SM

Freddie Mac

8200 Jones Branch Drive

McLean, Virginia 22102

TO THE STOCKHOLDERS OF FREDDIE MAC

April 29, 2008

Dear Freddie Mac Stockholder:

We are pleased to invite you to attend Freddie Mac's annual stockholders' meeting, to be held

on Friday, June 6, 2008, at 9:00 a.m. at the Freddie Mac campus, 8000 Jones Branch Drive,

McLean, Virginia 22102. The Proxy Statement and Notice of Annual Meeting of Stockholders

accompanying this letter describes the business to be transacted at the meeting. This Proxy

Statement and the accompanying proxy card are first being mailed to stockholders on April 29, 2008.

We hope you will be able to attend the annual meeting and urge you to read the enclosed Proxy

Statement and Notice, as well as the accompanying Information Statement and Annual Report to

Stockholders and the audited Ñnancial statements included in the Annual Report, for information

about Freddie Mac and the annual meeting. Please complete, sign and return the enclosed proxy

card, or vote by Internet or by telephone, at your earliest convenience. Sending your proxy card, or

voting by Internet or by telephone, will not aÅect your right to vote your shares personally if you do

attend the meeting. Please indicate whether you plan to attend the meeting on the proxy card.

Sincerely,

Richard F. Syron

Chairman of the Board and Chief Executive OÇcer
FEDERAL HOME LOAN MORTGAGE CORPORATION

PROXY STATEMENT AND NOTICE OF

ANNUAL MEETING OF STOCKHOLDERS

Our annual meeting of stockholders will be held on Friday, June 6, 2008, at 9:00 a.m. at the

Freddie Mac office located at 8000 Jones Branch Drive, McLean, Virginia 22102, for the purposes of:

(1) electing 11 members to our Board of Directors, each for a term ending on the date of our

next annual meeting;

(2) ratifying the appointment by the Audit Committee of our Board of Directors of

PricewaterhouseCoopers LLP as our independent auditors for the Ñscal year ending

December 31, 2008;

(3) approving the amendment and restatement of the 2004 Stock Compensation Plan; and

(4) transacting any other business that may properly come before the meeting or any

adjournment thereof.

RECORD DATE

March 31, 2008 is the record date for the annual meeting. This means that owners of Freddie Mac common stock

at the close of business on that date are entitled to receive notice of the meeting, and vote at the meeting or any

meeting adjournment.

Stockholders of record on the record date will be admitted to the meeting with photo identiÑcation and proof of

stock ownership (as described in ""Annual Meeting Admission'' below).

WHO MAY ATTEND THE MEETING

Attendance is limited to stockholders, including persons holding proxies from stockholders, and one guest each.

Invited representatives of the media may attend the meeting.

ANNUAL MEETING ADMISSION

Registration begins at 8:00 a.m. A valid photo identiÑcation and proof of stock ownership must be presented in

order to attend the meeting.

If your shares are registered in your name, you should bring the bottom half of the proxy card, which is your

admission ticket. If you hold Freddie Mac stock in the name of a broker, trust, bank or other nominee (""street

name''), you must bring a copy of an account statement reÖecting your stock ownership as of the record date. If

you plan to attend as the proxy of a stockholder, you must present valid proof of proxy. Cameras, recording

devices and other electronic devices are not permitted at the meeting.

WEBCAST OF THE MEETING

If you are not able to attend the meeting in person, you may listen to a live webcast of the meeting on the Internet

by visiting http://www.freddiemac.com/investors at 9:00 a.m. on June 6, 2008. You will not be able to ask

questions unless you attend the meeting in person.

SECURITY AND PARKING AT THE MEETING

The annual meeting will be held at the Freddie Mac campus. The campus consists of several buildings, so please

take note that 8000 Jones Branch Drive is the address of the building where the meeting will be held.

Reserved parking will be available for annual meeting attendees. Security measures will require that photo

identiÑcation and your admission ticket or proof of stock ownership (as described in ""Annual Meeting Admission''

above) be presented to the security guard in order to access the reserved parking area.
Our Board of Directors recommends that you vote ""FOR'' the election of directors, the

ratiÑcation of the appointment of our independent auditors and the amendment and restatement of

the 2004 Stock Compensation Plan.

Your vote is important. Please vote your proxy promptly so your shares can be represented at

the annual meeting, even if you plan to attend the annual meeting. You can vote by Internet, by

telephone, or by using the enclosed proxy card. Please see your proxy card for speciÑc instructions

on how to vote.

Our proxy tabulator, Computershare Trust Company N.A., must receive any proxy that will not

be delivered in person to the annual meeting by 11:59 p.m., eastern time, on Thursday, June 5, 2008.

Unless you will be voting your shares in person at the annual meeting, you have the power to

revoke a proxy at any time until 11:59 p.m. eastern time, on Thursday, June 5, 2008 by giving the

Corporate Secretary of Freddie Mac written notice of your revocation or by submitting a later

dated proxy. You may also revoke your proxy by voting your shares in person at the annual

meeting.

The accompanying Proxy Statement contains information describing each matter we expect to

be presented for action at the annual meeting.

By Order of the Board of Directors,

Robert E. Bostrom

Executive Vice President, General Counsel and

Corporate Secretary

Dated: April 29, 2008

McLean, Virginia
TABLE OF CONTENTS

About the Meeting ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1

Corporate Governance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5

Corporate Governance Guidelines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5

Director IndependenceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5

Director QualiÑcations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6

Audit Committee Financial Expert ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6

Codes of ConductÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6

Chairman of the Board ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7

Lead Director ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7

Contacting the Board ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7

Stock Ownership by Directors, Executive OÇcers and Greater than 5% Holders ÏÏÏÏÏ 8

Proposal 1: Election of Directors ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11

Director Nomination Process ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11

Nominees for Election ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11

Meetings of the Board and Committees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18

Board Compensation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 21

Transactions with Institutions Related to Directors ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26

Policy Governing Related Person TransactionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27

Audit Committee ReportÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30

Executive OÇcersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32

Report of the CHRC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35

Compensation Discussion and Analysis ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35

Executive Compensation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 61

Proposal 2: RatiÑcation of Appointment of Independent Auditors ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 86

Description of FeesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 86

Approval of Independent Auditor Services and Fees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 86

Proposal 3: Approval of Amended and Restated 2004 Stock Compensation Plan ÏÏÏÏÏÏÏÏÏ 88

Securities Authorized for Issuance Under Equity Compensation PlansÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99

Other Proposed ActionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99

Availability of Annual Report ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99

Section 16(a) BeneÑcial Ownership ReportingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99

Stockholder Proposals and Nominations for Next Annual Meeting of Stockholders ÏÏÏÏÏÏÏ 100

Solicitation by Board; Expenses of SolicitationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 101

Appendix A: 2004 Stock Compensation Plan, as amended and restated ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-1
ABOUT THE MEETING

Who is soliciting my vote?

The Board of Directors of Freddie Mac is soliciting your vote on proposals being submitted to our

annual meeting of stockholders to be held on June 6, 2008.

What am I voting on?

You will be voting on the following three items:

‚ election of 11 members to the Board;

‚ ratiÑcation of the appointment of PricewaterhouseCoopers LLP by the Audit Committee of

our Board of Directors as our independent auditors for the Ñscal year ending December 31,

2008; and

‚ approval of the amendment and restatement of the 2004 Stock Compensation Plan, or the

2004 Employee Plan.

The Board is not aware of any other matters to be presented for a vote at the annual meeting.

Who is entitled to vote?

Holders of record of our common stock, par value $0.21 per share, as of the close of business on

March 31, 2008, the record date, are entitled to vote at the annual meeting. As of the record date,

there were 646,531,619 votes that could be cast at the annual meeting by all stockholders,

consisting of one vote for each share of Freddie Mac common stock outstanding as of that date. We

have no other outstanding classes of stock that are entitled to vote at the annual meeting.

How many votes do I have?

Stockholders entitled to vote have one vote for each share of Freddie Mac common stock they

owned on the record date for each matter presented to the stockholders for a vote. There is no

cumulative voting. For purposes of determining the number of votes cast with respect to any voting

matter, only those votes cast ""for'' or ""against'' are counted; ""votes withheld'' and ""abstentions'' are

not counted as votes cast.

How do I vote by proxy?

Stockholders can vote by proxy in three ways: by Internet; by telephone; or by mail (using the

enclosed proxy card). Please see your proxy card or the information provided to you by your bank,

trust, broker or other holder of record for more information on how to vote by proxy. If you vote by

proxy, your shares will be voted at the annual meeting in the manner you indicate.

What if I hold shares indirectly?

If you hold shares in a stock brokerage account or through a bank, trust or other nominee, you are

considered to be the beneÑcial owner of shares held in ""street name'' and these proxy materials are

being forwarded to you by your broker or nominee. You may not vote directly any shares held in

""street name''; however, as the beneÑcial owner you have the right to direct your broker or nominee

on how to vote your shares.

If you hold shares in ""street name'' and you want to attend the annual meeting, you must bring to

the meeting proof of stock ownership, such as an account statement from your broker or nominee

which conÑrms that you are the beneÑcial owner of those shares.

About the Meeting

1
If you want to vote in person at the annual meeting and you hold your shares in ""street name,'' you

must bring a proxy letter issued by your broker or bank to vote your shares in person at the meeting.

Can I change my vote after voting by proxy?

Yes. You can change or revoke your proxy through 11:59 p.m. eastern time, on Thursday, June 5,

2008, regardless of the method by which you previously cast your vote. You may also revoke your

proxy by voting your shares in person at the annual meeting.

Can I vote in person at the annual meeting?

Yes. However, we encourage you to vote by Internet, by telephone, or by completing and returning

the enclosed proxy card to ensure that your shares are represented and voted.

How many votes must be present to hold the annual meeting?

Your shares are counted as present at the annual meeting if you attend the meeting or if you

properly return a proxy by mail, by telephone or by Internet. To conduct the meeting, a majority of

our outstanding shares of common stock as of March 31, 2008 must be present in person or by

proxy at the meeting. This is referred to as a quorum. Abstentions and broker or nominee non-votes

will be counted for purposes of establishing a quorum at the annual meeting. See ""Will my shares

be voted if I do not return my proxy or attend the annual meeting?'' below for more information on

voting by brokers and nominees. If a quorum is not present, the meeting will be adjourned until a

quorum is present. We urge you to vote by proxy even if you plan to attend the annual meeting so

that we will know as soon as possible that enough votes will be present for us to hold the meeting.

How many votes are needed to approve Freddie Mac's proposals?

The 11 nominees for director who receive the greatest number of ""for'' votes will be elected as

directors. This number is called a plurality. Shares not voted will have no impact on the election of

directors. If you properly return a proxy, your proxy will be voted ""for'' each of the nominees for

director unless your proxy is marked ""vote withheld'' as to a particular nominee or nominees for

director.

The ratiÑcation of the appointment of PricewaterhouseCoopers LLP as our independent auditors for

the Ñscal year ending December 31, 2008 and the approval of the amendment and restatement of

the 2004 Employee Plan require a majority of the votes cast at the meeting to be voted ""for'' such

proposals, provided that the total vote cast on the amendment and restatement of the 2004

Employee Plan proposal represents over 50% in interest of all securities entitled to vote on the

proposal. A properly executed proxy marked ""abstain'' with respect to either proposal and a broker

or nominee non-vote with respect to either proposal will not be counted as a vote cast on such

proposal.

How will voting on any other business be conducted?

We currently do not know of any business to be considered at the annual meeting other than the

proposals described in this Proxy Statement. If any other business is properly presented at the

annual meeting, your signed proxy gives authority to the named proxies to vote your shares on such

matters at their discretion.

About the Meeting

2
Is my vote conÑdential?

Yes. Proxy cards, ballots, telephone votes, Internet votes and voting tabulations that identify

individual stockholders are conÑdential. Only certain employees who collect the proxy cards and

ballots at the annual meeting, or who receive and review telephone and Internet votes, and the

inspectors of election who process proxy cards, ballots, telephone votes and Internet votes, and count

the votes will have access to your proxy card, ballot, telephone vote or Internet vote.

Who will count the vote?

Representatives of Computershare Trust Company, N.A., our transfer agent, will count the votes

and act as inspectors of election.

Will my shares be voted if I do not return my proxy or attend the annual meeting?

Your shares may be voted on certain types of proposals if they are held in the name of a brokerage

Ñrm or nominee, even if you do not provide the brokerage Ñrm or nominee with voting instructions.

Brokerage Ñrms and nominees have the authority under the rules of the New York Stock

Exchange, or NYSE, to vote shares for which their customers do not provide voting instructions on

certain ""routine'' matters. The election of directors and the ratiÑcation of

PricewaterhouseCoopers LLP as our independent auditors for Ñscal year 2008 currently are

considered routine matters for which brokerage Ñrms and nominees may vote shares for which they

have not received voting instructions. This is called a ""broker vote.''

Under NYSE rules, your broker or nominee may not vote on the proposal relating to the

amendment and restatement of the 2004 Employee Plan without your speciÑc instructions.

If your broker or nominee does not have discretion to vote your shares held in the name of the

brokerage Ñrm or other nominee on a particular proposal because it is not considered to be a routine

matter, and you do not give your broker or nominee instructions on how to vote your shares on such

a proposal, the votes will be ""broker non-votes.'' We count broker non-votes for quorum purposes,

but we do not count broker non-votes (or abstentions) as votes ""for'' or ""against'' the proposals to

be acted on at the annual meeting.

If you do not vote shares registered in your name, your shares will not be voted.

What if I return my proxy card but do not provide voting instructions?

Proxy cards that are signed and returned but do not contain instructions on how you want your

shares voted will be voted:

‚ ""for'' the election of each of the 11 nominees for director named in this Proxy Statement;

‚ ""for'' the ratiÑcation of the appointment of PricewaterhouseCoopers LLP as our independent

auditors for the Ñscal year ending December 31, 2008;

‚ ""for'' the approval of the amendment and restatement of the 2004 Employee Plan; and

‚ in accordance with the best judgment of the named proxies on any other matters properly

brought before the meeting.

Can I have Freddie Mac's proxy materials delivered to me electronically next year?

Yes. If you vote electronically via the Internet, and hold your shares in street name, you may

consent to electronic delivery of future Freddie Mac proxy statements, proxy cards and annual

About the Meeting

3
reports by responding aÇrmatively to the request for your consent when prompted. See ""How do I

sign up to receive proxy materials electronically?'' below for additional information.

We encourage you to consent to electronic delivery because it will reduce the costs associated with

printing and mailing our proxy materials and annual reports. If you consent and Freddie Mac

delivers some or all of its future annual meeting materials to you by electronic mail or by posting

materials to the Internet, you will not receive paper copies of these materials through the mail

unless you request them from Freddie Mac.

How do I sign up to receive proxy materials electronically?

If you hold shares in street name, you may submit your consent to electronic delivery at

www.freddiemac.com/investors/ar/edelivery.html. Your consent will be effective until you revoke it.

By consenting to electronic delivery, you are stating to Freddie Mac that you currently have access

to the Internet and expect to have access in the future. If you do not have access to the Internet, or

do not expect to have access in the future, please do not consent to electronic delivery, because

Freddie Mac may rely on your consent and not deliver paper copies of future annual meeting

materials. In addition, if you consent to electronic delivery, you will be responsible for any Internet

charges that you may incur in connection with the electronic delivery of the proxy materials and

annual report.

What if I vote ""abstain''?

Abstentions will be treated as shares present and entitled to vote for purposes of determining the

presence of a quorum. Abstentions do not constitute a vote ""for'' or ""against'' any matters and thus

will have no eÅect on the outcome of a vote on a proposal.

What happens if the meeting is postponed or adjourned?

Your proxy will still be valid and may be voted at the postponed or adjourned meeting. You will still

be able to change or revoke your proxy at any time before the polls are declared open at the annual

meeting.

Does Freddie Mac provide for ""householding'' of proxy materials?

Yes. We have adopted a procedure for stockholders whose shares are held in street name called

""householding,'' pursuant to which stockholders of record who have the same address and the same

last name and do not participate in electronic delivery of proxy materials will receive only one copy

of our Proxy Statement and our Information Statement and Annual Report to Stockholders, or

Annual Report, unless one or more of these stockholders notiÑes us that they wish to continue

receiving multiple copies. This procedure provides extra convenience for stockholders and a cost

savings for us. Currently, we are not providing householding to stockholders whose shares are

registered in their name.

If at any time you no longer wish to participate in householding and would prefer to receive a

separate Proxy Statement and Annual Report, or if your shares are held in street name and you are

receiving multiple copies of our Proxy Statement and Annual Report and wish to receive only one,

please notify your bank, broker, trust or other holder of record. For more information, call or write

to Freddie Mac at the contact information provided under ""Availability of Annual Report'' below.

Stockholders who participate in householding will continue to receive separate proxy cards.

Householding will not in any way aÅect the mailing of dividend checks.

About the Meeting

4
CORPORATE GOVERNANCE

We are committed to excellence in corporate governance and have taken measures to achieve

this goal, as well as to meet the corporate governance requirements of the Sarbanes-Oxley Act of

2002, or the Sarbanes-Oxley Act, the corporate governance regulations of the OÇce of Federal

Housing Enterprise Oversight, or OFHEO, and the listing standards of the exchanges on which our

securities are listed, including the NYSE.

Corporate Governance Guidelines

In March 2008, the Board adopted revised Corporate Governance Guidelines, or the Guidelines,

which are available on our website at www.freddiemac.com/governance/pdf/gov guidelines.pdf.

Printed copies of the Guidelines also are available to any stockholder upon request to the Corporate

Secretary, at the address speciÑed below under ""Contacting the Board.''

Director Independence

The non-employee members of the Board have determined that:

‚ With the exception of Richard F. Syron, our Chief Executive OÇcer, and Eugene M.

McQuade, who was deemed to have resigned as a director eÅective September 1, 2007, all

members of the Board who served as directors in 2007 and all nominees are independent

within the meaning of both Section 303A.02 of the NYSE Listed Company Manual and the

independence criteria set forth in Section 5 of our Guidelines. Additionally, except as

disclosed for JeÅrey M. Peek and Jerome P. Kenney under ""Transactions with Institutions

Related to Directors'' below, no member of the Board who served as a director in 2007 nor

any nominee has a material relationship with Freddie Mac.

‚ All current members of the Audit Committee, the Compensation and Human Resources

Committee, or the CHRC, and the Governance, Nominating and Risk Oversight

Committee, or the GNROC, are, and members of the Board to be appointed to those

committees eÅective June 6, 2008 will be, independent within the meaning of

Section 303A.02 of the NYSE Listed Company Manual and Sections 4 and 5 of our

Guidelines. All current members of the Audit Committee also are, and members of the

Board to be appointed to the Audit Committee eÅective June 6, 2008 also will be,

independent within the meaning of Rule 10A-3 promulgated under the Securities Exchange

Act of 1934, as amended, or the Exchange Act, and Section 303A.06 of the NYSE Listed

Company Manual.

In making the foregoing independence determinations, as required under our Guidelines, the

non-employee directors considered the relationship between Freddie Mac and the National

Housing Conference, or NHC, where Mr. Retsinas was a member of the board of trustees and the

board of governors until December 2007, and between Freddie Mac and the National Housing

Endowment, or NHE, where Mr. Retsinas is currently a member of the board of trustees. Freddie

Mac made contributions to NHC in 2006 and to NHE in 2004 and 2005 that, in each case,

exceeded the greater of $100,000 or two percent of NHC's and NHE's gross revenues, respectively,

for those years. The contribution to NHC in 2006 was $511,000 and the contributions to NHE in

2004 and 2005 were $200,000 and $375,000, respectively. Because Freddie Mac's relationship with

NHC and NHE preceded the Board's initial consideration of Mr. Retsinas as a director candidate,

and given the nature of Freddie Mac's relationship and Mr. Retsinas' aÇliation with both NHC

Corporate Governance

5
and NHE, including the fact that Mr. Retsinas does not hold an executive position at either NHC

or NHE, the non-employee directors have determined that the relationships were not material and

do not impair Mr. Retsinas' independence. Freddie Mac's contributions to NHE inadvertently were

not communicated by management to or considered by the non-employee directors in connection

with their previous determination of Mr. Retsinas' independence at the time of his initial

nomination as a director candidate in 2007, and the non-employee directors therefore have reevaluated and ratiÑed that determination in light of the NHE contributions.

Mr. Syron is Chief Executive OÇcer of Freddie Mac as well as Chairman of the Board.

Because Mr. Syron is an employee of Freddie Mac, he is not independent under the Guidelines or

the NYSE Listed Company Manual.

Director QualiÑcations

OFHEO's corporate governance regulations and the Guidelines impose a term limit of ten

years and a retirement age of 72 for directors. We do not have any directors who have served longer

than ten years or who have reached 72 years, except for Shaun O'Malley, who will be 72 years old

at the time of the annual meeting and will retire from the Board eÅective as of the end of his

current term.

Audit Committee Financial Expert

We have a standing Audit Committee that satisÑes the ""audit committee'' deÑnition under

Section 3(a)(58)(A) of the Exchange Act, the requirements of Rule 10A-3 promulgated under the

Exchange Act and Sections 303A.06 and 303A.07 of the NYSE Listed Company Manual. The

current members of the Audit Committee are Robert R. Glauber, Richard Karl Goeltz, Thomas S.

Johnson, Shaun F. O'Malley and Stephen A. Ross.

Mr. Goeltz has been a member of the Audit Committee since March 31, 2004, and is currently

its chairman. The Board has determined that Mr. Goeltz is independent within the meaning of

Rule 10A-3 promulgated under the Exchange Act, and that he is an ""audit committee Ñnancial

expert'' under SEC regulations. However, Mr. Goeltz is not an auditor or accountant for Freddie

Mac, does not perform Ñeld work and is not an employee of Freddie Mac. In accordance with the

SEC's safe harbor relating to audit committee Ñnancial experts, a person designated or identiÑed as

an audit committee Ñnancial expert will not be deemed an ""expert'' for purposes of the federal

securities laws. In addition, such designation or identiÑcation does not impose on such person any

duties, obligations or liabilities that are greater than those imposed on such person as a member of

the Audit Committee and Board of Directors in the absence of such designation or identiÑcation,

and does not aÅect the duties, obligations or liabilities of any other member of the Audit Committee

or Board of Directors.

Codes of Conduct

We have separate codes of conduct applicable to employees and to Board members that outline

the principles, policies and laws governing their activities. The employee and Board codes were last

revised eÅective February 25, 2008. Upon joining Freddie Mac or its Board, all employees and

directors, respectively, are required to sign acknowledgements that they have read the applicable

code and agree to abide by it. In addition, all employees and directors must respond to an annual

questionnaire concerning code compliance. The employee code also serves as the code of ethics for

Corporate Governance

6
senior executives and Ñnancial oÇcers required by the Sarbanes-Oxley Act and SEC regulations.

Copies of our employee and director codes of conduct are available, and any amendments or waivers

that would be required to be disclosed are posted, on our website at www.freddiemac.com. Printed

copies of the codes of conduct also are available to any stockholder upon request to the Corporate

Secretary, at the address speciÑed below under ""Contacting the Board.''

Chairman of the Board

Mr. Syron has served as Chairman of the Board since December 31, 2003. Under our bylaws,

the Chairman of the Board is elected annually by the Board at its meeting following the annual

meeting.

Under the terms of Mr. Syron's amended employment agreement, Mr. Syron has agreed to

serve as Chief Executive OÇcer until the appointment of a successor, at which time Mr. Syron will

cease to be Chief Executive OÇcer and will become Executive Chairman of the Board through

December 31, 2009. Mr. Syron has agreed to actively assist us in recruiting and retaining his

successor as Chief Executive OÇcer. For more information about Mr. Syron's employment

agreement, see ""Executive Compensation Ì Employment and Separation Agreements Ì Richard F.

Syron'' below.

Consistent with a consent order we entered into with the OÇce of Federal Housing Enterprise

Oversight, or OFHEO, we have committed to OFHEO to separate the positions of Chairman and

Chief Executive OÇcer within a reasonable period of time.

Lead Director

The bylaws provide for the position of Lead Director, whose responsibilities include assisting

the Chairman of the Board in scheduling and developing the agenda and agenda material for Board

meetings; chairing meetings of the Board held among the non-employee directors; and, as Chairman

of the GNROC (unless another director is chosen by the Board to serve as Chair of the GNROC),

leading the GNROC in reviewing the Board's governance procedures and policies, including

developing recommendations concerning the memberships and chairs of the Board committees and

revisions to the committee charters. The Lead Director is elected annually by a majority of the

non-employee directors at the Board meeting following the annual meeting. Mr. O'Malley is

currently the Lead Director. Mr. O'Malley's term as Lead Director will end when he retires from

the Board eÅective as of the end of his current term. If the Chairman is an independent director,

the non-employee directors may nominate another independent director to serve as Lead Director.

If they do not do so, the Chairman will serve as Lead Director. We will announce the results of the

election of the Lead Director following his or her election.

Contacting the Board

To contact our Board, please send your comments in writing to Corporate Secretary, Freddie

Mac, 8200 Jones Branch Drive, McLean, Virginia 22102. All comments or complaints relating to

our accounting, internal accounting controls or auditing matters will be forwarded to the Chair of

the Audit Committee, for treatment in a manner consistent with the Audit Committee's complaint

policy for such matters, and to the Lead Director. All other comments will be forwarded to the

Lead Director. Comments indicating that they are to be submitted to the Lead Director or to the

Audit Committee Chair anonymously or conÑdentially will be treated accordingly. You will receive

Corporate Governance

7
a written acknowledgement from the Corporate Secretary upon receipt of your comment, unless it

is anonymous. Please refer to our website at www.freddiemac.com for more information on our

Board and how to contact our Board members.

Stock Ownership by Directors, Executive OÇcers and Greater than 5% Holders

We expect our directors and oÇcers to own our common stock. A signiÑcant portion of director

and executive compensation is paid in common stock, as described in greater detail in

""Proposal 1: Election of Directors Ì Board Compensation'' and ""Compensation Discussion and

Analysis'' below. We believe that stock ownership by our directors and executive oÇcers aligns their

interests with the long-term interests of our stockholders.

BeneÑcial Ownership. Our only class of voting stock is our common stock. The following table

shows the beneÑcial ownership of our common stock as of April 1, 2008 by our current directors,

director nominees, all named executive oÇcers (as that term is deÑned in ""Executive

Compensation Ì Compensation Tables Ì Summary Compensation Table'' below), all of our

directors and executive oÇcers as a group, and holders of more than 5% of our common stock.

BeneÑcial ownership is determined in accordance with SEC rules for computing the number of

shares of common stock beneÑcially owned by a person and the percentage ownership of that person.

As of April 1, 2008, each director, director nominee and named executive oÇcer, and all of our

directors and executive oÇcers as a group, owned less than 1% of our outstanding common stock.

The information presented below is based on information provided to us by the individuals or

entities speciÑed in the table.

Corporate Governance

8
As of April 1, 2008

Common Stock Stock Options Total Common

BeneÑcially Exercisable Stock

Owned Excluding Within 60 Days of BeneÑcially

Name Position Stock Options* April 1, 2008 Owned*

Barbara T. Alexander Director 1,596 3,177 4,773

GeoÅrey T. Boisi Director 7,900 3,177 11,077

Patricia L. Cook EVP, Chief Business 27,334(1) 52,022 79,356

OÇcer

Michelle Engler Director 11,076(2) 8,758 19,834

Robert R. Glauber Director 364(3) 455 819

Richard Karl Goeltz Director 11,410(4) 8,377 19,787

Thomas S. Johnson Director 15,450(5) 5,656 21,106

Jerome P. Kenney Director nominee 0 0 0

William M. Lewis, Jr. Director 7,645(6) 3,177 10,822

Michael C. May SVP, Multifamily Sourcing 25,500(7) 44,677 70,177

Eugene M. McQuade Former President and 48,783(8) 0 48,783

Chief Operating OÇcer;

Former Director

Shaun F. O'Malley** Lead Director 8,512(9) 9,083 17,595

Michael Perlman EVP, Operations and 99 0 99

Technology

Anthony S. Piszel EVP and Chief Financial 18,746(10) 0 18,746

OÇcer

Nicolas P. Retsinas Director 2,381 0 2,381

Stephen A. Ross Director 27,112(11) 15,449 42,561

Joseph A. Smialowski Former EVP, Operations 0(12) 0 0

and Technology

Richard F. Syron Chairman of the Board and 216,810(13) 323,479 540,289

Chief Executive OÇcer

All directors and executive officers 501,061(15) 528,567 1,029,628

as a group (25 persons)(14)

Common Stock Percent

5% Holder*** BeneÑcially Owned of Class

Capital Research Global Investors 60,678,100(16) 9.4%

333 South Hope Street

Los Angeles, CA 90071-1406

Capital World Investors 42,545,600(17) 6.6%

333 South Hope Street

Los Angeles, CA 90071-1406

AXA Financial, Inc. 36,630,015(18) 5.7%

1290 Avenue of the Americas

New York, NY 10104

* Includes shares of stock beneÑcially owned as of April 1, 2008. Also includes restricted stock units, or RSUs, vesting

within 60 days of April 1, 2008. An RSU represents a conditional contractual right to receive one share of Freddie

Mac common stock at a speciÑed future date. See ""Board Compensation Ì Equity Compensation'' and

""Compensation Discussion and Analysis'' below for more information.

** Mr. O'Malley will retire from the Board eÅective as of the end of his current term.

Corporate Governance

9
*** We require that beneÑcial owners of more than 5% of our common stock report the amount of their ownership

interest and certain other information to us. All persons who have Ñled such a report to date are identiÑed in this

table. To enforce compliance with the reporting requirement, we may deny beneÑcial owners who have failed to Ñle

the required report the right to vote any shares in excess of the 5% threshold. Any shares as to which voting rights

are denied will not be counted as outstanding shares for determining whether a quorum exists or whether a majority

of shares has been voted for or against any proposal.

(1) Includes 4,412 RSUs.

(2) Includes 2,458 RSUs and 360 dividend equivalents on RSUs.

(3) Includes 356 RSUs and 8 dividend equivalents on RSUs.

(4) Includes 3,788 RSUs and 364 dividend equivalents on RSUs.

(5) Includes 2,609 RSUs and 145 dividend equivalents on RSUs.

(6) Includes 1,535 RSUs and 73 dividend equivalents on RSUs.

(7) Includes 1,382 RSUs.

(8) Figures are based on our records as of April 1, 2008. Includes 0 RSUs.

(9) Includes 1,434 RSUs and 66 dividend equivalents on RSUs.

(10) Includes 0 RSUs.

(11) Includes 6,134 RSUs and 826 dividend equivalents on RSUs.

(12) Figures are based on our records as of April 1, 2008. Includes 0 RSUs.

(13) Includes 19,412 RSUs.

(14) In addition to the persons shown in the table, this group includes our Executive Vice President, General Counsel and

Corporate Secretary; our Executive Vice President, Human Resources and Corporate Services; our Senior Vice

President, General Auditor; our Senior Vice President, Corporate Controller and Principal Accounting OÇcer; our

Senior Vice President, Chief Enterprise Risk OÇcer; our Senior Vice President, External Relations; our Senior

Vice President, Single Family Sourcing; and our Senior Vice President and Chief Compliance OÇcer.

(15) Includes 48,966 RSUs and 1,842 dividend equivalents on RSUs.

(16) Based on a review of beneÑcial ownership reports as of December 31, 2007 that are Ñled with us and that are the

equivalent of Schedule 13G and 13D reports Ñled with the SEC, and in reliance on updates to those reports based

on a review of Form 13F Ñlings with the SEC, as of December 31, 2007, Capital Research Global Investors,

333 South Hope Street, Los Angeles, CA 90071-1406, beneÑcially owned 60,678,100 shares, with sole voting power

as to 31,393,350 shares and sole dispositive power as to 60,678,100 shares.

(17) Based on a review of beneÑcial ownership reports as of December 31, 2007 that are Ñled with us and that are the

equivalent of Schedule 13G and 13D reports Ñled with the SEC, and in reliance on updates to those reports based

on a review of Form 13F Ñlings with the SEC, as of December 31, 2007, Capital World Investors, 333 South Hope

Street, Los Angeles, CA 90071-1406, beneÑcially owned 42,545,600 shares, with sole voting power as to

6,022,700 shares and sole dispositive power as to 42,545,600 shares.

(18) Based on a review of beneÑcial ownership reports as of December 31, 2007 that are Ñled with us and that are the

equivalent of Schedule 13G and 13D reports Ñled with the SEC, and in reliance on updates to those reports based

on a review of Form 13F Ñlings with the SEC, as of December 31, 2007, AXA Financial, Inc., 1290 Avenue of the

Americas, New York, New York 10104, beneÑcially owned 36,630,015 shares, with sole voting power as to

29,609,379 shares, shared voting power as to 1,552,606 shares, sole dispositive power as to 36,629,979 shares and

shared dispositive power as to 36 shares.

