exv10w4











Exhibit 10.4




EXECUTIVE MANAGEMENT COMPENSATION PROGRAM


Program Description

Amended and Restated as of June 2, 2011
 




	Objective

	To provide a compensation structure that addresses the Company’s
and the Federal Housing Finance Agency’s (“FHFA”) shared
interests of motivating, retaining, and, in some instances,
recruiting members of Executive Management while Freddie Mac is
in conservatorship.
	Effective Period

	The Executive Management Compensation Program is intended to be
effective for calendar years 2009, 2010, and thereafter as long
as Freddie Mac remains in Conservatorship. The specific
parameters of the Executive Management Compensation Program may
be amended from time to time by the Compensation Committee of
Freddie Mac’s Board of Directors (the “Committee”), if approved
by FHFA after consulting with the U.S. Department of the Treasury
(“Treasury”), as appropriate.
	Covered Positions

	Freddie Mac’s Chief Executive Officer (“CEO”), Chief Operating
Officer (“COO”), Chief Financial Officer (“CFO”), Executive Vice
Presidents (“EVPs”), and Senior Vice Presidents (“SVPs”),
collectively referred to as “Executive Management,” and,
individually referred to as a “Covered Officer.”
	Covered Position 

Participation 

Requirement

	Participation of a Covered Officer in the Executive Management
Compensation Program is contingent upon the Covered Officer
agreeing to be bound by the terms of the Executive Management
Compensation Recapture Policy (the “Recapture Policy”) that has
been approved by both the Committee and FHFA.
	Composition of
Total 

Direct
Compensation

	The total direct compensation (“TDC”) shall be comprised of two
components, a “Base Salary” and a “Target Incentive Opportunity.”
Two-thirds (2/3) of the TDC amount shall be delivered in Base
Salary and one-third (1/3) of the TDC shall be delivered in a
Target Incentive Opportunity. The TDC for all participants will
be approved by the Committee, FHFA, or the CEO, as appropriate,
as of the effective date of this program.

 

For an employee hired or promoted into a Covered Officer position
subsequent to approval of the Executive Management Compensation
Program, the Committee (for Executive Officers) or an Authorized
Officer (for Non-Executive Officers) will recommend a TDC for
such employee, which, for Executive Officers, will be subject to
approval by FHFA after consulting with Treasury, as appropriate.
	Adjustments to TDC

	The Committee (for Executive Officers) or an Authorized Officer
(for Non-Executive Officers) may recommend adjustments to TDC for
Covered Officers. Any such recommendations for Executive
Officers are subject to approval by FHFA after consulting with
Treasury, as appropriate. An approved adjustment to a Covered
Officer’s TDC shall become effective as of the date specified in
the approval document.
	Base Salary

	The Base Salary will consist of two components. One component
will be paid in cash on a semi-monthly basis during each calendar
year (the “Semi-Monthly Base Salary”) and the other component
will be earned on a semi-monthly basis during each calendar year,
but subject to a deferral and payment schedule (the “Deferred
Base Salary”) as discussed below.






 









 






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	Effective Date for Base Salary


 

For each employee who was a Covered Officer as of January 1,
2009, the Semi-Monthly Base Salary and Deferred Base Salary will
be effective retroactive to January 1, 2009, subject to the
exception provided in the section “Semi-Monthly Base Salary”
below. For an employee who is hired into a Covered Officer
position after January 1, 2009, the Semi-Monthly Base Salary and
Deferred Base Salary shall be pro-rated effective as of the date
of hire. For an employee who is promoted after January 1, 2009
into either a Covered Position or a Covered Position with
increased scope and responsibility, the Semi-Monthly Base Salary
and Deferred Base Salary shall be pro-rated effective as of the
date of promotion.
	Semi-Monthly Base 

Salary

	Semi-Monthly Base Salary for any Covered Officer cannot exceed
$500,000, except for the CEO, COO, and CFO, or other exceptions
as approved from time to time by FHFA. In those instances, the
Semi-Monthly Base Salary will be the amount approved by FHFA
after consultation with Treasury, as appropriate, as of the
Covered Officer’s date of hire or promotion.

