exv10w31







 




    Exhibit 10.31



 




    2009
    LONG-TERM INCENTIVE AWARD



 




    Parameters
    Document



 


			
	
    Objective 		
    The long-term incentive deferred cash award (LTI) is intended to
    provide a “forward looking” incentive award to
    eligible officers and directors.
	 
	
    Grant Date 		
    March 16, 2009
	 
	
    Performance Period 		
    LTI awards granted in March 2009 with performance measures
    covering the 2009 and 2010 performance period
	 
	
    General Eligibility 		
    An employee who, as of the LTI grant date, is classified by
    Freddie Mac (in its sole discretion) as either (i) an
    active, full-time or part-time officer or director, or an
    officer or director on short term disability and/or approved
    leaves of absence or (ii) is classified by Freddie Mac as a
    LTI eligible non-officer in a market-priced position. However,
    Senior Vice Presidents, Executive Vice Presidents, and the Chief
    Executive Officer are not eligible to participate in this
    program until such time as Freddie Mac has additional guidance
    from the Federal Housing Finance Agency on the application of
    recent announcements by the U.S. Department of Treasury, as well
    the American Recovery and Reinvestment Act’s restrictions
    on executive compensation.
	 
	
    Aggregate Corporate LTI

    Pool 		
    The corporate-wide aggregate value of the LTI grants is equal to
    the sum of annualized LTI targets of employees eligible to
    participate in the LTI program. Each Division’s share of
    the corporate-wide pool is equal to the aggregate value of its
    eligible employees’ LTI targets as a percentage of the
    corporate LTI pool, less the aggregate value of the LTI targets
    for Division employees who are direct reports to the Chief
    Executive Officer, subject to any adjustment in the allocation
    by the Chief Executive Officer.
	 
	
    Individual LTI Targets 		
    Officers: LTI target is the employee’s target in
    effect on the date that the grant is approved.
	 
	
     		
    Directors: For non-market priced director-level
    employees, the LTI target is the LTI target applicable to the
    position’s salary grade. For LTI eligible employees in a
    market priced position, the LTI target generally is the salary
    grade target that is closest to the median of the Estimated
    Market
    Distribution1

    of such position, subject to the protocol established by the
    Human Resources Division for market-priced positions LTI
    eligibility and targets.
	 
	
    LTI Grant Amount 		
    For LTI awards granted in 2009, an eligible employee’s
    grant shall be equal to their LTI target, except (a) an
    employee who receives a Business Results Rating (BRR) of 1 is
    not eligible to receive a LTI grant and an employee who receives
    a BRR of 2 may, subject to the Division Head’s
    approval, receive a LTI grant, which in most instances will be
    substantially below their target, and (b) no more than 5%
    of the participants can receive between 100% and 150% of their
    LTI target but in no event can the aggregate amount exceed the
    Aggregate Corporate LTI Pool approved by the Compensation
    Committee.
	 
	
    Vesting and Payment

    Amount 		
    Management shall provide a recommendation to the Compensation
    Committee of Freddie Mac’s Board of Directors regarding the
    level of achievement of the performance
    measure(s)
    described in Exhibit A (the “Performance
    Multiplier”) prior








		
	    1 	
    Estimated Market Distribution (EMD) is a range of market
    compensation (base salary and bonus) unique to each job and is
    based on data representing the median pay practice for a similar
    role in the comparative markets.





    

    Page 1 of 3








 





			
	
     		
    to the first and the second anniversary of the grant date and,
    except as set forth below under “Treatment of Award Upon
    Termination,” upon the Compensation Committee’s
    approval an employee’s right to payment of that portion of
    the LTI award shall vest.
	 
	
     		
    Based on Performance Multiplier, the LTI actual dollar amount of
    the LTI grant paid can range from 0% – 120% of the
    grant as determined on each of the 1st and 2nd anniversary of
    the grant date.
	 
	
     		
    Performance Measure(s) and Performance Multiplier
    — See Exhibit A.
	 
	
    Payment Timing 		
    Any award to be paid shall be paid as soon as administratively
    practicable on or about the 1st and 2nd anniversary of grant
    date.
	 
	
    Form of Payout 		
    Cash less applicable withholding.
	 
	
    Treatment of Award

    Upon Termination 		
    Voluntary Termination or Non-Severance Eligible Termination:
    If an employee voluntarily terminates their employment or if
    Freddie Mac terminates employment and the employee does not
    receive severance, any unvested or unpaid portion of the award
    is forfeited.
	 
