exv10w26







 




    Exhibit
    10.26



 


 




    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    EXECUTIVE DEFERRED COMPENSATION PLAN



 


 




    As Amended
    and Restated

    Effective January 1, 2002 (unless otherwise noted)
    



 












 







    TABLE OF
    CONTENTS



 


	 	 	 
	
 
	
 
	
 

	

    Article I

    Establishment of the Plan


	
 
	
    1

	
 
	
 
	
 

	

    Article II

    Definitions


	
 
	
    1

	
 
	
 
	
 

	

    Article III

    Eligibility and Participation


	
 
	
    3

	
 
	
 
	
 

	

    Article IV

    Account


	
 
	
    6

	
 
	
 
	
 

	

    Article V

    Payment of Distributions


	
 
	
    7

	
 
	
 
	
 

	

    Article VI

    Administration


	
 
	
    11

	
 
	
 
	
 

	

    Article VII

    Amendment and Termination


	
 
	
    12

	
 
	
 
	
 

	

    Article VIII

    Miscellaneous


	
 
	
    13



















 







    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    EXECUTIVE DEFERRED COMPENSATION PLAN

    (Restated
    and Amended 1/1/2002)
    



 




    ARTICLE I




    Establishment of the Plan



 



    1.1 Purpose. The Federal Home Loan Mortgage Corporation
    (“Corporation”) hereby amends and restates the
    Executive Deferred Compensation Plan, which was last amended and
    restated effective January 1, 1994, and which was
    subsequently amended effective April 1, 1999. The purpose
    of the amended and restated Executive Deferred Compensation Plan
    (“Plan”) is to allow Corporation Executives to defer a
    portion of their annual salary and cash bonus, as well as to
    permit certain Corporation Executives to defer settlement of
    Restricted Stock Units granted by the Corporation. The
    Corporation intends that the Plan shall at all times be
    maintained on an unfunded basis for federal income tax purposes
    under the Internal Revenue Code of 1986, as amended
    (“Code”), and be administered as a “top hat”
    plan exempt from the substantive requirements of the Employee
    Retirement Income Security Act of 1974, as amended
    (“ERISA”).



 



    1.2. Effective Date. Unless otherwise indicated, this
    Plan as amended and restated shall be effective as of
    January 1, 2002.



 



    1.3. Name. The name of the Plan is the Federal Home Loan
    Mortgage Corporation Executive Deferred Compensation Plan.



 




    ARTICLE II




    Definitions



 



    2.1. Administrator. The Human Resources Committee of the
    Board.



 



    2.2. Beneficiary. The individual or individuals
    designated by the Participant to receive distributions under
    this Plan in the event of the Participant’s death.



 



    2.3. Board. The Board of Directors of the Federal Home
    Loan Mortgage Corporation or such Committee thereof delegated to
    act on its behalf.



 



    2.4. Bonus. A cash bonus or cash incentive award paid for
    service and performance over a period of a year or more or in
    connection with transactions, and any other cash payment that
    does not constitute Salary which the Administrator determines
    shall constitute Bonus for purposes of the Plan.



 



    2.5. Bonus Deferral Election. An annual election to defer
    a portion, portions or all of a Bonus award not yet awarded, in
    the form specified by the Administrator, and subject to the
    terms of this Plan.



 



    2.6. Compensation. An Executive’s Salary and Bonus
    from the Corporation for the Plan Year.



 



    2.7. Corporation. The Federal Home Loan Mortgage
    Corporation.



 



    2.8. Deferral Election. The Bonus Deferral Election or
    the Salary Deferral Election.













 






    2.9. Deferred Bonus. The amount of Bonus, or any portion
    or portions thereof, which the Executive and the Corporation
    mutually agreed, prior to the awarding thereof, shall be
    deferred in accordance with this Plan.



 



    2.10. Deferred Compensation. Deferred Bonus and Deferred
    Salary.



 



    2.11. Deferred Stock Units. The number of restricted
    stock units granted under other compensatory plans of the
    Corporation that have become vested thereunder but which the
    Executive and the Corporation mutually agreed, prior to vesting,
    shall be deferred as to settlement in accordance with this Plan.



 



    2.12. Deferred Salary. The amount of Salary, or any
    portion or portions thereof, which the Executive and the
    Corporation mutually agreed, prior to the earning thereof, shall
    be deferred in accordance with this Plan.



 



    2.13. Disability. A Participant shall have incurred a
    Disability under this Plan if he or she is considered disabled
    under the applicable terms of the Federal Home Loan Mortgage
    Corporation Long-term Disability Plan.



 



    2.14. Executive. An Employee of the Corporation eligible
    to make deferrals under the eligibility provisions of
    Section 3.1.



 



    For purposes of this Plan, the term “Employee” shall
    mean any Regular Full-Time or Part-Time employee, as defined in
    Freddie Mac Policy
    No. 3-221,
    Employment Classifications Policy (as may be amended, replaced
    or redesignated from time to time), who is on the payroll of the
    Employer and not paid by Accounts Payable, and whose wages from
    the Employer are subject to withholding for the purposes of
    Federal income taxes and the Federal Insurance Contributions
    Act. For purposes of the Plan, Part-Time Employees include only
    those Employees who are regularly scheduled to work at least 20
    hours per week.