 

For any Covered Officer other than the CEO, COO, and CFO, with a
Semi-Monthly Base Salary greater than $500,000 immediately prior
to the adoption of the Executive Management Compensation Program,
that Covered Officer’s Semi-Monthly Base Salary will be reduced
to $500,000 effective January 1, 2010.


 


Form of Payout


 

Cash less applicable withholdings


 

Treatment of Base Salary Under Freddie Mac’s Benefit Plans

 


Semi-Monthly Base Salary will be considered compensation for
purposes of the following Freddie Mac retirement or executive
benefit plans that take base salary into consideration: the tax
qualified Thrift/401(k) Savings Plan, the tax qualified
Employees’ Pension Plan, the non-qualified Supplemental Executive
Retirement Plan, the Executive Deferred Compensation Plan, and
the following welfare benefit plans: (1) the Flexible Benefits
Plan (for purposes of calculating FlexDollars); (2) the Group
Term Life Insurance Plan; (3) the Group Universal Life Insurance
Program; (4) the Long-Term Disability Plan; (5) the Accidental
Death and Personal Loss Plan; and (6) the purchase and payout of
vacation.
	Deferred Base Salary

	The portion of Base Salary that is not paid in Semi-Monthly Base
Salary shall be delivered in the form of Deferred Base Salary.
The Deferred Base Salary, which is earned on a semi-monthly basis
during each calendar year, shall be deferred and paid according
to the applicable Approved Payment Schedule below.

 


Approved Payment Schedule: Calendar Year 2009


 


Deferred Base Salary earned during each quarter of 2009 will be
paid on the last business day of the corresponding quarter of
2010, provided the Covered Officer is actively employed by the
Company on such payment date, or in the






 









 






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	event that the Covered
Officer dies, has a Long-Term Disability or Retires in 2010. For
clarity, the 2009 Deferred Base Salary will not become
non-forfeitable upon the Covered Officer’s death, Long-Term
Disability or Retirement, as provided below under “Treatment Upon
Termination” if such event occurs in 2009. The 2009 Deferred
Base Salary will, however, become non-forfeitable, subject to the
Recapture Policy, if such event occurs in 2010.


 



Approved Payment Schedule: Calendar Year 2010 and Subsequent Years


 



Fifty percent (50%) of Deferred Base Salary earned during each
quarter of a calendar year will be paid in a fixed amount on the
last business day of the corresponding quarter of the immediately
following calendar year.



 


The amount that will be paid for the remaining fifty percent
(50%) of Deferred Base Salary earned during each quarter of a
calendar year will be determined by the Committee’s approved
Deferred Base Salary funding level. The approved
performance-based portion of the Deferred Base Salary funding
level will be determined by the Committee’s assessment of the
following:
	 

	1. 	The Company’s performance against the objectives on the
short-term incentive (“STI”) scorecard (i.e., for the STI plan
applicable to employees at the level of Vice President and below
for the performance year in which the performance-based portion
of Deferred Base Salary is earned);
	 

	2. 	All other relevant internal and external factors and non-STI
scorecard developments that affect our corporate condition and
mission fulfillment; and,
	 

	3. 	Achievement of significant accomplishments beyond the STI
scorecard objectives or adverse developments.
	 

	The approved funding level, expressed as a percentage that can
range from 0% up to a maximum of 125%, will be equal to the
aggregate amount of funds approved by the Committee for
distribution to Covered Officers divided by the performance-based
portion of Deferred Base Salary earned.

 


The amount of the performance-based portion of Deferred Base
Salary that will be paid to a Covered Officer will be equal to
the performance-based portion of Deferred Base Salary earned
multiplied by Deferred Base Salary funding level.


 


For any Covered Officer for whom a separate division scorecard is
approved by a Board committee, the performance-based portion of
the Deferred Base Salary funding level will be based on the
appropriate Board committee’s assessment of performance against
such separate division scorecard.