	
     		
    Death and Long-Term Disability: If an employee’s
    employment is terminated due to either death or long-term
    disability, any vested but unpaid portion of the LTI award will
    be paid as soon as administratively possible. The amount paid
    will be based on the Performance Multiplier.
	 
	
     		
    Any unvested portion of the LTI award will remain outstanding
    until the Compensation Committee approves the Performance
    Multiplier. Upon such approval, the employee’s right to
    receive any such award shall vest and the unpaid portion of the
    LTI award will be paid as soon as administratively possible. The
    amount paid will be based the Performance Multiplier.
	 
	
     		
    Retirement or Severance Eligible Termination: If an
    employee is terminated by Freddie Mac due to a severance
    eligible event and receives severance pay or if an employee
    terminates employment due to retirement (either
    (i) age/years of service of 62/5 or (ii) sum of age
    and years of service equal no less than 70, with minimum age of
    55) any vested but unpaid portion of the LTI award will be
    paid as soon as administratively possible. The amount paid will
    be based on the Performance Multiplier.
	 
	
     		
    Any unvested portion of the LTI award will remain outstanding
    until the Compensation Committee approves the Performance
    Multiplier. Upon such approval, the employee’s right to
    receive a pro-rata payment shall vest. The pro rata payment
    shall be based on the following methodology:
	 
	
     		
    Step 1. The number of whole months worked in the performance
    year
	 
	
     		
    Step 2. Divided by twelve
	 
	
     		
    Step 3. Multiplied by the employee’s portion of LTI
    grant scheduled to vest and be paid for that performance year
    and the Performance Multiplier
	 
	
    Additional Forfeiture

    Provision 		
    Upon a “Forfeiture Event” (as defined below), any
    unvested or any unpaid LTI award will be cancelled and the
    employee or former employee will be required to immediately
    repay Freddie Mac the gross value of any LTI award payment that




    

    Page 2 of 3








 





			
	
     		
    was made within 12 months prior to the Forfeiture Event
	 
	
     		
    A Forfeiture Event shall mean the employee or former employee
    directly or indirectly seeking or accepting employment with, or
    providing professional services to, a “Competitor” in
    violation of any non-competition covenant agreement between the
    employee and Freddie Mac in effect as of the date the employee
    receives an LTI grant.
	 
	
    Regulatory Approval and

    Reservation of Rights 		
    Notwithstanding the terms set forth above, with respect to
    certain designated officers Freddie Mac’s Conservator is
    required to approve the actual payment of compensation,
    including payment of this LTI grant. As a consequence, such
    officer’s right to payment of the LTI grant set forth
    herein is conditioned on the Conservator’s approval after
    Compensation Committee’s determination of the Performance
    Multiplier.
	 
	
     		
    Amounts paid pursuant to this plan will not be considered
    compensation for purposes of the tax qualified
    Thrift/401(k)
    Savings Plan, the tax qualified Employees’ Pension Plan and
    the non-qualified Supplemental Executive Retirement Plan.
	 
	
     		
    Nothing in this program is intended to create a contract to
    employ any employee for any particular term or period of time or
    otherwise abrogate Freddie Mac’s or the employee’s
    right to terminate the employment relationship at any time for
    any lawful reason.


    

	 
	
     		
    Freddie Mac reserves the right to modify the terms and
    conditions set forth herein at anytime for any reason at the
    corporation’s sole discretion.
	 
	
     		
    The terms of this plan are subject to and shall be construed in
    accordance with applicable law and any regulation, guidance or
    interpretation issued by the Federal Housing Finance Agency or
    the U.S. Department of Treasury.




    

    Page 3 of 3








 







    Exhibit A:



 




    2009
    Long-Term Incentive Award Performance Measures and Performance
    Multiplier



 




    Performance
    Measures



 



    Corporate Performance Measures:  Freddie
    Mac’s ability to remediate the subset of the ninety-seven
    matters requiring attention or other concerns identified at the
    Conservatorship date by the Federal Housing Finance Agency
    (FHFA) (together, “MRAs”) planned for 2009 or earlier
    completion will determine the LTI value that is ultimately
    delivered to recipients of the 2009 LTI grant (which will be
    granted in March 2009). The LTI grant is scheduled to vest 50%
    on each of the first and second anniversaries of the grant date.
    The value that a participant ultimately receives at each vest
    date is calibrated based on Freddie Mac’s performance
    against the performance objectives for each vesting cycle
    (identified below). This calibration is applied consistently to
    all employees (regardless of level) who receive an LTI grant.