Corporate Governance

10
PROPOSAL 1: ELECTION OF DIRECTORS

Director Nomination Process

Under its charter, the GNROC is responsible for recommending to the Board the slate of

nominees to be proposed for election by the stockholders at our annual meeting and for reviewing

proposals for nominations from stockholders that are submitted in accordance with the procedures

summarized below. The GNROC is composed of the following six directors, each of whom is

independent under the Guidelines and the NYSE Listed Company Manual: Ms. Alexander and

Messrs. Boisi, Goeltz, Johnson, O'Malley (Chair) and Ross.

The GNROC has the authority to employ a variety of methods for identifying and evaluating

potential Board nominees. Candidates for vacancies on the Board may come to the attention of the

GNROC through several diÅerent means, including recommendations from Board members,

senior management or professional search Ñrms, stockholder nominations and other sources.

The GNROC considers all nominations submitted by stockholders that meet the eligibility

requirements outlined in our bylaws. As required by our bylaws, stockholder nominations of

candidates for election as directors must be submitted in writing to the Corporate Secretary, Freddie

Mac, 8200 Jones Branch Drive, McLean, Virginia 22102, no fewer than 75 days prior to the date of

the annual meeting. Due to the timing of this annual meeting, and as announced in our press

release dated February 4, 2008, the deadline for stockholder nominations of candidates for election

as directors was March 24, 2008. We have not received any stockholder nominations of candidates

for election as directors for this annual meeting. For information on what must be included in the

written notice to nominate a candidate for election at the next annual meeting of stockholders, see

""Stockholder Proposals and Nominations for Next Annual Meeting of Stockholders'' below.

As stated in the Guidelines, our Board seeks candidates for election to the Board who have

achieved a high level of stature, success and respect in their principal occupations. Directors must

exemplify high standards of integrity and be committed both to our public mission and to the

interests of our stockholders. We seek to have a diversity of talent on the Board. Candidates are

selected for their character, judgment, experience and expertise. In addition, candidates must have

the ability and time to commit to Board service. In selecting candidates for election to the Board,

the Board also considers a director's independence under the independence standards that are a

part of the Guidelines. These independence standards incorporate the independence standards set

forth in the NYSE Listed Company Manual. See ""Corporate Governance Ì Corporate

Governance Guidelines'' above.

Stockholder nominees for election to the Board will be evaluated by the GNROC based on the

criteria speciÑed above in the same way as is a nominee recommended by the Board or

management.

Nominees for Election

Our enabling legislation establishes the membership of our Board at 18 directors: 13 directors

elected by the stockholders and Ñve directors appointed by the President of the United States. All

directors have the same duties and responsibilities and serve for a term ending on the date of the

next annual meeting of stockholders. Eleven directors are to be elected by stockholders at this

meeting. Prior to our March 31, 2004 annual meeting, the OÇce of Counsel to the President

informed us that the President did not intend to reappoint any of his then-current Presidential

Proposal 1: Election of Directors

11
appointees. Consequently, each of their terms as Presidential appointees ended on the date of that

annual meeting. No new appointees have been named by the President as of the date of this Proxy

Statement.

The Board has nominated the persons named below for election at this annual meeting to serve

until the next annual meeting. Each of the persons named below is nominated for reelection at this

meeting, except for Jerome P. Kenney, who is being nominated for election to the Board for the

Ñrst time at this meeting. Mr. Kenney was identiÑed as a potential candidate by a third-party search

Ñrm retained to assist the GNROC in its search for possible director candidates. The evaluation of

the suitability of Mr. Kenney as a director of Freddie Mac was performed by the GNROC.

There will be seven vacancies on the Board of Directors after the meeting. As indicated above,

there are no nominees for the Ñve directors to be appointed by the President of the United States.

Also, there are two fewer nominees for director than the number of directors to be elected by

stockholders under our enabling legislation and our bylaws because we are still engaged in the

process of identifying appropriate and qualiÑed candidates to Ñll those positions. If we Ñnd a

qualiÑed individual with appropriate skills to Ñll either of the vacancies, then we anticipate that,

following the GNROC's recommendation of any such candidate to serve as a director, the Board

will appoint the person to Ñll the vacancy. The stockholders will not elect such candidates because,

under our bylaws, a vacancy on the Board may be Ñlled by the aÇrmative vote of the majority of the

directors then serving as directors. A director who is appointed by the Board to Ñll a vacancy on the

Board will serve as a director until the next annual meeting of stockholders.

The Board expects each of its current members and each nominee, and any future Presidential

appointee, to attend any Freddie Mac annual stockholders' meeting at which such person is

standing for election or reelection or will begin a term as a Presidential appointee to the Board.

Eight of the 10 nominees for reelection to the Board attended the June 8, 2007 annual meeting.

Ms. Alexander and Mr. Retsinas did not attend the June 8, 2007 annual meeting due to prior

commitments made before the meeting date was set. If any of the 11 nominees becomes unavailable

for election, either because such nominee is unable or unwilling to serve as a director on the date of

the annual meeting or any adjournment of the meeting, the proxies received on behalf of that

nominee will be voted for a substitute nominee. The Board has no reason to believe that any of the

nominees will be unable or unwilling to serve if elected.

Unless stockholders specify otherwise in their proxies, proxies solicited by the Board will be

voted ""for'' each of the 11 nominees for election named in this Proxy Statement. The 11 nominees

who receive the greatest number of votes will be elected. No stockholder is entitled to cumulate his

or her votes in the election of directors. Your proxy may not be voted for a greater number of

persons than the 11 nominees named.

We recommend that you vote for each of the 11 nominees.

The nominees have provided the following information about their age, their principal

occupations, their business experience and other matters.

Proposal 1: Election of Directors

12
BARBARA T. ALEXANDER Director since 2004

Age 59

Ms. Alexander has been an independent consultant since January 2004.

Prior to that, she was a Senior Advisor to UBS Warburg LLC and

predecessor Ñrms (UBS) from October 1999 to January 2004 and

Managing Director of the North American Construction and

Furnishings Group in the Corporate Finance Department of UBS from

1992 to October 1999. From 1987 to 1992, Ms. Alexander was a

Managing Director in the Corporate Finance Department of Salomon

Brothers Inc. From 1972 to 1987, she held various positions at

Salomon Brothers, Smith Barney, Investors DiversiÑed Services, and

Wachovia Bank and Trust Company. Ms. Alexander is a member of

the board of directors of Centex Corporation, where she is the Chair of

the Governance Committee; and Qualcomm Incorporated, where she is

a member of the Audit Committee and the Governance Committee.

She also is an Executive Fellow at the Joint Center for Housing

Studies at Harvard University, where Mr. Retsinas is the Director.

GEOFFREY T. BOISI Director since 2004

Age 60

Mr. Boisi has been Chairman and Chief Executive OÇcer of

Roundtable Investment Partners LLC, a private investment

management Ñrm, since January 2008, and prior to that served as

Chairman and Senior Partner since March 2005. From 2000 to May

2002, Mr. Boisi was Vice Chairman of JP Morgan Chase, where he

served as Co-Chief Executive OÇcer of JP Morgan, the Ñrm's

investment bank, and was a member of JP Morgan Chase's executive

and management committees. From 1993 to 2000, he was the founding

Chairman and Senior Partner of The Beacon Group, a merger and

acquisition advisory and private investment Ñrm. From 1971 to 1993,

Mr. Boisi held various positions at Goldman Sachs & Company,

including senior general partner, member of the Ñrm's management

committee and head of the investment banking business.

Proposal 1: Election of Directors

13
MICHELLE ENGLER Director since 2001

Age 50

Ms. Engler is an attorney and is Trustee of the JNL Series Trust and

the JNL Investor Series Trust, each an investment company, and has

been a member of the board of managers of each of the JNL Variable

Funds L.L.C. since 2000. From 1992 to 2000, she was of counsel to

the law Ñrm of Varnum, Riddering, Schmidt & Howlett, a Grand

Rapids, Michigan-based law Ñrm. Prior to that, she was a partner in

the Houston law Ñrm of Nathan, Wood & Sommers. Ms. Engler served

on our Board as a Presidential appointee from 2001 through March 31,

2004, when she was elected to our Board by the stockholders.

ROBERT R. GLAUBER Director since 2006

Age 69

Mr. Glauber is a Lecturer at Harvard's Kennedy School of

Government. Prior to that, he served as Chairman and Chief Executive

OÇcer of the National Association of Securities Dealers, or NASD,

from September 2001 to September 2006, after becoming NASD's

CEO and President in November 2000 and a member of NASD's

board in 1996. Prior to becoming an oÇcer at NASD, he was a

Lecturer at the Kennedy School from 1992 until 2000, Under Secretary

of the Treasury for Finance from 1989 to 1992 and, previous to that, a

Professor of Finance at the Harvard Business School. Mr. Glauber

served as Executive Director of the Task Force appointed by President

Reagan to report on the 1987 stock market break (""Brady

Commission''). He has served on the board of the Federal Reserve

Bank of Boston, a number of Dreyfus mutual funds, the Investment

Company Institute, and as president of the Boston Economic Club.

Mr. Glauber also is a director of Moody's Corporation, where he is a

member of the Audit Committee; and lead director of XL Capital Ltd.

Mr. Glauber has been a Senior Advisor at Peter J. Solomon Co., an

investment bank, since November 2006.

Proposal 1: Election of Directors

14
RICHARD KARL GOELTZ Director since 2003

Age 65

Mr. Goeltz was Vice Chairman, Chief Financial OÇcer and Member

of the OÇce of the Chief Executive of American Express Company

from 1996 to 2000. Prior to that, he was Group Chief Financial OÇcer

and a member of the Board of NatWest Group from 1992 to 1996.

Mr. Goeltz also held various Ñnance positions at The Seagram

Company Ltd., including Executive Vice President-Finance and Chief

Financial OÇcer, and at Exxon Corporation. He is a director of Delta

Air Lines, Inc. where he is Chair of the Finance Committee and a

member of the Audit Committee; a director of Warnaco Group, Inc.,

where he is a member of the Nominating and Corporate Governance

Committee and the Compensation Committee; a director of the New

Germany Fund; and a director of Aviva plc, where he is a member of

the Audit Committee and Chair of the Remuneration Committee. He

also is a member of the Court of Governors and the Council of the

London School of Economics and Political Science.

THOMAS S. JOHNSON Director since 2004

Age 67

Mr. Johnson retired in September 2004 as Chairman and Chief

Executive OÇcer of GreenPoint Financial Corporation, a national

specialty mortgage lender and New York consumer banking company,

following the acquisition of GreenPoint Financial by North Fork

Bancorporation, Inc., with whom Mr. Johnson remained employed in a

non-management capacity until December 31, 2004. Mr. Johnson had

held the oÇces of Chairman and Chief Executive OÇcer of

GreenPoint since 1993. He also was President of GreenPoint through

1997. Prior to that, he served as President and a director of Chemical

Bank and Chemical Banking Corporation and then of Manufacturers

Hanover Trust Company and Manufacturers Hanover Corporation.

Mr. Johnson also is a director of Alleghany Corporation; RR Donnelley &

Sons, Inc.; and the Phoenix Companies, where he is a member of the

Audit Committee.

Proposal 1: Election of Directors

15
JEROME P. KENNEY Director Nominee

Age 66

Since his retirement from Merrill Lynch & Co., Inc. in January 2008,

Jerome P. Kenney has served as a consultant for Merrill Lynch, as

senior advisor, and holds the honorary position of vice chairman

emeritus. Prior to retiring from Merrill Lynch, he served as vice

chairman and member of the Executive Client Coverage Group from

January 2003 until January 2008. Mr. Kenney was a member of the

Executive Management Committee for over 20 years. From 1990 until

February 2002, he served as head of Corporate Strategy, M&A and

Research and also oversaw Corporate Credit, Marketing and

Government Relations. Previously, he served as president and chief

executive oÇcer of the Merrill Lynch Capital Markets Group

worldwide from 1984, and as a member of the board of directors from

1985 to 1991. He also served earlier as director of Securities Research,

director of Institutional Sales and Marketing and head of Investment

Banking. He is a director of Invesco Ltd., where he is a member of the

Audit Committee, the Compensation Committee and the Nomination

and Corporate Governance Committee; and a director of Och-ZiÅ

Capital Management Group, where he is a member of the

Compensation Committee and the Nominating, Corporate Governance

and ConÖicts Committee.

WILLIAM M. LEWIS, JR. Director since 2004

Age 51

Mr. Lewis is a Managing Director and Co-Chairman of Investment

Banking at Lazard Ltd., a position he has held since April 2004. From

1978 to 1980 and from 1982 to April 2004, he held various positions at

Morgan Stanley, most recently serving as Managing Director and CoHead of the Global Banking Department from 1999 to 2004.

Mr. Lewis also is a director of Darden Restaurants, Inc. and a Trustee

of Ariel Investment Trust.

Proposal 1: Election of Directors

16
NICOLAS P. RETSINAS Director since 2007

Age 61

Since 1998, Mr. Retsinas has been Director of Harvard University's

Joint Center for Housing Studies, where Ms. Alexander is an Executive

Fellow. He also is a lecturer in Housing Studies at the Graduate

School of Design and the Kennedy School of Government, and is a

lecturer in Real Estate at the Harvard Business School. Prior to his

Harvard appointment, Mr. Retsinas served as Assistant Secretary for

Housing Ì Federal Housing Commissioner at the United States

Department of Housing and Urban Development from 1993 to 1998

and as Director of the OÇce of Thrift Supervision from 1996 to 1997.

He served on the Board of the Federal Deposit Insurance Corporation

from 1996 to 1997, the Federal Housing Finance Board from 1993 to

1998 and the Neighborhood Reinvestment Corporation from 1993 to

1998. Mr. Retsinas serves on the Board of Trustees for the National

Housing Endowment and for Enterprise Community Partners and on

the Board of Directors of the Center for Responsible Lending.

STEPHEN A. ROSS Director since 1998

Age 64

Mr. Ross has been the Franco Modigliani Professor of Financial

Economics at the Massachusetts Institute of Technology since 1998

and has been, and continues to be, a consultant to a number of

investment banks and major corporations. He also has been Chairman

and Chief Executive OÇcer of Compensation Valuation, Inc., a

company specializing in the valuation of complex option contracts and

option valuation services, since April 2003; a member of the Advisory

Council of Taconic Capital Partners LLC, an event-driven hedge fund,

since January 2004; a director of IV Capital Ltd., a London-based

investment company, since May 1998; and Chairman of the Investment

Advisory Board of IVC International since July 2004. Mr. Ross also

was Co-Chairman of Roll and Ross Asset Management Corporation,

an investment management company, from 1986 to July 2004. He

previously was the Sterling Professor of Economics and Finance at

Yale University from 1976 to 1998, and a Professor of Economics and

Finance at the Wharton School of the University of Pennsylvania.

Mr. Ross is a member of the Board of Trustees of the California

Institute of Technology. He served as a CREF trustee from 1991 to

2004 and as a director of General Re Corporation from 1993 to 1998.

Proposal 1: Election of Directors

17
RICHARD F. SYRON Director since 2003

Age 64

Mr. Syron was appointed Chairman of the Board and Chief Executive

OÇcer of Freddie Mac in December 2003. Prior to joining Freddie

Mac, Mr. Syron was the Executive Chairman of Thermo Electron

Corporation from November 2002 to December 2003. Mr. Syron was

named to the Board of Thermo Electron in 1997. He became

Chairman in January 2000 and was Chief Executive OÇcer from June

1999 to November 2002. He also served as President of

Thermo Electron from June 1999 to July 2000. Prior to joining

Thermo Electron, he served as Chairman and Chief Executive OÇcer

of the American Stock Exchange from 1994 to May 1999, President of

the Federal Reserve Bank of Boston from 1989 to 1994, and President

of the Federal Home Loan Bank of Boston from 1986 to 1989.

Mr. Syron also is a director of Genzyme Corporation.

Meetings of the Board and Committees

The Board met 13 times in 2007 and 5 times during the period from January 1, 2008 through

April 22, 2008. During 2007, each of the current directors attended at least 75% of the meetings of

the Board and committees on which he or she served, and the non-employee directors met

regularly in executive session without management.

The Ñve current standing Board committees are the Audit Committee, the CHRC, the Finance

and Capital Deployment Committee, the GNROC and the Mission, Sourcing and Technology

Committee. The charters of the Finance and Capital Deployment Committee and the GNROC

were last revised in March 2008, and the charters of each of the other current standing committees

were last revised in March 2007. All the charters of the standing committees are available on our

website at www.freddiemac.com/governance/bd committees.html. Printed copies also are

available to any stockholder upon request to the Corporate Secretary, at the address speciÑed above

under ""Contacting the Board.''

In addition to these standing committees, a Special Derivative Litigation Committee, or the

SDLC, was created by the Board in December 2003 to investigate allegations and claims relating to

the company's Ñnancial restatements made in stockholder derivative litigation against certain

current and former executive oÇcers and directors. The SDLC was dissolved by the Board in April

2007 because the 2003 stockholder derivative litigation had been resolved. In January 2008, the

Board formed a Special Litigation Committee, or the SLC, to conduct a review and evaluation of

allegations and claims set forth in stockholder demand letters received in November and December

2007 in connection with the company's losses in the third quarter of 2007. The letters demand that

Freddie Mac commence legal proceedings against certain current and former directors and oÇcers

of Freddie Mac, Freddie Mac's independent auditors and other parties and that the company

implement corrective measures. One of the stockholders who submitted these demand letters has

subsequently Ñled a derivative action on behalf of Freddie Mac. In March 2008, the company

received another stockholder derivative demand letter containing essentially the same allegations as

those made in the November and December 2007 letters. The SLC will consider the claims raised

in the derivative action and all three demand letters.

Proposal 1: Election of Directors

18
The membership of current Board members on each committee, along with the number of

times each committee met in 2007 and during the period January 1, 2008 through April 22, 2008, is

shown in the table below.

Mission,

Finance and Sourcing and

Director Audit CHRC Capital Deployment GNROC Technology SDLC SLC

B. Alexander(1) É É Chair

G. Boisi Chair É É

M. Engler É É Chair Chair

R. Glauber ÉÉ É

R. Goeltz Chair É É

T. Johnson ÉÉ É É

W. Lewis É É

S. O'Malley É É Chair

N. Retsinas(2) É ÉÉ

S. Ross É Chair É É

R. Syron(3)

2007 Meetings(4) 13 8 7 9 6 0 0(5)

2008 Meetings(6) 94 4 3 2 0(7) 1

(1) Ms. Alexander became chairperson of the Mission, Sourcing and Technology Committee in June 2007 upon the

retirement of Ronald F. Poe, a former director. She served on the Finance and Capital Deployment Committee until

January 1, 2008 after which she joined the CHRC.

(2) Mr. Retsinas was elected to the Board at the annual meeting in June 2007.

(3) Mr. Syron is not a member of any committee.

(4) Includes one joint meeting of the Audit Committee and the Finance and Capital Deployment Committee.

(5) The SLC was not formed until January 2008 and therefore no meetings were held in 2007.

(6) Includes two joint meetings of the Audit Committee and the Finance and Capital Deployment Committee and one

joint meeting of the Audit Committee and the CHRC.

(7) The SDLC was dissolved in April 2007 and therefore no meetings were held in 2008.

The following is a description of the current Board committees and their responsibilities:

The Audit Committee's primary responsibility is to assist the Board in discharging its oversight

responsibilities with respect to Ñnancial matters and compliance with laws and regulations. The

committee's speciÑc responsibilities with respect to its oversight of our independent auditors are: to

appoint, evaluate, monitor the independence of, determine the compensation of, and, as the

committee may deem it appropriate, terminate and replace our independent auditors; to review the

independent auditors' report on the independent auditors' internal quality control procedures; and to

pre-approve any audit services, and any non-audit services permitted under applicable law, to be

performed by our independent auditors. Additional speciÑc responsibilities with respect to the

committee's oversight of Ñnancial matters include: to oversee the integrity of our Ñnancial reporting

processes and disclosure, including systems of control regarding Ñnance, accounting, compliance

with legal and regulatory requirements and programs for the detection and prevention of fraud; to

review management's policies and guidelines governing the processes for assessing and managing

Freddie Mac's risks; and to meet in joint session with the Finance and Capital Deployment

Committee to review Freddie Mac's major Ñnancial risk exposures and the steps management has

Proposal 1: Election of Directors

19
taken to monitor and control such exposures. The committee's speciÑc responsibilities with respect

to its oversight of our internal auditors include: to hire, determine the compensation of, evaluate the

performance of and decide whether to retain our Senior Vice President Ì General Auditor; to

approve and evaluate the annual plan, budget, organization and staÇng for the internal auditors,

including amendments to such plan or budget; and to assess, at least annually, the eÅectiveness of

the internal auditors. The committee also conducts an annual evaluation of its own performance,

including its oversight responsibilities described above.

The Audit Committee's purposes, duties and responsibilities under its charter include those

speciÑed in the NYSE Listed Company Manual for audit committees.

The CHRC's primary responsibility is to oversee our executive compensation program. The

executive oÇcers for whom the CHRC has compensation-setting authority include our Chief

Executive OÇcer, Chief Financial OÇcer, principal accounting oÇcer, any oÇcer in charge of a

principal business unit, division, or function, any other oÇcer who performs a signiÑcant policymaking function, as determined by the CHRC, and any other oÇcer at the level of Senior Vice

President or above whose target total compensation exceeds $2 million. An independent

compensation consultant, currently Hewitt Associates LLC (""Hewitt''), is retained by the CHRC

to assist in the review and establishment of compensation for this group and reports directly to the

CHRC on these matters.

The CHRC's speciÑc responsibilities include: in consultation with senior management and the

committee's independent consultant, to approve our executive compensation philosophy; to approve

the compensation of our executive oÇcers, including approving the goals and objectives relevant to

determining the compensation of the Chief Executive OÇcer, evaluating the Chief Executive

OÇcer's performance in light of those goals and objectives and such other factors as the CHRC

deems relevant, and using that evaluation for purposes of determining the Chief Executive OÇcer's

compensation; to approve cash incentive plans for non-executive oÇcers; to review, approve,

amend and/or terminate any stock-based compensation or beneÑt plan and any retirement plan,

including our pension plan and thrift plan; to review the management of our human resources; to

review plans, policies and procedures for management succession; and to conduct an annual

evaluation of the CHRC's performance.

In addition, under the CHRC's charter, the CHRC Chair may approve any executive

compensation action where competitive circumstances preclude delaying approval to the next

CHRC meeting, provided that the Chair reports to the CHRC on such action at its next regularly

scheduled meeting.

The CHRC's purposes, duties and responsibilities under its charter include those speciÑed in

the NYSE Listed Company Manual for compensation committees. For more information, see

""Compensation Discussion and Analysis Ì Role of Executive OÇcers and the Compensation

Consultant'' below.

The Finance and Capital Deployment Committee's primary functions are: to review our capital

requirements, management, allocation and plan; to recommend dividends on, and issuances and

repurchases of, our common and preferred stock for approval by the Board; to monitor our debt and

mortgage-related securities activities; to monitor our investment, funding, liquidity and hedging

strategies and activities; to monitor our asset/liability management techniques; to monitor and

approve certain enterprise risk metrics and limits; to meet in joint session with the Audit Committee

Proposal 1: Election of Directors

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to review Freddie Mac's major Ñnancial risk exposures and the steps management has taken to

monitor and control such exposures; and to conduct an annual evaluation of the committee's

performance.

The GNROC's members are the chairs of each of the other standing committees and, if the

Lead Director is not one of the committee chairs, the Lead Director, and any other directors

designated by the Board. Its primary functions are: to oversee corporate governance matters

generally, including reviewing and recommending changes in our bylaws, our Guidelines, and the

independence standards and qualiÑcations for Board membership set forth in the Guidelines; to

conduct an annual evaluation of the committee's performance and to oversee the annual evaluation

of the performance of the Board and each of its other committees; to identify individuals qualiÑed

to be members of the Board and to recommend Board nominees; to review and make

recommendations concerning the independence of Board members and to review the application to

Board members of membership qualiÑcations under the Guidelines; to review and make

recommendations concerning membership on Board committees and on committee structure and

responsibilities; to recommend non-employee director compensation; to oversee enterprise-wide risk

management strategies and governance, to review major enterprise risk exposures and to review the

capabilities for and adequacy of resources allocated to enterprise risk management; to review

management's proposed response to stockholder proposals submitted for inclusion in our Proxy

Statement and make recommendations to the Board regarding responses to any such proposals; to

oversee management of legislative and related matters; to review the activities of our political action

committee; and to oversee our compliance with the consent order we have entered into with

OFHEO.

The GNROC's purposes, duties and responsibilities under its charter include those speciÑed in

the NYSE Listed Company Manual for governance and nominating committees.

The Mission, Sourcing and Technology Committee's primary functions are: to review our

mission-related activities; to review our mortgage purchase activities, including relationships with

customers; to review signiÑcant mortgage purchase transactions; to review the management of risks

associated with our mortgage purchase activities; to review the implementation of OFHEO's

Mortgage Fraud Policy Guidance; to review enterprise-wide technology; and to conduct an annual

evaluation of the committee's performance.

The Special Litigation Committee's primary function is to conduct a review and evaluation of

allegations and claims set forth in the derivative action and in all three stockholder demand letters

and derivative litigation and to determine what actions should be taken in connection with such

allegations and claims.

Board Compensation

Each year, the Board reviews compensation for our non-employee directors. The components of

our non-employee director compensation are cash fees and stock awards. The Board believes that

appropriate compensation levels help attract and retain superior candidates for Board service and

that director compensation, supported by our non-employee director stock ownership guidelines,

which are discussed in greater detail below, should be weighted toward stock-based compensation to

enhance alignment with the interests of our stockholders. Stock-based compensation currently

constitutes approximately 50% of director compensation. As of March 3, 2007, all stock-based

Proposal 1: Election of Directors

21
compensation for non-employee directors is in the form of grants of RSUs. Prior to March 3, 2007,

the annual equity grant to non-employee directors consisted of a mix of stock options and RSUs.

We do not have any pension or retirement plans for our non-employee directors. Employee

directors do not receive any compensation for their Board service.

The following table shows the cash and equity compensation levels that were in eÅect in 2007,

which remain in eÅect currently.

2007 Non-Employee Director Compensation Levels

Board Service

Cash Compensation

Annual Retainer ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 60,000

Annual Supplemental Retainer for Lead Director ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,000

Per Meeting Fee ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,500

Initial and Annual Equity Compensation(1)

RSUs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $120,000

Committee Service (Cash)

Annual Retainer for Committee Chair (other than Audit) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 10,000

Annual Retainer for Audit Committee Chair ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,000

Per Meeting Fee (other than Audit) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,500

Per Meeting Fee for Audit Committee MembersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,000

Per Interview Fee for Director Recruiting ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,500

Per Interview Fee for Litigation-Related Interviews(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,500

Supplemental Payments to Working Group, EÅective September 7, 2007

Annual Retainer for Members of Current Working Group(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 40,000

(1) Newly elected and newly appointed non-employee directors during their Ñrst term received initial grants of RSUs

with a fair market value of approximately $120,000 on the date of the annual stockholders' meeting, or, if the election

or appointment occurred midterm, on the date of such director's election or appointment, prorated based on the

number of whole months from the date of election or appointment until the next expected stockholders' meeting.

(2) No such fees were paid in 2007.

(3) On September 7, 2007, the Board approved the payment of an annual retainer of $40,000 to each member of the

working group that was formed in May 2007 to lead the Board's eÅorts on management succession planning matters

(the ""Current Working Group''). Members of the Current Working Group are Messrs. Glauber, Boisi, Johnson and

O'Malley. The retainer is paid in equal quarterly installments, beginning with the fourth quarter of 2007. On

September 7, 2007, the Board also approved a supplemental payment of $20,000 to each member of the Current

Working Group in recognition of the Current Working Group's services from May to September 2007 and a

supplemental payment of $20,000 to each member of a prior working group (the ""Original Working Group'') in

recognition of the Original Working Group's services from December 2006 to April 2007 on succession planning for

the Chief Executive OÇcer. Members of the Original Working Group were Messrs. Boisi, Johnson and O'Malley.

Cash Compensation. Cash compensation consists of annual retainers and meeting fees.

Annual retainers are paid in quarterly installments. The retainer paid to non-employee directors who

are elected or appointed after the most recent annual stockholders' meeting is prorated based on the

quarter in which they join the Board. Non-employee directors also are reimbursed for reasonable

out-of-pocket costs for attending each meeting of the Board or any Board committee of which they

are a member.

Under the 1995 Directors' Stock Compensation Plan (the ""Directors' Plan'') and the

Directors' Deferred Compensation Plan, an unfunded, non-qualiÑed plan, directors may elect to

defer receipt of cash fees and stock awards, as well as elect to convert cash fees into stock. Deferred

Proposal 1: Election of Directors

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cash is credited to a director's account as of the date the amounts would have otherwise been paid

to the director. For 2007, six directors elected to defer all or a portion of their 2007 cash fees into

deferred stock or common stock.

Deferred compensation to be settled in stock accrues dividend equivalents in the form of

additional deferred stock. The number of additional shares of deferred stock that are accrued, as

dividends are declared and paid on our common stock, is determined as if the dividend equivalents

on the deferred compensation had been reinvested in shares of Freddie Mac common stock.

Subject to earlier payment in the event of hardship withdrawals, deferred cash compensation

distributions are payable in lump sums at the earlier to occur of (i) the end of the deferral period or

(ii) the earlier of a director's termination of membership on the Board, disability or death.

Equity Compensation. Non-employee directors receive stock-based compensation under the

Directors' Plan.

The number of RSUs awarded to non-employee directors is calculated by dividing the dollar

amount of the award by the fair market value of our common stock on the grant date. Fair market

value is deÑned under the Directors' Plan as the closing sales price of a share of our common stock

reported for such date. For RSU grants made on or after March 3, 2007, vesting occurs in four equal

increments with 25% vesting on each anniversary date of the grant, unless vesting is accelerated

under certain circumstances, including death, disability or retirement from the Board. For equity

grants outstanding as of December 31, 2006, vesting with respect to both stock options and RSUs

occurs in equal increments over four terms on the Board, with 25% vesting at the end of every term

of oÇce, unless vesting is accelerated under certain circumstances, including death, disability or

retirement from the Board.

Dividend equivalents on RSUs granted to our non-employee directors are accrued as additional

RSUs and are generally settled at the same time as the underlying RSUs. However, unlike the

underlying RSUs, the dividend equivalents on RSUs are not subject to a vesting schedule and are

settled upon termination of Board service irrespective of whether the underlying RSUs vest. A

director will forfeit unvested RSUs upon a termination other than for death, disability or retirement.

Retirement for purposes of the Directors' Plan is a termination resulting from the director's

attainment of 72 years of age or ten consecutive terms in oÇce.

EÅective as of January 1, 2006, we stopped granting dividend equivalents on awards of stock

options to non-employee directors. Prior to January 1, 2006, however, stock options granted to our

non-employee directors had dividend equivalent rights on each share underlying the option equal

to the dividend per share declared and paid on our outstanding common stock. For stock options

vested as of December 31, 2004, dividend equivalents are accrued and are payable in cash upon

exercise or expiration of the option. In response to Section 409A of the Internal Revenue Code (the

""Code''), the CHRC approved a modiÑcation of the terms of certain outstanding stock options

granted under the Directors' Plan. In particular, the terms of any stock option grant or portion

thereof outstanding as of December 31, 2005 that was not vested as of December 31, 2004 were

modiÑed to eliminate the accrual of dividend equivalents. Dividend equivalents accrued through

December 31, 2005 with respect to these stock options were distributed in a lump sum in 2006.

Thereafter, dividend equivalents with respect to these stock options will not accrue but will be

distributed as soon as practicable after dividends on our common stock have been declared.

Proposal 1: Election of Directors

23
Non-Employee Director Stock Ownership Guidelines. Under the Guidelines, non-employee

directors generally are expected to hold an investment of at least Ñve times the annual Board

retainer in our common stock within Ñve years after joining the Board, unless the GNROC

determines that it is unduly burdensome for a director to make such an investment. Because the

current Board retainer is $60,000, non-employee directors are expected to hold an investment of at

least $300,000. Non-employee directors will be treated as complying with this stock ownership

requirement, even if the non-employee directors do not otherwise meet the requirement, if they

retain all Freddie Mac common stock received upon exercise of stock options or lapsing of

restrictions on RSUs. This requirement does not take into account Öuctuations in the price of our

common stock and may not be satisÑed with deferred stock.

The following table summarizes the 2007 compensation provided to all persons who served as

non-employee directors during 2007.