 



The performance-based portion of the Deferred Base Salary earned
during each quarter of a calendar year will be adjusted in a
manner consistent with the approved Deferred Base Salary funding
level, and will be paid on the last business day of the
corresponding quarter in the immediately following calendar year.






 









 






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	Form of Payout
	 

	Cash less applicable withholdings.
	 

	Treatment Under Freddie Mac’s Benefit Plans
	 

	Deferred Base Salary will be considered compensation for purposes
of the Federal Home Loan Mortgage Corporation Supplemental
Executive Retirement Plan (Thrift 401(k) and Pension SERP) when
paid to an active Covered Officer, subject to the maximum
described in “Impact on Freddie Mac’s Supplemental Executive
Retirement Plan.”
	 

	Deferred Base Salary will not be considered compensation for
purposes of any of Freddie Mac’s tax qualified retirement or
executive benefit or welfare plans.
	Target Incentive 

Opportunity

	For each performance year, every Covered Officer will be provided
an annual Target Incentive Opportunity, which will be equal to
1/3 of TDC.
	 

	Effective Date for 2009 Target Incentive Opportunity
	 

	For each employee who was in a Covered Officer position on
January 1, 2009, the 2009 Target Incentive Opportunity will be
effective retroactive to January 1, 2009 and will be equal to 1/3
of their TDC (i.e., the 2009 Target Incentive Opportunity will
not be pro-rated).
	 

	For an employee who was hired into a Covered Officer position
after January 1, 2009, the 2009 Target Incentive Opportunity
shall be pro-rated based on their date of hire. For an employee
who is promoted after January 1, 2009 into either a Covered
Position or a Covered Position with increased scope and
responsibility, the 2009 Target Incentive Opportunity shall be
pro-rated effective as of the date of promotion.
	 

	Effective Date for Target Incentive Opportunity in 2010 and
Subsequent Years
	 

	For each employee who is in a Covered Officer position as of
January 1 of any calendar year, the Target Incentive Opportunity
will be effective on January 1 of that calendar year and will be
equal to 1/3 of their TDC.
	 

	For an employee who is hired into a Covered Officer position
after January 1 of any calendar year, the Target Incentive
Opportunity for that calendar year shall be pro-rated based on
the date of promotion or hire. For an employee who is promoted
after January 1 of any calendar year into either a Covered
Position or a Covered Position with increased scope and
responsibility, the Target Incentive Opportunity shall be
pro-rated effective as of the date of promotion.
	 

	Target Incentive Opportunity Payouts
	 

	A Covered Officer will be eligible to be paid 50% of their annual
Target Incentive Opportunity no later than March 15 of the
calendar year immediately following the performance year (the
“First Incentive Opportunity Payment”), and the remaining 50% no
later than March 15 of the second calendar year immediately
following the performance year (the “Second Incentive






 









 






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	Opportunity Payment”).
	 

	2009 Target Incentive Opportunity (Payouts in 2010 and 2011)
	 

	The amount of the annual Target Incentive Opportunity that is
actually paid will be determined by the aggregate amount of funds
approved by the Committee for distribution to Covered Officers
for each payment. In determining the aggregate amount of funds
approved for distribution, which can be greater than, less than,
or equal to the aggregate Target Incentive Opportunity for the
Covered Officers, the Committee will take into account the
following:
	 

	1. 	The Company’s performance against the objectives on the
long-term incentive (“LTI”) scorecard (i.e., for the LTI plan
applicable to employees at the level of Vice President and below)
for the LTI grant made in the same calendar year of the Covered
Officers’ annual Target Incentive Opportunity;
	 

	2. 	All other relevant internal and external factors and non-LTI
scorecard developments that affect our corporate condition and
mission fulfillment; and,
	 

	3. 	Achievement of significant accomplishments beyond the LTI
scorecard objectives or adverse developments.
	 

	The approved funding level, expressed as a percentage that can
range from 0% up to a maximum of 120%, will be equal to the
aggregate amount of funds approved by the Committee for
distribution to Covered Officers divided by the aggregate Target
Incentive Opportunity for those same Covered Officers.
	 