 



    Business Infrastructure Performance
    Measures:  In addition to the Corporate
    Performance Measures, a limited number of officer- and
    non-officer-level employees who are accountable for business
    infrastructure objectives will have performance measures based
    on successful completion of specific deliverables for business
    infrastructure objectives.



 




    Performance
    Calibration for 1st LTI Vesting — Portion Scheduled to
    Vest in March 2010



 



    Corporate Performance Measures:  Based on the
    company’s remediation of MRAs that are scheduled to be
    remediated prior to January 1, 2010. The LTI grant date
    value that actually vests and is paid can range from
    0% – 120% (i.e., the Corporate Performance Measure
    Multiplier) as illustrated in Chart A.



 



    The Corporate Performance Measure Multiplier is applied
    consistently to all employees (regardless of level) who are
    recipients of the 2009 LTI grant. Once an assessment of
    performance is made, it applies to the 50% of the LTI grant date
    value (i.e., the portion scheduled to vest and be paid in
    March 2010). Note: For those employees who also have the
    Business Infrastructure Performance Measure, the Corporate
    Performance Measure will only be applied to 25% of the LTI grant
    date value and the additional 25% of the LTI grant date value
    scheduled to vest and be paid in March 2010 will be based on
    performance against the Business Infrastructure Performance
    Measure).



 



    Each of the MRAs scheduled to be remediated prior to
    January 1, 2010 has been classified into one of five
    categories and each category has been assigned a
    weighting/prioritization percentage (Column A), with the
    sum of all categories equaling 120%.



 



    The maximum Corporate Performance Measure Multiplier is equal to
    the sum of the Performance Multiplier Contribution Percentage
    for each MRA category (Column C), which is equal to the
    actual percentage of MRAs remediated prior to January 1,
    2010 that were scheduled to be remediated prior to
    January 1, 2010 (Column B) multiplied by the
    category’s weighting/prioritization percentage
    (Column A).



 



    As part of their assessment of performance, the Compensation
    Committee of the Freddie Mac Board of Directors reserves the
    right to adjust the Performance Multiplier Contribution
    Percentage upward for any category (to a maximum of the
    category’s weighting/prioritization percentage) based on a
    review of factors they deem appropriate, which may include
    completion status of MRAs that are not remediated, progress made
    toward remediating MRAs, scope/difficulty of remediating MRAs,
    and internal/external factors influencing the remediation of
    MRAs.













 





	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 

	

    Chart A: 2009 Corporate
    Performance Measures



	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    (A)
	
 
	
 
	
    (B)
	
 
	
 
	
    (C) = (A) x (B)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Matters Requiring Attention

    Categories


	
 
	
 
	
    Category

    Weighting/

    Prioritization
	
 
	
 
	
    Multiplied by:

    Percentage of Matters Requiring Attention

    remediated prior to January 1, 2010 that were

    scheduled to be remediated prior to January 1, 2010
	
 
	
 
	
    Equals:

    Performance Multiplier

    Contribution Percentage

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Credit Risk Management and

    Governance/Loan Loss Reserves


	
 
	
 
	
    35%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Internal Controls (including End-To-End,

    Internal Audit, Contingency Planning)


	
 
	
 
	
    25%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Models and Model Governance


	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Accounting/Accounting

    Policy/Forecasting


	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Board Governance and Others


	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	

    Total:

    Percentage of the 2009 LTI grant date value scheduled to vest in
    March 2010

    that actually vests and is paid (Maximum Performance Multiplier
    of 120%)


	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 









 



    No payment will be made if the sum of the Performance Multiplier
    Contribution Percentages is less than 50%.



 



    Business Infrastructure Performance
    Measures:  Based on the company’s
    successful completion of deliverables prior to January 1,
    2010 for infrastructure objectives identified in Chart B.
    The LTI grant date value that actually vests and is paid can
    range from 0% – 120% (i.e., the Business
    Infrastructure Performance Measure Multiplier).



 



    The Business Infrastructure Performance Measure Multiplier is
    applied consistently to all employees (regardless of level) who
    are recipients of the 2009 LTI grant and are also subject to
    this performance measure. Once an assessment of performance is
    made, it applies to the 25% of the LTI grant date value (i.e.,
    the portion scheduled to vest and be paid in March 2010).