 



    The term Employee shall not include:



 


			
	 	    (a) 
	
    individuals whom the Corporation classifies, pursuant to Freddie
    Mac Policy
    No. 3-221,
    Employment Classifications Policy (as may be amended, replaced
    or redesignated from time to time), as




 


			
	 	    (i) 
	
    Co-Op, Work Study Students or Interns,




 


			
	 	    (ii) 
	
    Employment Agency Temporaries,




 


			
	 	    (iii) 
	
    Independent Contractors/Consultants, or




 


			
	 	    (iv) 
	
    Temporary Employees




 



    (or similar classification) regardless of the individuals’
    employment status under applicable law;



 


			
	 	    (b) 
	
    individuals who are retroactively classified as Regular
    Full-Time or Part-Time employees with respect to such period of
    retroactive classification; and




 


			
	 	    (c) 
	
    Leased Employees (as defined in the FHLMC Employees’
    Pension Plan).





    

    2








 






    2.15. Interest Rate. For a calendar year, the Prime Rate
    as of the first business day of such calendar year, plus 1%, or
    such other index or rate as is determined by the Administrator
    at its last meeting of the prior calendar year.



 



    2.16. Participant. An Executive who has met the
    eligibility requirements under Article III hereof and,
    where the context requires, a retired or former Executive to
    whom payments are due under this Plan.



 



    2.17. Plan Year. The twelve (12) month period
    beginning on January 1 of the calendar year and ending on
    December 31 of the same calendar year.



 



    2.18. Prime Rate. The base rate on corporate loans at
    large U.S. money center commercial banks as reported by the Wall
    Street Journal.



 



    2.19. Retirement. Retirement in accordance with the
    eligibility provisions of Article V and the retirement
    benefit provisions of Article VI of the FHLMC
    Employees’ Pension Plan.



 



    2.20. Salary. An Executive’s annual cash base pay
    for the Plan Year, as determined by the Administrator.



 



    2.21. Salary Deferral Election. An annual election to
    defer a portion, portions or all of Salary not yet earned, in
    the form specified by the Administrator, and subject to the
    terms of this Plan.



 



    2.22. Stock Units Deferral Election. An election to defer
    settlement of a specific award of restricted stock units granted
    under the FHLMC 1995 Stock Compensation Plan (or successor
    thereto) in the form specified by the Administrator and subject
    to the terms of this Plan.



 



    2.23. Termination of Employment. A separation from
    the service of the Corporation for any reasons other than
    Retirement, death or Disability.



 




    ARTICLE III




    Eligibility and Participation



 



    3.1 Eligibility. For purposes of the Plan, Employees
    shall be deemed “Executives” eligible to make
    deferrals in a given Plan Year, subject to applicable
    limitations under Section 3.1(d) and other provisions of
    the Plan, as follows:



 



    (a) Officers. Subject to Section 3.1(f), all
    Employees designated by the Corporation as occupying officer
    titles of Vice President and above.



 



    (b) Other Employees in Specified Positions. Subject to
    Sections 3.1(d) and (f), effective March 1, 2002, an
    Employee who is not an Officer (as defined in
    Section 3.1(a)) is eligible to participate in the Plan if
    (i) his or her targeted annual compensation for the given
    Plan Year (beginning with 2002), including only such equity
    compensation as is delivered under the Funding &
    Investments Incentive Plan and the annual Securities
    Sales & Trading Group Incentive Plan (or the
    respective successors thereto), is at least $200,000 (indexed
    under Section 3.1(e) for each Plan Year after 2002), as
    determined by the




    

    3








 






    Administrator, and (ii) such employee is serving in a
    position with one of the following titles, or an equivalent
    position as determined by the Administrator:



 


			
	 	    (i) 
	
    With respect to the Corporation’s Funding and Investment
    Division (“F&I”): Senior Portfolio Management
    Director, Senior Debt Securities Marketing Director, Senior
    Investment Strategy Director, Securities Marketing-Investment
    Director, Senior Research Analysis Director, Senior Securities
    Performance Director, Senior Investment Strategy Director,
    Senior Portfolio Management Director, Portfolio Management
    Director, Securities Strategy and Policy Director, Senior Debt
    Funding Portfolio Director, Credit Risk and Capital Management
    Director, Strategic Re-engineering Director, Arbitrage and
    Production Development Director; and




 


			
	 	    (ii) 
	
    With respect to the Corporation’s Single Family Securities
    Sales and Trading Group in the Single Family Division
    (“SS&TG”): National Sales Director; Head Trader;
    Sales Director; and Research Director.




 



    (c) Other Employees Not in F&I or SS&TG.
    Subject to Sections 3.1(d) and (f), effective March 1,
    2002, an Employee who is not an Officer and who is not working
    in F&I or SS&TG will be eligible to participate in the
    Plan if his or her projected Salary for the given Plan Year
    (beginning with 2002) is not less than $180,000 for 2002,
    with such amount indexed under Section 3.1(e) for each
    subsequent Plan Year.