	 	First Incentive Opportunity Payment — The amount actually paid
will be equal 50% of the Covered Officer’s annual Target
Incentive Opportunity multiplied by the approved funding level
for the first vesting.
	 

	 	Second Incentive Opportunity Payment — The amount actually paid
will be equal to 50% of the Covered Officer’s annual Target
Incentive Opportunity multiplied by the approved funding level
for the second vesting.
	 

	For Covered Officers who are members of the Freddie Mac
Management Committee on the date the Committee approves the
funding level, the amount of the Target Incentive Opportunity
that is paid is also subject to an assessment of division and/or
individual performance as determined by the CEO, for Covered
Officers other than the CEO. For the CEO, Freddie Mac’s Board of
Directors conducts the assessment. This assessment can result in
an increase or decrease to the amount payable of up to 25%.
However, in no event can the aggregate amount paid to the Covered
Officers who are members of the Management Committee for any
First or Second Incentive Opportunity Payment exceed the
aggregate Target Incentive Opportunities for those Covered
Officers multiplied by the funding level.
	 

	2010 and Subsequent Year Target Incentive Opportunities
	 

	The Committee or the CEO will determine the actual amount that is
paid to a Covered Officer (other than the CEO) for either the
First or the Second






 









 






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	Incentive Opportunity Payments based on: (i) the aggregate amount of funds approved by the Committee for
distribution to Covered Officers for each payment, (ii) an
assessment of individual, group or enterprise performance; and
(iii) any other relevant factors. For the CEO, the Committee
determines the actual amount to be paid based on the same
factors, after obtaining and considering the views of the other
non-management members of the Board.
	 

	In determining the aggregate amount of funds approved for
distribution, which can be greater than, less than, or equal to
the aggregate Target Incentive Opportunity for the Covered
Officers, the Committee will take into account the following:
	 

	1. 	The Company’s performance against the objectives on the
long-term incentive (“LTI”) scorecard (i.e., for the LTI plan
applicable to employees at the level of Vice President and below)
for the LTI grant made in the same calendar year of the Covered
Officers’ annual Target Incentive Opportunity;
	 

	2. 	All other relevant internal and external factors and non-LTI
scorecard developments that affect our corporate condition and
mission fulfillment; and,
	 

	3. 	Achievement of significant accomplishments beyond the LTI
scorecard objectives or adverse developments.
	 

	The actual amount paid to a Covered Officer for each of the First
and Second Incentive Opportunity Payments can range from 0% to
150% of his/her Target Incentive Opportunity. However, in no
event can the aggregate amount paid to the Covered Officers for
any First or Second Incentive Opportunity Payment exceed the
aggregate amount of funds approved for distribution.
	 

	Form of Payout
	 

	Cash less applicable withholdings
	 

	Treatment Under Freddie Mac’s Benefit Plans
	 

	The Target Incentive Opportunity will not be considered
compensation for purposes of any Freddie Mac retirement benefit
or welfare plans.
	Impact on Freddie
Mac’s 

Supplemental Executive 

Retirement Plan

	The Supplemental Executive Retirement Plan (“SERP”) shall be
modified effective January 1, 2010 to provide that the maximum
covered compensation, for purposes of the plan, relative to
Covered Officers only, may not exceed two times the Covered
Officer’s Semi-Monthly Base Salary. It is the intent of Freddie
Mac and FHFA that, upon the conclusion of Conservatorship, the
definition of “compensation” for purposes of accruals under the
SERP will revert to the definition of “compensation” in place
prior to the amendment to the SERP made to conform its terms to
this Executive Management Compensation Program.
	Treatment Upon 

Termination: 

  

Semi-Monthly 

Base Salary

	Under all termination events except death, Semi-Monthly Base
Salary will terminate as of the date employment terminates. In
the event of death, Semi-Monthly Base Salary will terminate at
the end of the month in which the death occurs.