 



    The other 25% of the LTI grant date value, which is scheduled to
    vest and be paid in March 2010, will be based on the Corporate
    Performance Measure. Successful completion of the Business
    Infrastructure Performance Measures is not a prerequisite for
    vesting and payment of the portion of the LTI grant date value
    calibrated against the Corporate Performance Measures, and vice
    versa.



 



    Each of the deliverables scheduled to be successfully completed
    prior to January 1, 2010 has been assigned a
    weighting/prioritization percentage (Column A), with the sum of
    all categories equaling 120%.













 






    The maximum Performance Multiplier is equal to the sum of the
    Performance Multiplier Contribution Percentage for each 2009
    Deliverable (Column C), which is equal to 100% (if the
    deliverable is complete) or 0% (if the deliverable is not
    complete) (Column B) multiplied by the deliverable’s
    weighting/prioritization percentage (Column A).



 


	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 

	

    Chart B: 2009 Business
    Infrastructure Performance
    Measures1




	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    (A)
	
 
	
 
	
    (B)
	
 
	
 
	
    (C) = (A) x (B)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    2009 Deliverables


	
 
	
 
	
    Category

    Weighting/

    Prioritization
	
 
	
 
	
    Multiplied by:

    Percentage Complete (100% if complete and

    0% if not complete)
	
 
	
 
	
    Equals:

    Performance Multiplier

    Contribution Percentage

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    A Financial Data Warehouse which will evolve to be the single
    source for financial reporting and initially used to generate
    selected financial reports


	
 
	
 
	
    30%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Business process models encompassing loan purchasing, servicing,
    securitization, and accounting for Single Family core products


	
 
	
 
	
    25%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    System tested end-to-end software solution, including major
    wrapped components from the existing legacy systems, for the
    Single Family line of business


	
 
	
 
	
    25%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Data models in a data dictionary


	
 
	
 
	
    25%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Define the redesigned financial close model, including
    rationalizing controls


	
 
	
 
	
    5%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    User acceptance test plan that validates the new platform’s
    ability to meet business requirements


	
 
	
 
	
    5%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Migration strategy that will define the transition for the
    current state to the new platform and processes; including
    Sarbanes-Oxley 404 compliance


	
 
	
 
	
    5%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	

    Total:

    Percentage of the 2009 LTI award scheduled to vest in March 2010
    that actually vests and is paid (Maximum Performance Multiplier
    of 120%)


	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 














		
	    1 	
    All 2009 Deliverables are specific to the Single Family
    Strategic Technology Initiative




 



    No payment will be made if the sum of the Performance Multiplier
    Contribution Percentages is less than 50%.













 







    Performance
    Calibration for 2nd LTI Vesting — Portion
    Scheduled to Vest in March 2011:



 



    Corporate Performance Measures:  Based
    on (i) the company’s performance against MRAs that
    have target completion dates in 2010 and (ii) avoidance of
    any repeat MRAs that are identical to MRAs that were remediated
    in 2009. The LTI value can range from 0% — 120% (i.e.,
    the Corporate Performance Measure Multiplier), as illustrated in
    Chart C.



 



    For the 2010 performance period, the Compensation Committee of
    the Freddie Mac’s Board of Directors reserves the right to
    include an additional Corporate Performance Measure pertaining
    to the company’s financial performance.



 



    The Corporate Performance Measure Multiplier is applied
    consistently to all employees (regardless of level) who are
    recipients of the 2009 LTI grant. Once an assessment of
    performance is made, it applies to the 50% of the LTI grant date
    value (i.e., the portion scheduled to vest and be paid in
    March 2011). Note: For those employees who also have the
    Business Infrastructure Performance Measure, the Corporate
    Performance Measure will only be applied to 25% of the LTI grant
    date value and the additional 25% of the LTI grant date value
    scheduled to vest and be paid in March 2011 will be based on
    performance against the Business Infrastructure Performance
    Measure.



 


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 

	

    Chart C: 2010 Corporate
    Performance Measures



	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Performance Level


	
 
	
 
	
    Below Threshold
	
 
	
 
	
    Threshold
	
 
	
 
	
    Below Plan
	
 
	
 
	
    On Plan
	
 
	
 
	
    Above Plan

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Percentage of Matters Requiring Attention remediated during 2010
    that were scheduled to be remediated during 2010


	
 
	
 
	
    Less than 70%
	
 
	
 
	
    70%
	
 
	
 
	
    80%
	
 
	
 
	
    90%
	
 
	
 
	
    100%

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Equals:

    MRA Performance Multiplier


	
 
	
 
	
    0%
	
 
	
 
	
    50%
	
 
	
 
	
    75%
	
 
	
 
	
    100%
	
 
	
 
	
    120%

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	

    Less:

    Repeat Identical Matters Requiring Attention Identified


	
 
	
 
	
    5% reduction for each Repeat Identical Matters Requiring
    Attention Identified

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Equals:

    Performance Multiplier (final) — Percentage of the
    2009 LTI award scheduled to vest in March 2011 that actually
    vests and is paid


	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 









 



    No payment will be made if either the Performance Multiplier
    (final) is less than 50% or there are more than
    ten Repeat Identical Matters Requiring Attention.



