Section 8.1 of the Plan, then the number of shares to be
    purchased on such Purchase Date by any Participant shall be
    reduced pro-rata based on the number of shares for which the
    Participant’s Option would have been exercised, so that the
    number of shares purchased by all Participants equals the number
    of remaining available shares.



 




    ARTICLE
    VII

    Withdrawal, Employment Termination and Leave of
    Absence



 



    7.1 Withdrawal.  A Participant, by giving
    notice to the Corporation by such deadline and in such form as
    the Plan Administrator may establish, may withdraw from the Plan
    with respect to a specified Offering. In the event a Participant
    so withdraws: (i) payroll deductions, if any, previously
    authorized by such Participant shall cease, (ii) no shares
    shall be purchased for him or her on the Purchase Date for such
    Offering, and (iii) all amounts accumulated in his or her
    Participant Account, whether through payroll deduction, lump sum
    payment (if available) or crediting of Interest (if any,
    pursuant to Section 2.9), shall be refunded to him or her within
    sixty (60) days after the Purchase Date for the specified
    Offering. In such case, if the crediting of any Interest has
    been authorized by the Committee in accordance with
    Section 2.9, such crediting will apply only through the
    Purchase Date and not with respect to any period thereafter. A
    Participant who has instructed the Corporation to cease payroll
    deductions and who, pursuant to Section 5.3(c), receives a
    refund of the balance of his or her Participant Account shall be
    deemed to have withdrawn from the Plan for that Offering. A
    Participant’s withdrawal will not have any effect upon his
    or her eligibility to participate during any subsequent Offering.




    

    6








 






    7.2 Employment Termination.  In the event
    that a Participant’s employment terminates for any reason
    (including disability, retirement or death), no further payroll
    deduction shall be made from any Compensation due and owing to
    the Participant at such time and the Participant shall not be
    required or permitted to make a lump sum payment thereafter
    under the Plan. The Corporation shall refund the balance in the
    Participant Account with Interest, if any (pursuant to
    Section 2.9), credited through no later than the
    termination date, to the Participant, or, if the Participant is
    deceased, in accordance with Section 10.1, within sixty
    (60) days after the termination date. In such case, the
    Participant’s Option shall terminate at the time of
    termination of employment, and no shares may be purchased for a
    Participant thereafter for any reason.



 



    7.3 Leave of Absence.  The Plan
    Administrator may adopt rules governing Participants who take a
    leave of absence in excess of 90 days (without a statutory
    or contractual right to return) or who have other changes in
    employment status not otherwise covered by this
    Section 7.3, which rules may specify that such
    Participants’ participation may be limited or terminated
    (subject to the explicit terms of the Plan and the requirements
    of Code Section 423).



 




    ARTICLE
    VIII

    Stock



 



    8.1 Generally.  The shares of Common Stock
    of the Corporation to be delivered under the Plan upon purchase
    by Participants may consist, in whole or in part, of authorized
    but unissued shares, treasury shares, or shares acquired in
    market transactions on behalf of the Participants. The maximum
    number of shares that may be delivered upon purchase by
    Participants under the Plan shall be 3,600,000 plus the balance
    of any shares authorized for use under this Plan prior to its
    restatement effective January 1, 2005, subject to
    adjustment upon changes in capitalization of the Corporation as
    provided in Section 10.2. Any shares purchased by
    Participants pursuant to dividend reinvestment under
    Section 8.5 shall not be counted against the shares
    reserved for delivery under this Section 8.1.



 



    8.2 Stockholder Rights.  Subject to
    Section 8.3, upon purchase of shares on each Purchase Date,
    a Participant shall acquire all the rights and privileges of a
    stockholder in the Corporation with respect to shares delivered
    to him or her under the Plan on such Purchase Date, including
    the right to direct the vote of the shares on any matter for
    which the record date for voting is on or after such Purchase
    Date and the right to receive any dividend for which the record
    date is on or after such Purchase Date, for so long as such
    shares are credited to the Participant Share Account. These
    rights shall be subject to the customary terms and conditions
    applicable to shares held for customers in a brokerage account,
    except as otherwise provided by the Plan Administrator.



 



    8.3 Transfer and Forfeiture.  No
    Participant may sell, certificate, pledge or otherwise transfer
    the shares delivered to him or her under the Plan after the
    Effective Date until after the expiration of the applicable
    Holding Period, if any, except as permitted under Offering terms
    or rules adopted by the Committee. Shares purchased under the
    Plan are non-forfeitable.