 









 






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	Treatment Upon 

Termination: 

  

Deferred Base Salary

	Death: If a Covered Officer’s employment is terminated due to
death, any unpaid Deferred Base Salary will be paid as soon as
administratively possible. If, at the time of the Covered
Officer’s death, the Deferred Base Salary funding level has not
been determined, the performance-based portion of Deferred Base
Salary will remain outstanding until such determination is made.
The actual amount paid for the performance-based portion will be
determined by the approved Deferred Base Salary funding level.
	 

	The date on which the Committee approves the Deferred Base Salary
funding level is referred to as the “Deferred Base Salary
Determination Date.” Payment of any performance-based Deferred
Base Salary will occur as soon as administratively possible after
the Deferred Base Salary Determination Date.
	 

	Long-Term Disability: If a Covered Officer’s employment is
terminated due to Long-Term Disability, the Covered Officer’s
right to receive any unpaid Deferred Base Salary will become
non-forfeitable, subject to the Recapture Policy, but will be
paid no earlier than as called for in the Approved Payment
Schedule above. The actual amount paid for the performance-based
portion of Deferred Base Salary earned will be determined by the
approved Deferred Base Salary funding level.
	 

	Retirement: If a Covered Officer terminates employment due to
retirement (as defined in Definitions), the Covered Officer’s
right to receive any unpaid Deferred Base Salary will become
non-forfeitable, subject to the Recapture Policy, and the
Deferred Base Salary will be paid no earlier than as called for
in the Approved Payment Schedule above. The actual amount paid
for the performance-based portion of Deferred Base Salary will be
determined by the approved Deferred Base Salary funding level.
	 

	Involuntary Termination: If a Covered Officer is involuntarily
terminated, any unpaid Deferred Base Salary will be forfeited
unless the Committee (for Executive Officers) or an Authorized
Officer (for non-Executive Officers) recommends that the Covered
Officer receive either all or a portion of the unpaid Deferred
Base Salary. The Committee’s recommendation for Executive
Officers is subject to approval by FHFA after consulting with
Treasury, as appropriate.
	 

	Voluntary Termination: If a Covered Officer voluntarily
terminates employment, any unpaid Deferred Base Salary will be
forfeited.
	Treatment Upon 

Termination: 

  

Target Incentive 

Opportunity

	Minimum Service Required: In order to be eligible to receive any
portion of an annual Target Incentive Opportunity upon
termination, a Covered Officer must have been employed for a
minimum of four (4) whole calendar months during the performance
year for which the incentive is being earned.


 


Death and Long-Term Disability: If a Covered Officer’s
employment is terminated due to either death or Long-Term
Disability, any earned but unpaid portion of the Target Incentive
Opportunity will be paid as soon as administratively possible
following the date of death or the first day of Long-Term
Disability. The actual amount that is paid will be determined
consistent with the process under Target Incentive Opportunity
Payouts.






 









 






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	If, at the time of the Covered Officer’s death or Long-Term
Disability, the Target Incentive Opportunity funding level has
not been determined, the award will remain outstanding until such
determination is made. As soon as administratively possible
after the Target Incentive Opportunity Payment Determination Date
(which is the date on which the Committee approves the LTI
funding level), but no later than March 15 of the calendar year
following each calendar year performance period, the Covered
Officer, or the Covered Officer’s beneficiary(ies), will receive
all unpaid portions of their Target Incentive Opportunity
determined consistent with the process under Target Incentive
Opportunity Payouts.
	 

	Retirement: If a Covered Officer terminates employment due to
Retirement (as defined in Definitions), any earned but unpaid
portion of the Target Incentive Opportunity will be paid as soon
as administratively possible. The actual amount paid will be
determined consistent with the process under Target Incentive
Opportunity Payouts.
	 