2007 Non-Employee Director Summary Compensation Table

Change in Pension

Fees Value and

Earned or NonqualiÑed Deferred

Paid in Stock Option Compensation All Other

Name Cash(1) Awards(2)(3) Awards(2)(4)(5) Earnings(6) Compensation(7)(8)(9) Total

B. Alexander $109,000 $ 72,358 $41,334 $ 0 $13,199 $235,891

G. Boisi 185,500 72,358 41,334 0 13,199 312,391

M. Engler 103,000 97,327 62,226 0 14,227 276,780

R. Glauber 164,500 42,665 8,862 0 10,507 226,534

R. Goeltz 169,500 89,521 60,719 9,139 14,730 343,609

T. Johnson 184,500 90,965 63,654 0 14,052 353,171

W. Lewis, Jr. 91,500 72,358 41,334 0 3,199 208,391

S. O'Malley 309,500 195,400 80,668 2,579 14,311 602,458

J. Peek(10) 48,000 23,199 8,179 0 1,466 80,844

R. Poe(11) 47,500 97,722 58,885 0 19,299 223,406

N. Retsinas(12) 76,500 16,993 0 0 1,365 94,858

S. Ross 145,000 146,183 67,747 0 19,042 377,972

(1) For Messrs. Boisi, Johnson and Ross, all of the amount shown was paid in the form of common stock pursuant to

their election to convert 100% of their retainer and meeting fees into common stock. For Messrs. Lewis and Peek,

all of the amount shown was paid in the form of deferred stock pursuant to their election to convert 100% of their

retainer and meeting fees into deferred stock. For Mr. Retsinas, includes $46,500 paid in the form of deferred stock

pursuant to his election to convert 100% of his retainer and meeting fees paid in the third and fourth quarters of

2007 into deferred stock.

(2) Represents the compensation cost for the year of all of the directors' stock awards (all of which were RSUs)

and option awards, respectively, outstanding in 2007, as determined under Statement of Financial Accounting

Standards No. 123(R) (""SFAS 123(R)''), rather than an amount paid to or realized by the directors. See

NOTE 10 to the consolidated Ñnancial statements included in the accompanying Annual Report for a discussion

of the assumptions made in determining the SFAS 123(R) values. The amounts reported disregard estimates of

forfeitures for awards with service-based vesting conditions. There can be no assurance that the full SFAS 123(R)

Proposal 1: Election of Directors

24
amounts will ever be realized by any director. No option awards were made to non-employee directors in 2007. The

grant date fair values of the RSU awards made to each non-employee director in 2007 were as follows:

Grant Date

Fair Value of

RSU Awards

B. Alexander ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $120,018

G. Boisi ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

M. Engler ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

R. Glauber ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

R. Goeltz ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

T. Johnson ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

W. Lewis, Jr. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

S. O'Malley ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

J. Peek(10)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

R. Poe(11) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì

N. Retsinas(12) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

S. Ross ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 120,018

The grant date fair value of the RSU awards is calculated by multiplying the number of RSUs granted by the grant

date fair value of our common stock. The grant date fair value of these RSUs awards is based on the fair market

value of our common stock on June 8, 2007, which was $64.63.

(3) At December 31, 2007, the aggregate number of common shares underlying the outstanding RSU awards that had

not vested and were held by each non-employee director was: Ms. Alexander Ì 3,714 shares; Mr. Boisi Ì

3,714 shares; Ms. Engler Ì 4,030 shares; Mr. Glauber Ì 2,927 shares; Mr. Goeltz Ì 3,810 shares; Mr. Johnson Ì

3,858 shares; Mr. Lewis Ì 3,714 shares; Mr. O'Malley Ì 4,030 shares; Mr. Peek Ì 0 shares; Mr. Poe Ì 0 shares;

Mr. Retsinas Ì 1,857 shares; and Mr. Ross Ì 4,030 shares.

(4) At December 31, 2007, the aggregate number of common shares underlying outstanding option awards, exercisable

and unexercisable, held by each non-employee director was: Ms. Alexander Ì 6,360 shares; Mr. Boisi Ì

6,360 shares; Ms. Engler Ì 12,669 shares; Mr. Glauber Ì 1,822 shares; Mr. Goeltz Ì 11,781 shares;

Mr. Johnson Ì 9,171 shares; Mr. Lewis Ì 6,360 shares; Mr. O'Malley Ì 12,994 shares; Mr. Peek Ì 0 shares;

Mr. Poe Ì 20,265 shares; Mr. Retsinas Ì 0 shares; and Mr. Ross Ì 19,360 shares.

(5) The value of dividend equivalents is recognized in the compensation expense of the stock option awards shown in the

2007 Non-Employee Director Compensation table. The following presents the actual amounts of cash dividend

equivalents paid in 2007 to those non-employee directors who had stock option grants or portions thereof that were

outstanding and not vested and exercisable as of December 31, 2004: Ms. Alexander, $7,942; Mr. Boisi, $7,942;

Ms. Engler, $14,123; Mr. Glauber, $0; Mr. Goeltz, $13,627; Mr. Johnson, $11,079; Mr. Lewis, $7,942;

Mr. O'Malley, $14,350; Mr. Peek, $0, Mr. Poe, $16,266; Mr. Retsinas, $0; and Mr. Ross, $16,266. Dividend

equivalents on RSUs granted to our non-employee directors are not paid out in cash but are accrued as additional

RSUs and are generally settled at the same time as the underlying RSUs.

(6) We do not have any pension or retirement plans for our non-employee directors. For Mr. Goeltz, includes $9,139 in

above-market interest earned in 2007 on his deferred compensation balances relating to his 2005 and 2007 elections

to receive deferred cash. For Mr. O'Malley, includes $2,579 in above-market interest earned in 2007 on his

deferred compensation balances relating to his 2007 election to receive deferred cash. Deferred compensation to be

settled in cash is credited with interest compounded quarterly at the rate of: (i) 1% per annum in excess of the

prime rate as reported by The Wall Street Journal on the Ñrst business day of each calendar year during the deferral

period; or (ii) such other rate as is determined by the CHRC. In 2007, interest was credited at a rate of 9.25% based

on the prime rate on January 2, 2007 of 8.25% plus 1%. Disclosure of nonqualiÑed deferred compensation earnings

for Mr. Goeltz and Mr. O'Malley consisted of the above-market portion of interest paid in 2007. Of the 9.25% rate

of interest that was paid in 2007 on the deferred compensation balances of Messrs. Goeltz and O'Malley, 3.67%

was considered above-market. The market rate of interest for 2007 was 5.58%, which was 120% of the applicable

federal quarterly compounded long-term rate for January 2007.

Proposal 1: Election of Directors

25
(7) For Mr. Poe, includes a $5,000 donation made by us to the charity of Mr. Poe's choice in recognition of his service

on the Board. The Freddie Mac Foundation provides a dollar-for-dollar match to eligible organizations and

institutions, up to an aggregate amount of $10,000 per director per Ñscal year. Matching contributions made to

charities designated by the non-employee directors were as follows: Ms. Alexander, $10,000; Mr. Boisi, $10,000;

Ms. Engler, $9,450; Mr. Glauber, $10,000; Mr. Goeltz, $10,000; Mr. Johnson, $10,000; Mr. O'Malley, $10,000;

Mr. Poe, $10,000; Mr. Retsinas, $1,350; and Mr. Ross, $10,000.

(8) We have provided Business Travel Accident Insurance for oÇcers, employees and non-employee directors for many

years. The basic beneÑt provides $250,000 to their heirs in the event of accidental death while on business travel for

Freddie Mac. The cost of this insurance is attributed to each non-employee director as compensation and reported

on a tax Form 1099 each year. In 2007, we learned that the premium cost allocated to the non-employee directors

and reported as compensation to the non-employee directors for the three years 2004 through 2006 had been

overstated. We made cash payments to the following current non-employee directors to reimburse them for the tax

expense they incurred because we had overstated the compensation they received from Freddie Mac:

Ms. Alexander, $3,174; Mr. Boisi, $3,174; Ms. Engler, $4,286; Mr. Glauber, $482; Mr. Goeltz, $4,286; Mr. Johnson,

$3,730; Mr. Lewis, $3,174; Mr. O'Malley, $4,286; Mr. Peek, $1,447; Mr. Poe, $4,286; Mr. Retsinas, $0; and

Mr. Ross, $4,286.

(9) Includes spousal business travel and entertainment expenses incurred in connection with the March 2007 Board

meeting and for which non-employee directors were reimbursed. The reimbursements paid to aÅected non-employee

directors were as follows: Ms. Engler, $466; Mr. Goeltz, $419; Mr. Johnson, $297; and Mr. Ross, $4,731.

(10) Mr. Peek resigned from the Board eÅective September 17, 2007. All of Mr. Peek's 3,601 RSUs outstanding and

unvested as of September 17, 2007 were forfeited. The related dividend equivalents (a total of 164 shares) as of

September 17, 2007 were delivered to Mr. Peek in shares of common stock on December 10, 2007. At the time of

his resignation from the Board, Mr. Peek had 1,316 stock options. These options expired on December 17, 2007.

(11) Mr. Poe retired from the Board eÅective June 8, 2007. All of Mr. Poe's 4,684 RSUs outstanding as of June 8, 2007,

including all previously unvested RSUs and all previously outstanding and deferred shares, were accelerated and

delivered to Mr. Poe in shares of common stock as of that date. The related dividend equivalents (a total of

320 shares) as of June 8, 2007 were delivered to Mr. Poe in shares of common stock as of that date. Mr. Poe's option

awards continue to vest and become exercisable according to the schedule that currently applies to those options.

Because Mr. Poe retired from the Board eÅective before the last stockholders' meeting, he did not receive the

June 8, 2007 equity grant to non-employee directors.

(12) Mr. Retsinas joined the Board on June 8, 2007.

Transactions with Institutions Related to Directors

In the ordinary course of business, we were a party during 2007, and expect to continue to be a

party during 2008, to certain business transactions with institutions aÇliated with members of our

Board. Management believes that the terms and conditions of the transactions were no more and

no less favorable to us than the terms of similar transactions with unaÇliated institutions to which

we are, or expect to be, a party. Those transactions that are required to be disclosed under rules

promulgated by the SEC are described below.

In October 2007, Freddie Mac purchased mortgage-related securities with an aggregate unpaid

principal balance of approximately $4.3 billion issued by a bankruptcy remote entity of CIT Group,

Inc. (""CIT''), of which a former member of our Board, JeÅrey M. Peek, is Chairman and Chief

Executive OÇcer. During the period from October 1, 2007 through April 8, 2008, Freddie Mac has

received principal and interest payments on these securities of approximately $621.3 million. As a

holder of the securities, Freddie Mac will continue to receive principal and interest payments while

the securities are outstanding. An aÇliate of CIT is the master servicer for these securities and

receives a fee calculated on the unpaid principle balance of each underlying loan for its services.

During the period from October 1, 2007 through April 8, 2008, the CIT aÇliate has received

servicing fees of approximately $17.5 million. To avoid the appearance of a conÖict of interest,

Proposal 1: Election of Directors

26
Mr. Peek resigned from Freddie Mac's Board eÅective September 17, 2007, prior to completion of

this transaction.

Jerome P. Kenney, a director nominee, is currently an independent consultant to Merrill

Lynch & Co. (""Merrill Lynch''). Mr. Kenney retired as Vice Chairman of Merrill Lynch in January

2008. While at Merrill Lynch, Mr. Kenney served in many capacities and most recently was a

member of Merrill Lynch's Executive Client Coverage Group. Since January 1, 2007, Merrill

Lynch, though its subsidiaries, has participated in the following transactions with Freddie Mac:

‚ As an underwriter for three equity securities oÅerings, Ñve mortgage-related securities

oÅerings, and 604 debt securities oÅerings to the public, for which it received underwriting

fees of approximately $4.8 million, $0.8 million and $19.3 million, respectively.

‚ As a counterparty in capital markets transactions, including derivative transactions,

repurchase transactions and forward purchases and sales of securities (predominantly

mortgage-related securities, but also asset backed commercial paper and other securities).

The largest amount of notional or principal balance outstanding for these transactions during

the period from January 1, 2007 to April 8, 2008 was $107.3 billion, $3.0 billion, and

$8.5 billion, respectively. The largest total counterparty exposure (i.e., the risk of loss to

Freddie Mac if Merrill Lynch were to fail to perform under its obligations) during the period

from January 1, 2007 to April 8, 2008 was approximately $925.5 million.

‚ As a dealer in 14 resecuritizations of our mortgage-related securities that involved payments

of resecuritization fees to Freddie Mac in the amount of approximately $11.5 million.

Freddie Mac regularly purchases securities from Merrill Lynch for its mortgage-related

investment portfolio and its non-mortgage securities investment portfolio and occasionally may sell

mortgage-related securities to or through Merrill Lynch. Freddie Mac expects to continue to

engage in similar transactions with Merrill Lynch and its subsidiaries in 2008.

Policy Governing Related Person Transactions

In December 2007, the Board adopted the company's policy governing the Approval of Related

Person Transactions (the ""Related Person Transactions Policy''). This is a written policy and set of

procedures for the review and approval or ratiÑcation of transactions involving related persons,

which consist of any person who is, or was at any time since the beginning of the company's last

completed Ñscal year, a director, director nominee, executive oÇcer, or immediate family member

of any of the foregoing persons.

Under authority delegated by the Board, (a) the Executive Vice President Ì General Counsel

and Corporate Secretary (the ""General Counsel''), in the case of executive oÇcers and their

respective immediate family members (other than the Chief Executive OÇcer, the President, the

Chief Operating OÇcer, the General Counsel and their respective immediate family members)

and (b) the GNROC (or its Chair under certain circumstances), in the case of directors, director

nominees and their respective immediate family members, and the Chief Executive OÇcer, the

President, the Chief Operating OÇcer, the General Counsel and their respective immediate family

members (each, an ""Authorized Approver'') are responsible for applying the Related Person

Transactions Policy. Transactions covered by the Related Person Transactions Policy consist of any

transaction, arrangement or relationship or series of similar transactions, arrangements or

relationships, in which (i) the aggregate amount involved exceeded or is expected to exceed

Proposal 1: Election of Directors

27
$120,000; (ii) the company was or is expected to be a participant; and (iii) any related person had

or will have a direct or indirect material interest. The Related Person Transactions Policy includes a

list of categories of transactions identiÑed by the Board as having no signiÑcant potential for an

actual conÖict of interest or the appearance of a conÖict or improper beneÑt to a related person, and

thus are not subject to review (the ""Excluded Transactions''). Excluded Transactions include, for

example, transactions in which the related person's interest arises only from the related person's

position as a director of, or less than 10% ownership level in, another entity that is a party to the

transaction; transactions involving a related person where the rates or charges are determined by

competitive bids or are in conformity with law or governmental authority; transactions involving

certain compensation, indemnity or expense advance payments to an executive oÇcer or director of

the company; certain discretionary charitable contributions by the company to a non-proÑt entity

with which a related person is aÇliated; and certain transactions deemed not to be material under

the director independence standards contained in the Corporate Governance Guidelines.

The company's Legal Division will assess whether any proposed transaction involving a related

person is a related person transaction covered by the Related Person Transactions Policy. If so, the

transaction will be reviewed by the appropriate Authorized Approver. In consultation with the

Chair of the GNROC, the General Counsel may refer any proposed transaction to the GNROC for

review and approval. In those instances in which the General Counsel or his designee determines

that it is not practicable or desirable for the company to wait until the next GNROC meeting to

review a related person transaction involving a director, director nominee, or any of their respective

immediate family members, the Chair of the GNROC may review and approve the related person

transaction on behalf of the GNROC and report such action to the GNROC at its next regularly

scheduled meeting.

If possible, approval of a related person transaction will be obtained prior to the eÅectiveness or

consummation of the transaction. If advance approval of a related person transaction by the

appropriate Authorized Approver is not feasible or otherwise not obtained, then the transaction will

be considered promptly by the appropriate Authorized Approver to determine whether ratiÑcation

is warranted.

In determining whether to approve or ratify a related person transaction covered by the Related

Person Transactions Policy, the appropriate Authorized Approver will review and consider all

relevant information regarding the related person transaction or the related person available to the

Authorized Approver, which may include:

‚ the nature of the related person's interest in the transaction;

‚ the approximate total dollar value of, and extent of the related person's interest in, the

transaction;

‚ whether the transaction was or would be undertaken in the ordinary course of business of the

company;

‚ whether the transaction is proposed to be, or was, entered into on terms no less favorable to

the company than terms that could have been reached with an unrelated third party; and

‚ the purpose of, and potential beneÑts to the company of, the transaction.

A director who may be a related person in connection with a particular proposed related person

transaction will not participate in any discussion or approval of the transaction, other than

Proposal 1: Election of Directors

28
discussion for the purpose of providing material information concerning the transaction to the

GNROC. The appropriate Authorized Approver may, in such Authorized Approver's sole

discretion, impose such conditions as the Authorized Approver deems appropriate on the company

or the related person in connection with the approval of the related person transaction including, but

not limited to, ratiÑcation, revision or termination of the transaction.

Prior to December 2007, our written policies and procedures for the review, approval or

ratiÑcation of related person transactions and other conÖict of interest matters were based on our

Corporate Governance Guidelines, our Codes of Conduct for directors and employees and our

processes for gathering and disclosing information about such transactions. Among other things, the

Codes of Conduct provide that when performing their Freddie Mac duties, our directors and

employees must act at all times in our best interests. Employees and their immediate families are

not permitted to engage in business with us unless they have consulted with our Chief Compliance

OÇcer or the Compliance Division. If a director wishes to obtain a waiver of any Code provision

(including those dealing with conÖicts of interest), the waiver must be approved by the Board of

Directors and disclosed to stockholders.

Proposal 1: Election of Directors

29
AUDIT COMMITTEE REPORT

The Audit Committee operates under a written charter most recently revised and approved by

the Board in March 2007. As stated in the charter, the Audit Committee's primary responsibility is

to assist the Board in discharging its oversight responsibilities with respect to Ñnancial matters and

compliance with laws and regulations. The Audit Committee's speciÑc responsibilities are

summarized under ""Proposal 1: Election of Directors Ì Meetings of the Board and Committees''

above. A copy of the charter is available on our website at www.freddiemac.com.

The Audit Committee currently comprises the following Ñve directors: Messrs. Glauber,

Goeltz, Johnson, O'Malley and Ross. The Board has determined that each of these directors meets

the independence requirements of the NYSE Listed Company Manual and our Guidelines. During

the year ended December 31, 2007, the Audit Committee met 13 times. During the period from

January 1, 2008 through April 22, 2008 the Audit Committee met nine times.

Mr. Goeltz is currently the Chairman of the Audit Committee and has been a member of the

Audit Committee since March 31, 2004. The Board has determined that Mr. Goeltz has the

requisite experience to qualify as an ""audit committee Ñnancial expert'' under the rules and

regulations of the SEC and has designated him as such. However, Mr. Goeltz is not an auditor or

accountant for Freddie Mac, does not perform Ñeld work and is not an employee of Freddie Mac.

In accordance with the SEC's safe harbor relating to audit committee Ñnancial experts, a person

designated or identiÑed as an audit committee Ñnancial expert will not be deemed an ""expert'' for

purposes of the federal securities laws. In addition, such designation or identiÑcation does not

impose on such person any duties, obligations or liabilities that are greater than those imposed on

such person as a member of the Audit Committee and Board of Directors in the absence of such

designation or identiÑcation and does not aÅect the duties, obligations or liabilities of any other

member of the Audit Committee or Board of Directors.

Management is responsible for the eÅectiveness of our internal control over Ñnancial reporting

and the preparation of our consolidated Ñnancial statements in accordance with U.S. Generally

Accepted Accounting Principles, or GAAP. Our independent auditors are responsible for

performing an independent audit of our consolidated Ñnancial statements and for expressing an

opinion, based on the results of their audit, whether the consolidated Ñnancial statements are fairly

presented, in all material respects, in conformity with GAAP. The Audit Committee is responsible

for overseeing the conduct of these activities and, subject to stockholder ratiÑcation, appointing our

independent auditors. As stated above and in its charter, the Audit Committee's role in this process

is one of oversight. While the Audit Committee has the responsibilities and powers set forth in its

charter, it is not the responsibility of the Audit Committee to prepare Ñnancial statements, or to

determine that our Ñnancial statements and disclosures are complete and accurate and prepared in

accordance with GAAP and applicable rules and regulations. These are the responsibilities of

management. It is also not the responsibility of the Audit Committee to plan or conduct an

independent audit of the Ñnancial statements. These are the responsibilities of our independent

auditors. In carrying out its oversight responsibilities, the Audit Committee is not providing any

expert, professional or special assurance as to our Ñnancial statements or any professional

certiÑcation. The Audit Committee relies on the information provided and representations made to

it by management, and also on the report on our consolidated Ñnancial statements that it receives

from our independent auditors.

Audit Committee Report

30
In discharging its responsibilities relating to our internal controls, accounting and Ñnancial

reporting policies and auditing practices, the Audit Committee discussed and reviewed with our

independent auditors, PricewaterhouseCoopers LLP, the overall scope and process for their audit.

The Audit Committee regularly meets with PricewaterhouseCoopers LLP, with and without

management present, to discuss the results of their examination, their observations about our

internal controls and the overall quality of our Ñnancial reporting.

The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required

to be discussed by Statement on Auditing Standards No. 114, The Auditor's Communication With

Those Charged With Governance (which supersedes Statement on Auditing Standards No. 61).

The Audit Committee also has received the written disclosures and the letter from

PricewaterhouseCoopers LLP that are required by Independence Standards Board Standard No. 1,

Independence Discussions with Audit Committees, and has discussed with

PricewaterhouseCoopers LLP their independence from Freddie Mac and our management. At the

direction of the Audit Committee, PricewaterhouseCoopers LLP did not provide any non-audit

services to Freddie Mac in 2007.

The Audit Committee has reviewed and discussed with management our audited consolidated

Ñnancial statements as of and for the Ñscal year ended December 31, 2007.

The Audit Committee has also met with members of senior management and compliance,

enterprise risk oversight, Ñnance, legal and internal audit personnel to discuss and review, among

other things, the results of internal audit examinations, the scope and resources for the internal audit

function, management's development and implementation of systems and programs for the

detection and prevention of fraud, management's policies, guidelines and processes regarding the

assessment and management of our risk exposures, the status of litigation and investigations in

which we are involved, our compliance with legal and regulatory requirements, and directors' and

employees' compliance with our Codes of Conduct. OFHEO's annual report of examination

regarding our safety and soundness was presented to the full Board, and so was not separately

discussed by the Audit Committee in 2007.

Based on the reviews, reports and discussions referred to above, the Audit Committee

recommended to the Board that the audited Ñnancial statements referred to above be included in

our Annual Report for the year ended December 31, 2007.

In addition, the Audit Committee has approved the appointment of

PricewaterhouseCoopers LLP as our independent auditors for the Ñscal year ending December 31,

2008, and has submitted the appointment to the stockholders for ratiÑcation at this annual meeting.

The Audit Committee pre-approved the terms of the audit services expected to be provided by our

independent auditors for the Ñscal year ending December 31, 2008.

This report is respectfully submitted by the members of the Audit Committee of the Board.

Richard Karl Goeltz, Chairman

Robert R. Glauber

Thomas S. Johnson

Shaun F. O'Malley

Stephen A. Ross

Audit Committee Report

31
EXECUTIVE OFFICERS

As of April 1, 2008, our executive oÇcers are as follows:

Year of

Name Age AÇliation Position

Richard F. Syron ÏÏÏÏÏÏÏ 64 2003 Chairman and Chief Executive OÇcer

Robert E. Bostrom ÏÏÏÏÏÏ 55 2006 Executive Vice President, General Counsel and Corporate

Secretary

Patricia L. Cook ÏÏÏÏÏÏÏÏ 55 2004 Executive Vice President, Chief Business OÇcer

Paul G. George ÏÏÏÏÏÏÏÏÏ 56 2005 Executive Vice President, Human Resources and Corporate

Services

Michael PerlmanÏÏÏÏÏÏÏÏ 57 2007 Executive Vice President, Operations and Technology

Anthony S. Piszel ÏÏÏÏÏÏÏ 53 2006 Executive Vice President and Chief Financial OÇcer

Kirk DieÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 2006 Senior Vice President and General Auditor

David B. Kellermann ÏÏÏÏ 40 1992 Senior Vice President Ì Corporate Controller and Principal

Accounting OÇcer

Michael C. May ÏÏÏÏÏÏÏÏ 49 1983 Senior Vice President, Multifamily Sourcing

Hollis S. McLoughlinÏÏÏÏ 57 2004 Senior Vice President, External Relations and Chief of StaÅ

Paul E. Mullings ÏÏÏÏÏÏÏÏ 57 2005 Senior Vice President, Single Family Sourcing

Anurag Saksena ÏÏÏÏÏÏÏÏ 47 2005 Senior Vice President and Chief Enterprise Risk OÇcer

Jerry Weiss ÏÏÏÏÏÏÏÏÏÏÏÏ 50 2003 Senior Vice President and Chief Compliance OÇcer

The following is a brief biographical description of each of our executive oÇcers who are not

also nominees for election to our Board of Directors.

Robert E. Bostrom was appointed Executive Vice President, General Counsel and Corporate

Secretary in February 2006. Prior to joining us, Mr. Bostrom was the managing partner of the New

York oÇce of Winston & Strawn LLP, a member of that Ñrm's executive committee and head of

its Ñnancial institutions practice. Mr. Bostrom originally joined Winston & Strawn in 1990. From

1992 until 1996, Mr. Bostrom served as Executive Vice President of Legal, Regulatory and

Compliance and General Counsel of National Westminster Bancorp.

Patricia L. Cook was appointed Executive Vice President, Chief Business OÇcer in June 2007.

Prior to holding her current position, she served as our Executive Vice President, Investments and

Capital Markets beginning in February 2005 and prior to that, she served as our Executive Vice

President, Investments beginning in August 2004. Prior to joining us, Ms. Cook was Managing

Director and Chief Investment OÇcer, Global Fixed Income at JPMorgan Fleming Asset

Management from May 2003. Prior to joining JP Morgan Fleming, she was Managing Director and

Chief Investment OÇcer, Fixed Income at Prudential Investment Management. From June 1991

to July 2001, Ms. Cook was Managing Director at Fisher Francis Trees and Watts. Prior to that,

she worked in various management positions at Salomon Brothers, Inc. from January 1979 to June

1991.

Paul G. George was appointed Executive Vice President, Human Resources and Corporate

Services in December 2006. He joined us in August 2005 as Executive Vice President, Human

Resources. Prior to joining us, Mr. George was Senior Executive Vice President of Human

Resources at Wachovia Corp. from January 2001 through December 2004. Prior to that, he was a

member of Waste Management Inc.'s interim management team from 1998 to 1999. He also

served for approximately nine years as Senior Vice President of Human Resources at United

Airlines. Between 1985 and 1988 he was Vice President of Human Resources at PaciÑc Southwest

Executive OÇcers

32
Airlines. Prior to that he was a partner at Meserve, Mumper & Hughes, the second oldest law Ñrm

in Los Angeles.

Michael Perlman was appointed Executive Vice President, Operations and Technology in

August 2007. Prior to joining us, Mr. Perlman was a managing director at Morgan Stanley until July

2007 where he developed operations and technology infrastructure to support their Fixed Income

and Global Operations Divisions. Mr. Perlman also played signiÑcant roles in building Morgan

Stanley's mortgage conduit and diÅerent Ñnancial services systems. Before joining Morgan Stanley

in September 1997, Mr. Perlman was a founding partner at AT&T Solutions' Financial Services

Group and a partner in the Washington, DC and New York oÇces of Deloitte & Touche, where he

specialized in large-scale business and technology renovation.

Anthony S. Piszel was appointed Executive Vice President and Chief Financial OÇcer in

November 2006. Prior to joining us, Mr. Piszel was Chief Financial OÇcer at HealthNet, one of the

nation's largest publicly traded managed health care companies, from August 2004 to November

2006. Prior to that, he held a number of Ñnancial positions at Prudential Financial from 1998 to

2004, most recently as Senior Vice President and Corporate Controller. Prior to joining Prudential,

Mr. Piszel was an audit partner at Deloitte and Touche.

Kirk Die was appointed Senior Vice President and General Auditor in April 2006. Mr. Die

joined us from MBNA Corp., where he served in a series of increasingly responsible roles from

1993. Most recently, as a result of MBNA's merger with Bank of America, he was the audit

executive responsible for the combined Card Services Division. Prior to the merger, he was Senior

Executive Vice President and Corporate General Auditor of MBNA. Prior to becoming Corporate

General Auditor, Mr. Die managed the Operational, Business Development and Financial Audit

Departments of MBNA. Prior to that, Mr. Die was a manager with Coopers & Lybrand (now

PricewaterhouseCoopers LLP).

David B. Kellermann was appointed Senior Vice President Ì Corporate Controller and

Principal Accounting OÇcer in March 2008. Prior to holding his current position, he served as our

Senior Vice President, Business Area Controller, starting in October 2006. Prior to that

appointment, Mr. Kellermann was Vice President, Strategy Execution and Integration from

February 2005 until October 2006, during which time he also assumed responsibility for the Finance

Program Management OÇce. Before that, Mr. Kellermann held the positions of Vice President,

Valuation, Risk Management and Investment Process from November 2003 to February 2005 and

Vice President, Mortgage Portfolio Investment Process from May 2003 to November 2003.

Mr. Kellermann also held various other positions at our company since joining us in 1992, including

Portfolio Management Director Ì Senior from March 2002 to May 2003.

Michael C. May was appointed Senior Vice President, Multifamily Sourcing in August 2005.

Prior to this appointment, Mr. May served as our Senior Vice President, Operations starting in

February 2005. He also served as Senior Vice President, Mortgage Sourcing, Operations & Funding

from October 2003 to February 2005. Prior to that, Mr. May held the positions of Senior Vice

President, Single Family Operations from July 2002 to October 2003 and Senior Vice President,

Project Enterprise from January 2001 to July 2002. Mr. May also held various positions at our

company since joining us in 1983, including Senior Vice President, Customer Services and Control,

Vice President of Loan Prospector and Vice President of Structured Finance.

Executive OÇcers

33
Hollis S. McLoughlin was appointed Senior Vice President, External Relations and Chief of

StaÅ in June 2007. Prior to this appointment, Mr. McLoughlin served as our Senior Vice

President, External Relations starting in January 2006. He also served as Senior Vice President and

Chief of StaÅ from April 2004 to January 2006. From 1998, Mr. McLoughlin was Chief Operating

OÇcer of two private equity-backed operating companies. Before that, he was one of the founding

partners of Darby Overseas, a private equity partnership based in Washington, D.C. He has also

been a senior executive at Purolator Courier, an overnight delivery company, and a privately held

transportation company. From 1989 through 1992, Mr. McLoughlin served as Assistant Secretary

of the Treasury under former President George H. W. Bush. He served as Chief of StaÅ to

Sen. Nicholas Brady, R-N.J., in 1982 and to Rep. Millicent Fenwick, R-N.J., from 1975 to 1979.

Paul E. Mullings was appointed Senior Vice President, Single Family Sourcing in July 2005.

Before joining us, Mr. Mullings was Senior Vice President of JPMorgan Chase and Mortgage

Finance and Fair Lending Executive at Chase Home Finance. Prior to joining Chase Home

Finance in 1997, Mr. Mullings was President and Chief Executive OÇcer of Mortgage Electronic

Registration Systems, Inc. Mr. Mullings was also President and Chief Executive OÇcer of the

residential mortgage division of First Interstate Bank, Los Angeles. Prior to First Interstate, he held

a series of increasingly responsible senior management positions at Glendale Federal Bank,

Glendale, California.

Anurag Saksena was appointed Senior Vice President and Chief Enterprise Risk OÇcer in

August 2005. Prior to joining us, Mr. Saksena led Enterprise Risk Management at General Motors

Acceptance Corporation from July 1999 to December 2004. In addition, Mr. Saksena founded

Enterprise Risk Advisors, LLC. He has also held risk and portfolio management positions of

increasing responsibility at Societπ e Gπ enπ erale in New York, Royal Bank Financial Group in Toronto π

and Great-West Life Assurance Company in Winnipeg.

Jerry Weiss was appointed Senior Vice President and Chief Compliance OÇcer in October

2003. Prior to joining us, Mr. Weiss worked from 1990 at Merrill Lynch Investment Managers, most

recently as First Vice President and Global Head of Compliance. From 1982 to 1990, Mr. Weiss

was with a national law practice in Washington, D.C., where he specialized in securities regulation

and corporate Ñnance matters.

Executive OÇcers

34
REPORT OF THE CHRC

The CHRC has reviewed and discussed the Compensation Discussion and Analysis with

management and, based on such review and discussion, has recommended that the Compensation

Discussion and Analysis be included in this Proxy Statement.

This report is respectfully submitted by the members of the Compensation and Human

Resources Committee of the Board.