 



    (d) Limitation on Number of Eligible Persons. The
    aggregate number of persons who may be eligible Executives for
    any given Plan Year shall not exceed 4.25% of the Company’s
    Employees (as defined in Section 2.14 hereof), as
    determined annually by the Administrator in the third or fourth
    quarter of each year for the following Plan Year. If the number
    of persons determined by the Administrator to be eligible for a
    given Plan Year under Section 3.1(a), (b) and
    (c) would exceed the limitation set forth in this
    Section 3.1(d), the Administrator will determine how to
    limit participation of employees eligible under
    Sections 3.1(b) and (c), based on compensation levels and
    such additional criteria as the Administrator may deem relevant,
    such that the aggregate number of persons who may be eligible
    Executives for the Plan Year will satisfy the requirement of
    this Section 3.1(d). The number of Officers eligible to
    participate in a given Plan Year under Section 3.1(a) shall
    not be subject to limitation under this Section 3.1(d).



 



    (e) Indexing of Compensation Thresholds. For each
    Plan Year for which a compensation threshold referenced in
    Section 3.1(b) or (c) is to be indexed, such threshold
    amount will be adjusted by the percentage determined by the
    Human Resources Division as the average actual percentage change
    in overall salary ranges in the preceding Plan Year.



 



    (f) Execution of Restrictive Covenant Agreement. The
    Administrator may, in its discretion, request that prior to
    commencing participation in the Plan, an otherwise eligible
    Executive execute a restrictive covenant agreement in such form
    and containing such provisions as the Administrator deems
    acceptable. If the Executive fails to timely execute the
    restrictive covenant agreement presented by the Administrator,
    the Executive shall be ineligible to participate in the Plan.
    The Administrator may, in its discretion, in ensuing Plan Years,
    decide to again offer the Executive such a restrictive covenant
    agreement and permit participation in the Plan to commence at
    some future date if that agreement is then timely executed.




    

    4








 






    3.2. Election to Defer Bonus. Any Executive may
    participate in the Deferred Bonus portion of this Plan for the
    Plan Year for which he or she is eligible under Section 3.1
    by executing a Bonus Deferral Election on or before December 31
    of the prior Plan Year, in such form as is approved by the
    Administrator, electing to defer a set amount or amounts of any
    Bonus which may be paid in the following Plan Year, not to
    exceed the Bonus less applicable withholding taxes thereon,
    subject to the terms of this Plan. A Participant’s Bonus
    Deferral with respect to his Bonus for the Plan Year shall be
    expressed as a percentage of at least ten (10) percent of
    the Bonus or in such other manner as designated by the
    Administrator. The Administrator may, in its discretion, permit
    Participants to make up to four (4) elections with respect
    to the Distribution (under Article V) of a particular
    Bonus Deferral.



 



    3.3. Election to Defer Salary.



 



    (a) Timing of Election and Limit on Salary Deferral.
    An Executive may participate in the Deferred Salary portion of
    this Plan for any Plan Year for which he or she is eligible
    under Section 3.1 by executing a Salary Deferral Election
    on or before December 31 of the prior Plan Year, in such form as
    is approved by the Administrator, electing to defer a set amount
    or amounts of Salary to be earned in the following Plan Year,
    not to exceed Salary less authorized salary deductions and
    applicable withholding taxes thereon and on non-cash
    compensation for that Plan Year to the extent withholding is not
    otherwise provided for with respect to such compensation,
    subject to the terms of this Plan. A Participant’s Salary
    Deferral with respect to his Salary for the Plan Year shall be
    expressed as a percentage of at least ten (10) percent of
    the Salary or in such other manner as designated by the
    Administrator. The Administrator may, in its discretion, permit
    Participants to make up to four (4) elections with respect
    to the Distribution (under Article V) of a particular
    Salary Deferral.



 



    (b) Newly Hired and Promoted Executives. Any person
    who commences employment as an Executive, is promoted to
    Executive status or otherwise is first determined to be an
    Executive during a Plan Year may participate in the Deferred
    Salary portion of this Plan for such Plan Year by executing a
    Salary Deferral Election within thirty (30) days after the
    commencement of such employment or Executive status, as
    applicable, and shall be eligible to participate in the Deferred
    Bonus portion of the Plan for such Plan Year on terms specified
    by the Administrator.



 



    3.4. Election to Defer Restricted Stock Units. An
    Executive eligible under Section 3.1(a) who is a Senior
    Vice President or above, and who receives equity awards in the
    form of restricted stock units under the FHLMC 1995 Stock
    Compensation Plan (or successor thereto), may participate in the
    Deferred Stock Units portion of this Plan for the Plan Year
    ending December 31, 2002 or any subsequent Plan Year for
    which he or she is eligible under Section 3.1(a) and this
    Section 3.4 by executing a Stock Units Deferral Election,
    in such form as is approved by the Administrator, electing to
    defer the settlement of a specific award of restricted stock
    units. The Stock Units Deferral Election shall be executed
    within thirty (30) days after the date of grant of the
    restricted stock units (or by such other deadline as the
    Administrator may specify), and at a time that the restricted
    stock units remain unvested. The Stock Units Deferral Election
    shall apply to the entire number of restricted stock units
    subject to the particular award, unless otherwise determined by
    the Administrator.



 



    3.5. Revocation. Except as provided in
    Section 5.1(d), (a) a Bonus Deferral Election, once
    made, may not be revoked; (b) a Salary Deferral Election,
    once made, may not be revoked, except to revoke an election
    pertaining to salary not yet earned for the remainder of the
    Plan Year in question, upon at least thirty (30) days prior
    written notice; and (c) a Stock Units Deferral Election,
    once made, may not be revoked.