 



    8.4 Removing Shares From the Participant Share
    Account.  After the expiration of the Holding
    Period, if any, applicable to shares, a Participant may remove
    shares from his or her Participant Share Account by
    (i) directing the sale of such shares; (ii) directing
    the issuance and delivery of a share certificate evidencing such
    shares; or (iii) if the Plan Administrator so permits,
    transferring such shares to another brokerage account, in each
    case subject to such rules as the Plan Administrator may
    establish (which may limit the availability of any of these
    alternatives so long as




    

    7








 






    some means for removal of shares is provided). In addition, a
    Participant’s ability to remove shares from the Participant
    Share Account and subsequent transactions in such shares may be
    restricted by the Plan Administrator for administrative reasons,
    may be conditioned upon the Participant’s agreement to
    promptly disclose his or her subsequent sales or dispositions of
    the shares and the terms thereof, and shall be subject to the
    Corporation’s securities compliance and insider trading
    rules and its code of conduct. Shares that are sold, shares for
    which certificates are issued or delivered (other than to the
    Custodian or its nominee) or shares that are transferred to
    another brokerage account will no longer be deemed held for a
    Participant’s Share Account.



 



    8.5 Dividends.  With regard to dividends
    declared and paid on shares held in a Participant Share Account
    at the record date for such dividends, a Participant may elect
    to: (i) receive such dividends in cash; or (ii) have
    such dividends reinvested in additional shares of Common Stock.
    Such dividend reinvestment purchases may be from the Corporation
    or in the open market on such terms and conditions as may be
    approved by the Plan Administrator, but in no event will any
    discount in the purchase price of shares provided under the Plan
    for regular Plan purchases apply to the dividend reinvestment
    purchases. Shares of Common Stock purchased through reinvestment
    of dividends shall not be regarded as purchased pursuant to the
    terms of this Plan.



 




    ARTICLE
    IX

    Administration



 



    9.1 Generally.  Subject to
    Section 4.1, the Plan shall be administered by the Plan
    Administrator and persons to whom the Plan Administrator may
    delegate authority. The Plan Administrator shall be vested with
    full authority to make, administer, and interpret such rules and
    regulations as deemed necessary to administer the Plan, and any
    determination, decision, or action of the Plan Administrator or
    persons to whom authority has been delegated in connection with
    the construction, interpretation, administration or application
    of the Plan shall be final, conclusive and binding upon all
    Participants. The Plan Administrator shall have the authority to
    employ agents to perform such of the administrative duties
    hereunder as may be delegated to such agents, and to authorize
    the payment of reasonable compensation for the performance of
    services by such agents. All actions by the Plan Administrator
    shall be deemed actions by or on behalf of the Corporation.



 



    9.2 Sale of Shares.  The Plan
    Administrator shall establish a procedure pursuant to which a
    Participant may arrange, after expiration of any applicable
    Holding Period, for the sale of shares credited to his or her
    Participant Share Account. Neither the Plan Administrator nor
    the Corporation shall have responsibility for, or incur
    liability as a result of, any transaction described in
    Section 8.4.



 



    9.3 Expenses.  Expenses associated with
    the purchase of shares pursuant to Article VI of the Plan
    and administration of the Plan shall be borne by the
    Corporation. Expenses incurred in connection with
    Participant’s sale of shares shall be borne by the
    Participant. Reasonable fees may be charged to Participants for
    other transactions and services under the Plan, in the
    discretion of the Plan Administrator.



 



    9.4 Custodian.  The Plan Administrator may
    appoint a Custodian that shall perform such duties as may be set
    forth in the Plan or in any agreement between the Corporation
    and the Custodian.




    

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    ARTICLE
    X

    Miscellaneous



 



    10.1 Transferability.  No right or
    interest of a Participant under the Plan may be pledged,
    encumbered, or hypothecated to or in favor of any party, made
    subject to any lien, obligation, or liability of such
    Participant, or otherwise assigned, transferred, or disposed of
    except by will or the laws of descent and distribution (subject
    to the limitations set forth in Section 7.2), and any right
    of a Participant under the Plan will be exercisable during the
    Participant’s lifetime only by the Participant. The
    foregoing notwithstanding, the Plan Administrator may, in its
    discretion, approve alternative forms of registration of a
    Participant Share Account to the extent permitted by applicable
    regulations under Section 423 of the Code.



 



    10.2 Change in Capitalization.  The number
    and kind of shares of stock available for issuance or delivery
    under the Plan, and the calculated Purchase Price for any
    ongoing Offering, will be proportionately adjusted, as
    determined by the Committee, in the event of any large, special
    and non-recurring dividend or other distribution (whether in the
    form of cash or other property), recapitalization, forward or
    reverse split, dividend of Common Stock, reorganization, merger,
    consolidation, spin-off, combination, repurchase, or share
    exchange, rights offering or other similar corporate transaction
    or event affecting the Common Stock. Alternatively, the
    Committee may terminate any ongoing Offering or accelerate the
    end of the Offering Period prior to such extraordinary event in
    order that the interests of Participants will not be impaired as
    a result of such an event.