GeoÅrey T. Boisi, Chairman

Barbara T. Alexander

Michelle Engler

Thomas S. Johnson

Shaun F. O'Malley

COMPENSATION DISCUSSION AND ANALYSIS

This discussion addresses our compensation objectives and policies applicable to the executive

oÇcers named in the Summary Compensation Table appearing under ""Executive Compensation Ì

Compensation Tables'' below, otherwise referred to as our ""named executive oÇcers.'' To the

extent that we may modify these objectives and policies in the future to reÖect changing

circumstances, the information contained in this discussion may change accordingly. The following

discussion and analysis contains statements regarding future individual and company performance

targets and goals. These targets and goals are disclosed in the limited context of Freddie Mac's

compensation programs and should not be construed as statements of management's expectations or

estimates of results or other guidance. Freddie Mac cautions investors not to apply these statements

to other contexts.

Compensation Philosophy and Objectives

The principal objectives of our compensation program for our named executive oÇcers are to

attract and retain high caliber executives, to motivate the executives to work eÅectively to achieve

annual and long-term corporate and individual objectives that are aligned with the interests of our

stockholders and other critical constituencies and, based on our pay-for-performance philosophy, to

reward the executives when those objectives are met or exceeded.

In addition to individual performance and a review of compensation against the market, in

determining named executive oÇcer compensation we consider the following:

‚ Potential Ì The named executive oÇcer's ability to assume greater responsibility and

leadership roles.

‚ Ease of Replacement/Retention Risk Ì The availability of qualiÑed candidates inside the

company, the strength of the external labor pool and the risk that competitors may target the

named executive oÇcer.

‚ Strategic Impact Ì The named executive oÇcer's short-, medium-, and long-term

contributions and strategic impact on our performance.

Compensation Discussion and Analysis

35
Achieving our compensation objectives requires the CHRC and management to exercise

signiÑcant judgment. As a starting point for this exercise of judgment, we generally establish a target

total direct compensation level for each named executive oÇcer. For these purposes, ""total direct

compensation'' consists of base salary, target annual bonus, and target annual long-term equity

award.

While the majority of our oÇcers are not covered by employment agreements, certain of the

employment agreements or oÅer letters applicable to the named executive oÇcers provide certain

contractual protections, such as guaranteed base salary levels, guaranteed incentive payments in

certain situations, and special termination beneÑts. Since 2003, when we announced the need to

restate our Ñnancial results for 2000 through 2002 (the ""restatement''), we have been engaged in a

process of restructuring through changes aÅecting, among other things, governance, corporate

culture, internal controls, accounting practices and disclosure. With the exception of Mr. May, all of

our named executive oÇcers have been hired since the commencement of that process. As is

typical in such periods of transition, uncertainties amongst executive oÇcers are greater than they

otherwise would be. We believe the contractual protections provided are necessary to recruit and

retain the exceptional leaders we need to complete the restructuring process and position us for the

future.

On November 9, 2007, we entered into an amendment to Mr. Syron's December 6, 2003

employment agreement that extends the term of his employment agreement through December 31,

2009 under revised compensation terms. We believe the compensation provided under Mr. Syron's

extension agreement is reasonable and comparable to the compensation practices of companies in

our Comparator Group, structured to be consistent with our pay-for-performance philosophy, and

justiÑed by Mr. Syron's performance. We believe it was important to secure Mr. Syron's

commitment to stay an extra year so as to enable Freddie Mac to continue its progress towards

accomplishing signiÑcant initiatives and provide the Board with suÇcient time to focus on

succession planning and transition processes. The CHRC also approved a special, one-time cash

performance award opportunity for Mr. Syron to provide additional incentive for the completion of

key tasks through September 30, 2009. We believe that this award is consistent with our pay-forperformance philosophy, which requires the demonstration and evaluation of performance prior to

payment. For more information on Mr. Syron's extension agreement, see ""Employment and

Separation Agreements Ì Richard F. Syron'' below. For more information on the parameters of

Mr. Syron's special performance award, see ""Compensation Structure Ì Chief Executive OÇcer

Special Performance Award Opportunity'' below. See also our website at

www.freddiemac.com/governance/compensation.html, where Mr. Syron's extension agreement is

posted.

Role of Executive OÇcers and the Compensation Consultant

The CHRC, with input from other non-employee directors, annually reviews and approves the

compensation of our Chief Executive OÇcer and our other executive oÇcers. When possible,

including in 2007, management provides competitive market data and otherwise begins discussions

concerning executive compensation with the CHRC at least one meeting in advance of the meeting

at which the CHRC makes its annual executive compensation decisions. For executive oÇcers other

than the Chief Executive OÇcer, the Chief Executive OÇcer, working with the Executive Vice

President Ì Human Resources and Corporate Services (the ""EVP Ì Human Resources''), makes

recommendations to the CHRC regarding executive compensation actions. The CHRC Chair,

Compensation Discussion and Analysis

36
with the support of Hewitt and the EVP Ì Human Resources, as appropriate, prepares a

recommendation regarding compensation of the Chief Executive OÇcer for the CHRC's approval.

The CHRC approves salary adjustments, annual bonus payments and targets, and long-term equity

awards and targets after reviewing these recommendations.

To assist the CHRC in carrying out its responsibilities, the CHRC has retained and is assisted

by Hewitt, a global human resources consulting Ñrm that provides executive compensation

consulting to many Fortune 100 companies and has advised our Board on compensation matters

since 1990. Hewitt may provide services directly to the CHRC or, depending on the project, work

with the EVP Ì Human Resources and his staÅ to provide information and materials to the

CHRC with respect to its executive compensation responsibilities. Although most such materials

are prepared by employees of the company, all such materials are reviewed by Hewitt. Hewitt also

assists in preparing some materials. The CHRC generally works with Hewitt together with

management. On occasion, the Chairman of the CHRC works directly with Hewitt without the

involvement of management. The EVP Ì Human Resources is management's primary contact with

Hewitt and is responsible for assisting Hewitt in carrying out its assignments for the CHRC, but, as

necessary and appropriate, Hewitt may communicate with other executive oÇcers and with

governance attorneys in the company's Legal Division in carrying out executive compensation

projects.

Hewitt's role is to assist the CHRC in discharging its responsibilities with respect to its

oversight of compensation and beneÑts, which includes apprising the CHRC of best practices as well

as emerging compensation trends and issues, including compensation governance. In its capacity as

a consultant to management, Hewitt will also help management identify acceptable approaches to

ensure that compensation continues to clearly link to short- and long-term performance. In its

capacity as a consultant to the CHRC and the GNROC, Hewitt provides the following services to

the CHRC and, for non-employee director compensation, the GNROC, as applicable:

‚ independent advice and market data to CHRC members on executive compensation and

beneÑt matters, to ensure alignment with our business and strategic objectives, our pay

philosophy, and prevailing market and governance practices;

‚ review of committee meeting materials, attending committee meetings, and responding to

questions which may arise;

‚ review of portions of our draft annual proxy statement relating to executive compensation,

including the Compensation Discussion and Analysis; and

‚ independent advice and market data to the GNROC on non-employee director

compensation.

In addition, on an ad-hoc basis, the CHRC or the Board may engage Hewitt for special

projects. Hewitt also is expected to attend meetings the CHRC deems appropriate throughout the

course of the year and to remain available for consultation with the CHRC Chair and management.

During 2007, Hewitt's primary consultant for the CHRC attended (either in person or via

telephone) or made himself available to participate in every CHRC meeting. Additionally, the

CHRC has set aside time at its meetings to meet with Hewitt in executive session without

management present in order to discuss any executive compensation questions, comments or

concerns.

Compensation Discussion and Analysis

37
The CHRC engages Hewitt directly and requires management to disclose annually to the

CHRC the work performed by and fees paid to Hewitt, including any work Hewitt performed for

management. Pursuant to a policy on the selection and retention of outside advisors to the Board,

the CHRC annually reviews and pre-approves any services that Hewitt will provide to

management so that the CHRC can determine that Hewitt's acceptance of engagements and

remuneration from management has not impaired the Ñrm's ability to provide independent advice

regarding management compensation to the CHRC.

During 2007, Hewitt advised the CHRC and the GNROC on senior management and nonemployee director compensation and various other compensation and beneÑt related matters.

Hewitt's work included: providing guidance for Mr. Syron's special performance award opportunity

and amended employment agreement (as discussed under ""Compensation Discussion and

Analysis'' below); providing competitive market data and advice on the award structure and

implementation of performance RSUs; reviewing management's recommendations for 2007

executive oÇcer compensation actions, and providing advice to the CHRC on compensation actions

for these executives; reviewing executive compensation best practices; providing a Board

compensation study based on non-employee director compensation market data for the Comparator

Group (deÑned under ""Compensation Discussion and Analysis'' below), including providing

perspective and recommendations; and reviewing all CHRC meeting materials. Fees for Hewitt's

consulting advice to the CHRC and the GNROC for the year ended December 31, 2007 were

approximately $230,000, including travel expenses for attendance at committee meetings.

Hewitt also provided consulting services to management during 2007 in the general areas of

compensation and beneÑts. Compensation services included: providing oÇcer market compensation

data and other competitive market information; consulting on the competitiveness and market

perspective of short-term and long-term incentive design for non-executive oÇcers; consulting on

compliance with OFHEO's Examination Guidance for Compensation Practices; consulting on our

2007 proxy statement; providing guidance on the structure of non-executive oÇcer-level new hire

compensation packages; providing advice on compensation trends and practices; and responding to

various ad-hoc compensation data requests. BeneÑts services included: consulting on retirement

program investment and life insurance beneÑts; analyzing our beneÑts index; and providing ad-hoc

beneÑt design studies. Fees for Hewitt's non-CHRC and non-GNROC related services for the year

ended December 31, 2007 were approximately $280,000, including travel expenses for attendance at

meetings.

Evaluating and Targeting Executive Compensation

A number of factors are taken into consideration during the annual process to evaluate and set

target compensation for the named executive oÇcers, as discussed below.

To evaluate the named executive oÇcer's current compensation compared to the competitive

market, we review the compensation of executives in comparable positions at companies that are

either in a similar line of business or are otherwise comparable for purposes of recruiting and

retaining individuals with the requisite skills and capabilities. We refer to this group of companies as

the Comparator Group.

We review and discuss the composition of the Comparator Group on an annual basis with the

CHRC and Hewitt. In determining which companies to include in the Comparator Group, we

examine several criteria, including the relevant labor market for talent and those companies with

Compensation Discussion and Analysis

38
which we compete for investment capital. To reÖect the investment capital criterion, we examine

those companies competing in the mortgage-backed securities sector. To reÖect the relevant labor

market, we examine industry segments and companies from which we have recruited and to which

we have lost oÇcer talent. For a more detailed discussion of the CHRC's role in the annual process

of evaluating, recommending and approving compensation for the named executive oÇcers and the

role of Hewitt, see ""Corporate Governance Ì Interaction with and Independence of Compensation

Consultant.''

A signiÑcant secondary factor that we take into account in determining the composition of the

Comparator Group is organization scope. This factor focuses on companies in the relevant industry

sectors that are comparable in asset/revenue size, operational scope, market capitalization, and

proÑtability. Also relevant is the selection of companies from which we have the ability to obtain

high quality, reliable, and consistent compensation data.

After considering these criteria, the CHRC selected the following companies in November

2006 as the Comparator Group for purposes of competitive compensation market analysis in 2007:

American Express Lehman Brothers

American International Group Mellon Financial (now Bank of New York Mellon)

Bank of America MetLife

Capital One Financial Corporation SLM (formerly known as Sallie Mae)

Citigroup State Street

Countrywide Suntrust Banks

Fannie Mae U.S. Bancorp

Fifth Third Bancorp Wachovia

Hartford Financial Services Group Washington Mutual

J.P. Morgan Chase Wells Fargo

We are not able to use the Comparator Group to obtain competitive compensation information

for all named executive oÇcers. For example, we do not use the Comparator Group when

comparable executive positions do not exist in the Comparator Group or when available data are

incomplete. In those instances, we use data from alternative widely used survey sources for Ñnancial

services companies. In those cases in which the alternative survey sources do not identify executive

positions comparable to our positions, we set compensation targets based on our best estimate of the

relative scope and responsibilities of the position as compared to the scope and responsibilities of

comparable positions within Freddie Mac for which survey data exist. For Ms. Cook's position,

Executive Vice President, Chief Business OÇcer and Mr. May's position, Senior Vice President,

Multifamily Sourcing, a reasonable match and/or suÇcient data were not available in the

Comparator Group and a survey by McLagan, an Aon consulting company, was used. Overall, we

believe the companies that participated in the McLagan survey, Ñnancial services companies,

appropriately represent our relevant labor market, and that the McLagan survey is an appropriate

source of compensation data for jobs that cannot be found in the Hewitt survey of the Comparator

Group. To protect the conÑdentiality of the companies participating, McLagan does not provide the

identities of component companies of the surveys used in setting the compensation levels of

Ms. Cook and Mr. May. For Mr. Perlman's and Mr. Smialowski's position (Executive Vice

President, Operations and Technology), the Comparator Group data was provided to and

considered by the CHRC. However, the CHRC determined that the Comparator Group positions

were more technology-oriented and did not reÖect the breadth of the operational responsibilities for

Compensation Discussion and Analysis

39
our position. Accordingly, a premium was applied to the data in an eÅort to account for the

diÅerence in scope of responsibilities. The CHRC also considered the compensation relationship

between Freddie Mac's position and other executive positions within the company, as well as

publicly available information concerning the total direct compensation for a Fannie Mae executive

with similar responsibilities. In setting the compensation targets for this position, as well as all other

positions, the CHRC exercised its judgment in arriving at appropriate compensation levels taking

into account available competitive market compensation data and other factors discussed under

""Compensation Philosophy and Objectives.''

The CHRC applied the compensation philosophy and criteria described above at its March 3,

2007 meeting to set 2007 target total direct compensation for the named executive oÇcers other

than Mr. Perlman, who had not yet joined the company. In addition, on November 9, 2007, we

entered into an amendment extending Mr. Syron's employment agreement with us through

December 31, 2009, pursuant to which Mr. Syron's base salary eÅective July 1, 2007, his 2007 target

bonus and his 2007 target long-term equity award were increased over the levels approved by the

CHRC at its March 3, 2007 meeting. For more information, see ""Chief Executive OÇcer Special

Performance Award Opportunity'' and ""Executive Compensation Ì Richard F. Syron'' below.

The following table shows the named executive oÇcers' target total direct compensation for

2007.

Target Bonus

Expressed as

Percentage of Target Long-Term 2007 Target

Annualized 2007 Target Equity Award for Total Direct

Base Salary Base Salary Bonus(1) 2007 Performance(2) Compensation

Mr. Syron(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,200,000 278% $3,336,000 $9,400,000 $13,396,000

Mr. Piszel(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 650,000 155% $1,007,500 $3,000,000 $ 4,657,500

Ms. Cook ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 600,000 333% $2,000,000 $2,600,000 $ 5,200,000

Mr. Perlman(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 500,000 245% $1,225,000 $1,525,000 $ 3,250,000

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 418,000 115% $ 480,000 $ 677,000 $ 1,575,000

Mr. McQuade(4) ÏÏÏÏÏÏÏÏÏÏÏ $ 900,000 180% $1,620,000 $6,000,000 $ 8,520,000

Mr. Smialowski(5) ÏÏÏÏÏÏÏÏÏÏ $ 550,000 209% $1,150,000 $2,100,000 $ 3,800,000

(1) Actual 2007 bonus payouts, paid in March 2008, for each named executive oÇcer are shown in the Summary

Compensation Table under ""Bonus'' and are discussed further under ""2007 Annual Bonus Compensation'' below.

(2) Actual long-term equity incentives awarded in respect of performance during 2007, granted in March 2008, are shown

below under ""2007 Long-Term Equity Awards.''

(3) The 2007 base salaries, 2007 target bonuses and target long-term equity award for 2007 performance for

Messrs. Piszel and Perlman were in accordance with their oÅer letters, and, in the case of Mr. Syron, his amended

employment agreement.

(4) Mr. McQuade resigned his position as President and Chief Operating OÇcer eÅective September 1, 2007.

(5) Mr. Smialowski resigned his position as Executive Vice President, Operations and Technology eÅective June 30, 2007

but remained employed with the company until December 31, 2007.

After considering the factors discussed below, 2007 target total direct compensation for two of

the named executive oÇcers who are currently employed by Freddie Mac and who were employees

for the entire 2007 calendar year was set by the CHRC below, and for two of the named executive

oÇcers at or above, the median level of total direct compensation for comparable executives in the

Comparator Group or, as discussed above, based on alternative survey data.

At its March 3, 2007 meeting, the CHRC decided that Messrs. Syron's and McQuade's 2007

target total direct compensation, including their bonus targets, should remain unchanged from their

Compensation Discussion and Analysis

40
2006 levels. The 2007 bonus targets for Messrs. Syron and McQuade were conditioned on their

executing waivers to their employment agreements so that their potential payments upon

termination of employment (which, in some cases, take into account target bonuses) would be

calculated based on the bonus target in their respective employment agreements, not the higher

2007 bonus targets. Pursuant to the terms of the November 9, 2007 amendment to his employment

agreement, Mr. Syron's 2007 annual bonus target and long-term equity award target were increased

in December 2007, and his base salary was increased eÅective July 1, 2007. At its March 3, 2007

meeting, the CHRC determined to increase Mr. Smialowski's annual bonus target and long-term

equity award target for 2007. With the exception of Mr. Perlman, who joined the company in 2007,

2007 target total direct compensation for the remaining named executive oÇcers was unchanged

from their 2006 levels.

At the March 3, 2007 meeting at which the 2007 total direct compensation targets were

approved, the CHRC approved a change in methodology used to calculate the number of RSUs

subject to an award by eliminating the economic discount used in converting the approved dollar

value of long-term equity awards into a speciÑc number of RSUs. To oÅset the elimination of the

economic discount, the CHRC adjusted upward the long-term incentive targets for all executives

other than those with employment agreements or oÅer letters that provide for guaranteed longterm incentive targets. This change did not result in additional cost to the company and did not

provide employees with greater value. See ""RSUs Ì Valuation of RSUs'' below for more

information concerning the elimination of the economic discount.

During the CHRC's process to establish 2007 compensation targets for the company's

executive oÇcers, the CHRC reviewed data and discussed and considered the following for each

named executive oÇcer, except for Mr. Perlman, who had not yet joined the company:

‚ The major components of each executive oÇcer's compensation;

‚ Competitive compensation data;

‚ An assessment of the executive oÇcer's performance for the year;

‚ A tally sheet of total compensation and beneÑts paid to, or accrued for, each executive

oÇcer;

‚ The grant date value of all stock options and RSUs awarded;

‚ The estimated year-over-year actuarial increase in qualiÑed and non-qualiÑed pension

beneÑts;

‚ The value of all outstanding equity awards, which includes all unvested RSUs, unvested

stock options and unexercised vested stock options;

‚ Freddie Mac's actual cost of providing life insurance, disability insurance, and medical

insurance to each executive oÇcer;

‚ The annual interest accrual for participants in the Executive Deferred Compensation Plan;

‚ The estimated value and summary of various perquisites received; and

‚ The estimated potential value of compensation due if an executive oÇcer were terminated by

Freddie Mac on December 31, 2006 for reasons other than ""for cause.''

Compensation Discussion and Analysis

41
Prior to the determination of actual awards for performance in 2007, the CHRC reviewed updates to

the information listed above for the named executive oÇcers, as well as the following additional

items for each of the named executive oÇcers:

‚ A chart providing a visual and numerical summary of the total compensation mix for each

executive oÇcer;

‚ A tabular comparison of the executive's 2007 target compensation to the competitive market

data;

‚ A chart illustrating the projected value of the executive's unvested equity that is scheduled to

vest in the future, absent prospective awards, at three hypothetical stock prices; and

‚ A tabular comparison of the executive's equity that is owned outright versus equity that is ""at

risk.''

Management's presentation of the value of outstanding equity awards was intended to provide

the CHRC with a perspective on the ""at risk'' pay that a named executive oÇcer would forfeit if he

or she were to voluntarily terminate his or her employment with Freddie Mac. This value also

provides the CHRC with a perspective on a competitor's potential cost if it were successful in an

attempt to recruit one of our named executive oÇcers and were to compensate such oÇcer for

forfeited equity. We consider each of these perspectives important when evaluating the retention

risk for a named executive oÇcer, setting target compensation, and recommending actual awards.

The CHRC does not seek to maintain any direct relationship between the various elements of

compensation, or to standardize the mix of pay for executive oÇcers. The CHRC believes, however,

that, at a minimum, an executive oÇcer's target long-term incentive award should generally be

40% of his or her target total direct compensation.

As part of the CHRC's regular decision-making process, the tally sheet provided to the CHRC

for each executive oÇcer discloses the executive oÇcer's then-current post-termination beneÑts and

other executive oÇcer beneÑts. The tally sheet provides the CHRC with a comprehensive view of

all components of compensation and beneÑts provided to an executive in order for the CHRC to

assess the reasonableness of the total value of compensation and beneÑts provided. Historically, the

level of an executive oÇcer's post-termination beneÑts and other beneÑts has not directly aÅected

the CHRC's analysis in determining any individual executive oÇcer's target or actual base salary,

annual bonus or annual long-term incentive award.

Compensation Structure

Our pay-for-performance philosophy is implemented by providing the named executive oÇcers

competitive base salaries, annual bonus opportunities, and long-term equity incentive opportunities.

The named executive oÇcers may also receive certain perquisites and other beneÑts.

Base Salary

As discussed under ""Evaluating and Targeting Executive Compensation'' above, the base

salaries of our named executive oÇcers, including the Chairman and Chief Executive OÇcer, are

broadly based on salaries for comparable positions in the market. Base salaries take into

consideration base salaries of comparable positions in the Comparator Group and alternative survey

data, if applicable, and also reÖect the named executive oÇcer's job performance, future potential,

Compensation Discussion and Analysis

42
scope of responsibilities and experience. For each of the named executive oÇcers, base salaries are

consistent with the terms of his or her respective employment agreement or oÅer letter and are

reviewed annually.

Annual Bonuses

Our annual cash bonus program is intended to motivate our named executive oÇcers to work

eÅectively to achieve both our annual corporate performance objectives and their individual

performance objectives and to reward them based on achievement against such objectives.

The determination of the actual bonus payable to our named executive oÇcers occurs at the

end of an annual cycle that consists of several stages. For 2007, the Ñrst stage occurred at the

March 3, 2007 CHRC meeting where, based upon recommendations from management and input

from the full Board, the CHRC both approved the 2007 Bonus Funding Scorecard and concurred

with an aggregate amount of funding to be made available for 2007 bonuses if all objectives on the

2007 Bonus Funding Scorecard were achieved.

 The 2007 Bonus Funding Scorecard contained a balanced set of performance measures that

integrated Freddie Mac's perennial and annual objectives, as follows:

‚ Mission. Meeting speciÑc U.S. Department of Housing and Urban Development

(HUD) goals and, to the extent consistent with the Interagency Guidance on non-traditional

mortgage products and our stated position on subprime lending, HUD subgoals, for the

percentage of mortgages purchased by Freddie Mac that fall into the categories of low- and

moderate-income, underserved areas, and special aÅordable housing for 2007. See

""Regulation and Supervision Ì Department of Housing and Urban Development Ì

Housing Goals and Home Purchase Subgoals'' in our Annual Report for a more detailed

discussion of these goals and subgoals. The 2007 goals were as follows:

Housing Goals:

Low- and moderate-income goal: 55%

Underserved areas goal: 38%

Special aÅordable goal: 25%

Home Purchase Subgoals:

Low- and moderate-income subgoal: 47%

Underserved areas subgoal: 33%

Special aÅordable subgoal: 18%

‚ Shareholder Value. Accomplishing a number of speciÑc Ñnancial goals in the categories

listed below.

‚ Growth of adjusted fair value. Adjusted fair value is an internal measure used to assess

performance with respect to those drivers of fair value results that we actively seek to

manage.

‚ Fair value return on common equity. Our Annual Report discusses the changes in fair

value and management's expectations concerning long-term fair value growth under

""Management's Discussion and Analysis of Financial Condition and Results of

Operations Ì Consolidated Fair Value Balance Sheets Analysis.''

‚ Guarantee portfolio growth. Accomplishing a speciÑc growth goal for our credit

guarantee portfolio.

Compensation Discussion and Analysis

43
‚ Achieving a speciÑc market share in the conventional conforming mortgage market.

‚ Achieving a targeted return on equity for our purchases of single-family loans.

‚ Achieving a targeted return on equity for our net purchases of mortgage investments.

‚ Achieving a targeted debt option adjusted spread to LIBOR.

The Shareholder Value targets reÖected aggressive assumptions regarding portfolio growth

and proÑtability that would be very challenging to achieve due to signiÑcant external

pressures and internal infrastructure challenges. The targets for adjusted fair value growth,

market share in the conventional conforming market and debt option adjusted spread to

LIBOR were set at levels somewhat above our actual results for 2006; the targets for

guarantee portfolio growth and return on equity for net purchases of mortgage investments

were maintained at levels comparable to our actual results for 2006; and the targets for fair

value return on common equity and return on equity for our purchases of single-family

loans were set at levels somewhat below our actual results for 2006. These adjustments were

made to reÖect anticipated market and competitive conditions in 2007. In particular,

management and the CHRC considered the possible need for strategic choices between

achieving the shareholder value objectives and achieving the company's mission and risk

management objectives, given that actions to increase purchases of goal-qualifying

mortgages could potentially detract from the accomplishment of the shareholder value

objectives.

‚ Accounting and Controls. Returning to quarterly Ñnancial reporting and making

substantial progress toward completion of our initiative, known as the Comprehensive Plan,

to strengthen our controls related to Ñnancial operations and reporting and to remediate

previously identiÑed material weaknesses within our internal control processes, with priority

focus on strengthening technology infrastructure and controls.

‚ Touch More Loans. Enhancing our acquisition, retention and disposition capabilities for

non-standard mortgage products.

‚ Employee Engagement. Managing voluntary attrition to be equal to or lower than 11.5%,

the 2006 rate.

‚ Risk Management and Controls. Advancing our enterprise risk management processes.

‚ EÇciency. Managing administrative expenses as a percentage of our average total

mortgage portfolio to 8.4 basis points.

‚ External Reputation. EÅectively managing our reputation.

There was no arithmetic weighting applied to the eight performance objectives. However, for

2007, the top priorities for corporate performance established by the CHRC were the achievement

of the Accounting and Controls and Touch More Loans objectives, as achieving these objectives

would substantially enhance our long-term capability to achieve our perennial objectives of Mission

and Shareholder Value. Management designed the 2007 Bonus Funding Scorecard objectives with

the understanding that achieving the performance goals would require not only strong Ñnancial

performance by the company, but also the achievement of two additional performance categories,

External Reputation and EÇciency, that management also believed would be diÇcult to

accomplish in 2007. Management acknowledged that there was a signiÑcant possibility that several

Compensation Discussion and Analysis

44
of the objectives would not be achieved, in some cases for reasons beyond the control of the

company.

Some of the performance criteria in the 2007 Bonus Funding Scorecard cannot be precisely

quantiÑed. Furthermore, to some extent, the achievement of one particular corporate goal can aÅect

the company's ability to achieve one or more other goal(s), depending on Ñnancial market

conditions. For example, maximizing some of the Shareholder Value metrics can, at least in some

cases, be inconsistent with achieving some of the Mission goals (such as increasing the percentages

of mortgages purchased in certain HUD-deÑned categories) that we are mandated to achieve as part

of our federal charter or by our regulators.

Management recommended to the CHRC at its March 2007 meeting that an aggregate

amount of funding for the 2007 bonus pool be established. The CHRC concurred with this funding

level and with guidelines for adjusting the funding level based on changes in employee

demographics, such as additional employees becoming eligible for annual bonuses.

2007 Annual Bonus Compensation

CHRC Assessment of 2007 Corporate Performance

With respect to the 2007 Bonus Funding Scorecard, at the January 31, 2008 CHRC meeting,

management reported that we should be assessed as ""below plan'' because we did not achieve all of

the performance measures contained within the Shareholder Value and EÇciency objectives.

Additionally, we fell slightly short of expectations on the Mission and Touch More Loans objectives.

The assessment of our performance against the 2007 Scorecard objectives was as follows:

‚ Mission. We fell slightly short of this objective. A combination of deteriorating conditions

in the mortgage credit markets, decreased housing aÅordability that began in 2005, and

regulatory changes made meeting the aÅordable housing goals and subgoals for 2007 more

challenging than in previous years. Management reported to the CHRC that we achieved

the HUD goals as well as the sub-goal for the percentage of mortgages purchased by Freddie

Mac that fall into the category of underserved housing. We did not achieve the two HUD

sub-goals for the percentage of mortgages that fall into the categories of low- and

moderate-income and special aÅordable housing. We believe, however, that the achievement

of these two sub-goals was infeasible in 2007. Accordingly, we have submitted an

infeasibility analysis to HUD, which is in the process of reviewing our submission.

‚ Shareholder Value. We did not achieve all of the performance measures of this objective.

In developing the performance goals for Shareholder Value, management made aggressive

assumptions regarding portfolio growth and proÑtability before the deterioration in the

housing market. We fell substantially short of the objective for fair value return on common

equity, and also fell substantially short of the objective for return on equity for our purchases

of single-family loans. We met or exceeded the remaining Ñve Ñnancial measures.

Achieving the two missed Shareholder Value objectives became increasingly diÇcult

throughout the year due to deteriorating conditions in the housing and credit markets. In

addition, although it was not a speciÑc Scorecard measure, we considered the decline in our

GAAP Ñnancial results when evaluating performance against the Shareholder Value

measure.

Compensation Discussion and Analysis

45
‚ Accounting and Controls. We exceeded our objective with respect to Accounting and

Controls. We returned to quarterly Ñnancial reporting in 2007 and believe we are on track to

complete the Comprehensive Plan, which consists of Ñxing known issues (i.e. remediation of

material weaknesses and signiÑcant deÑciencies), identifying unknown risk and control

issues, implementing system changes, and implementing close process improvements.

‚ Risk Management. We achieved our objective to advance our risk management processes.

We integrated several key functions into the enterprise risk oversight function in order to

strengthen the overall risk management process; our Enterprise Risk Oversight, Investments

and Capital Markets and Finance divisions have jointly developed performance metrics for

the 2008 Bonus Funding Scorecard; and a risk-based scenario approach to assess economic

capital was completed. Finally, a mandatory employee risk management training program

was implemented in June 2007.

‚ External Reputation. We achieved our objective of eÅectively managing our reputation

risk despite the challenges posed by our Ñnancial results, a reduction in our dividend, and

raising additional capital. We also continued to take a leadership role in the housing crisis

through our $20 billion subprime loan purchase commitment and have maintained industry

support for the positions of the government-sponsored entities (the ""GSEs'') on key

legislative and regulatory issues.

‚ EÇciency. We did not achieve all of the EÇciency objectives. For 2007, administrative

expenses as a percentage of our average total mortgage portfolio declined to 8.6 basis points,

but were above the targeted goal of 8.4 basis points. While our core general and

administrative expenses were at or below the target amount, our total administrative

expenses increased substantially as a result of special initiatives required in 2007 to complete

the Comprehensive Plan.

‚ Touch More Loans. We fell slightly short of this objective, which was modiÑed mid-year

for several reasons. First, within our single-family business, we adjusted the implementation

of certain initiatives so that we could focus on helping customers weather impacts to their

business and keep borrowers in their homes in light of deteriorating market conditions.

Second, within our multifamily business, we focused on managing the signiÑcantly increased

volume so that we could oÅer stability in this market. Third, we re-allocated resources to the

Comprehensive Plan and information technology systems initiatives. Nevertheless, despite

these mid-year changes, we believe both the product and infrastructure achievements

towards the Touch More Loans objective were signiÑcant.

‚ Employee Engagement. We exceeded our objective to maintain the retention of critical

talent. Our actual voluntary attrition rate was 9.3%.

After reviewing and discussing the information presented by management, the CHRC

exercised its discretion in determining whether we achieved all or any portion of the Scorecard

objectives and our performance relative to particular objectives, and agreed with management's

assessment that the company's performance should be ""below plan.'' However, the CHRC also

considered:

‚ The challenging market and regulatory conditions that prevailed during 2007;

‚ The degree of diÇculty in achieving all of the elements for the eight objectives in the 2007

Bonus Funding Scorecard; and

Compensation Discussion and Analysis

46
‚ The entirety of our corporate performance, including both accomplishments captured on the

2007 Bonus Funding Scorecard and other notable accomplishments not addressed on the

Scorecard that have better positioned the company, such as:

‚ A successful oÅering of $6 billion in preferred stock in December 2007, which

substantially strengthened our capital position.

‚ Our market-leading response to early signs of the subprime crisis.

‚ The settlement of various litigation matters and the SEC's investigation of Freddie Mac

relating to the restatement.