    

    5








 






    3.6. Change of Status.



 



    (a) Bonus Deferral and Salary Deferral.
    Notwithstanding any other provision of this Plan, in the case of
    any Executive whose status changes to that of a non-Executive
    while still employed by the Corporation, any election to defer
    Salary or to defer part or all of Bonus for a prior year entered
    into prior to the occurrence of such change in status shall be
    unaffected hereunder by such change in status. As provided in
    Section 3.5 hereof, a deferral election pertaining to
    Salary not yet earned for the Plan Year in question may be
    revoked. No new elections to defer Salary or Bonus will be
    permitted hereunder while such employee remains in a
    non-Executive status. However, should such individual again
    become an Executive of the Corporation, his or her participation
    in the Plan thereafter while an Executive shall be governed by
    this Article III and other applicable provisions of the
    Plan.



 



    (b) Stock Unit Deferral. Notwithstanding any other
    provision of this Plan, in the case of any Executive eligible
    for Stock Unit Deferral under Section 3.4 whose status
    changes so that he is no longer eligible for such deferral while
    still employed by the Corporation, any outstanding Stock Unit
    Deferral shall be unaffected hereunder by such change in status.
    No new Stock Unit Deferrals will be permitted hereunder while
    such employee remains ineligible. However, should such
    individual again become a Senior Executive of the Corporation,
    his or her participation in the Plan thereafter while an
    Executive shall be governed by this Article III and other
    applicable provisions of the Plan.



 




    ARTICLE IV




    Account



 



    4.1. Account. The Administrator shall establish, or cause
    to be established, an Account for each Participant hereunder.



 



    4.2. Deferral Contribution.



 



    (a) Cash Deferrals. Each Participant’s Account
    shall be credited by bookkeeping entries with cash amounts which
    the Participant has elected to defer by a Salary Deferral
    Election or Bonus Deferral Election hereunder as of the date
    such amounts would have been paid to such Participant had such
    Deferral Election not been in force.



 



    (b) Stock Unit Deferrals. The Account of each
    Participant participating under Section 3.4 shall be
    credited by bookkeeping entries with the number of Deferred
    Stock Units which the Participant has elected to defer by a
    Stock Units Deferral Election hereunder as of the date the
    restricted stock units being deferred would have been settled by
    delivery of shares of Common Stock to such Participant absent
    the Stock Units Deferral Election.



 



    4.3. Adjustments. Each Participant’s Account shall
    be credited by bookkeeping entries with (a) interest at the
    Interest Rate on each cash deferral from the date as of which
    such amount is credited under Section 4.2 above, compounded
    daily, until the applicable date or event to which such amounts
    have been deferred in accordance with Article V hereof, and
    (b) cash and or additional Stock Units, in connection
    dividend equivalents and adjustments to the stock-denominated
    portion of the Account, to the extent such dividend equivalents
    are authorized for crediting to the Account and not for payment
    directly to the Participant. Each Participant’s Account
    shall be debited with any distribution hereunder. Interest shall
    be calculated as of the last day of each month, and credited
    within thirty (30) days following the end of each month.
    Dividend equivalents on Deferred Stock Units shall be paid or
    credited in accordance with the dividend equivalents provisions
    applicable to the restricted stock units prior to vesting,
    provided that the




    

    6








 






    Administrator may vary the terms of such payment or crediting in
    order to promote uniform treatment of Deferred Stock Units or
    otherwise for purposes of convenient administration.



 



    4.4. Statements. An individual statement of each
    Participant’s Account will be issued to each Participant
    with respect to each calendar quarter within 30 days
    following the close of such quarter.



 




    ARTICLE V




    Payment of Distributions



 



    5.1. Participant’s Salary and Bonus Deferral
    Elections.



 



    (a) Elections as to Deferral Period. A Participant
    shall elect at the time of his or her respective Deferral
    Election to have the amount or amounts of Deferred Salary or
    Deferred Bonus (as applicable) subject to such Deferral
    Election, plus interest at the applicable Interest Rate,
    deferred until (1) any number of whole years specified by
    the Participant in such Deferral Election or (2) such
    Participant’s Retirement; provided that in no event may
    (x) a Participant make a Deferral Election for a period
    longer than Participant’s life expectancy or (y) the
    commencement of any distribution be deferred beyond the earlier
    of the Participant’s Termination of Employment, Disability
    or death, if applicable; and provided further that the
    Administrator may impose such limitations on Deferral Elections
    as it may deem advisable for purposes of convenient
    administration of the Plan.