 



    10.3 Amendment or Termination.  The
    Committee may amend, alter, suspend, discontinue, or terminate
    the Plan without the consent of stockholders or Participants,
    except that any such action will be subject to the approval of
    the Corporation’s stockholders within twelve months after
    such Committee action if such stockholder approval is required
    by any applicable federal or state law or regulation or the
    rules of any automated quotation system or stock exchange on
    which the Common Stock may then be quoted or listed, and the
    Committee may otherwise, in its discretion, determine to submit
    other such actions to stockholders for approval; provided,
    however, that (i) any amendment or other action under this
    Section 10.3 by the Committee pursuant to delegated
    authority, to increase the shares available under the Plan
    (other than in connection with an adjustment under
    Section 10.2), reduce the minimum Purchase Price permitted
    under the Plan, or increase the maximum amount of Participant
    contributions under Section 3.2 to an amount in excess of
    the level then permitted under Code Section 423, or which
    otherwise exceeds the authority of the Committee under the
    Committee’s charter and applicable resolutions of the
    Board, shall require the approval of the Board as well; and
    (ii), without the consent of an affected Participant, no
    amendment, alteration, suspension, discontinuation, or
    termination of the Plan may materially and adversely affect the
    rights of such Participant with respect to any Offering that has
    been completed prior to such Committee action. The foregoing
    notwithstanding, (a) upon termination of the Plan, the
    Committee may elect to terminate all outstanding Options at such
    time as the Committee may designate; (b) in the event of
    such termination of any Option prior to its exercise, all
    amounts contributed to the Plan which remain in a
    Participant’s Account will be returned to the Participant
    as promptly as practicable; and (c) the Plan shall
    automatically terminate upon the earlier of: (i) the date
    on which the total number of shares authorized for purchase
    under the Plan have been purchased and any Plan requirements
    extending thereafter (e.g., any Holding Period) have been
    met; or (ii) January 1, 2015.




    

    9








 






    10.4 No Right to Continued
    Employment.  Neither the Plan nor any action taken
    hereunder, including the grant of an Option, will be construed
    as giving any employee the right to be retained in the employ of
    the Corporation, nor will it interfere in any way with the right
    of the Corporation to terminate any employee’s employment
    at any time.



 



    10.5 Taxes.  The Corporation is authorized
    to withhold from any payment to be made to a Participant,
    including any payroll and other payments not related to the
    Plan, amounts of withholding and other taxes due in connection
    with any transaction under the Plan, and a Participant’s
    enrollment in the Plan will be deemed to constitute his or her
    consent to such withholding. In addition, Participants may be
    required to advise the Corporation of sales and other
    dispositions of Common Stock acquired under the Plan in order to
    permit the Corporation to comply with tax laws and to claim any
    tax deductions to which the Corporation may be entitled with
    respect to the Plan.



 



    10.6 Nonexclusivity of the Plan.  Neither
    the adoption of the Plan by the Committee nor its submission to
    the stockholders of the Corporation for approval will be
    construed as creating any limitations on the power of the
    Committee to adopt such other compensatory arrangements as it
    may deem desirable, including, without limitation, the granting
    of stock options otherwise than under the Plan, and such
    arrangements may be either applicable generally or only in
    specific cases.



 



    10.7 Stockholder Approval.  The Plan (as
    amended and restated) shall become effective on the Effective
    Date; provided, however, that the Plan has been approved by the
    stockholders of the Corporation in a manner sufficient to meet
    the requirements of Section 423(b)(2) of the Code.



 



    10.8 Equal Rights and Privileges.  All
    Participants shall have the same rights, responsibilities and
    privileges with respect to Options granted and Common Stock
    purchased under the Plan, (i) except as limited under
    Section 3.2, (ii) except that the amount of Common
    Stock which may be purchased by any Employee under such Option
    may bear a uniform relationship to the Compensation of such
    Employee, and (iii) except as otherwise may be permitted
    under Section 423 of the Code.



 



    10.9 Controlling Law.  This Plan and the
    respective rights and obligations of the Corporation and the
    Participants, except to the extent otherwise provided by
    applicable federal law, shall be construed under the laws of the
    Commonwealth of Virginia, exclusive of Virginia’s conflict
    of laws provisions.




    

    10