‚ Our absorption of signiÑcant and unplanned volume increases in single-family and

multifamily loans as a result of the shifts taking place in the mortgage Ñnance industry

in 2007 (especially the departure of many private-label issuers of mortgage securities

from the mortgage purchase market and the corresponding growth in purchases by

Freddie Mac).

Additionally, the CHRC considered Freddie Mac's results versus the objectives in light of the

unique business conditions under which the company operates. Freddie Mac's objectives require

the company to balance optimizing the annual shareholder value performance measures, making

business decisions that allow us to meet our Mission goals and that are in the best long-term interest

of the company, and executing against annual objectives that take into account the guidance from

OFHEO. After discussing management's recommendation, the CHRC exercised its judgment to

determine an appropriate level of funding for the 2007 corporate bonus pool. The bonus funding

level that was approved by the CHRC was signiÑcantly less than the level agreed upon in March

2007 had the company achieved all its 2007 Bonus Funding Scorecard objectives. The CHRC did

not consider what the 2007 bonus funding level would have been based solely on an assessment of

""below plan'' performance against the Scorecard objectives. No formulas or arithmetic methods

were applied for calculating any speciÑc funding level based on any speciÑc performance level (i.e.,

""below plan'', ""on plan'' or ""above plan''). As discussed below, individual named executive oÇcer

bonus payments were determined in part on the basis of an assessment of such executive oÇcer's

individual performance.

Individual Performance Assessments

The CHRC does not use predetermined arithmetic formulas to determine the compensation it

deems appropriate for each individual executive oÇcer, including the named executive oÇcers;

rather, determining appropriate compensation requires the exercise of judgment to balance

quantitative as well as qualitative factors. The aggregate 2007 annual bonus awarded to each

executive oÇcer takes into account not only the company's performance against the 2007 Bonus

Funding Scorecard and the other company-wide factors described above, but also an assessment by

the Chief Executive OÇcer of each executive oÇcer's and his or her division's performance during

the year, as discussed below, and the CHRC's business judgment and discretion in determining

the compensation it deems appropriate for each individual named executive oÇcer. For the Chief

Executive OÇcer, the CHRC, with input from the other non-employee members of the Board,

assessed his performance during the year and applied the same discretion with respect to his

compensation.

Compensation Discussion and Analysis

47
For 2007, a portion of the executive oÇcer bonuses, other than Mr. Syron's, was delivered in

RSUs with a three-year vesting schedule. Providing a portion of the bonus compensation in RSUs

reinforces the linkage between the executive oÇcers' performance and shareholder value. The

three-year vesting schedule oÅers an additional retention element, the ultimate value of which is

tied to shareholder value.

The following table summarizes the annual bonus awards made to the named executive oÇcers

for their performance during 2007:

For Performance During 2007

Actual Cash

Actual Bonus as % of Supplemental

Target Bonus Cash Bonus Target Bonus RSU Bonus

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,336,000(1) $2,200,000(2) 66% $ 0

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,007,500(1) $1,350,000 134% $200,000

Ms. CookÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,000,000 $1,400,000 70% $200,000

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,225,000(1) $1,225,000 100% $ 50,000

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 480,000 $ 465,000 97% $ 75,000

Mr. McQuade(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,620,000 n.a. n.a. n.a.

Mr. Smialowski(4)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,150,000 $1,150,000 100% n.a.

(1) In accordance with Mr. Piszel's and Mr. Perlman's oÅer letters and Mr. Syron's amended employment agreement,

respectively.

(2) For 2007 performance only. Excludes a special extension bonus of $1,250,000 that is reported for Mr. Syron in the

Summary Compensation Table below. The special extension bonus was paid to Mr. Syron in December 2007 for his

agreement to extend the terms of his employment agreement. See ""Executive Compensation Ì Employment and

Separation Agreements Ì Richard F. Syron.''

(3) Mr. McQuade terminated his employment eÅective September 1, 2007 and did not receive an annual bonus in

respect of his performance in 2007.

(4) Mr. Smialowski resigned his position as Executive Vice President, Operations and Technology eÅective June 30, 2007

and terminated his employment eÅective December 31, 2007. The cash bonus reported was paid on January 31, 2008

pursuant to his transition period agreement, which became eÅective June 29, 2007. See ""Executive

Compensation Ì Potential Payments Upon Termination or Change in Control Ì Joseph A. Smialowski'' below.

Mr. Syron

Mr. Syron's individual 2007 performance was evaluated based on the company's performance

against the 2007 Bonus Funding Scorecard objectives and other achievements not reÖected on the

Scorecard. Despite the fact that a substantial portion of the 2007 Bonus Funding Scorecard

objectives were achieved, in determining Mr. Syron's 2007 bonus, the CHRC considered the

Ñnancial performance of the company during the year, the ""below plan'' performance on the

EÇciency Scorecard objective and a modest shortfall on the Mission and Touch More Loans

Scorecard objectives. Mr. Syron's 2007 bonus also reÖects the fact that he is accountable for the

success of the organization and for assuring that the pay-for-performance philosophy is executed

through compensation decisions.

In its evaluation of Mr. Syron's 2007 performance, the CHRC also determined that,

notwithstanding the Ñnancial performance of the company during 2007, the company, under

Mr. Syron's leadership, substantially achieved or exceeded a number of the non-Ñnancial 2007

Scorecard performance objectives designed to build long-term shareholder value. As discussed

under ""CHRC Assessment of 2007 Corporate Performance'' above, Mr. Syron also led the

accomplishment of a number of objectives above and beyond the 2007 Scorecard. Furthermore,

Mr. Syron has eÅectively carried out the duties of both the Chief Executive OÇcer and President

Compensation Discussion and Analysis

48
since Mr. McQuade, the company's former President and Chief Operating OÇcer, announced his

departure in May 2007. Mr. Syron will continue to fulÑll both of these roles until a successor Chief

Executive OÇcer is appointed. In the CHRC's view, through Mr. Syron's leadership, the company

is leading the home mortgage industry through the subprime crisis by establishing appropriate

guidelines regarding subprime lending practices and responding to the needs of a mortgage market

that continues to experience severe volatility.

The CHRC determined that the Chief Executive OÇcer's total actual 2007 direct

compensation was appropriate after taking into account the factors described above, as well as the

following:

‚ our Chief Executive OÇcer's total direct compensation level is consistent with competitive

market practices, as reÖected by Chief Executive OÇcer pay in our Comparator Group;

‚ our Chief Executive OÇcer has a much broader scope of responsibility than that of other

executive oÇcers within the company;

‚ our Chief Executive OÇcer has been carrying out the duties of both the Chief Executive

OÇcer and President since mid-2007; and

‚ our Chief Executive OÇcer is the primary leader responsible for external representation.

Mr. Piszel

Mr. Piszel's performance for 2007 was evaluated primarily based on the company's

performance against one of the most critical 2007 Bonus Funding Scorecard objectives Ó

Accounting and Controls Ó and other division-speciÑc performance objectives that Mr. Syron

established for 2007. The CHRC agreed with management's assessment that, under Mr. Piszel's

leadership, we achieved ""above plan'' performance on the Accounting and Controls scorecard

objective. More speciÑcally, Mr. Piszel was able to exceed this objective by directing our return to

quarterly Ñnancial reporting in 2007 and substantially completing the Comprehensive Plan. The

company also successfully designed and implemented controls for our Ñnancial reporting.

Additionally, we have strengthened our internal controls during 2007 by achieving a number of

signiÑcant milestones. For more information, see ""CONTROLS AND PROCEDURES Ì Internal

Control Over Financial Reporting'' in the accompanying Annual Report. With respect to additional

achievements not captured by the 2007 Bonus Funding Scorecard, the CHRC also determined that

Mr. Piszel quickly developed a plan for SEC registration and has made substantial progress

executing on the plan.

Ms. Cook

Ms. Cook's performance for 2007 was evaluated based on the company's performance against

several 2007 Bonus Funding Scorecard objectives and other division-speciÑc performance

objectives that Mr. Syron and Ms. Cook established for 2007. On the three 2007 Bonus Funding

Scorecard objectives for which Ms. Cook was primarily responsible, the CHRC agreed with

management's assessment that we fell slightly short on two (Mission and Touch More Loans), and

were farther below plan on one (Shareholder Value). With respect to additional achievements not

captured by the 2007 Bonus Funding Scorecard, however, the CHRC agreed with management's

assessment that Ms. Cook played a signiÑcant role in our December 2007 $6 billion preferred stock

oÅering and our market-leading response to early signs of the subprime crisis. In addition,

Compensation Discussion and Analysis

49
Ms. Cook assumed formal responsibility for three additional divisions in June 2007 and has been

informally responsible for these areas since late 2006 without any adjustment to her compensation.

Mr. Perlman

Because Mr. Perlman joined Freddie Mac in August 2007, his performance was not assessed

based on 2007 Bonus Funding Scorecard objectives. The CHRC agreed with management's

assessment that Mr. Perlman has had an immediate impact on moving forward several major

initiatives. For example, his leadership and business expertise enabled us to progress signiÑcantly on

the Comprehensive Plan with respect to the remediation of several material weaknesses and

signiÑcant deÑciencies in our internal controls. The CHRC also agreed with management's

assessment that Mr. Perlman played a signiÑcant role in our ability to absorb the signiÑcantly

increased and unplanned volume of multifamily loans in 2007 by reallocating staÅ, adopting a

variety of eÇciencies, and utilizing outsourcing in order to provide capacity to our business units and

our customers. More importantly, we were able to absorb this additional volume without increasing

our general and administrative costs and without incurring signiÑcant disruptions. Further, the

CHRC agreed with management's assessment that Mr. Perlman has made progress in improving

eÇciency in the operations and technology division, including substantially reducing our reliance on

external contractors.

Mr. May

Mr. May's performance for 2007 was evaluated based on one of the company's 2007 Bonus

Funding Scorecard objectives, division-speciÑc performance objectives that Ms. Cook and Mr. May

established for 2007, and other accomplishments. On the 2007 Bonus Funding Scorecard objective

for which Mr. May had the greatest inÖuence (Touch More Loans), we fell slightly short of our

objective. With respect to the division-speciÑc objectives, Mr. May accomplished several

initiatives to ensure that the Multifamily division is prepared to meet future challenges and

substantially accomplish the division's Ñnancial objectives. A new organizational structure was

developed and implemented to achieve the business objective of enhancing the speed of service to

eÅectively meet the needs of customers. Additionally, the Multifamily division met the market

demand and processed record volumes in the second half of the year, which included the largest

transaction in the history of the division.

Chief Executive OÇcer Special Performance Award Opportunity

In connection with Mr. Syron's extension agreement in November 2007, the CHRC and other

non-employee directors approved the establishment of a special, one-time cash performance award

opportunity for Mr. Syron. The award opportunity was designed to provide additional incentive and

recognition for the completion of key tasks over the period from June 1, 2007 through

September 30, 2009. These key tasks are beyond the performance measures established by the 2007

Bonus Funding Scorecard. This award is consistent with our pay-for-performance philosophy,

which requires the demonstration and evaluation of performance prior to payment. The award is

subject to the conditions outlined in Mr. Syron's amended employment agreement and Mr. Syron

may not defer payment of this award until a later date.

The CHRC Ñrst set the parameters of the award and developed a list of critical infrastructure,

control and cultural objectives that would signiÑcantly beneÑt shareholder interests over the twoyear period. The CHRC believed that, if accomplished, these achievements would result in

Compensation Discussion and Analysis

50
substantial enhancement of shareholder value. The maximum amount payable under this award

would place Mr. Syron's compensation between the 50th and 75th percentile of the Comparator

Group data. After receiving advice from Hewitt, the CHRC concluded that this would be

appropriate compensation for superior levels of performance. The agreement was reviewed by

OFHEO.

The performance determination will be made by the CHRC at a meeting in the third quarter of

2009. The actual payment, if any, will be made as soon as administratively practicable following the

determination of performance, but no later than October 31, 2009.

The amount of the actual award will range from $0 to $6 million, with no guarantee that any

payment will be made. The speciÑc award amount will be determined by the CHRC, in its sole

discretion, based on a reasonable relationship to the number and relative signiÑcance and/or

strategic value of performance milestones (described below) that the company achieves either in

whole or part over the performance period. In determining the actual award amount to be paid to

Mr. Syron, the CHRC will obtain and consider the views of the other non-employee directors. The

CHRC will also consider Mr. Syron's actual compensation under our standard annual compensation

program during the performance period, and how it compares to the compensation of Chief

Executive OÇcers in the Comparator Group.

Award Size as

Payout Level % of Target Description

Minimum 0% No milestones achieved

1% Ó 99% Some, but not all milestones are achieved in whole or part as

described above.

Maximum 100% All milestones achieved

The performance milestones*, which will be measured from June 1, 2007 through

September 30, 2009, are:

‚ Remediate all material weaknesses and signiÑcant deÑciencies disclosed in the 2006 annual

report dated March 23, 2007.

‚ Return to timely and sustainable Ñnancial reporting with the expectation that we will achieve

compliance with Section 404(a) of the Sarbanes-Oxley Act of 2002 with the issuance of our

2009 Ñnancial statements and substantial completion of each element of the

Comprehensive Plan.

‚ Make material improvements in the information technology (IT) infrastructure. ®Sustained

and reliable operation of IT general controls, remediation of all technology-related material

weaknesses and signiÑcant deÑciencies, consistent application of the systems development

life cycle, progress on the development of an end-to-end platform for distributing credit risk

exceeding the company's risk proÑle, completion of systems work necessary to support SEC

registrant reporting, timely completion of major system projects as reported from time to

time to the Mission, Sourcing and Technology Committee, improving ability of legacy

systems to interface easily with external, third-party IT solutions.©

‚ Complete SEC registration under the Exchange Act.

* Information/data listed in brackets following certain measures are the type of information, both objective and subjective, which the

CHRC will take into consideration in determining whether the milestone has been achieved.

Compensation Discussion and Analysis

51
‚ Manage a smooth succession process for the Chief Executive OÇcer position. ®Quality of

the Chief Executive OÇcer search process, speed and success of integrating the new Chief

Executive OÇcer into the company's management team, success in transitioning day-to-day

business operations responsibilities to the new Chief Executive OÇcer.©

‚ Substantially enhance the leadership strength of our executive team and the Board. Enhance

the level of alignment and collaboration within both our executive team and the Board.

®Increase in ready-now candidates for critical succession roles, increase success in Ñlling

critical succession roles with internal candidates, increase representation of minority and

female oÇcers, success expanding key experience/competency needs when new Board

members are selected.©

‚ Improve the company's ability to identify and respond to new mission needs and capital

market changes and execute on those opportunities that enhance our housing mission and

long-term shareholder value. ®Success aligning the company's eÅorts to improve its Ñnancial

performance consistent with our mission, success helping shape the new aÅordable housing

goals to focus on delivering housing opportunity directly to our mission constituents, success

developing and delivering to market viable, non-predatory sub-prime loan products,

providing liquidity, aÅordability and stability to residential mortgage markets.©

‚ Demonstrate substantial progress toward embedding a pay-for-performance culture.

®Increasing the level of bonus diÅerentiation versus 2005 results, maintaining an appropriate

distribution of performance ratings that aligns with business performance, maintaining

bonus payouts linked directly to actual performance against annual Scorecard, utilizing

performance features in multiple elements of the pay structure for executive oÇcers.©

‚ Demonstrate substantial progress in managing the company within the current and future

legislative and regulatory framework. ®Informing regulators, Congress and industry groups

on the impact of proposed legislative and regulatory actions on the GSEs and providing

constructive solutions to respond to legislative and regulatory changes and concerns;

addressing concerns raised by Congress, regulators and industry groups regarding how GSEs

fulÑll their mission as well as concerns regarding potential safety and soundness issues;

achieving compliance with the rules and standards under which the GSEs will operate.©

‚ Achieve meaningful enhancement of shareholder economic value. ®Determining appropriate

metrics to measure fair value; year-over-year adjusted GAAP results; return on capital;

changes in market share; credit performance; quality and eÅectiveness of proÑtability

measures.©

The accomplishment of most or all of these milestones would result in a dramatic

transformation of the company as compared to its position in late 2003, when Mr. Syron assumed

leadership.

The CHRC is responsible for exercising its judgment at the end of the performance period to

assess all relevant information, including the information outlined above, to determine the extent to

which the performance milestones have been achieved in whole or part (as deÑned above), in

deciding what amount, if any, of the award opportunity should be paid.

This is a special award intended to recognize the achievement of speciÑc performance criteria

prior to September 30, 2009. Our normal plan termination provisions do not apply to this

opportunity. In the event of death, disability or involuntary termination by us without cause or

Compensation Discussion and Analysis

52
termination by Mr. Syron for Good Reason (as such term is deÑned in Mr. Syron's Employment

Agreement) prior to September 30, 2009, the entire award will be forfeited unless the CHRC, in

its sole discretion, determines that some or all of the performance milestones had been achieved

prior to the event of death, disability, or involuntary termination by us without cause or termination

by Mr. Syron for Good Reason. In the event of termination by us for cause or voluntary

termination by Mr. Syron other than for Good Reason prior to September 30, 2009, the entire award

will be forfeited.

The November 9, 2007 amendment to Mr. Syron's employment agreement includes an escrow

provision under which up to $4 million of the special performance award payment would, under

speciÑed circumstances, be escrowed for a period of one year after the payment of the award.

2007 Long-Term Equity Awards

A signiÑcant portion of our named executive oÇcers' compensation is in the form of long-term

equity awards, to ensure that the executive oÇcers' Ñnancial interests are well aligned with the

long-term interests of our stockholders. In addition, long-term equity compensation is a key

component of our compensation structure that enables us to motivate leaders and key employees

and encourage them to provide long-term service.

In setting the target long-term equity awards for 2007 for each of the named executive oÇcers,

the CHRC considered the factors discussed under ""Evaluating and Targeting Executive

Compensation'' above and the terms of our named executive oÇcers' employment agreements and

oÅer letters.

Awards granted to named executive oÇcers in March 2008 for performance in 2007 were

entirely in the form of RSUs. As discussed below under ""RSUs,'' a portion of these RSUs are

subject to a performance-based vesting condition. The value of the equity awards increases or

decreases with changes in the value of Freddie Mac stock. The equity awards thus focus executives

on improving the long-term value of Freddie Mac through continued productive service subsequent

to the date of the award.

In March 2008, the CHRC determined the actual RSU awards to the named executive oÇcers

in respect of 2007 performance. Overall, the CHRC determined it was appropriate that each of the

named executive oÇcers' actual award was equal to or greater than their target, despite the

challenging market and regulatory conditions that prevailed during 2007. The CHRC made this

decision in order to recognize that a number of actions and accomplishments by management better

position the company for the future. The individual executive's amount of these long-term equity

awards was based on a number of factors, including:

‚ The executive's performance and contribution during 2007, as discussed under ""2007 Annual

Bonus Compensation Ì Individual Performance Assessments'' above;

‚ The executive's potential for making future contributions and ability to assume greater

responsibility and leadership roles;

‚ The engagement and retention of the executive;

‚ Criticality of the executive's skills;

Compensation Discussion and Analysis

53
‚ The executive's total direct compensation compared to competitive market levels; and

‚ The performance of the company against the 2007 Bonus Funding Scorecard.

Messrs. McQuade and Smialowski were no longer with the company and did not receive a

long-term equity award for 2007.

The following table summarizes targets and the value of long-term equity awards actually

granted to the named executive oÇcers for their performance during 2007:

For Performance During 2007(1)

Target Long-Term Actual Award

Equity Award Actual Award as % of Target

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $9,400,000(2) $10,000,000 106%

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,000,000(2) $ 3,200,000 107%

Ms. Cook ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,600,000 $ 2,800,000 108%

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,525,000(2) $ 1,600,000 105%

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 677,000 $ 677,000 100%

Mr. McQuade(3)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $6,000,000 n.a. n.a.

Mr. Smialowski(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,100,000 n.a. n.a.

(1) The long-term equity awards in respect of performance during 2007 were granted in March 2008 and will also be

reported in our 2009 proxy statement.

(2) In accordance with Mr. Piszel's and Mr. Perlman's oÅer letters and Mr. Syron's amended employment agreement,

respectively.

(3) Mr. McQuade terminated his employment eÅective September 1, 2007 and did not receive a long-term equity award

in respect of his performance during 2007.

(4) Mr. Smialowski terminated his employment eÅective December 31, 2007 and did not receive a long-term equity

award in respect of his performance during 2007.

RSUs

General. An RSU represents a conditional contractual right to receive one share of our

common stock at a speciÑed future date subject to certain restrictions (i.e., the vesting period, and,

in certain cases, performance-based conditions or criteria). The underlying stock is not issued until

the restrictions lapse, at which time the RSU is settled or, if previously elected by the grantee for

grants made prior to 2008, deferred. See ""Other Executive BeneÑts, including Perquisites and

Retirement BeneÑts Ì Executive Deferred Compensation and Supplemental Executive Retirement

Plan'' below for more information regarding the deferral of RSUs. In the event a cash dividend is

declared and paid on our common stock, holders of RSUs will receive dividend equivalents, paid

out in cash promptly after the payment date for such dividend, equal to the number of RSUs held

by the executive oÇcer multiplied by the dividend paid on each outstanding share of our common

stock. RSUs do not have voting rights because they are not considered legally issued or

outstanding shares.

RSUs granted as part of annual long-term equity awards generally vest in four installments at

the rate of 25% on each anniversary of the grant date. Of the awards of RSUs made to our named

executive oÇcers in March 2008 for their 2007 performance, 25% are subject to an additional

performance vesting criterion. The satisfaction of this requirement will be determined in the sole

discretion of the CHRC. In order for these RSUs to be considered earned, the CHRC must

determine no later than March 31, 2009 that management completed the process of registering our

common stock with the SEC. If earned, these RSUs will be subject to the same time-based vesting

Compensation Discussion and Analysis

54
as the other RSUs held by our named executive oÇcers and will vest with respect to 25% of the

award in March 2009, 2010, 2011 and 2012.

As reported in our May 7, 2007 proxy statement, of the awards of RSUs made to our named

executive oÇcers in March 2007 for their 2006 performance, 25% also were subject to an additional

performance vesting criterion. At its January 31, 2008 meeting, the CHRC determined that this

criterion was met. The CHRC determined that the company is in a substantially better position to

compete in the marketplace as compared to the company's positioning at the beginning of 2007 due

to substantial progress improving controls, preparing for a return to timely Ñnancial reporting and

for SEC registration, improving risk management capabilities, improving the pay-for-performance

culture, retaining key staÅ, and assuring suÇcient capitalization to weather the mortgage market

downturn.

Valuation of RSUs. In awarding RSUs, the CHRC Ñrst approves a dollar value of the RSUs

to be awarded. The number of RSUs awarded to each executive oÇcer is then calculated by

dividing the dollar amount of the award by the closing price of our common stock on the date of

grant.

In 2006, the CHRC decided to eliminate the use of an economic discount in converting the

approved dollar value of long-term equity awards into a speciÑc number of RSUs. The discount had

been applied to the fair market value of the company's common stock on the date of RSU grants,

and had the eÅect of increasing the speciÑc number of RSUs awarded in order to reÖect the risk of

forfeiture during the restricted period. The CHRC requested that management develop an

economically neutral transition plan in order to minimize the impact of the elimination of the

discount on award recipients. At the March 3, 2007 meeting, the CHRC approved a change in the

methodology used to calculate the number of RSUs subject to an award by eliminating the

economic discount. The change in methodology resulted in the value of the RSU portion of the

long-term equity award being adjusted upwards by approximately 11% for Ms. Cook and

Messrs. May and Smialowski. This change in methodology resulted in an economically neutral

outcome from the company's perspective. It did not result in additional cost to the company and did

not provide the employee with greater value, because the upward adjustment of the long-term

equity award targets was oÅset by the elimination of the economic discount in determining the

speciÑc number of RSU awards.

For Messrs. Syron and McQuade, this change in methodology was not applicable and, for

Mr. Syron, will not be applicable in the future, because in 2006 they requested not to have their

target long-term equity awards adjusted upward. Additionally, this adjustment is not applicable to

Mr. Piszel, or other executive oÇcers with an employment agreement or oÅer letter that sets forth a

deÑned dollar value for the annual long-term equity award.

Stock Options

General. Each stock option entitles its holder to purchase one share of our stock at its fair

market value on the date that the option was granted. Stock options granted as part of long-term

incentive awards generally vest in four installments at the rate of 25% on each anniversary of the

grant date. For example, the stock options granted to executive oÇcers in June 2006 vested with

respect to 25% of the award in June 2007 and will vest with respect to 25% of the award in each of

June 2008, 2009, and 2010. The company has not granted stock options to executive oÇcers since

June 2006.

Compensation Discussion and Analysis

55
Valuation of Stock Options. To determine the number of stock options for the annual award,

the CHRC Ñrst approves a dollar amount of stock options to be awarded. On the grant date, that

dollar amount is converted into a number of shares of common stock subject to the stock option

using a Black-Scholes model for the valuation of stock options. The exercise price of stock options is

equal to the fair market value of a share of our common stock on the grant date. At the time of the

June 2006 grant of stock options, fair market value was deÑned by the 2004 Employee Plan as the

average of the high and low prices of a share of our common stock on the grant date as reported in

The Wall Street Journal's composite transactions table for New York Stock Exchange listed

securities. On December 7, 2006, the CHRC approved an amendment to the 2004 Employee Plan

to change the deÑnition of fair market value that is used for purposes of determining the exercise

price of stock options, from the average of the high and low prices to the closing price of our stock on

the date of grant.

Proportion of Long-Term Incentives Awarded in RSUs and Stock Options

Awards made in 2008 for performance by the named executive oÇcers in 2007 were solely in

the form of RSUs. The CHRC's decision to deliver the annual long-term incentive award in RSUs

was determined as part of its annual review of executive compensation. Factors considered

included long-term incentives that are appropriate for internal desired outcomes, competitive

market practices at both the companies in the Comparator Group and the Ñnancial services

industry, and the greater retention value of RSUs versus stock options. A major consideration in the

CHRC's decision to use solely RSUs was the CHRC's conclusion that during our ongoing

restructuring period, RSUs better achieved a number of internal objectives, including:

‚ motivating leaders and key employees and encouraging them to provide long-term service

without undue focus on short-term changes in stock price; and

‚ increasing the immediate ""at risk'' equity value to assist in maximizing retention to maintain

stability in leadership and key contributor roles.

Other Executive BeneÑts, Including Perquisites and Retirement BeneÑts

Generally Available BeneÑts

Health and Welfare Plans

The named executive oÇcers are eligible to participate in employee beneÑt programs and plans

that are generally available to all full-time and part-time employees (subject to fulÑlling certain

eligibility requirements). These include beneÑts such as our active employee health and welfare

plans (including medical, dental, vision, group life insurance, accidental death and personal loss

insurance and employee assistance beneÑts), as well as other programs such as our Employee

Stock Purchase Plan (the ""ESPP''). In designing these beneÑts we seek to provide an overall level

and mix of beneÑts that is competitive with those oÅered by companies in our Comparator Group.

Tax-QualiÑed DeÑned BeneÑt and DeÑned Contribution Retirement Plans

The named executive oÇcers are eligible to participate in our broad-based tax-qualiÑed

retirement plan (""Pension Plan'') and savings plan (the ""Thrift/401(k) Savings Plan''), on the

same terms as other employees. For additional information on these two plans, including the present

value of accumulated beneÑts under the Pension Plan for each of the named executive oÇcers, see

Compensation Discussion and Analysis

56
the ""Summary Compensation'' and ""Pension BeneÑts'' tables and narrative disclosures in the

""Executive Compensation'' section below.

Executive Deferred Compensation and Supplemental Executive Retirement Plans

During 2007, the named executive oÇcers were eligible to participate in the Freddie Mac 2002

Executive Deferred Compensation Plan, or the Executive Deferred Compensation Plan, which

allowed them to elect to defer a portion of their annual salary and all of their cash bonus and the

settlement of their RSUs received under our stock plan. EÅective January 1, 2008, the Executive

Deferred Compensation Plan has been amended and restated to redesign the plan and bring the plan

into documentary compliance with Code Section 409A. Among the changes made to the plan is the

prospective elimination of the deferred settlement of RSUs for RSUs granted in 2008 and later

years and a limitation on the amount of annual salary that may be deferred equal to 80% of such

salary. The named executive oÇcers were eligible to defer settlement of RSUs granted in 2007.

While Mr. May has a deferred compensation balance, none of our named executive oÇcers deferred

receipt of salary or bonus under the Executive Deferred Compensation Plan in 2007. Mr. Perlman

deferred the settlement of his sign-on award RSU grant received in 2007. For more information,

see ""Executive Compensation Ì Non-QualiÑed Deferred Compensation'' below.

The named executive oÇcers were also eligible to participate in the Freddie Mac Supplemental

Executive Retirement Plan (SERP) during 2007. This plan was also amended and restated

eÅective January 1, 2008 to redesign the plan and bring the plan into documentary compliance with

Code Section 409A. This plan has two components, one of which corresponds to the Pension Plan

and the other of which corresponds to the Thrift/401(k) Savings Plan. The Pension SERP BeneÑt

(which used to be called the ""Restoration BeneÑt'' prior to the SERP's restatement) provides

participants with the full amount of beneÑts to which they would have been entitled under the

Pension Plan if that plan (1) was not subject to certain limits on compensation and beneÑts that can

be taken into account under the Code and (2) did not exclude from compensation amounts

deferred under our Executive Deferred Compensation Plan. The Thrift/401(k) SERP BeneÑt

(which used to be known as the ""Make-Up Contribution'' prior to the SERP's restatement)

provides participants with the full amount of beneÑts to which they would have been entitled under

the Thrift/401(k) Savings Plan if that plan (1) was not subject to certain limits under the Code

and (2) did not exclude from compensation amounts deferred under our Executive Deferred

Compensation Plan. We believe that the SERP is an appropriate beneÑt because oÅering such a

beneÑt helps us remain competitive with companies in our Comparator Group.

For speciÑc information on the accruals and earnings under the Thrift/401(k) SERP BeneÑt

for each of the named executive oÇcers, see the ""Non-qualiÑed Deferred Compensation'' table and

accompanying narrative disclosures below. For a summary of our pension beneÑt obligations to the

named executive oÇcers, including under our tax-qualiÑed pension plan and the Pension SERP

BeneÑt, see the ""Pension BeneÑts'' table and narrative disclosures below.

Perquisites and Additional Life and Disability Insurance Payments

Certain perquisites are made available to our named executive oÇcers. These include Ñnancial

planning services, relocation reimbursements and related tax gross-ups, home security systems

(Chief Executive OÇcer and Chief Operating OÇcer only), personal use of a car and driver for

commuting transportation in the Washington, D.C. area and related tax gross-ups (Chief Executive

OÇcer and Chief Operating OÇcer only), payment of spousal business travel and spousal dining

Compensation Discussion and Analysis

57
costs for business purposes and related tax gross-ups, and the accompaniment of spouses and other

family on charter aircraft business travel so long as there is no incremental cost to the company.

These types of perquisites are common among executives in our industry. In addition, providing

them as perquisites (as opposed to increasing base salary in an amount designed to compensate for

the loss of these perquisites) avoids the increase that would otherwise occur in certain other beneÑt

costs that are based on the level of an executive's base salary. Further details regarding these

perquisites are contained in the Summary Compensation Table and accompanying footnotes. The

Summary Compensation Table also details certain payments for life and disability insurance made

on behalf of the named executive oÇcers.

Post-Termination Compensation

The named executive oÇcers may receive certain payments or beneÑts at, following, or in

connection with a change in control of Freddie Mac, a change in the named executive oÇcer's

responsibilities, or a named executive oÇcer's termination, including resignation, severance,

retirement or constructive termination. These payments are described in detail in ""Executive

Compensation Ì Potential Payments Upon Termination or Change in Control'' and ""Executive

Compensation Ì Employment and Separation Agreements'', where the speciÑcs of the employment

agreement, oÅer letter or separation arrangement applicable to each named executive oÇcer are

explained.

The termination provisions diÅer signiÑcantly among the named executive oÇcers, all of whom,

with the exception of Mr. May, have either employment agreements or oÅer letters with certain

minimum compensation guarantees. These diÅerences grew out of the diÅerent negotiations that

occurred with respect to the employment of the named executive oÇcers, all of whom, with the

exception of Mr. May, were hired after the restatement, between December 31, 2003 and August 1,

2007. During the negotiations with our named executive oÇcers, we relied on the advice of Hewitt

and competitive market survey data in the Ñnancial services industry provided by Hewitt in

structuring the post-employment compensation arrangements. Each arrangement was entered into

following arms-length negotiations with the named executive oÇcer. In addition, each postemployment compensation arrangement was submitted to OFHEO for its review and approval

pursuant to statutory and regulatory requirements that OFHEO determine whether termination

beneÑts to be provided to our executive oÇcers are comparable to beneÑts that would be provided to

oÇcers of other public and private entities involved in Ñnancial services and housing interests who

have comparable duties and responsibilities. In light of the restructuring eÅorts that began in 2003

and which are still underway and the relatively late stages in their careers of some of our new named

executive oÇcers, it was not unexpected that a condition of their accepting employment was our

provision of signiÑcant protections if their employment is terminated without cause or they

terminate for good reason during the early years of their employment with us.