 



    In the likely event that actual performance results in a value
    that is between two Performance Levels (e.g., greater than On
    Plan, but less than Above Plan), linear interpolation will be
    used to determine the appropriate Performance Multiplier.
    Specifically, a calculation will be performed to determine how
    far above or below (expressed in percentage terms) our actual
    performance is from the closest Performance Level. This













 






    percentage will then be used to adjust (either up or down) the
    Performance Multiplier of the closest Performance Level, which
    will result in the actual Performance Multiplier used to
    determine the LTI value delivered to LTI recipients.



 



    Business Infrastructure Performance
    Measures:  Based on the company’s
    successful completion of deliverables prior to January 1,
    2011 for infrastructure objectives identified in Chart D.
    The LTI grant date value that actually vests and is paid can
    range from 0% — 120% (i.e., the Business
    Infrastructure Performance Measure Multiplier).



 



    For the 2010 performance period, the Compensation Committee of
    the Freddie Mac’s Board of Directors reserves the right to
    change or include additional Business Infrastructure Performance
    Measures.



 



    The Business Infrastructure Performance Measure Multiplier is
    applied consistently to all employees (regardless of level) who
    are recipients of the 2009 LTI grant and are also subject to
    this performance measure. Once an assessment of performance is
    made, it applies to the 25% of the LTI grant date value (i.e.,
    the portion scheduled to vest and be paid in March 2011). The
    other 25% of the LTI grant date value scheduled to vest and be
    paid in March 2011 will be based on the Corporate Performance
    Measure. Successful completion of the Business Infrastructure
    Performance Measures is not a prerequisite for vesting and
    payment of the portion of the LTI grant date value calibrated
    against the Corporate Performance Measures, and vice versa.



 



    Each of the deliverables scheduled to be successfully completed
    prior to January 1, 2011 has been assigned a
    weighting/prioritization percentage (Column A), with the
    sum of all categories equaling 120%.



 



    The maximum Performance Multiplier is equal to the sum of the
    Performance Multiplier Contribution Percentage for each 2009
    Deliverable (Column C), which is equal to 100% (if the
    deliverable is complete) or 0% (if the deliverable is not
    complete) (Column B) multiplied by the
    deliverable’s weighting/prioritization percentage
    (Column A).



 


	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 

	

    Chart D: 2010 Business
    Infrastructure Performance
    Measures2




	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    (A)
	
 
	
 
	
    (B)
	
 
	
 
	
    (C) = (A) x (B)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    2010 Deliverables


	
 
	
 
	
    Category

    Weighting/

    Prioritization
	
 
	
 
	
    Multiplied by:

    Percentage Complete (100% if complete and

    0% if not complete)
	
 
	
 
	
    Equals:

    Performance Multiplier

    Contribution Percentage

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Selected products will be purchased, serviced, and accounted for
    in the new platform


	
 
	
 
	
    30%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Platform is completed and operationally ready to support the
    full Single Family line of business by early 2011


	
 
	
 
	
    25%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    The Financial Data Warehouse is the primary source of financial
    reports for new business


	
 
	
 
	
    25%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Organization has the structure and processes in place to support
    the new platform


	
 
	
 
	
    15%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Key controls will be tested for operational effectiveness and to
    maintain Sarbanes-Oxley 404 compliance


	
 
	
 
	
    15%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Plan to retire legacy systems and databases defined


	
 
	
 
	
    10%
	
 
	
 
	
    xx%

    (To Be Determined)
	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	

    Total:

    Percentage of the 2009 LTI grant scheduled to vest in March 2011
    that actually vests and is paid (Maximum Performance Multiplier
    of 120%)


	
 
	
 
	
    xx%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 














		
	    2 	
    All 2010 Deliverables are specific to the Single Family
    Strategic Technology Initiative




 



    No payment will be made if the sum of the sum of Performance
    Multiplier Contribution Percentages is less than 50%.