 



    (b) Deferrals for a Period of Years. If a
    Participant makes a Deferral Election for a period of years as
    specified in Section 5.1(a)(1), the following rules shall
    also apply:



 



    (1) The Participant shall designate, at the time of such
    Deferral Election, one of the following methods of payment;
    (i) a lump-sum payment or (ii) reasonably equal annual
    installments over five (5), ten (10) or fifteen
    (15) years;



 



    (2) With respect to any such Deferral Election relating to
    Deferred Salary to be earned or a Deferred Bonus to be paid in
    Plan Year 1995 and thereafter, the Participant shall also
    designate, at the time of such Deferral Election, one of the
    following methods of payment which shall apply in the event he
    or she experiences a Termination of Employment or suffers a
    Disability prior to the expiration of the period of years
    specified in the Deferral Election: (i) a lump sum or
    (ii) reasonably equal annual installments over three
    (3) years. Provided, however, that with respect to any such
    Deferral Elections relating to Deferred Salary to be earned or a
    Deferred Bonus to be paid in Plan Year 2003 and thereafter, in
    the event that the Participant is terminated for Gross
    Misconduct (as defined in Corporate
    Policy 3-254
    or 3-254.1,
    as applicable and as may be modified or replaced from time to
    time) as determined by the Administrator, such Deferral Election
    shall be invalidated, and such Deferred Salary and/or Deferred
    Bonus shall be distributed in accordance with
    Section 5.3(a) in the form of a lump-sum.



 



    (3) With respect to any such Deferral Elections relating to
    Plan Years prior to those described in (2) above, the
    Participant may designate, on a one-time irrevocable basis in a
    manner prescribed by the Administrator and subject to the
    Administrator’s approval, one of the methods of payment
    described in (2) above which shall apply in the event he or
    she experiences a Termination of Employment or incurs a
    Disability prior to the expiration of the period of years
    specified in such prior Deferral Elections. If the terminated or
    disabled Participant fails to make the one-time irrevocable
    election, he or she shall be deemed to have elected and shall be
    entitled to receive reasonably equal annual installments over
    three (3) years.




    

    7








 






    (c) Deferrals until Retirement. If a Participant
    makes a Deferral Election until Retirement as specified in
    Section 5.1(a)(2)
    above, the following rules shall also apply:



 



    (1) Subject to the approval of the Administrator, the
    Participant shall designate, at least ninety (90) days
    prior to the date of Retirement, one of the following methods of
    payment commencing with his or her Retirement: (i) a
    lump-sum payment or (ii) reasonably equal annual
    installments over five (5), ten (10) or fifteen
    (15) years.



 



    (2) If such Participant separates from the service of the
    Corporation by reason of Retirement without having made an
    approved election under this Section 5.1(c), then the
    Participant will be deemed to have elected and shall be entitled
    to receive reasonably equal annual installments over fifteen
    (15) years, unless the Administrator and the Participant
    mutually agree to another method of payment otherwise allowable
    herein.



 



    (3) With respect to any such Deferral Election relating to
    Deferred Salary to be earned or a Deferred Bonus to be paid in
    Plan Year 1995 and thereafter, the Participant shall also
    designate, at the time of such Deferral Election, one of the
    following methods of payment which shall apply in the event he
    or she experiences a Termination of Employment or suffers a
    Disability prior to Retirement: (i) a lump sum or
    (ii) reasonably annual installments over three
    (3) years. Provided, however, that with respect to any such
    designation with respect to Deferral Elections relating to
    Deferred Salary to be earned or a Deferred Bonus to be paid in
    Plan Year 2003 and thereafter, in the event that the Participant
    is terminated for Gross Misconduct (as defined in Corporate
    Policy 3-254 or 3-254.1, as applicable and as may be modified or
    replaced from time to time) as determined by the Administrator,
    such designation shall be invalidated, and such Deferred Salary
    and/or Deferred Bonus shall be distributed in accordance with
    Section 5.3(a) in the form of a lump-sum.



 



    (4) With respect to any such Deferral Elections relating to
    Plan Years prior to those described in (3) above, the
    Participant may designate, on a one-time irrevocable basis in a
    manner prescribed by the Administrator and subject to the
    Administrator’s approval, one of the methods of payment
    described in (3) above which shall apply in the event he or
    she experiences a Termination of Employment or incurs a
    Disability prior to Retirement. If the terminated or disabled
    Participant fails to make the one-time irrevocable election, he
    or she shall be deemed to have elected and shall be entitled to
    receive reasonably equal annual installments over three
    (3) years.



 



    (d) Revocation of Payment Elections in Anticipation of
    Retirement. Subject to the approval of the Administrator, a
    Participant entitled to receive distributions after
    January 1, 1994, may revoke (i) the elections made
    pursuant to Section 5.1(b) above for each Deferral Election
    and (ii) any form of payment elections made prior to
    January 1, 1994 in connection with deferrals to commence at
    Retirement, provided that in either event any such revocation is
    made and new elections are filed with the Administrator not less
    than ninety (90) days prior to the date of
    Participant’s Retirement. If a Participant exercises his or
    her rights under this subsection and if approval is granted by
    the Administrator, the Participant may elect the following
    methods of payment commencing with his or her Retirement:
    (1) one lump-sum payment; or (2) reasonably equal
    annual installments over five (5), ten (10) or fifteen
    (15) years.