Compensation Committee Discretion

The CHRC retains the discretion to decrease all forms of incentive payouts based on signiÑcant

individual or company performance, subject, in certain cases, to the terms of a named executive

oÇcer's employment agreement or oÅer letter. Likewise, the CHRC retains the discretion to

increase payouts and/or consider special awards for signiÑcant achievements.

Compensation Discussion and Analysis

58
Timing of Equity Grants

Freddie Mac has a policy for the dating of equity grants, including annual long-term equity

incentive awards and other awards such as sign-on awards. In recommending the eÅective date of

grant for the annual long-term equity incentive award to all eligible employees, including named

executive oÇcers, management considers, based on discussions with our Legal Division, the timing

of the release of material, non-public information and other risks. If there is no material non-public

information pending, then the recommended eÅective date is the date of the meeting at which the

award is approved by the CHRC. If there is material non-public information pending, the eÅective

date of grant is deferred to the third business day after the date of the public announcement and

release of the material non-public information. Neither management nor the CHRC have in the

past or plan in the future to time the release of material non-public information for the purpose of

aÅecting the value and amount of equity incentive awards.

In the case of sign-on awards, the policy requires that the eÅective date of grant is the next

regularly scheduled meeting of the CHRC following the CHRC's approval and the individual's Ñrst

date of employment, even if the CHRC decides not to meet on such date. With respect to stockbased incentive awards other than annual awards and sign-on awards, and subject to deferral of

eÅective dates of grant until the third business day after public release in the case of pending

material non-public information, the eÅective date of grant is generally the date of the meeting at

which the award is approved by the CHRC, subject to deferral as described above for annual

awards.

Adjustment or Recovery of Awards

Our standard RSU and stock option award agreements provide that any unvested RSUs and

any unexercised stock options, whether or not vested, would be immediately canceled and forfeited

and that the recipient would be required to repay all after-tax gains recognized upon the vesting of

RSUs or exercise of our stock options under the award in the event that the employee seeks or

accepts employment with one of our competitors. After we register our common stock with the

SEC we will become subject to Section 304 of the Sarbanes-Oxley Act, which provides that if we

are required to restate our Ñnancials due to material noncompliance with any Ñnancial reporting

requirements as a result of misconduct, our Chief Executive OÇcer and our Chief Financial OÇcer

must reimburse us for (1) any bonus or other incentive-based or equity-based compensation

received during the 12 months following the Ñrst public issuance of the non-complying document,

and (2) any proÑts realized from the sale of our securities during those 12 months. Additionally,

OFHEO could require us to seek to include language regarding adjustments or return of prior

stock awards in employment agreements we may seek to enter into in the future.

Stock Ownership Guidelines

We expect our directors and oÇcers to own our common stock. A signiÑcant portion of director

and executive compensation is paid in common stock, as described in greater detail herein and in

""Proposal 1: Election of Directors Ì Board Compensation''. We believe that stock ownership by

our directors and executive oÇcers aligns their interests with the long-term interests of our

stockholders.

We expect our Chief Executive OÇcer to own, within four years of each such oÇcer's date of

hire or promotion, as appropriate, Freddie Mac stock with a fair market value equal to Ñve times

Compensation Discussion and Analysis

59
such oÇcer's annual base salary. We also expect, within four years of the date of hire or promotion

to executive oÇcer, our other executive oÇcers to own Freddie Mac stock with a fair market value

equal to three times such oÇcer's annual base salary. Each of our executive oÇcers, including our

Chief Executive OÇcer, will be treated as complying with this stock ownership requirement, even if

the oÇcer does not otherwise meet the requirement, if the oÇcer:

‚ retains all Freddie Mac stock the oÇcer owned as of the later of January 31, 2006 or the date

the executive oÇcer is hired or promoted into an executive oÇcer position; and

‚ retains all Freddie Mac stock acquired through the settlement of restricted stock units (net

of shares withheld for taxes) for which the restrictions have lapsed, or for which the

restrictions lapse in the future.

For information on our stock ownership requirements for non-employee directors, see

""Proposal 1: Election of Directors Ì Board Compensation Ì Non-Employee Director Stock

Ownership Guidelines.''

Compensation Discussion and Analysis

60
EXECUTIVE COMPENSATION

Compensation Tables

The following tables set forth compensation information for our Chief Executive OÇcer, our

Chief Financial OÇcer, our three other most highly compensated executive oÇcers who were

serving as executive oÇcers as of December 31, 2007 and two former executive oÇcers who

otherwise would have been listed in the table, but had ceased to be executive oÇcers before

December 31, 2007.

Summary Compensation Table

Change in

Pension Value and NonqualiÑed

Deferred Stock Option Compensation All Other

Name and Principal Position Year Salary(1) Bonus(2) Awards(3) Awards(3) Earnings(4) Compensation(5) Total

Richard F. Syron 2007 $1,200,000 $3,450,000 $8,662,876 $3,471,051 $734,063 $771,585 $18,289,575

Chairman of the Board and 2006 1,100,000 2,400,000 7,162,448 3,261,460 355,273 453,882 14,733,063

Chief Executive OÇcer

Anthony S. Piszel(6) 2007 650,000 1,350,000 1,875,521 0 84,038 352,469 4,312,028

Executive Vice President and 2006 88,750 3,100,000 93,593 0 0 367,954 3,650,297

Chief Financial OÇcer

Patricia L. Cook(6) 2007 600,000 1,400,000 1,717,224 603,851 225,550 302,578 4,849,203

Executive Vice President and 2006 600,000 2,300,000 1,118,767 533,747 221,353 123,062 4,896,929

Chief Business OÇcer

Michael Perlman(6) 2007 208,333 1,775,000 127,989 0 0 73,451 2,184,773

Executive Vice President,

Operations and Technology

Michael C. May 2007 418,000 715,000 599,423 281,262 194,772 140,921 2,349,378

Senior Vice President,

Multifamily Sourcing

Eugene M. McQuade(6) 2007 600,000 0 2,208,341 500,894 0 446,091 3,755,326

Former President and Chief 2006 900,000 1,500,000 3,627,289 1,088,677 193,180 338,313 7,647,459

Operating OÇcer

Joseph A. Smialowski(6) 2007 550,000 1,350,000 549,830 162,195 0 158,649 2,770,674

Former Executive Vice 2006 541,667 975,000 776,270 308,145 148,351 70,078 2,819,511

President, Operations and

Technology

The stock and option award amounts used to calculate total compensation shown above are not the amounts granted to or

actually realized by our named executive oÇcers in 2006 or 2007, but rather the compensation expense recognized by

Freddie Mac in the year shown for the named executive oÇcers' restricted stock unit awards and option awards as

determined under SFAS 123(R). For example, in the table above, the value disclosed for stock and option awards is the

SFAS 123(R) expense recognized in 2007 for Mr. Syron's restricted stock unit awards and option awards, $12,133,927.

The actual fair market value of stock options that were exercised and the restricted stock unit awards that vested in 2007

was $4,433,106. This results in a $7,700,821 diÅerence between total 2007 compensation using the SFAS 123(R) expense

(reÖected in the table above) and the total 2007 compensation using the value of stock options that were exercised and

restricted stock units that vested in 2007. The chart below compares the 2007 total compensation for all named executive

oÇcers as reÖected in the Summary Compensation Table with the total compensation for 2007 using the fair market value

of stock options that were exercised and restricted stock units that vested in 2007.

Total 2007 Compensation

Using Value of Stock

Total 2007 Options Exercised and

Compensation Using Restricted Stock Awards

Name SFAS 123(R) Expense Vesting in 2007

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $18,289,575 $10,588,754

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,312,028 3,137,889

Ms. CookÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,849,203 3,891,280

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,184,773 2,056,784

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,349,378 2,042,768

Mr. McQuadeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,755,326 5,203,895

Mr. SmialowskiÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,770,674 2,983,850

Executive Compensation

61
(1) Mr. Syron's 2007 salary of $1,200,000 was attributable to his annual salary of $1,100,000 from January 1, 2007

through June 30, 2007 and $1,300,000 from July 1, 2007 through December 31, 2007. Mr. Perlman's 2007 salary of

$208,333 was attributable to the period from his employment date, August 1, 2007, through December 31, 2007,

based on an annual salary of $500,000. Mr. McQuade's 2007 salary of $600,000 was attributable to his annual salary

of $900,000 from January 1, 2007 through his termination date of September 1, 2007.

(2) Except as otherwise noted, amounts reported for all named executive oÇcers are for performance in 2006 and 2007.

Mr. Syron's bonus in 2007 includes a special extension bonus of $1,250,000 for his agreement to extend the terms of

his employment agreement. Mr. Piszel's bonus in 2006 includes a one-time cash sign-on bonus of $2,500,000 that is

subject to repayment under certain circumstances. Mr. Perlman's bonus includes a one-time cash sign-on bonus of

$550,000 that is subject to repayment under certain circumstances. Mr. May's bonus includes a retention bonus of

$250,000. Mr. Smialowski's bonus in 2007 is in accordance with his Transition Period Agreement dated May 18,

2007 and is the sum of $1,150,000 attributable to his annual bonus for performance in 2007, and a $200,000

supplemental cash payment. The 2006 annual bonus amounts were approved by the CHRC on March 3, 2007 and

paid on March 16, 2007. The 2007 annual bonus amounts were approved by the CHRC on March 7, 2008 and paid

on March 17, 2008. For information regarding guaranteed bonuses and contractual target bonuses for Messrs. Syron,

Piszel, Perlman and Smialowski, see ""Employment and Separation Agreements'' below.

(3) See Note 10 to the consolidated Ñnancial statements included in the accompanying Annual Report for a discussion of

the assumptions made in determining SFAS 123(R) values. The amounts reported disregard estimates of forfeitures

for awards with service-based vesting conditions. There can be no assurance that the SFAS 123(R) amounts will

ever be realized by any named executive oÇcer.

Grants of RSUs include the right to receive dividend equivalents. Prior to January 1, 2006, stock options also had

dividend equivalent rights on each share underlying the option equal to the dividend per share declared and paid on

our outstanding common stock. For stock options vested as of December 31, 2004, dividend equivalents are accrued

and are payable in cash upon exercise or expiration of the option. In response to Code Section 409A, the CHRC

approved a modiÑcation of the terms of certain outstanding stock options granted under the 2004 Employee Plan. In

particular, the terms of any stock option grant or portion thereof outstanding as of December 31, 2005 that was not

vested as of December 31, 2004 were modiÑed to eliminate the accrual of dividend equivalents. Dividend equivalents

accrued through December 31, 2005 with respect to these stock options were distributed in a lump sum in 2006.

Thereafter, dividend equivalents with respect to these stock options will not accrue but will be distributed as soon as

practicable after dividends on our common stock have been declared. Beginning January 1, 2006, dividend

equivalents are no longer granted in connection with awards of stock options.

The value of dividend equivalents is recognized in the compensation expense of the stock option and RSU awards

shown in the Summary Compensation Table. The table below shows the actual amount of cash dividend equivalents

paid in 2006 and 2007 to the named executive oÇcers on their outstanding RSU awards and the portions of their

outstanding stock option awards that were not vested and exercisable before January 1, 2005.

Dividend

Dividend Equivalents Equivalents Paid on Total Dividend

Year Paid on RSUs Stock Options Equivalents Paid

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 $400,489 $ 497,955 $ 898,444

2006 471,555 1,180,719 1,652,274

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 168,561 0 168,561

2006 39,470 0 39,470

Ms. Cook ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 121,704 84,255 205,959

2006 111,177 190,655 301,832

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 10,103 0 10,103

Mr. MayÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 42,466 56,783 99,249

Mr. McQuade ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 183,842 140,963 324,805

2006 288,602 347,332 635,934

Mr. Smialowski ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 97,893 42,300 140,193

2006 83,212 86,856 170,068

Executive Compensation

62
(4) Amounts reported reÖect the actuarial increase in the present value of each named executive oÇcer's accrued beneÑts

under our Pension Plan and the Pension SERP BeneÑt from September 30, 2005 to September 30, 2006 (for 2006)

and from September 30, 2006 to September 30, 2007 (for 2007), determined using the assumptions applied in our

consolidated Ñnancial statements for the years ended December 31, 2006 and 2007, respectively, and the normal

retirement age of 65 speciÑed in the Pension Plan. See Note 14 to the consolidated Ñnancial statements included in

the accompanying Annual Report for a discussion of these assumptions. Present values are determined based on

generational mortality tables developed by the Society of Actuaries' Retirement Plans Experience Committee.

Mr. Piszel was not a participant in the Pension Plan as of September 30, 2007, but became a participant as of

December 31, 2007. The amounts reported for Mr. Piszel reÖect the actuarial increase in the present value from

September 30, 2006 to September 30, 2007.

With the exception of Mr. May, the values reported include amounts that the named executive oÇcers are not

currently entitled to receive because such amounts are not yet vested. The amounts reported do not include values

associated with retiree medical beneÑts, which are generally available to all employees. For additional information

concerning the Pension Plan and the Pension SERP BeneÑt, see ""Pension BeneÑts'' below. For additional

information concerning the Thrift/401(k) SERP BeneÑt, see ""Non-qualiÑed Deferred Compensation'' below.

The amounts reported for Mr. May also include the above-market earnings on his accumulated balance in the

Executive Deferred Compensation Plan as of December 31, 2007. Deferrals under the Executive Deferred

Compensation Plan are credited with interest compounded daily at the rate of: 1% per annum in excess of the prime

rate as reported by the Wall Street Journal on the Ñrst business day of each calendar year during the deferral period.

In 2007, interest was credited at a rate of 9.25% based on the prime rate on January 2, 2007 of 8.25% plus 1%.

NonqualiÑed deferred compensation earnings included for Mr. May consisted of the above-market portion of interest

paid in 2007, which was 3.69%, equal to the 9.25% credited minus 120% of the applicable federal long-term rate, or

5.56%.

(5) Amounts reÖect (i) basic and matching contributions we made to our tax-qualiÑed Thrift/401(k) Savings Plan;

(ii) accruals we made pursuant to the Thrift/401(k) SERP BeneÑt; (iii) FlexDollars (described below); (iv) the

dollar value of premiums paid by us with respect to life and disability insurance; (v) perquisites and other personal

beneÑts received; and (vi) gross-ups for the payment of taxes associated with perquisites and other personal beneÑts.

These amounts are as follows:

Life and

Thrift/401(k) Thrift/401(k) Disability

Savings Plan SERP Flex Insurance Tax

Year Contributions Accruals Dollars Premiums Perquisites Gross-Ups

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 $17,041 $435,575 $22,344 $167,694 $117,731 $11,200

2006 13,200 229,375 22,344 167,694 15,114 6,155

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 0 2,438 14,655 0 272,188 63,188

2006 0 0 180 0 250,132 117,642

Ms. Cook ÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 13,666 275,200 13,712 0 0 0

2006 13,100 96,250 13,712 0 0 0

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏ 2007 0 0 1,986 0 45,572 25,893

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2007 20,416 94,225 26,280 0 0 0

Mr. McQuade ÏÏÏÏÏÏÏÏÏ 2007 13,666 187,325 12,652 205,578 16,074 10,796

2006 13,200 71,250 18,978 205,578 22,385 6,922

Mr. Smialowski ÏÏÏÏÏÏÏÏ 2007 13,666 130,492 13,867 0 0 624

2006 7,167 49,767 13,144 0 0 0

Executive Compensation

63
Employer contributions to the Thrift/401(k) Savings Plan are available on the same terms to all of our employees.

We match up to the Ñrst 6% of eligible compensation at 100% of the employee's contributions, with the percentage

matched dependent upon the employee's length of service. Employee contributions and our matching contributions

are invested in accordance with the employee's investment elections and are immediately vested. In addition, we have

discretionary authority to make additional contributions to our Thrift/401(k) Savings Plan, referred to as the ""basic

contribution,'' that are allocated uniformly on behalf of each eligible employee, based on a stated percentage of each

employee's eligible compensation. If the company decides to make a discretionary basic contribution, that

contribution is made by the company after the end of the calendar year to which it relates. The formula for the

contribution is 2% of pay up to the Social Security wage base, which was $97,500 for 2007, and 4% of pay above the

Social Security wage base. Discretionary basic contributions were approved and posted to employees' accounts in

2006 and 2007. In 2006 and 2007, employees became vested in the basic contribution after Ñve years of service.

For additional information regarding the Thrift/401(k) SERP BeneÑt, see ""Non-qualiÑed Deferred Compensation''

below. Amounts for the Thrift/401(k) Savings Plan Contributions and Thrift/401(k) SERP Accruals include all

contributions made in respect of each named executive oÇcer without regard to vesting status.

FlexDollars are provided under our Flexible BeneÑts Plan and are generally available to all employees to oÅset costs

related to medical coverage, dental coverage, vision coverage, group term life insurance, accidental death and

personal loss insurance, and vacation purchase. FlexDollars can be used to oÅset the cost of other beneÑts and any

unused FlexDollars are payable as taxable income.

We provide Mr. Syron life insurance policies totaling $10,000,000 to be paid in the event of his death and a disability

policy due to be paid to Mr. Syron in the event of his disability. We provided Mr. McQuade life insurance policies

totaling $7,000,000 to be paid in the event of his death and disability coverage to provide beneÑts to Mr. McQuade

in the event of his disability. This commitment to Mr. McQuade ended upon the termination of his employment with

us. Amounts reported reÖect premiums paid on these policies. For more information regarding insurance beneÑts

made available to Messrs. Syron and McQuade, see ""Potential Payments Upon Termination or Change in Control''

and ""Employment and Separation Agreements'' below.

Perquisites include Ñnancial planning, personal use of car and driver for commuting in the Washington, D.C. metro

area (for Messrs. Syron and McQuade only), home security systems (for Messrs. Syron and McQuade only),

spousal business travel and spousal dining for business purposes, legal fees incurred in connection with negotiating

employment agreements and relocation expenses. Perquisites are valued at their aggregate incremental cost to

Freddie Mac. Ms. Cook received no perquisites in 2006 and 2007. During the years reported, the aggregate value of

perquisites furnished to Messrs. May and Smialowski was less than $10,000.

For Mr. Syron, the perquisite cost reported for 2007 that exceeds the greater of $25,000 or 10% of the total perquisite

cost reported is $100,000 for legal fees, approved by the Board, incurred in connection with his amended employment

agreement. For Mr. Piszel, the perquisite cost reported for 2006 and 2007 that exceeds the greater of $25,000 or 10%

of the total perquisite costs reported is $225,132 and $264,561, respectively for relocation expense. Aggregate cost to

the company for this expense is calculated based on the actual cost of services. For Mr. Perlman, the perquisite cost

recorded for 2007 that exceeds the greater of $25,000 or 10% of the total perquisite costs reported is $45,572 for

relocation expense.

(6) Ms. Cook became Executive Vice President and Chief Business OÇcer on June 5, 2007. Prior to that, she was

Executive Vice President, Investments and Capital Markets. Mr. Perlman became Executive Vice President,

Operations and Technology on August 1, 2007. Mr. McQuade resigned his position as President and Chief Operating

OÇcer eÅective September 1, 2007. Mr. Smialowski resigned his position as Executive Vice President, Operations

and Technology eÅective June 30, 2007 and served as a special advisor to the Chairman and Chief Executive OÇcer

until December 31, 2007.

Grants of Plan-Based Awards Ì 2007

The following table contains information concerning grants of plan-based awards to each of the

named executive oÇcers during 2007. For more information on the equity awards to our named

executive oÇcers, including the timing of equity grants, see ""Compensation Discussion and

Analysis Ì RSUs'' and ""Ì Stock Options'' above.

Executive Compensation

64
Estimated Future

Payouts Under All Other

Non-Equity Stock Awards: Grant Date

Incentive Plan Number of Fair Value of

CHRC Awards Shares of Stock and

Grant Approval Stock or Units Option

Name Date(1) Date(1) Target ($) (#)(2) Awards(3)($)

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3/29/07 3/3/07 107,824 $6,450,032

3/29/07 3/3/07 35,942(5) 1,092,277

12/6/07 6/8/07 21,564 800,024

$6,000,000(4)

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3/29/07 3/3/07 37,613 2,250,010

3/29/07 3/3/07 12,538(5) 381,030

Ms. CookÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3/29/07 3/3/07 34,642 2,072,284

3/29/07 3/3/07 11,548(5) 350,944

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9/6/07 9/6/07 20,206 1,200,034

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3/29/07 3/3/07 8,777 525,040

3/29/07 3/3/07 2,926(5) 88,921

Mr. McQuadeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3/29/07 3/3/07 71,778 4,293,760

3/29/07 3/3/07 23,926(5)(6) 727,111

Mr. Smialowski ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3/29/07 3/3/07 27,997 1,674,781

3/29/07 3/3/07 9,333(5)(6) 283,630

(1) Except as otherwise noted, these equity awards were made in 2007 in respect of the executive's performance in 2006.

Mr. Syron's December 6, 2007 equity award and special performance award were made in connection with his

amended employment agreement entered into in November 2007. The time between the June approval of

Mr. Syron's grant and the December grant date resulted from the length of time to Ñnalize negotiations on and obtain

the required regulatory approvals for that agreement.

The CHRC approved the annual grant of RSUs and Performance RSUs for executive oÇcers on March 3, 2007, with

an eÅective grant date of March 29, 2007, which was the fourth business day of the open stock trading window period

following the release of our Ñscal year 2006 Ñnancial results.

(2) To determine the number of RSUs and Performance RSUs for the annual award, the CHRC Ñrst sets the dollar

amount of RSUs and Performance RSUs to be awarded. On the grant date, that dollar amount is converted into

RSUs and Performance RSUs by dividing the dollar amount of the award by the fair market value of our common

stock on the grant date.

The RSUs granted to the named executive oÇcers on March 29, 2007 vest at a rate of 25% in each of March 2008,

2009, 2010 and 2011. Because the CHRC has determined that the performance vesting requirement has been

satisÑed for the Performance RSUs, the Performance RSUs granted to the named executive oÇcers on March 29,

2007 also vest at a rate of 25% in each of March 2008, 2009, 2010 and 2011. The RSUs granted to Mr. Syron on

December 6, 2007 in connection with his amended employment agreement vest at a rate of 25% in each of December

2008, 2009, 2010 and 2011. The one-time sign-on RSU award granted to Mr. Perlman on September 6, 2007 will

vest at a rate of 33.33% in each of September 2008, 2009 and 2010.

(3) The amounts reported in this column reÖect the aggregate grant date fair value, determined in accordance with

SFAS 123(R), of RSU and Performance RSU awards granted during 2007.

The grant date fair value of RSU and Performance RSU awards is calculated by multiplying the number of RSUs

granted by the grant date fair value of our common stock. The grant date fair value of the RSU awards made in 2007

is based on the fair market value of our common stock on March 29, 2007, which was $59.82. The grant date fair

value of the Performance RSU awards made in 2007 is based on the fair market value of our common stock on

January 31, 2008, which was $30.39, because that was the date the CHRC determined that the performance vesting

requirement had been satisÑed. The grant date fair value of Mr. Syron's additional award is based on the fair market

value of our common stock on December 6, 2007, which was $37.10 and the grant date fair value for Mr. Perlman's

award is based on the fair market value of our common stock on September 6, 2007, which was $59.39.

(4) Mr. Syron was granted a Special Performance Award in connection with the November 9, 2007 amendment to his

employment agreement. See ""Compensation Discussion and Analysis Ì Compensation Structure Ì Chief

Executive OÇcer Special Performance Award Opportunity'' for more information regarding the Special Performance

Award.

(5) Represents Performance RSUs. At its January 31, 2008 meeting, the CHRC determined that the performance

vesting requirement for this Performance RSU grant was met.

(6) Because Messrs. McQuade and Smialowski had terminated their employment prior to the CHRC determination that

the performance vesting requirement had been satisÑed, these awards were cancelled, and the company is not

recognizing any compensation expense for them.

Executive Compensation

65
Outstanding Equity Awards at Fiscal Year-End Ì 2007

The following table shows outstanding equity awards held by the named executive oÇcers as of

December 31, 2007.

Option Awards Stock Awards

Number of Securities Number of Securities Number of Shares Market Value of

Underlying Underlying Option or Units of Stock Shares or Units of

Unexercised Options Unexercised Options Exercise Price Option That Have Not Stock That Have

Name Exercisable (#) Unexercisable (#) ($)(1) Expiration Date Vested (#) Not Vested ($)(2)

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏ 124,935(3) 41,645(3) $64.36 08/08/14 18,908(3) $ 644,196

82,695(4) 82,695(4) 62.69 05/05/15 38,825(4) 1,322,768

32,857(4) 98,573(4) 60.45 06/04/16 90,578(4) 3,085,992

107,824(4) 3,673,564

35,942(5) 1,224,544

21,564(6) 734,685

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì 59,205(7) 2,017,114

37,613(4) 1,281,475

12,538(5) 427,170

Ms. CookÏÏÏÏÏÏÏÏÏÏÏÏ 13,935(4) 4,645(4) 64.63 08/01/14 4,280(4) 145,820

18,795(4) 18,795(4) 62.69 05/05/15 8,825(4) 300,668

9,895(4) 29,685(4) 60.45 06/04/16 27,300(4) 930,111

34,642(4) 1,180,253

11,548(5) 393,440

Mr. Perlman ÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì 20,206(8) 688,418

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏ 2,770 0 60.75 03/04/09 Ì Ì

5,240 0 67.85 03/01/11 Ì Ì

6,900 0 64.35 02/29/12 Ì Ì

4,920(9) 1,640(9) 54.30 11/25/13 3,380(9) 115,157

8,902(3) 2,968(3) 64.36 08/08/14 1,348(3) 45,926

5,815(4) 5,815(4) 62.79 04/10/15 2,765(4) 94,204

2,615(4) 7,845(4) 60.45 06/04/16 7,223(4) 246,088

8,777(4) 299,032

2,926(5) 99,689

Mr. McQuadeÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì

Mr. SmialowskiÏÏÏÏÏÏÏ 14,100(4) Ì 62.69 03/31/08 Ì Ì

9,335(4) Ì 60.45 03/31/08 Ì Ì

(1) Consistent with the terms of our 2004 Employee Plan, the option exercise price is set at a price equal to the fair

market value of our common stock on the grant date.

(2) Market value is calculated by multiplying the number of RSUs held by each named executive oÇcer on

December 31, 2007 by the closing price of our common stock on December 31, 2007 ($34.07), the last day of trading

for the year.

(3) Stock options and RSUs granted on August 9, 2004 vest at a rate of 25% on August 9, 2005, April 1, 2006, April 1,

2007 and April 1, 2008.

(4) Stock options and RSUs granted on August 2, 2004, May 6, 2005, April 11, 2005, June 5, 2006 and March 29, 2007

vest at a rate of 25% on each anniversary of the grant date. Mr. Smialowski's option awards are unexercised stock

options that remained exercisable for 90 days following his departure on December 31, 2007. As of the date of this

proxy statement all of Mr. Smialowski's stock options have expired.

(5) On January 31, 2008, the CHRC determined that the performance vesting criteria for these RSUs granted on

March 29, 2007 was met. These RSUs vest at a rate of 25% on each anniversary of the grant date.

(6) RSUs granted on December 6, 2007 vest at a rate of 25% on each anniversary of the grant date.

(7) Mr. Piszel's sign-on award of RSUs vests at a rate of 25% on each anniversary of the December 7, 2006 grant date.

(8) Mr. Perlman's sign-on award of RSUs vests at a rate of 33.33% on each anniversary of the September 6, 2007 grant

date.

(9) Stock options granted on November 26, 2003 vest at a rate of 25% on each of March 6, 2005, 2006, 2007 and 2008.

RSUs granted on November 26, 2003 vest 100% on March 6, 2008.

Executive Compensation

66
For information on alternative settlement provisions of RSU and stock option grants in the

event of certain terminations, see ""Potential Payments Upon Termination or Change in Control''

below.

Option Exercises and Stock Vested Ì 2007

The following table sets forth information concerning value realized upon the exercise of stock

options and the vesting of RSUs during 2007 by each of the named executive oÇcers.

Option Awards Stock Awards

Number of Shares Number of Shares Value

Acquired on Value Realized Acquired on Realized on

Name Exercise (#) on Exercise ($) Vesting (#)(1) Vesting ($)(2)

Mr. SyronÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 $0 68,512 $4,433,106

Mr. PiszelÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 19,735 701,382

Ms. Cook ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 21,663 1,363,152

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 0 0

Mr. MayÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 10,957 574,075

Mr. McQuade ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 64,696(3) 4,157,804

Mr. Smialowski ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 15,935(3) 925,201

(1) Amounts reported reÖect the number of RSUs that vested during 2007 prior to our withholding of shares to satisfy

appropriate taxes.

(2) Amounts reported are calculated by multiplying the number of pre-tax RSUs that vested during 2007 by the fair

market value of our common stock on the day of vesting.

(3) Messrs. McQuade and Smialowski resigned from the company eÅective September 1, 2007 and December 31, 2007,

respectively. For more information, see ""Potential Payments upon Termination or Change in Control Ì Eugene M.

McQuade'' or ""Ì Joseph A. Smialowski'' and ""Employment and Separation Agreements Ì Eugene M. McQuade''

or ""Ì Joseph A. Smialowski.''

Pension BeneÑts Ì 2007

The following table shows the actuarial present value of the accumulated retirement beneÑts

payable under the Pension Plan and the Pension SERP BeneÑt for each of the named executive

oÇcers, computed as of September 30, 2007 (the date used for pension calculations in our

consolidated Ñnancial statements for the year ended December 31, 2007 included in the

accompanying Annual Report). A summary of the material terms of each plan follows the table,

including information on early retirement.

Executive Compensation

67
Number of Years Present Value of

Credited Accumulated Payments During

Name Plan Name Service(#)(1) BeneÑt($)(2) Last Fiscal Year($)

Mr. Syron ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan 4.0 $ 84,213 $0

Pension SERP BeneÑt 4.0 1,461,895 0

Mr. Piszel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan 1.0 0 0

Pension SERP BeneÑt 1.0 0 0

Ms. CookÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan 3.4 44,266 0

Pension SERP BeneÑt 3.4 523,074 0

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan 0 0 0

Pension SERP BeneÑt 0 0 0

Mr. May ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan 24.8 281,019 0

Pension SERP BeneÑt 24.8 874,497 0

Mr. McQuade ÏÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan Ì Ì 0

Pension SERP BeneÑt Ì Ì 0

Mr. SmialowskiÏÏÏÏÏÏÏÏÏÏÏÏ Pension Plan Ì Ì 0

Pension SERP BeneÑt Ì Ì 0

(1) Amounts reported represent the credited years of service for each named executive oÇcer as of September 30, 2007,

under the Pension Plan and the Pension SERP BeneÑt, respectively. Amounts reported do not reÖect certain

contractual retirement beneÑts Mr. Syron would receive pursuant to his employment agreement should his

employment be terminated under certain conditions prior to vesting in the Pension SERP BeneÑt. For further

information on these additional beneÑts for Mr. Syron, see ""Potential Payments Upon Termination or Change in

Control''.

(2) Amounts reported reÖect the present value, expressed as a lump sum as of September 30, 2007, of each named

executive oÇcer's beneÑts under the Pension Plan and the Pension SERP BeneÑt, respectively. Amounts reported are

calculated using the assumptions applied in Note 14 to the consolidated Ñnancial statements included in the

accompanying Annual Report, and the normal retirement age of 65 speciÑed in the Pension Plan. Present values

represent generational mortality tables developed by the Society of Actuaries' Retirement Plans Experience

Committee. For all of the named executive oÇcers except Messrs. McQuade and Smialowski, the amounts shown

may include amounts in which the named executive oÇcers are not yet vested. Messrs. McQuade and Smialowski

both terminated their employment before earning vested beneÑts, so the value of their accumulated beneÑts at

December 31, 2007 was $0. Pension Plan and Pension SERP beneÑts are subject to a Ñve-year cliÅ vesting schedule.

For additional information, see the descriptions of the employment agreements under ""Employment and Separation

Agreements'' below. Mr. Piszel joined us as Executive Vice President and Chief Financial OÇcer on November 13,

2006 and as of September 30, 2007 had not yet met the one year and 1000 hour eligibility requirements for the

Pension Plan or Pension SERP BeneÑt; therefore, the beneÑt amounts as of September 30, 2007 for Mr. Piszel are

zero. Mr. Perlman joined us as Executive Vice President, Operations and Technology on August 1, 2007 and as of

September 30, 2007 had not yet met the one year and 1000 hour eligibility requirements for the Pension Plan or

Pension SERP BeneÑt; therefore, the beneÑt amounts as of September 30, 2007 for Mr. Perlman are zero.