	If, at the time of the Covered Officer’s termination, performance
against the performance measure(s) has not been determined, the
Target Incentive Opportunity will remain outstanding until the
Target Incentive Opportunity Payment Determination Date. As soon
as administratively possible after the Target Incentive
Opportunity Determination Date, but no later than March 15 of the
calendar year following each calendar year performance period,
the Covered Officer’s right to receive a pro-rata payment shall
become non-forfeitable, subject to the Recapture Policy. The
Covered Officer is eligible to receive a pro-rata payment for the
performance year in which the Covered Officer was employed. If
the Covered Officer is employed for less than four (4) whole
calendar months during a performance year, the Covered Officer
will forfeit the Target Incentive Opportunity payment for that
performance year. The pro-rata payment shall be calculated using
the following methodology:
	 

	 	Step 1. The number of whole months employed during the applicable
performance year (minimum of four months required)
	 

	 	Step 2. Divided by twelve (12), the number of whole months in the
performance year
	 

	 	Step 3. Multiplied by 50% of the Covered Officer’s annual Target
Incentive Opportunity and adjusted consistent with the process
under Target Incentive Opportunity Payouts.
	 

	The above formula will be applied separately to each of the of
the performance years for which a Covered Officer is eligible for
a pro-rata payment of the Target Incentive Opportunity.
	 

	Involuntary Termination: If a Covered Officer is involuntarily
terminated, any unpaid portion of the Target Incentive
Opportunity will be forfeited unless the Committee (for Executive
Officers) or an Authorized Officer (for non-Executive Officers)
recommends that the Covered Officer receive either all or a
portion of the unpaid Target Incentive Opportunity. The
Committee’s recommendation for Executive Officers is subject to
approval by FHFA after consulting with Treasury, as appropriate.






 









 






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	Voluntary Termination: If a Covered Officer voluntarily
terminates employment, any unpaid portion of the Target Incentive
Opportunity will be forfeited.
	Additional Forfeiture 

Provision

	Upon a “Forfeiture Event” (as defined in Definitions), any
unearned or any unpaid Total Incentive Opportunity will be
cancelled and the Covered Officer or former Covered Officer will
be required to immediately repay Freddie Mac the gross value of
the Target Incentive Opportunity that was paid during the 12
month period immediately prior to the Forfeiture Event.


 

In the event that a repayment is triggered under a current or
former Covered Officer’s Recapture Policy, any earned but unpaid
amounts that are subject to recapture under the terms of the
Recapture Policy will be forfeited.
	Regulatory Approval
and 

Reservation of
Rights

	Actual payment of any Deferred Base Salary or any Target
Incentive Opportunity at the time of termination is conditioned
on the prior approval of FHFA at the time of any proposed
payment.


 


Freddie Mac reserves the right, subject to FHFA approval, to
modify the terms and conditions set forth herein so long as such
modifications reasonably and in good faith are not detrimental to
the rights of the employee.
	 

	The terms of this program are subject to and shall be construed
in accordance with applicable law and any applicable regulation,
guidance or interpretation issued by FHFA or Treasury.
	Definitions

	Authorized Officers: Those officers deemed Authorized Officers in
the Board of Directors resolution delegating authority to
management on human resources matters, as may be amended or
restated from time to time.
	 

	Executive Officer: Those officers defined as Executive Officers
in the Compensation Committee Charter then in effect.
	 

	Forfeiture Event: A Forfeiture Event shall mean the Covered
Officer or former Covered Officer directly or indirectly seeks or
accepts employment with, or provides professional services to, a
“Competitor” in violation of any non-competition covenant
agreement between the Covered Officer and Freddie Mac in effect
as of the date the Covered Officer receives a Target Incentive
Opportunity.
	 

	Long-Term Disability: A Long-Term Disability shall be as defined
in Freddie Mac’s Long-Term Disability Plan.
	 

	Retirement: A Covered Officer is eligible to retire when s/he has
attained or exceeded the Normal Retirement Age in the Freddie Mac
Employees’ Pension Plan, which is currently 65 years of age.