 



    5.2 Participant’s Stock Units Deferral Elections. A
    Participant eligible to defer restricted stock units under
    Section 3.4 shall elect the period of deferral in his or
    her Stock Units Deferral Election as (a)




    

    8








 






    any number of whole years specified by the Participant in such
    Stock Units Deferral Election, but not less than one year after
    the latest vesting date of the restricted stock units, or
    (2) such Participant’s Retirement; provided that
    (x) in no event may a Participant make a Stock Units
    Deferral Election for a period longer than Participant’s
    life expectancy, (y) in no event may the commencement of
    any distribution be deferred beyond the earlier of the
    Participant’s Termination of Employment, Disability or
    death, if applicable, and (z) the Stock Units Deferral
    Election shall further specify, in the case of Retirement,
    whether the distribution will be in a lump sum or in equal
    installments over 5, 10 or 15 years, and in the case of
    Disability or Termination of Employment whether the distribution
    will be in a lump sum or equal installments over three years. In
    addition, the Administrator may impose such further limitations
    on, and rules governing, Stock Units Deferral Elections as it
    may deem advisable for purposes of convenient administration of
    the Plan. In the event that the Participant is terminated for
    Gross Misconduct (as defined in Corporate
    Policy 3-254
    or 3-254.1,
    as applicable and as may be modified or replaced from time to
    time) as determined by the Administrator, such Deferral Election
    shall be invalidated, and such Deferred Salary and/or Deferred
    Bonus shall be settled in accordance with Section 5.3(c)
    within 30 days of the Participant’s termination for
    Gross Misconduct.



 



    5.3 Scheduled Distributions. 



 



    (a) Lump-Sum Cash Payments. (i) If a
    Participant elects a lump sum distribution under
    Section 5.1 and the Administrator has rendered its approval
    where required, all distributions equal to the cash balance in a
    Participant’s Account attributable to the Deferral Election
    in question shall be payable in a lump sum to the Participant by
    the Corporation, at the direction of the Administrator, as of
    the applicable date or event under Section 5.1 for such
    Deferral Election; (ii) if a Participant dies prior to
    receipt of the lump sum, the lump sum shall be paid to the
    Participant’s Beneficiary. In either event, the
    distribution shall occur within thirty (30) days after such
    applicable date or event and interest shall be credited through
    such applicable date or event.



 



    (b) Installment Cash Payments. If a Participant
    elects (or is deemed to have elected) installment payments in
    accordance with Section 5.1, such installments shall be
    payable as follows:



 



    (1) Timing of Payments. (i) Except in the event
    of a Participant’s Termination of Employment or Disability,
    the first installment shall be made within thirty (30) days
    after the month in which occurs the relevant event requiring the
    commencement of benefits hereunder (the “Triggering
    Event”). The second installment shall be made in the
    January of the year next following the year in which the first
    installment was paid. All subsequent installments shall be made
    each January thereafter until the aggregate number of
    installments equals the number elected (or deemed elected) by
    the Participant. (ii) In the event of a Participant’s
    Termination of Employment (other than from Gross Misconduct) or
    Disability, the first installment shall be made during January
    of the following year. The second and subsequent installments
    shall be made as set forth in
    Section 5.3(b)(1)(i)
    herein.



 



    (2) Computation of Payments. (i) For payments
    to be made pursuant to
    Section 5.3(b)(1)(i),
    the first installment (the “Principal Amount”) shall
    be the quotient of (A) an amount equal to the portion of
    the Participant’s Account, including interest accrued
    thereon, attributable to the relevant Deferral Election and
    determined as of the Triggering Event divided by (B) the
    relevant number of installments elected (or deemed elected) by
    the Participant. (ii) For payments to be made pursuant to
    Section 5.3(b)(1)(ii),
    the Principal Amount shall be the quotient of (A) an amount
    equal to the balance of the Participant’s Account
    determined as of the date of Termination of Employment or
    Disability, and including interest accrued thereon through the
    end of the year preceding the day of payment, divided by
    (B) the relevant number of installments elected (or deemed
    elected) by the Participant. (iii) Each subsequent
    installment shall be equal to the Principal Amount plus interest
    at the Interest Rate on the remaining




    

    9








 






    balance of the relevant portion of the Participant’s
    Account through the end of the day preceding the date of payment.



 



    (3) Payment to Beneficiary. If a Participant dies
    prior to receipt of all of the applicable installment payments,
    the remaining cash balance of the applicable portion of the
    Participant’s Account shall be paid in a lump sum to the
    Participant’s Beneficiary within thirty (30) days
    after the date of death and interest shall be credited through
    that date.



 



    (c) Settlement of Deferred Stock Units. Deferred
    Stock Units shall be settled in accordance with the election of
    the Participant, subject to the terms of the Plan and any
    applicable rules adopted by the Administrator. Settlement shall
    be effected by delivery of one share of the Corporation’s
    Common Stock in settlement of each Deferred Stock Unit.
    Fractional shares shall be settled in the manner specified for
    the restricted stock units award to which the Deferred Stock
    Units relate. If a Participant dies prior to receipt in full of
    shares in settlement of his or her Deferred Stock Units, the
    remaining share balance of the applicable portion of the
    Participant’s Account shall be paid in shares in a lump sum
    to the Participant’s Beneficiary within thirty
    (30) days after the date of death.