Pension Plan

The Pension Plan is a tax-qualiÑed, deÑned beneÑt pension plan we maintain that covers

substantially all employees who have attained age 21 and completed one year of service with us.

Pension Plan beneÑts are based on an employee's years of service and highest average monthly

compensation, up to limits imposed by law. SpeciÑcally, the normal retirement beneÑt under the

Pension Plan for service after December 31, 1988 is a monthly payment calculated as follows:

‚ 1% of the participant's highest average monthly compensation for the 36-consecutive month

period during which the participant's compensation was the highest,

‚ multiplied by the participant's full and partial years of credited service under the Pension

Plan.

Executive Compensation

68
A named executive oÇcer who worked for the company prior to 1989 would have two

additional components to his Pension Plan beneÑt. The Ñrst component would provide employees

who were hired in 1985 or earlier with a beneÑt attributable to service through the end of 1988. The

second component would provide employees who were hired before 1985 and remained with the

company through 1990 with a supplemental beneÑt relating to that time period. A Ñxed dollar

value for these components was established when we changed to the methodology for calculating

pension beneÑts described above.

For purposes of the Pension Plan, compensation includes the non-deferred base salary paid to

each employee, as well as overtime pay, shift diÅerentials, non-deferred bonuses paid under our

corporate-wide annual bonus program or pursuant to a functional incentive plan (excluding the

value of any stock options or cash equivalents), commissions, and amounts deferred under the

Thrift/401(k) Savings Plan, the Flexible BeneÑts Plan and qualiÑed transportation under Code

Section 132(c)(4). Compensation does not include supplemental compensation plans providing

temporary pay, or any amounts paid after termination of employment.

Notwithstanding the lump sum nature of the disclosure in the table above, lump sum payments

are not permitted under the Pension Plan if the present value of the accrued beneÑt would equal or

exceed $25,000. The normal form of beneÑt under the Pension Plan is an annuity providing

monthly payments for the life of the participant (and a survivor annuity for the participant's spouse

if applicable). Optional forms of beneÑt payment are available. A beneÑt with an actuarial present

value equal to or less than $5,000 may only be paid as a lump sum.

Participants under the Pension Plan who terminate employment before age 55 with at least

Ñve years of service are considered ""terminated vested'' participants. Such participants may

commence their beneÑt under the Pension Plan as early as age 55. The beneÑt is equal to the vested

portion of the participant's accrued beneÑt, reduced by 1/180th for each of the Ñrst 60 months, and

by 1/360th for each of the next 60 months, by which the commencement of such beneÑts precedes

age 65.

An early retirement beneÑt is available to a participant who terminates employment on or after

age 55 with at least Ñve years of service. This early retirement beneÑt is reduced by three

percent (3%) for each year (prorated monthly for partial years) by which the commencement of

such beneÑts precedes the earlier of (i) age 65 or (ii) such participant's attainment of age 62 or

later with at least 15 years of service or projected service as if the participant continued working

until age 62. There is no reduction for early commencement if the beneÑt is commenced at or after

age 62 (but before age 65) if the participant has 15 years of service or projected service.

Supplemental Executive Retirement Plan Ì Pension SERP BeneÑt

The ""Pension SERP BeneÑt'' component of the SERP is designed to provide participants with

the full amount of beneÑts to which they would have been entitled under the Pension Plan if that

plan (1) was not subject to certain limits on compensation that can be taken into account under

the Code and (2) did not exclude from ""compensation'' amounts deferred under our Executive

Deferred Compensation Plan. For example, the Pension Plan is only permitted under the Code to

consider the Ñrst $225,000 of an employee's compensation during 2007 for the purpose of

determining the participant's compensation-based normal retirement beneÑt. We believe the

Pension SERP BeneÑt is an appropriate beneÑt because oÅering such a beneÑt helps us remain

competitive with companies in the Comparator Group.

Executive Compensation

69
The Pension SERP BeneÑt is calculated as the participant's accrued annual beneÑt payable at

age 65 (or current age, if greater) under the Pension Plan without application of the limits

described in the preceding paragraph, less the participant's actual accrued beneÑt under the Pension

Plan. The Pension SERP BeneÑt is vested for each participant to the same extent that the

participant is vested in the corresponding beneÑt under the Pension Plan.

To be eligible for the SERP for any year, the named executive oÇcer must be eligible to

participate in the Pension Plan and eligible for matching contributions and basic contributions under

the Thrift/401(k) Savings Plan for part of that year.

Pension SERP BeneÑts that vest on or after January 1, 2005 are generally distributed in a lump

sum after separation from service and are payable 90 days after the end of the calendar year in

which separation occurs. Subject to plan limitations and restrictions under Code Section 409A,

employees may elect that this portion of the Pension SERP be paid upon separation in the form of a

single life annuity at age 65 or in equal annual installments over Ñve, 10 or 15 years (including

interest). Under IRS rules, distributions to so-called ""key employees'' (as deÑned by the IRS in

regulations concerning Code Section 409A) may not commence earlier than six months from the

key employee's separation from service. Payments under the SERP will be delayed if necessary to

meet this requirement.

Pension SERP BeneÑts that vested prior to January 1, 2005 are generally distributed after

separation from service (other than retirement) in the form of a single life annuity commencing at

age 65. In the case of retirement, the vested pre-2005 Pension SERP BeneÑt is combined with the

vested pre-2005 Thrift/401(k) SERP BeneÑt and is paid out in the form of a single life annuity

payable at age 65 (or in a series of equal installments over 15 years commencing with retirement if

actuarial estimates indicate that payment form would yield a longer period of payment).

Non-qualiÑed Deferred Compensation

As noted above in ""Compensation Discussion and Analysis Ì Other Executive BeneÑts,

including Perquisites and Retirement BeneÑts Ì Executive Deferred Compensation and

Supplemental Executive Retirement Plans'', the Executive Deferred Compensation Plan allows the

named executive oÇcers to defer receipt of a portion of their annual salary and cash bonus (and to

defer settlement of RSUs granted between 2002 and 2007). The Executive Deferred

Compensation Plan is a non-qualiÑed plan, and is unfunded (beneÑts are paid from the company's

general assets). The plan was amended and restated eÅective January 1, 2008, and pursuant to the

amended and restated plan, deferrals may be made for a period of whole years as elected by the

employee, but in no event past termination of employment. Deferred amounts are credited with

interest, which is currently the prime rate as reported by the Wall Street Journal as of the Ñrst

business day of the applicable calendar year, plus 1%. When employees make deferral elections for a

particular year, they also specify the form in which the deferral will be distributed after the

expiration of the election. The available selections are lump sum or reasonably equal installments

over Ñve, ten or Ñfteen years. A six-month delay in commencement of distributions applies to key

employees, in accordance with Code Section 409A. Hardship withdrawals are permitted in certain

limited circumstances.

Executive Compensation

70
Supplemental Executive Retirement Plan Ì Thrift/401(k) SERP BeneÑt

The ""Thrift/401(k) SERP BeneÑt'' portion of the SERP is an unfunded, nonqualiÑed deÑned

contribution plan designed to provide participants with the full amount of beneÑts that they would

have been entitled to under the Thrift/401(k) Savings Plan if that plan (1) was not subject to

certain limits on compensation that can be taken into account under the Code and (2) did not

exclude from compensation amounts deferred under our Executive Deferred Compensation Plan.

For example, in 2007 under the Code, only the Ñrst $225,000 of an employee's compensation is

considered when determining the company's percentage-based matching contribution for any

participant in the Thrift/401(k) Savings Plan. We believe the Thrift/401(k) SERP BeneÑt is an

appropriate beneÑt because oÅering such a beneÑt helps us remain competitive with companies in

the Comparator Group.

The Thrift/401(k) SERP BeneÑt equals the amount of the employer matching contributions

and basic contribution for each named executive oÇcer that would have been made to the

Thrift/401(k) Savings Plan during the year, based upon the participant's eligible compensation,

without application of the above limits, less the amount of the matching contributions and basic

contribution actually made to the Thrift/401(k) Savings Plan during the year. Participants are

credited with earnings or losses in their Thrift/401(k) SERP BeneÑt accounts based upon each

participant's individual direction of the investment of such notional amounts among the virtual

investment funds available under the SERP. Such investment options are based upon and mirror the

performance of those investment options available under the Thrift/401(k) Savings Plan. As of

December 31, 2007, there were 10 investment options in which participants' notional amounts could

be invested.

To be eligible for the SERP, the named executive oÇcer must be eligible to participate in the

Pension Plan and be eligible for matching contributions and basic contributions under the

Thrift/401(k) Savings Plan for part of the year. Additionally, to be eligible for the portion of the

Thrift/401(k) SERP BeneÑt attributable to employer matching contributions, the named

executive oÇcer must contribute the maximum amount permitted under the terms of the

Thrift/401(k) Savings Plan on a pre-tax basis throughout the entire portion of the year in which the

named executive oÇcer is eligible to make such contributions. That portion of the Thrift/401(k)

SERP BeneÑt is vested when accrued, while the accrual relating to the basic contribution is subject

to Ñve-year cliÅ vesting. For amounts vesting on or after January 1, 2005, the Thrift/401(k) SERP

BeneÑt is distributed as a lump sum payable 90 days after the end of the calendar year in which

separation occurs.

Thrift/401(k) SERP BeneÑts that vested prior to January 1, 2005 are generally distributed

after separation from service (other than retirement) in the form of three reasonably equal annual

installments, starting in the Ñrst quarter of the calendar year following the year in which the

termination occurs. In the case of retirement, the vested pre-2005 Thrift/401(k) SERP BeneÑt is

combined with the vested pre-2005 Pension SERP BeneÑt and is paid out in the form of a single

life annuity payable at age 65 (or in a series of equal installments over 15 years commencing with

retirement if actuarial estimates indicate that payment form would yield a longer period of

payment).

The following table shows the contributions, earnings, withdrawals and distributions, and

accumulated balances under the Thrift/401(k) SERP BeneÑt for each named executive oÇcer and

the Executive Deferred Compensation Plan (Mr. May only) as of December 31, 2007. For more

Executive Compensation

71
information, see ""Compensation Discussion and Analysis Ì Other Executive BeneÑts, including

Perquisites and Retirement BeneÑts Ì Executive Deferred Compensation and Supplemental

Executive Retirement Plan'' above.

Executive Freddie Mac Aggregate Aggregate

Contributions Contributions Earnings Aggregate Balance

in Last in Last in Last Withdrawals/ at Last

Name FY($)(1) FY($)(2) FY($)(3) Distributions($)(4) FYE($)(5)

Mr. SyronÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0 $435,575 $ 32,802 $ 0 $ 814,315

Mr. PiszelÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 2,438 5 0 2,442

Ms. Cook ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 275,200 15,900 0 397,100

Mr. Perlman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 0 0 0 0

Mr. MayÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 94,225 242,402 63,241 3,033,888

Mr. McQuade ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 187,325 14,154 0 282,992

Mr. Smialowski ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 130,492 8,474 0 190,731

(1) The SERP does not allow for employee contributions.

(2) Amounts reported reÖect company accruals under the Thrift/401(k) SERP BeneÑt during 2007. These amounts are

also reported in the ""All Other Compensation'' column of the Summary Compensation Table.

(3) Amounts reported represent the total interest and other earnings credited to each named executive oÇcer under the

Thrift/401(k) SERP BeneÑt and the Executive Deferred Compensation Plan during 2007. Above-market earnings

of $87,624 for Mr. May are reÖected in the column ""Change in Pension Value and NonqualiÑed Deferred

Compensation Earnings'' in the Summary Compensation Table for 2007 because Mr. May was a participant in the

Executive Deferred Compensation Plan. The credited interest rate for deferrals under the Executive Deferred

Compensation Plan for 2007 was 9.25%.

(4) Mr. May received a distribution under the Executive Deferred Compensation Plan during 2007 because the deferral

period for a prior deferral election expired.

(5) Amounts reported reÖect the accumulated balances under the Thrift/401(k) SERP BeneÑt for each named executive

oÇcer, including non-vested accruals and, for Mr. May, accumulated balances under the Executive Deferred

Compensation Plan. Matching contribution accruals vest immediately, whereas the basic contribution accruals as of

December 31, 2007 are subject to a Ñve-year cliÅ-vesting schedule. Because none of the named executive oÇcers,

other than Mr. May, has met the Ñve-year vesting requirement for the basic contribution, the diÅerence in the

aggregate balance above and the vested balance is equal to the non-vested basic contributions plus earnings. The

vested and non-vested components for each named executive oÇcer are as follows: Mr. Syron: vested balance:

$537,968; non-vested balance: $276,347; Mr. Piszel: vested balance: $2,442; non-vested balance: $0; Ms. Cook: vested

balance: $265,176; non-vested balance: $131,924; Mr. McQuade: vested balance: $189,037; non-vested balance:

$93,955; and Mr. Smialowski: vested balance: $122,076; non-vested balance: $68,654. Mr. May is fully vested. For a

more detailed discussion of the matching contribution accruals and basic contribution accruals, see ""Supplemental

Executive Retirement Plan Ì Thrift/401(k) SERP BeneÑt'' below.

Potential Payments Upon Termination or Change in Control

We have entered into certain employment agreements or oÅer letters and maintain certain

plans that will require us to provide compensation to our named executive oÇcers in the event of a

termination of employment or a change in control of Freddie Mac. The compensation and beneÑts

payable to each named executive oÇcer as of December 31, 2007 are shown in the tables below.

For more information, see ""Employment and Separation Agreements'' below. OFHEO has

reviewed the terms of the employment and separation agreements for Ms. Cook and Messrs. Syron,

Piszel, Perlman, McQuade and Smialowski and has approved the termination beneÑts set forth

therein.

Executive Compensation

72
Each of our named executive oÇcers is subject to a restrictive covenant and conÑdentiality

agreement with us. The standard agreement provides that the executive oÇcer will not seek

employment with one of our competitors in the 12 months immediately following termination of his

or her employment with us, regardless of whether the executive's employment is terminated by the

executive, by us, or by a joint decision. During that same 12-month period, each executive also

agrees not to solicit or recruit any of our managerial employees. The agreement provides for

continued conÑdentiality of information about us that constitutes trade secrets or proprietary or

conÑdential information. In the case of Mr. Syron, the terms of his employment agreement provide

for a non-competition period of two years following the termination of his employment with us,

rather than the standard 12 months.

As of December 31, 2007, other than Mr. May, none of the named executive oÇcers were

eligible for beneÑts under the Pension Plan and the Pension SERP beneÑt. The amounts presented

in the tables below do not include vested RSU or stock option awards or vested balances in the

Thrift/401(k) SERP BeneÑt or the Executive Deferred Compensation Plan as of December 31,

2007 because such vesting was not in connection with a termination or change in control. Amounts

shown in the tables also do not include certain items available to all employees generally upon a

termination event.

For RSUs, the value shown in the tables is calculated on a grant-by-grant basis by multiplying

the number of unvested RSUs by the closing price of our common stock on December 31, 2007.

For stock options, the value shown in the tables is calculated on a grant-by-grant basis by

multiplying the number of unvested options granted by the diÅerence between the exercise price for

such option and the closing price of our common stock on December 31, 2007.

Alternative Settlement Provisions of Equity Awards in the Event of Certain Terminations

RSUs

The RSUs awarded to our employees, including the named executive oÇcers, provide for

alternative settlement provisions in the event of certain terminations, as follows:

‚ Immediate vesting and settlement occurs in the event of death or disability.

‚ In the event of normal retirement, as deÑned in the 2004 Employee Plan, RSUs will vest

immediately and will be settled in accordance with the vesting schedule outlined in the award

agreement as if termination had not occurred, with the exception that RSUs granted within

one year of retirement will be forfeited. This treatment is subject to the executive's signing

an agreement containing certain restrictive covenants, including, but not limited to, noncompetition, non-solicitation, continued cooperation and other matters to protect our

business interests. Violation of any of the covenants results in the forfeiture of unsettled

shares and the requirement to repay any after-tax gain realized from the settlement of shares

within 12 months of the forfeiture event. In the event of retirement other than a normal

retirement, as deÑned in the 2004 Employee Plan, the vesting and settlement of awards may

be accelerated at the discretion of the CHRC with respect to the named executive oÇcers

other than Messrs. Syron and McQuade. This provision is not applicable to the awards

granted to Messrs. Syron and McQuade, as their employment agreements govern the

treatment of long-term equity awards under various termination scenarios.

Executive Compensation

73
‚ In the event of a termination due to ""special circumstances,'' such as a reorganization, a job

relocation, or a restructuring or other no-fault displacement, as determined in the sole and

absolute discretion of the Chairman and Chief Executive OÇcer, the RSUs vest

immediately and settle in accordance with the vesting schedule outlined in the award

agreement as if termination had not occurred. This provision is not applicable to the awards

granted to Messrs. Syron and McQuade and to Messrs. Piszel's and Perlman's sign-on

grants, as their agreements govern the treatment of long-term equity awards under various

termination scenarios.

Stock Options

The stock options granted to our employees, including the named executive oÇcers, provide for

alternative settlement provisions in the event of certain terminations, which are similar to the

provisions for RSUs, with the following modiÑcations:

‚ The stock options remain exercisable for three years after the date of termination in the event

of death.

‚ The stock options remain exercisable for the full balance of their term in the event of

disability.

‚ In the event of retirement, as deÑned in the 2004 Employee Plan, stock options will continue

to vest and remain exercisable for the full balance of the term, subject to the executive's

signing an agreement containing the same restrictive covenants as described above for

RSUs.

‚ The stock options will continue to vest and remain exercisable for the full balance of their

term in the event of termination due to ""special circumstances'' as described above for

RSUs. This provision is not applicable to the awards granted to Messrs. Syron and

McQuade as their employment agreements govern the treatment of long-term equity awards

under various termination scenarios.

‚ If the individual's employment is terminated for any reason other than those described above,

the employee has 90 days after termination to exercise options vested as of the date of

termination.

Executive Compensation

74
Richard F. Syron

The following table describes the potential payments as of December 31, 2007 upon

termination or a change in control of Freddie Mac for Richard F. Syron, our Chief Executive

OÇcer.

Voluntary For Good

Voluntary Reason Resignation Change in

BeneÑts and Without Good Involuntary or Involuntary Control

Payments Reason For Cause Without Cause Death or (Without

Upon Termination Resignation(1) Termination(2) Termination(1)(3) Disability(4) Termination)(5)

Compensation:

Base Salary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì $ 1,100,000 Ì Ì

Annual Bonus ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 2,640,000 $ 1,320,000 Ì

Equity Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 13,852,956 10,685,749 $13,852,956

Special Performance Award(6) ÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì

Repayment to Freddie Mac(7)ÏÏÏÏÏÏÏÏÏÏÏ $(1,250,000) $(1,250,000) Ì Ì Ì

BeneÑts:

Non-qualiÑed Pension ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 1,461,895 1,461,895 Ì

Deferred Compensation PayoutsÏÏÏÏÏÏÏ Ì Ì Ì 276,347 Ì

Life Insurance Proceeds ÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì 9,591,360 Ì

Disability BeneÑtsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì 505,392 Ì

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(1,250,000) $(1,250,000) $19,054,851 $23,840,743(8) $13,842,956

(1) ""Good reason'' includes: a reduction in Mr. Syron's then current base salary, annual target bonus or maximum bonus

opportunity; Mr. Syron's removal from the position of Chief Executive OÇcer or Chairman of the board, unless such

removal is for ""cause;'' a material diminution of Mr. Syron's duties or responsibilities; a change in our reporting

structure so that Mr. Syron reports to any person or entity other than the board; a request that Mr. Syron resign his

employment, unless such resignation is requested for ""cause''; Mr. Syron is not elected to the board, or, if Mr. Syron

is elected, he is not appointed as Chairman or Executive Chairman of the board, unless such action is for ""cause;''

and Mr. Syron's removal by the board as Executive Chairman of the board after the appointment of a successor Chief

Executive OÇcer prior to December 31, 2009, unless such removal is for ""cause.'' The board's appointment of a

successor Chief Executive OÇcer and Mr. Syron ceasing to be our Chief Executive OÇcer and becoming Executive

Chairman of our board would not constitute ""good reason.''

(2) Mr. Syron may be considered for a bonus attributable to 2007 under this termination event, at the discretion of the

CHRC.

(3) The amount reported under Base Salary reÖects the November 9, 2007 amendment to Mr. Syron's employment

agreement. The amount reported under Annual Bonus reÖects the sum of Mr. Syron's target bonus attributable to

each of 2007 and 2008 originally agreed to in his December 31, 2003 employment agreement. The amount reported

under Equity Awards reÖects $8,800,000 in cash for the unvested long-term equity award granted in 2007; the value

of all unvested RSUs granted prior to 2007, which vest immediately upon such termination; and the value of all

unvested options granted prior to 2007, which become exercisable immediately upon such termination. The amount

reported under Non-qualiÑed Pension reÖects the non-vested lump sum value of the Pension SERP BeneÑt as of

September 30, 2007. Mr. Syron's employment agreement provides for payment of the non-vested Pension SERP

BeneÑt under this termination event. Mr. Syron and his spouse also are entitled, until each of them reaches age 65

(at their expense), to continue to participate in health and related welfare plans in which they participated prior to

Mr. Syron's termination.

Executive Compensation

75
(4) The amount reported under Annual Bonus reÖects a $1,320,000 target bonus attributable to 2007. The amount

reported under Equity Awards reÖects the value of all outstanding RSUs, which vest immediately upon such

termination, and the value of all unvested stock options, which become exercisable immediately upon such

termination. The amount reported under Non-qualiÑed Pension reÖects the non-vested Pension SERP BeneÑt as of

September 30, 2007, which is payable under a disability event. The amount reported under Deferred Compensation

Payouts reÖects the non-vested Thrift/401(k) SERP BeneÑt as of December 31, 2007, which is payable upon a

disability event. Mr. Syron is not eligible for the non-vested Pension SERP BeneÑt or the non-vested Thrift/401(k)

SERP BeneÑt in the event of death. The amount reported under Life Insurance Proceeds reÖects the life insurance

policies we provide Mr. Syron with beneÑts totaling $10,000,000. As of December 31, 2007, the beneÑt to

Mr. Syron's beneÑciaries was $9,591,360, $6,000,000 of which is Term-Life and $3,591,360 of which is Endorsement

Split Dollar. We are the owner of the Endorsement Split Dollar Policy until the later of his attainment of age 65 or

the scheduled termination date, which is December 31, 2008 (the ""Scheduled Termination Date''). As of

December 31, 2007, in the event of death prior to the Scheduled Termination Date, the remaining $408,640 would be

payable to us. The amount reported under Disability BeneÑt reÖects the amount due to Mr. Syron in the event of

disability from December 31, 2007 through the Scheduled Termination Date. An additional $240,000 would be paid

annually under the group long-term disability plan should Mr. Syron be approved for long-term disability.

(5) This termination event represents a Change in Control in which Mr. Syron does not voluntarily terminate his

employment for Good Reason and he is not involuntarily terminated without Cause. If Mr. Syron terminated his

employment for Good Reason or he is involuntarily terminated without Cause in connection with the Change in

Control, he would receive the amounts reported under the column ""Voluntary For Good Reason Resignation or

Involuntary Without Cause Termination'' in lieu of this amount.

The amount reported under Equity Awards reÖects $8,800,000 in cash for the unvested long-term equity awards

granted in 2007; the value of all unvested RSUs granted prior to 2007, which vest immediately upon such termination;

and the value of all unvested options granted prior to 2007, which become exercisable immediately upon such

termination. For information on the calculation of the value of these RSUs and options, see Note (3) above.

(6) The CHRC has the sole discretion to determine if Mr. Syron should be entitled to a payment under his Special

Performance Award in the event Mr. Syron's employment terminates due to death, disability or involuntary

termination by us without cause or by Mr. Syron for good reason. In the event that Mr. Syron's employment had

terminated on December 31, 2007, we do not believe Mr. Syron would have received a payment under the Special

Performance Award.

(7) If Mr. Syron terminates his employment with us other than for good reason or for death or disability before

December 31, 2009, he is required to repay his special extension bonus, which is reÖected under Repayment to

Freddie Mac.

(8) The amount reÖected under Death or Disability includes both Life Insurance Proceeds and Disability BeneÑts. The

Total amount will change based on the actual event. For a death event, the Total amount will exclude the amount

reÖected under Disability BeneÑts. For a disability event, the Total amount will exclude the amount reÖected under

Life Insurance Proceeds.

The following summaries of certain termination scenarios reÖect the terms of the November 9,

2007 amendment to Mr. Syron's employment agreement.

Change in Control

Upon a ""change in control,'' any equity award granted to Mr. Syron at least 12 months prior to

the change in control will immediately vest. Vested RSUs will be paid out immediately and vested

stock options will remain exercisable until the expiration date of the options. Any equity awards

granted less than 12 months prior to the change in control will be cancelled in consideration of our

payment to Mr. Syron of $8,800,000 in cash for each cancelled equity award.

Termination Due to Death or Disability

In the event of a termination of his employment prior to December 31, 2009 due to disability or

death, we will pay Mr. Syron or his beneÑciaries his base salary through the end of the month in

Executive Compensation

76
which termination of employment occurs. We will pay any earned but unpaid bonus amounts from

the most recently completed calendar year, plus a prorated percentage of Mr. Syron's target bonus

for the calendar year in which employment termination occurs. Also, all RSUs awarded to

Mr. Syron will immediately vest and be paid out and all stock options granted will become

immediately exercisable. The stock options will remain exercisable: (i) in the event termination

occurs as a result of death, until the earlier to occur of (a) the third anniversary of the employment

termination or (b) the expiration date of the options; and (ii) in the event termination occurs as a

result of disability, until the scheduled expiration date applicable to the options.

Termination for Good Reason or Without Cause

Subject to Mr. Syron's execution of a general release and waiver, in the event that Mr. Syron

terminates his employment prior to December 31, 2009 for good reason or is terminated by us

without cause, we will pay Mr. Syron a lump sum cash payment equal to the base salary that would

have been paid to him for the period beginning on the termination date and ending on

December 31, 2008. In the event of a termination at any time in 2009, Mr. Syron would only receive

his base salary up to the date of termination. We will pay any earned but unpaid bonus amounts

from the most recently completed Ñscal year. Also, we will pay Mr. Syron a lump sum cash

payment equal to the sum of the target annual bonuses that would have been paid to him in respect

of each calendar year that ends during the period beginning on the termination date and ending on

December 31, 2008.

All RSUs awarded to Mr. Syron at least 12 months prior to the termination date will

immediately vest and be paid out, and all stock options granted to Mr. Syron at least 12 months

prior to the termination date will become immediately exercisable. All such stock options will

remain exercisable until the earlier to occur of (i) three years following such termination, or (ii) the

expiration date of the options. All equity awards granted less than 12 months prior to the

termination date will be cancelled in consideration of our payment to Mr. Syron of $8,800,000 in

cash for each cancelled equity award.

In addition, if he is not entitled to the Pension SERP BeneÑt solely because he is not yet vested

under our tax-qualiÑed pension plan, then we will pay Mr. Syron the beneÑt that would have been

payable to him under the SERP as of the date of the termination without regard to the vesting

requirement, and he will be entitled to the Thrift/401(k) SERP BeneÑt in accordance with the

terms of the SERP. We will make available to Mr. Syron and his spouse (at their expense)

continued health and other similar welfare beneÑts coverage until the date each reaches age 65.

Termination for Cause

In the event that Mr. Syron's employment is terminated by us for cause prior to December 31,

2009, we will pay Mr. Syron any earned but unpaid base salary through the date of termination and

any earned but unpaid bonus amounts from the most recently completed calendar year. All

unvested equity awards will be immediately cancelled.

Termination Following the Scheduled Termination Date

In the event that Mr. Syron terminates his employment following December 31, 2009 due to

retirement (and at the time of such termination of Mr. Syron's employment we could not have

terminated him for cause), all RSUs awarded to Mr. Syron will immediately vest, but will settle

Executive Compensation

77
pursuant to the vesting schedule set forth in the grant agreements. All stock options granted to

Mr. Syron will become immediately exercisable and will remain outstanding until the expiration

date of the options.

Anthony S. Piszel

The following table describes the potential payments as of December 31, 2007 upon

termination for Anthony S. Piszel, our Executive Vice President and Chief Financial OÇcer.

Involuntary Special

BeneÑts and Payments Voluntary For Cause Involuntary Termination Death or Circumstances

Upon Termination Resignation(1) Termination(1) Other Than For Cause(2) Disability(3) Termination(4)

Compensation:

Base Salary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì $1,300,000 Ì $1,300,000

Annual Bonus ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,007,500 $ 1,007,500 1,007,500 $1,007,500 1,007,500

Equity Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 2,017,114 3,725,759 3,298,589

Repayment to Freddie Mac ÏÏÏÏ (2,500,000) (2,500,000) Ì Ì Ì

BeneÑts:

Non-qualiÑed Pension ÏÏÏÏÏÏÏ Ì Ì Ì 71,575 Ì

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(1,492,500) $(1,492,500) $4,324,614 $4,804,834 $5,606,089

(1) The amount reported under Annual Bonus reÖects a guaranteed bonus of $1,007,500 attributable to performance in

2007. If Mr. Piszel terminates his employment with us for any reason or is terminated for cause before the second

anniversary of his employment date, he is required to repay the full $2,500,000 of his sign-on cash bonus which is

reÖected under Repayment to Freddie Mac.

(2) The amount reported under Base Salary reÖects two times annualized base salary of $650,000; under Annual Bonus,

reÖects a guaranteed bonus of $1,007,500 attributable to 2007; and under Equity Awards, reÖects the continued

vesting of Mr. Piszel's one time sign-on grant in accordance with the vesting schedule outlined in the award

agreement as if termination had not occurred.

(3) The amount reported under Annual Bonus reÖects a guaranteed bonus of $1,007,500 attributable to 2007; and under

Equity Awards reÖects the value of all unvested RSUs, which will vest and will be settled immediately upon such

termination. The amount reported under Non-qualiÑed Pension reÖects the non-vested Pension SERP BeneÑt as of

September 30, 2007, which is payable under a disability event. Mr. Piszel is not eligible for the non-vested Pension

SERP BeneÑt or the non-vested Thrift/401(k) SERP BeneÑt in the event of death.

(4) The amount reported under Base Salary reÖects two times annualized base salary of $650,000; and under Annual

Bonus, reÖects a guaranteed bonus of $1,007,500 attributable to 2007. Pursuant to the one time sign-on grant award

agreement and the long-term equity award agreement for RSUs granted in 2007, Mr. Piszel's termination would be

classiÑed as a ""Special Circumstance Termination'' if (a) his job were eliminated due to a reorganization or job

relocation or if his employment were terminated due to a restructuring or other no fault displacement, as determined

by the Chief Executive OÇcer, and (b) he had executed a written agreement containing non-competition, nonsolicitation, and other covenants. Under this provision, the one time sign-on award granted in 2006 and the RSUs

granted in 2007 will vest immediately (other than the Performance RSUs, because at December 31, 2007 the CHRC

had not determined that the performance criterion had been satisÑed), and will be settled in accordance with the

vesting schedule outlined in the award agreement as if termination had not occurred.

Mr. Piszel's October 14, 2006 oÅer letter provides that if, prior to the fourth anniversary of his

employment date, we terminate Mr. Piszel's employment for any reason other than cause, he will

receive a lump sum cash payment equal to two times his annualized base salary in eÅect at the

time of termination. This payment will be made in lieu of any payments under our otherwise

applicable severance plan, policy or practice. In the event that Mr. Piszel's employment is

terminated after the fourth anniversary of his employment date, he will be eligible to receive

severance pay pursuant to the terms of our applicable severance plan or policy. If Mr. Piszel

terminates his employment with us for any reason or is terminated for cause before the second

Executive Compensation

78
anniversary of his employment date, he is required to repay the full $2,500,000 of his sign-on cash

bonus. If we terminate Mr. Piszel's employment for any reason other than cause between the Ñrst

and fourth anniversaries of the date of grant, then the sign-on grant of 78,940 RSUs will vest and

continue to settle pursuant to the vesting schedule set forth in the grant agreement. If Mr. Piszel

terminates his employment with us for any reason or is terminated for cause, then any unvested

RSUs will be forfeited. Mr. Piszel is subject to non-competition and non-solicitation of employees

restrictions for a period of one year following any termination of his employment.

Patricia L. Cook

The following table describes the potential payments as of December 31, 2007 upon

termination for Patricia L. Cook, our Executive Vice President and Chief Business OÇcer.