 



    5.4 Hardship Withdrawals. (a) Upon written
    application, a Participant may request a withdrawal of all or
    any portion of the amounts then credited to his or her Account
    prior to the time of payment applicable under Section 5.1
    or 5.2 above in the case of an unforeseeable emergency. For
    purposes of this Section 5.4, an unforeseeable emergency is
    defined as severe financial hardship to the Participant
    resulting from a sudden and unexpected illness or accident of
    the Participant or of a dependant of the Participant, loss of
    the Participant’s property due to casualty, or other
    similar extraordinary and unforeseeable circumstances arising as
    a result of events beyond the control of the Participant. The
    circumstances that will constitute an unforeseeable emergency
    will depend upon the facts of each case, but, in any case,
    payment may not be made to the extent that such hardship is or
    may be relieved —



 


			
	 	    (i) 
	
    Through reimbursement or compensation by insurance or otherwise,




 


			
	 	    (ii) 
	
    By liquidation of the Participant’s assets, to the extent
    the liquidation of such assets would not itself cause severe
    financial hardship, or




 


			
	 	    (iii) 
	
    By cessation of deferrals under the Plan.




 



    Examples of what are not considered to be unforeseeable
    emergencies include the need to send a Participant’s child
    to college or the desire to purchase a home.



 



    (b) The amount to be withdrawn because of an unforeseeable
    emergency need shall not exceed the amount reasonably needed to
    satisfy such need. The decision-maker that makes the initial
    determination as to the existence of an unforeseeable emergency
    under Section 5.4(c) or (d) shall also determine
    whether the withdrawn amounts from the Participant’s
    Account shall be from the cash-denominated portion or the
    share-denominated portion or a combination thereof. No
    withdrawal of unvested shares shall be permitted.



 



    (c) A Participant (who is not a retired or former
    Executive) shall make written application and present evidence
    of such need to the Chief Executive Officer of the Corporation.
    Upon the advice of tax counsel, the Chief Executive Officer is
    authorized to make the initial determination as to the




    

    10








 






    existence of an unforeseeable emergency after reviewing the
    evidence presented by the Participant. Such determination shall
    not be made by the Chief Executive Officer as to an application
    made by himself or by the President of the Corporation. The
    Human Resources Committee shall make such determination for the
    Chief Executive Officer and President of the Corporation. If the
    Chief Executive Officer, after reviewing the evidence, makes an
    initial determination denying the Participant’s
    application, the Participant may make a written appeal to the
    Administrator no later than thirty (30) days from the date
    of the initial denial. The Chief Executive Officer’s
    authority to act under this Section 5.4 is subject to the
    Administrator’s right to revoke such authority in
    Section 6.1 hereof. The decision of the Administrator shall
    be final, conclusive and binding upon the Participant and any
    and all persons claiming through the Participant.



 



    (d) A Participant who is a retired or former Executive to
    whom payments are due under this Plan may make written
    application for a hardship withdrawal and present evidence of
    such need as set forth in Section 5.4(c) above except that
    (i) the Senior Vice President of Human Resources shall
    perform the functions of the Chief Executive Officer set forth
    therein and (ii) the Chief Executive Officer shall perform
    the functions of the Human Resources Committee set forth therein.



 



    5.5. Designation of Beneficiary.



 



    (a) All designations of Beneficiary shall be on such forms
    as are specified by and filed with the Administrator. Any
    Beneficiary designation made by the Participant in accordance
    with this provision may be changed from time to time, without
    the consent of any previously designated Beneficiary, by filing
    with the Administrator a notice of such change on the form
    provided by the Administrator and such change of Beneficiary
    designation shall become effective upon receipt by the
    Administrator.



 



    (b) In the event a Participant’s Beneficiary would
    otherwise become entitled to a distribution hereunder, and all
    Beneficiaries designated by the Participant are not then living,
    or if no valid Beneficiary designation is in effect, the
    Participant’s estate or duly authorized personal
    representative shall be deemed to have been designated by the
    Participant.



 




    ARTICLE VI




    Administration



 



    6.1 Plan Administration. The Human Resources Committee,
    referred to herein as Administrator, shall administer the Plan.
    Members of the Human Resources Committee, if otherwise eligible,
    shall be eligible to participate in the Plan, but no such member
    shall be entitled to make decisions solely with respect to his
    or her participation. The Administrator shall be vested with
    full authority and complete and absolute discretion to make,
    administer and interpret such rules and regulations as it deems
    necessary to administer the Plan. Any determination, decision or
    action of the Administrator in connection with the construction,
    interpretation, administration or application of the Plan shall
    be final, conclusive and binding upon all Participants and any
    and all persons claiming under or through any Participant. The
    Administrator shall have the authority to:



 


			
	 	    (i) 
	
    Employ agents to perform services on behalf of the Administrator
    and to authorize the payment of reasonable compensation for the
    performance of such services; and




 


			
	 	    (ii) 
	
    Delegate to designated employees or departments of the
    Corporation the authority to perform such of the
    Administrator’s administrative duties





    

    11








 






    hereunder as may be delegated to such employees or departments.



 



    Pursuant to this authority and subject, in each case, to the
    right of the Administrator to revoke such delegations in writing
    at any time, (i) the record keeping and bookkeeping
    responsibilities under this Plan (including the drafting of
    forms, rules concerning settlement of deferred stock units,
    directions concerning lump-sum cash payments and decision-making
    with respect to the restrictive covenant agreement discussed in
    Section 3.1(f)) are hereby delegated to the Senior Vice
    President of the Human Resources Division of the Corporation
    and/or such employees of that Division as the Senior Vice
    President shall designate; (ii) the approval authority for
    the designation or revocation of payment elections as permitted
    in this Plan, by Participants other than the Chief Executive
    Officer and President of the Corporation, are hereby delegated
    to the Chief Executive Officer of the Corporation, provided that
    such approvals shall be rendered in the sole discretion of the
    Chief Executive Officer and in the best interests of the
    Corporation; (iii) the determinations of hardship to the
    extent set forth in Section 5.4 hereunder are hereby
    delegated to the Chief Executive Officer of the Corporation and
    (iv) the interpretation, application and enforcement of the
    percentage cap in Section 3.1(d) is hereby delegated to the
    Senior Vice President of the Human Resources Division of the
    Corporation and/or such employees of that Division as the Senior
    Vice President shall designate.



 



    6.2. Cost of Administration. The Corporation shall pay
    the costs of administering the Plan.



 




    ARTICLE VII




    Amendment and Termination



 



    7.1. Amendment.  The Administrator may at any time amend
    this Plan; provided, however that (a) no amendment shall
    reduce amounts already credited to a Participant’s Account
    at the time of such amendment or, or except as provided in
    Section 7.2(b) hereof, accelerate the distributions
    hereunder, and (b) any amendment that would exceed the
    scope of the authority delegated by the Board to the
    Administrator shall be subject to the approval of the Board.



 



    7.2. Termination. The Corporation may at any time
    terminate this Plan provided that:



 



    (a) no such termination shall reduce amounts already
    credited to a Participant’s Account at such time; and



 



    (b) termination of the Plan will not accelerate the time of
    distributions nor cease the accrual of interest prior to the
    applicable event under Section 5.1 hereof, unless the
    Corporation, by action of its Board, shall elect to accelerate
    all distributions at the time it elects to terminate this Plan.




    

    12








 







    ARTICLE VIII




    Miscellaneous



 



    8.1. Effect on Other Plans. This Plan amends, restates
    and supersedes any prior Corporation Executive deferred
    compensation and deferred bonus plans, except that the timing
    and method of payment of distributions attributable to Deferral
    Elections previously made with respect to salary or bonuses
    which would have been paid prior to January 1, 1991, but
    for such elections, shall be controlled by such prior plans,
    unless revoked pursuant to Section 5.1(d) hereof.



 



    8.2. No Right of Employment. Nothing in the Plan shall be
    deemed to grant an Executive any rights other than those
    specifically outlined in the Plan. Nothing in the Plan shall be
    deemed to create any right of, or contract for, employment
    between an Executive and the Corporation.



 



    8.3. Withholding. The Corporation may deduct from any
    distributions due to any Participant or Beneficiary hereunder,
    any taxes required to be withheld by Federal, state or local
    governments. Withholding with respect to Deferred Stock Units
    shall be subject to the terms and conditions of withholding as
    applied to the restricted stock units that gave rise to the
    Deferred Stock Units, including any authorization to withhold
    shares to satisfy mandatory tax withholding requirements.



 



    8.4. Non-Assignability Clause. Participants may not
    borrow from their Accounts in this Plan. Neither the
    Participant, nor his Beneficiary, nor any other designee, shall
    have any right to commute, sell, assign, encumber, transfer or
    otherwise convey the right to receive any distributions
    hereunder which distributions and right thereto are expressly
    declared to be non-assignable and non-transferable; and, any
    such attempted assignment or transfer shall be null and void.



 



    8.5. Prohibition Against Funding. Any provision for
    distributions hereunder shall be by means of bookkeeping entries
    on the books of the Corporation and shall not create in the
    Participant or Beneficiary any right to, or claim against any
    specific assets of the Corporation, nor result in the creation
    of any trust or escrow account for the Participant or
    Beneficiary. A Participant or Beneficiary entitled to any
    distributions hereunder shall be a general creditor of the
    Corporation. A Participant or Beneficiary entitled to any
    distributions hereunder shall be a general creditor of the
    Corporation.



 



    8.6. Gender and Number. As used herein the masculine
    pronoun shall include the feminine and neuter genders, the
    singular shall include the plural, and the plural the singular,
    unless the context clearly indicates a different meaning.



 



    8.7. Controlling Law. This Plan and the respective rights
    and obligations of the Corporation and the Participants and
    Beneficiaries, except to the extent otherwise provided by
    Federal law, shall be construed under the laws of the
    Commonwealth of Virginia.



 



    8.8. Severability. The invalidity or unenforceability of
    any provision of this Plan shall not affect the other
    provisions, and the Plan shall be construed in all respects as
    if any invalid or unenforceable provisions were omitted.




    

    13








 






    IN WITNESS WHEREOF, the Corporation has caused this EXECUTIVE
    DEFERRED COMPENSATION PLAN, as amended and restated effective
    January 1, 2002, to be executed by its duly authorized
    officers, this
    28th
    day of March, 2002.



 



    FEDERAL HOME LOAN




    MORTGAGE CORPORATION



 



    Signed:  /s/  M.
    W. Hager








     




 



    Printed Name:  M. W. Hager







     




 



    Title:  Senior Vice President






 



    ATTEST:



 



    /s/  Alan
    Hausman








    Assistant Secretary




    

    14