Voluntary Resignation

 or Involuntary For Involuntary Special

BeneÑts and Payments Gross Misconduct Other Than For Death or Circumstance

Upon Termination Termination Gross Misconduct(1) Disability(2) Termination(3)

Compensation:

Base Salary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $1,200,000 Ì $1,200,000

Equity Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì $2,950,292 2,110,364

BeneÑts:

Non-qualiÑed Pension ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 523,074 Ì

Deferred Compensation PayoutsÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 131,925 Ì

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $1,200,000 $3,605,291 $3,310,364

(1) The amount reported for Base Salary reÖects the sum of Ms. Cook's annualized base salary of $600,000 pursuant to

her employment agreement plus severance pay equal to Ms. Cook's annualized base salary of $600,000 pursuant to

our oÇcer severance plan. Ms. Cook may be eligible to participate in the 2007 bonus program at the discretion of

the Chief Executive OÇcer, Chief Operating OÇcer or Executive Vice President, Human Resources and Corporate

Services. Any bonus paid under this program will be subject to CHRC approval.

(2) The amount reported under Equity Awards reÖects the value of all unvested RSUs, which will vest and will be settled

immediately upon such termination, and the value of all unvested stock options, which become exercisable

immediately upon such termination. The amount reported under Non-qualiÑed Pension reÖects the non-vested

Pension SERP BeneÑt as of September 30, 2007, which is payable under a disability event. The amount reported

under Deferred Compensation Payouts reÖects the non-vested Thrift/401(k) SERP BeneÑt as of December 31, 2007,

which is payable upon a disability event. Ms. Cook is not eligible for the non-vested Pension SERP BeneÑt or the

non-vested Thrift/401(k) SERP BeneÑt in the event of death. Ms. Cook may be eligible to participate in the 2007

bonus program at the discretion of the Chief Executive OÇcer, Chief Operating OÇcer or Executive Vice

President, Human Resources and Corporate Services. Any bonus paid under this program will be subject to CHRC

approval.

(3) The amount reported under Base Salary reÖects the sum of Ms. Cook's annualized base salary of $600,000 pursuant

to her oÅer letter plus severance pay equal to Ms. Cook's annualized base salary of $600,000 pursuant to our oÇcer

severance plan. The amount reported under Equity Awards reÖects the value of Ms. Cook's 2007 long-term equity

awards as of December 31, 2007.

Pursuant to the long-term equity award agreement for awards made in 2006 and for RSUs granted in 2007,

Ms. Cook's termination would be classiÑed as a ""Special Circumstance Termination'' if (a) her job were eliminated

due to a reorganization or job relocation or if her employment were terminated due to a restructuring or other no

fault displacement, as determined by the Chief Executive OÇcer, and (b) she had executed a written agreement

containing non-competition, non-solicitation, and other covenants. Under this provision, long-term equity awards

granted in 2006 and RSUs granted in 2007 will vest immediately (other than the Performance RSUs, because at

December 31, 2007 the CHRC had not determined that the performance criterion had been satisÑed), and will be

settled in accordance with the vesting schedule outlined in the award agreement as if termination had not occurred.

Executive Compensation

79
Ms. Cook's July 8, 2004 oÅer letter, as amended by a letter agreement dated July 9, 2004 and

action taken by the CHRC on May 6, 2005, provides that, if we terminate Ms. Cook on or after the

second anniversary of her employment date but prior to her sixty-second birthday for any reason

other than gross misconduct, as this term may be modiÑed in our sole discretion from time to time,

or any other willful or malicious misconduct on her part that is substantially injurious to us, she

will receive a lump sum cash severance payment in the amount of $600,000. If Ms. Cook's

employment with Freddie Mac terminates for any reason (other than disability or death or a special

circumstances termination) prior to the settlement of her RSU grants, she forfeits all of the

unsettled grants.

Pursuant to the terms of a Restrictive Covenant Agreement between Ms. Cook and us, in the

event that she is eligible for severance pay pursuant to the terms of our oÇcer severance policy upon

the termination of her employment, the amount she would receive is equal to her annualized base

salary at the time of termination; provided, that she executes a general release and waiver that is

satisfactory to us which may contain, in addition to a release of claims, provisions related to nonparticipation in others' claims against us, non-competition and non-solicitation provisions akin to

Mr. Piszel's, and non-disparagement, continued cooperation and treatment of conÑdential

information and such other provisions as we deem appropriate.

Michael Perlman

The following table describes the potential payments as of December 31, 2007 upon

termination for Michael Perlman, our Executive Vice President, Operations and Technology.

Involuntary Other Than For

Gross Misconduct or

BeneÑts and Payments Voluntary Special Circumstances Death or

Upon Termination Resignation(1) Termination(2) Disability(3)

Compensation:

Base SalaryÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $1,000,000 Ì

Annual Bonus ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,225,000 3,675,000 $1,225,000

Equity Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 688,418 688,418

Repayment to Freddie Mac ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (550,000) (550,000) Ì

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 675,000 $4,813,418 $1,913,418

(1) If Mr. Perlman terminates his employment with us for any reason other than death or disability before the second

anniversary of his employment date, he is required to repay the full $550,000 of his sign-on cash bonus which is

reÖected under Repayment to Freddie Mac.

(2) The amount reported under Base Salary reÖects two times annualized base salary of $500,000; under Annual Bonus,

reÖects a guaranteed bonus of $1,225,000 plus two times Mr. Perlman's target bonus of $1,225,000 attributable to

2007; and under Equity Awards, reÖects the continued vesting of Mr. Perlman's one time sign-on grant. Pursuant to

the long-term equity agreement for Mr. Perlman's sign-on grant, Mr. Perlman's termination would be classiÑed as a

""Special Circumstances Termination'' if (a) his job were eliminated due to a reorganization or job relocation or if

his employment were terminated due to a restructuring or other no fault displacement, as determined by the Chief

Executive OÇcer, and (b) he had executed a written agreement containing non-competition, non-solicitation, and

other covenants. Under this provision, the sign-on grant will vest immediately and will be settled in accordance with

the vesting schedule outlined in the award agreement as if termination had not occurred.

(3) The amount reported under Annual Bonus reÖects a guaranteed bonus of $1,225,000 attributable to 2007 and under

Equity Awards reÖects the value of all outstanding RSUs, which vest immediately upon such termination.

Mr. Perlman's July 24, 2007 oÅer letter provides certain beneÑts to Mr. Perlman in lieu of

severance if we terminate his employment prior to the second anniversary of his employment. If we

Executive Compensation

80
terminate Mr. Perlman's employment on or before the second anniversary of his employment date

for any reason other than gross misconduct or for violating any of our standards of conduct,

attendance or behavior, we will make a lump-sum cash payment to him equal to two times the sum

of his annualized base salary and target short-term incentive in eÅect at the time of termination. If

we terminate Mr. Perlman's employment between the second and third anniversaries of his

employment date for any reason other than gross misconduct or for violating any of our standards of

conduct, attendance or behavior, we will make a lump-sum cash payment to him equal to the sum

of his annualized base salary and target short-term incentive in eÅect at the time of termination. In

addition, if we terminate Mr. Perlman's employment on or before the third anniversary of his

employment date for any reason other than gross misconduct or for violating any of our standards of

conduct, attendance or behavior, we will pay Mr. Perlman a prorated target bonus for the year in

which he terminated employment, based on the number of months elapsed during such calendar

year, and all outstanding RSUs and/or stock options will continue to vest according to the vesting

schedule set forth in the grant agreements.

Michael C. May

The following table describes the potential payments as of December 31, 2007 upon

termination for Michael C. May, our Senior Vice President, Multifamily Sourcing.

Voluntary Resignation

or Involuntary For Special

BeneÑts and Payments Gross Misconduct Involuntary Other Than Death or Circumstance

Upon Termination Termination For Gross Misconduct(1) Disability(2) Termination(3)

Compensation:

Base SalaryÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $418,000 Ì $418,000

Bonus ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì

Equity Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì $900,095 545,120

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $418,000 $900,095 $963,120

(1) The amount reported for Base Salary reÖects Mr. May's annualized base salary of $418,000. Mr. May may be eligible

to participate in the 2007 bonus program at the discretion of the Chief Executive OÇcer, Chief Operating OÇcer or

Executive Vice President, Human Resources and Corporate Services. Any bonus paid under this program will be

subject to CHRC approval.

(2) The amount reported under Equity Awards reÖects the value of all unvested RSUs, which will vest and will be settled

immediately upon such termination, and the value of all unvested stock options, which become exercisable

immediately upon such termination. Mr. May may be eligible to participate in the 2007 bonus program at the

discretion of the Chief Executive OÇcer, Chief Operating OÇcer or Executive Vice President, Human Resources

and Corporate Services. Any bonus paid under this program will be subject to CHRC approval.

(3) The amount reported under Base Salary reÖects Mr. May's annualized base salary of $418,000 pursuant to our oÇcer

severance plan. The amount reported under Equity Awards reÖects the value of Mr. May's 2007 long-term equity

awards as of December 31, 2007.

Pursuant to the long-term equity award agreement for awards made in 2006 and for RSUs granted in 2007, Mr. May's

termination would be classiÑed as a ""Special Circumstance Termination'' if (a) his job were eliminated due to a

reorganization or job relocation or if his employment were terminated due to a restructuring or other no fault

displacement, as determined by the Chief Executive OÇcer, and (b) he had executed a written agreement containing

non-competition, non-solicitation, and other covenants. Under this provision, long-term equity awards granted in

2006 and RSUs granted in 2007 will vest immediately (other than the Performance RSUs, because at December 31,

2007 the CHRC had not determined that the performance criterion had been satisÑed), and will be settled in

accordance with the vesting schedule outlined in the award agreement as if termination had not occurred.

Executive Compensation

81
Eugene M. McQuade

We entered into an August 3, 2004 employment agreement with Mr. McQuade which provided

for his employment as President and Chief Operating OÇcer, eÅective September 1, 2004. The

agreement had an initial term of three years and on May 1, 2007, Mr. McQuade informed us that

he would leave the company at the conclusion of that employment agreement, September 1, 2007.

We did not enter into any separation agreements with Mr. McQuade and the CHRC did not

accelerate the vesting of Mr. McQuade's unvested RSUs and stock options. Under the terms of his

employment agreement, Mr. McQuade remains subject to non-competition and non-solicitation

restrictions for periods of two years and one year, respectively, following his termination of

employment with us. Under our stock compensation plans, all outstanding and unvested stock

options and RSUs as of September 1, 2007 were forfeited, and all vested and unexercised stock

options remained exercisable for 90 days following his departure.

Joseph A. Smialowski

Mr. Smialowski joined us as our Executive Vice President, Operations and Technology on

December 1, 2004. Mr. Smialowski resigned from this position eÅective June 30, 2007 and served as

a special advisor to our Chairman and Chief Executive OÇcer until December 31, 2007. We

entered into a Transition Period Agreement with Mr. Smialowski eÅective June 29, 2007, which

provided for the following:

‚ Mr. Smialowski's continued service to Freddie Mac through December 31, 2007 at his thencurrent base salary of $550,000, together with a cash bonus of $1,150,000 payable on

January 31, 2008, which is equal to his target bonus for the 2007 performance year, and a

supplemental cash payment of $200,000, also payable on January 31, 2008.

‚ Mr. Smialowski's assistance with the transition of his responsibilities to a successor

Executive Vice President, Operations and Technology.

‚ Mr. Smialowski's agreement to serve in an on-call consulting role once his successor has

been named and a transition of his responsibilities has been completed.

‚ All outstanding and unvested stock options and RSUs as of December 31, 2007 will be

forfeited, and all vested and unexercised stock options will remain exercisable for 90 days

following his departure.

Employment and Separation Agreements

The employment agreements or oÅer letters described below for Mr. Syron, Mr. Piszel,

Ms. Cook and Mr. Perlman are available on Freddie Mac's website at

www.freddiemac.com/governance. For information on the termination provisions in Mr. Syron's,

Mr. Piszel's, Ms. Cook's and Mr. Perlman's employment agreements or oÅer letters, as well as

certain compensation agreements we entered into with Messrs. McQuade and Smialowski, see

""Potential Payments Upon Termination or Change in Control'' above.

We entered into employment agreements or oÅer letters with each of the named executive

oÇcers, with the exception of Mr. May, when they Ñrst joined us. All of our named executive

oÇcers, with the exception of Mr. May, are parties to currently eÅective agreements. Some

agreements contain minimum guarantees with respect to base pay, bonus, and long-term equity

Executive Compensation

82
awards, as well as special provisions applicable upon termination. The CHRC and management

considered the executive protections (such as guaranteed bonuses and special termination beneÑts)

provided by each of these agreements necessary in order to achieve our goal of recruiting and

retaining exceptional leaders and executive oÇcers during a time of transition.

The employment agreement or oÅer letter for Messrs. Syron and Perlman set their respective

base salaries, minimum bonus opportunities, and long-term equity award opportunities.

Richard F. Syron

Mr. Syron was appointed Chairman of the Board and Chief Executive OÇcer, eÅective

December 31, 2003. The terms of his employment with us are governed by (a) a December 6, 2003

employment agreement, as supplemented by a December 12, 2003 agreement and as amended by a

November 9, 2007 amendment, (b) a June 1, 2006 compensation agreement and (c) a March 3,

2007 compensation agreement. The June 1, 2006 agreement superseded the provisions of

Mr. Syron's employment agreement that pertain to his cash bonus target for performance during

2006. The March 3, 2007 agreement superseded the provisions of Mr. Syron's employment

agreement that pertain to his cash bonus target for performance during 2007 and to his 2007 annual

equity award.

The November 9, 2007 amendment extends the terms of Mr. Syron's original employment

agreement from December 31, 2008 to December 31, 2009. Mr. Syron will continue to serve as

Chairman of the Board and Chief Executive OÇcer until his successor as Chief Executive OÇcer is

appointed, at which time Mr. Syron will become Executive Chairman of the Board for the balance

of his extended term. Mr. Syron will actively assist us in recruiting and retaining his successor as

Chief Executive OÇcer.

The amended agreement increased Mr. Syron's base salary to $1,300,000, eÅective as of July 1,

2007. The amended agreement also provides for a special extension bonus of $3,500,000, payable in

installments of $1,250,000 after its eÅective date, $1,500,000 after July 1, 2008 and $750,000 after

July 1, 2009. This special bonus is payable only if Mr. Syron remains employed with us as of each of

these dates and is subject to repayment by Mr. Syron if he terminates his employment with us

before December 31, 2009 other than for good reason, as deÑned in the amended agreement.

The amended agreement also provides that Mr. Syron will have the opportunity to earn an

annual cash bonus, based on performance criteria determined by the CHRC, for 2007 in a target

amount of 278% of his bonus-eligible earnings, for 2008 in a target amount of 302% of his bonuseligible earnings and for 2009 in a target amount of 322% of his bonus-eligible earnings, provided

that Mr. Syron remains employed by us through the end of the applicable calendar year. For any of

these years, the annual bonus actually awarded may range from 0% to 200% of the actual target,

depending on Mr. Syron's performance during the year.

Mr. Syron received an additional equity grant in December 2007 of RSUs in the amount of

$800,000 pursuant to the amended agreement. In 2008, Mr. Syron will be entitled to an equity grant

valued at $9,400,000, of which $8,800,000, the amount provided for in his original employment

agreement, will be guaranteed. In 2009 he will be entitled to an equity grant valued at $10,000,000,

none of which will be guaranteed. The size of the actual grants, to the extent not guaranteed, will

be determined based on an assessment of performance criteria established by the CHRC.

Executive Compensation

83
In addition to the provisions of the amended agreement, the CHRC has established a special

cash performance award opportunity for Mr. Syron. This opportunity is described in more detail in

""Compensation Discussion and Analysis Ì Compensation Structure Ì Chief Executive OÇcer

Special Performance Award Opportunity.''

During the term of the employment agreement, we will maintain, at our cost, insurance on the

life of Mr. Syron for the beneÑt of his beneÑciaries, with a beneÑt equal to $10,000,000. If

Mr. Syron remains employed by us through December 31, 2008, upon the later to occur of

December 31, 2008 and his turning 65, we will deliver to Mr. Syron a fully paid-up permanent life

insurance policy with a face amount equal to $4,000,000 and will maintain $6 million in term life

insurance during his employment in 2009.

Pursuant to his employment agreement, Mr. Syron is entitled to participate in all other

compensation and employee beneÑt or perquisite programs generally available from time to time to

our senior executives, on the terms and conditions then prevailing under each such program, except

that Mr. Syron is not eligible to participate in our oÇcer severance plan or policy.

Anthony S. Piszel

Mr. Piszel joined us as our Executive Vice President and Chief Financial OÇcer on

November 13, 2006. Under the terms of an oÅer letter dated October 14, 2006, Mr. Piszel receives

an annualized base salary of $650,000 and the opportunity to earn annual bonuses and long-term

equity awards. Under the terms of the agreement, Mr. Piszel received a one-time sign-on bonus in

the amount of $7,500,000, composed of $2,500,000 in cash and $5,000,000 in the form of RSUs.

Mr. Piszel's one-time sign-on bonus was structured to take into account the long-term incentive

opportunity that Mr. Piszel forfeited at his prior employer in order to join Freddie Mac. The number

of RSUs subject to the sign-on award is 78,940, which vest in four equal annual installments

beginning on December 7, 2007. The agreement also provides Mr. Piszel with an opportunity to

earn an annual cash bonus targeted at $1,007,500, with guaranteed minimum annual bonuses for

2006 and 2007 of $600,000 and $1,007,500, respectively.

The oÅer letter provides Mr. Piszel with an annual long-term equity award with a targeted

aggregate value of $3,000,000, with a guaranteed minimum equity award in 2007 of $3,000,000. The

long-term equity award vests in four equal annual installments beginning on the Ñrst anniversary of

the grant date.

Patricia L. Cook

Ms. Cook joined us as our Executive Vice President, Investments on August 2, 2004 and

became Executive Vice President, Investments and Capital Markets on February 1, 2005 and

Executive Vice President and Chief Business OÇcer on June 5, 2007. Under the terms of an oÅer

letter dated July 8, 2004, as amended by a letter agreement dated July 9, 2004 and action taken by

the CHRC on May 6, 2005, Ms. Cook receives an annualized base salary of $600,000 and an

annual cash bonus targeted at 167% of her bonus eligible earnings (currently deÑned as base

salary), subject to a maximum of 200% of this target, absent approval by the CHRC of a greater

Executive Compensation

84
amount. Ms. Cook also has the opportunity to earn an annual long-term equity award that has no

maximum award restriction.

Michael C. May

Mr. May joined us in 1983 and was appointed our Senior Vice President, Multifamily Sourcing

in August 2005. We do not have any agreements with Mr. May regarding the terms of his

employment.

Michael Perlman

Mr. Perlman joined us as our Executive Vice President, Operations and Technology on

August 1, 2007. Under the terms of an oÅer letter dated July 24, 2007, Mr. Perlman receives an

annualized base salary of $500,000 and the opportunity to earn annual bonuses and long-term equity

awards. The letter agreement provides Mr. Perlman with an opportunity to earn an annual cash

bonus targeted at 245% of his bonus eligible earnings, with a guaranteed minimum bonus

attributable to performance during calendar year 2007 of $1,225,000. Mr. Perlman also will be

eligible for an annual long-term equity award with a targeted aggregate value of $1,525,000, with a

guaranteed minimum award attributable to performance during calendar year 2007 of $1,525,000.

Under the terms of a cash sign-on payment letter agreement, Mr. Perlman received a one-time

cash payment of $550,000, which must be repaid if, prior to the second anniversary of

Mr. Perlman's start date, Mr. Perlman's employment is terminated. Mr. Perlman also received a

one-time sign-on equity award in the form of RSUs with a total dollar value of $1,200,000.

Mr. Perlman's one-time sign-on equity award was designed to take into account the long-term

incentive opportunity that Mr. Perlman forfeited at his prior employer in order to join Freddie Mac.

The number of RSUs subject to the sign-on award is 20,206, which vest in three equal installments

beginning on the Ñrst anniversary of the grant date.

Executive Compensation

85
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

As provided in its charter, the Audit Committee selects our independent auditors, reviews the

scope of the annual audit and pre-approves all audit and non-audit services permitted under

applicable law to be performed by the independent auditors. The Audit Committee has evaluated

the performance of PricewaterhouseCoopers LLP and has selected them as our independent

auditors for Ñscal 2008. You are requested to ratify the Audit Committee's appointment of

PricewaterhouseCoopers LLP. Representatives of PricewaterhouseCoopers LLP will be present at

the annual meeting and will be given the opportunity to make a statement, if they desire to do so,

and to respond to appropriate questions from stockholders present at the meeting. Unless

stockholders specify otherwise in their proxy, proxies solicited by the Board will be voted by the

proxy holders at the annual meeting to ratify the selection of PricewaterhouseCoopers LLP as our

independent auditors for Ñscal 2008. A majority of the votes cast at the annual meeting on this

proposal is required for ratiÑcation.

Description of Fees(1)

The following is a description of fees billed to us by PricewaterhouseCoopers LLP during 2006

and 2007. The increase in audit fees from 2006 to 2007 primarily reÖects the fact that

PricewaterhouseCoopers LLP began performing quarterly reviews pursuant to Statement on

Auditing Standards No. 100 in 2007.

2007 2006

Audit Fees(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $63,963,805 $45,075,574

Audit-Related Fees(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,419,297 8,898,000

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $73,383,102 $53,973,574

(1) These fees represent amounts billed within the designated year and include reimbursable expenses of $3,583,102 and

$3,442,574 for 2007 and 2006 respectively.

(2) Audit fees include fees billed by PricewaterhouseCoopers LLP in connection with the Statement on Auditing

Standards No. 100 quarterly reviews of our interim Ñnancial information and the audit of our annual consolidated

Ñnancial statements. The audit fees during 2007 include fees and expenses related to the 2006 ($15,413,410) and

2007 ($48,550,395) audits and preferred stock comfort letters. Fees related to preferred stock comfort letters were

included in the 2007 annual audit engagement fees while, in prior years, these fees were billed as a separate

engagement. In addition to the amounts shown above, approximately $10.4 million of fees and reimbursable expenses

will be billed in 2008 for the 2007 audit. The audit fees during 2006 include fees and expenses related to the 2005

($26,428,000) and 2006 ($18,547,574) audits and preferred stock comfort letters ($100,000). Audit fees of $65,300

and $37,400 in 2007 and 2006, respectively, related to the Freddie Mac Foundation are excluded because these fees

are incurred and paid separately by the Freddie Mac Foundation.

(3) 2007 audit-related fees principally include fees and expenses related to internal control design reviews ($7,419,297),

agreed upon procedures associated with Freddie Mac-sponsored securitization transactions ($1,982,000), and

Comperio subscription services ($18,000). 2006 audit-related fees principally include fees and expenses related to

internal control design reviews ($6,377,000), agreed upon procedures associated with Freddie Mac-sponsored

securitization transactions ($2,353,000) and agreed upon procedures with respect to Freddie Mac's option-adjusted

spread fair value disclosure ($150,000) and Comperio subscription services ($18,000).

Approval of Independent Auditor Services and Fees

The Sarbanes-Oxley Act and related rules adopted by the SEC require that all services

provided to companies subject to the reporting requirements of the Exchange Act by their

independent auditors be pre-approved by their audit committee or by authorized members of the

Proposal 2: RatiÑcation of Appointment of Independent Auditors

86
committee, with certain exceptions. The Audit Committee's charter requires that the Audit

Committee pre-approve any audit services, and any non-audit services permitted under applicable

law, to be performed by our independent auditors (or to designate one or more members of the

Audit Committee to pre-approve such services and to report such pre-approval to the Audit

Committee).

Audit services that are within the scope of an auditor's engagement approved by the Audit

Committee prior to the performance of those services are deemed pre-approved and do not require

separate pre-approval. Audit services not within the scope of an Audit Committee-approved

engagement, as well as permissible non-audit services, must be separately pre-approved by the

Audit Committee.

When the Audit Committee pre-approves a service, the Audit Committee typically sets a dollar

limit for such service. Management endeavors to obtain pre-approval of the Audit Committee, or of

the Chairman of the Audit Committee (when the Chairman of the Audit Committee has been

delegated such authority), before it incurs fees in excess of the dollar limit. If the Chairman of the

Audit Committee approves the increase, the Chairman will report such approval at the Audit

Committee's next scheduled meeting.

The pre-approval procedure is administered by our senior Ñnancial management, which reports

throughout the year to the Audit Committee. The Audit Committee pre-approved all audit and

audit-related services performed in 2007. At the direction of the Audit Committee,

PricewaterhouseCoopers LLP did not provide any non-audit services to us in 2007.

We recommend that you vote for the ratiÑcation of the selection of

PricewaterhouseCoopers LLP as our independent auditors for 2008.

Proposal 2: RatiÑcation of Appointment of Independent Auditors

87
PROPOSAL 3: APPROVAL OF AMENDED AND RESTATED

2004 STOCK COMPENSATION PLAN

General

You are being asked to approve the amended and restated Federal Home Loan Mortgage

Corporation 2004 Stock Compensation Plan, or 2004 Employee Plan to increase the number of

shares authorized for issuance under the 2004 Employee Plan by 15,000,000. Our Board approved

the amended and restated 2004 Employee Plan on March 7, 2008, subject to stockholder approval.

Stockholders initially approved the 2004 Employee Plan in 2004, and we have used the 2004

Employee Plan as our sole plan for grants of equity awards to employees since that time. The

proposed amendment and restatement would also make a number of changes to the 2004 Employee

Plan that are discussed below.

Currently, the shares remaining available for future awards under the 2004 Employee Plan are

insuÇcient to meet our long-term incentive needs. The company estimates that the additional

15,000,000 shares will be suÇcient to make awards under the 2004 Employee Plan for

approximately the next four years.

The company believes that its future success depends heavily on its ability to attract, motivate

and retain the highest caliber employees. Equity is a key component of Freddie Mac's total

compensation package and closely aligns the interests of key employees with those of the company's

stockholders. Given current compensation practice in the Ñnancial services industry, the company

believes it would be unable to compete eÅectively for critical employees absent suÇcient equity

incentives without signiÑcantly increasing Freddie Mac's cash compensation costs.

Information on the total number of shares available under our existing equity compensation

plans and subject to outstanding options, warrants and rights as of December 31, 2007 is presented

below under the caption ""Securities Authorized for Issuance under Equity Compensation Plans.''

Based on outstanding awards at March 31, 2008 under our current equity award plans for

employees and non-employee directors currently in eÅect, but excluding our ESPP, if stockholders

approve the amended and restated 2004 Employee Plan, the shares subject to outstanding awards

(including restricted stock, which shares are treated as already outstanding) and shares available

for future issuance under all continuing equity compensation plans, including the additional shares

to be reserved under the amended and restated 2004 Employee Plan, would be as follows:

Shares subject to outstanding awardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,989,097

Shares available for future equity awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 22,453,618

Total sharesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34,442,715

Percentage of outstanding shares* ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.33%

* Shares outstanding includes all common stock issued and outstanding at March 31, 2008,

without giving eÅect to issuance of unissued shares reserved under the equity award plans or

deliverable in the future in connection with outstanding awards.

The Board and the CHRC believe that attracting and retaining executives and other key

employees of high quality has been and will continue to be essential to our growth and success. As it

has in the past four years, the 2004 Employee Plan should enable us to implement a compensation

program with diÅerent types of incentives for motivating leaders and key employees and

encouraging them to provide long-term service. In particular, we intend to continue using awards of

stock-based compensation as an important element of compensation, because such awards enable

Proposal 3: 2004 Stock Compensation Plan

88
employees to acquire or increase their proprietary interest in Freddie Mac, thereby aligning interests

between employees and our stockholders. In addition, the amended and restated 2004 Employee

Plan will authorize stock-based and cash-based incentive awards by which we can tie employee

compensation to measures of our performance so as to provide our employees with incentives to

achieve excellent performance.

The amended and restated 2004 Employee Plan will authorize a broad range of awards,

including:

‚ options;

‚ stock appreciation rights, or SARs;

‚ restricted stock, which is an award of actual shares subject to a risk of forfeiture and

restrictions on transfer;

‚ deferred stock, including RSUs which are, in eÅect, forfeitable deferred stock;

‚ other awards based on our common stock;

‚ dividend equivalents;

‚ stock-based performance awards, which are, in eÅect, deferred stock awards that may be

earned by achieving speciÑc performance objectives; and

‚ cash-based performance awards which may be earned by achieving speciÑc performance

objectives.

Changes in the Amended and Restated 2004 Employee Plan

The amendment and restatement of the 2004 Employee Plan will make these signiÑcant

changes to the current 2004 Employee Plan:

‚ Increase the shares reserved by 15 million shares (2.32% of the currently outstanding

shares);

‚ Eliminate the current 50% cap on the number of shares that can be delivered under the 2004

Employee Plan in the form of restricted stock and other non-stock option/non-SAR awards;

‚ Authorize incentive awards in the form of cash rather than stock, subject to an annual perperson limit of $8 million plus any unused portion of the participant's cash limit from prior

years;

‚ Specify that the qualiÑcations of the members of the CHRC or other committee

administering the 2004 Employee Plan will be speciÑed in the Committee's charter rather

than in the 2004 Employee Plan;

‚ Require separate stockholder approval of:

‚ Transfers of awards to third parties for value; and

‚ A cash buyout of underwater options, which would be treated like other ""repricing'' events

under the 2004 Employee Plan;

‚ Clarify that, because shares count against the number reserved under the 2004 Employee

Plan when delivered to the participant and not if withheld for taxes or to pay an exercise

Proposal 3: 2004 Stock Compensation Plan

89
price, the CHRC can determine the number of shares expected to be delivered under

outstanding awards in calculating the number of shares available for future awards;

‚ Increase the portion of deferred stock and other non-option/non-SAR awards that may be

granted with a minimum vesting period of one year rather than three years from the current

level of 5% to 15%;

‚ Add regulatory compliance provisions, including for purposes of:

‚ Compliance with Code Section 409A, which potentially imposes early taxation, tax

penalties and interest on participants if we grant an award providing for payment in a

future year without meeting technical requirements of Section 409A. This includes

deletion of a feature permitting participants to elect to defer receipt of shares acquired

upon exercise of options, which is impractical under Section 409A; and

‚ Compliance with requirements under accounting standard FAS 123R, to control the

expense from stock-based awards in case of adjustments to awards resulting from equity

restructuring transactions, and to permit cash settlements of share-based awards where

the accounting consequences have been reviewed and considered; and

‚ Make explicit that an optionee's right to compensation for options cancelled in a merger is

based on the intrinsic (i.e., in-the-money) value of the award and not a greater fair value

based on the remaining life of the option.

Reasons for Stockholder Approval

The Board seeks stockholder approval of the amended and restated 2004 Employee Plan in

order to satisfy certain legal requirements, including requirements of the NYSE. In addition, we

seek stockholder approval so that designated stock options can qualify as incentive stock options

under the Code, which gives the holder of those options more favorable tax treatment. Finally, we

regard stockholder approval of the amended and restated 2004 Employee Plan and its material

terms, including the business criteria that may be used in setting performance goals for awards

under the 2004 Employee Plan, as desirable and consistent with corporate governance best

practices. We have not in the past granted equity awards except under plans approved by our

stockholders.

Restriction on Repricing

Without stockholder approval, we will not amend or replace previously granted options in a

transaction that constitutes a ""repricing.'' For this purpose, ""repricing'' means:

‚ lowering the exercise price of an option or grant price of a SAR after it is granted;

‚ canceling an option or SAR at a time when its exercise price or grant price exceeds the fair

market value of the underlying stock, in exchange for another option, SAR, award of

restricted stock, other equity, or cash, unless the cancellation and exchange occurs in

connection with a merger, acquisition, spin-oÅ or other similar corporate transaction;

‚ any other action that is treated as a repricing under GAAP; or

‚ any other action that has the same eÅect.

An adjustment to an exercise price or other price speciÑed in an award resulting from a stock

split, equity restructuring or other extraordinary corporate transaction would not constitute a

repricing.

Proposal 3: 2004 Stock Compensation Plan

90
Description of the Amended and Restated 2004 Employee Plan

The following is a brief description of the material terms and features of the 2004 Employee

Plan, as proposed to be amended and restated. Many terms of the current 2004 Employee Plan will

not be aÅected by the amendment and restatement, in which case the description below refers

simply to the 2004 Employee Plan without the terms ""amended and restated''. This description is

qualiÑed in its entirety by reference to the full text of the proposed amended and restated 2004

Employee Plan, a copy of which is attached to this Proxy Statement as Appendix A.

Shares Available. The number of shares of common stock reserved and available for awards

under the amended and restated 2004 Employee Plan will be 20,988,391 million shares. This

includes the 15 million shares to be added by the amendment, as well as shares that remained

available under the 1995 Plan and 1995 Plan shares that have become available under the 2004

Employee Plan. Shares subject to outstanding awards under the 1995 Plan have become available

under the 2004 Employee Plan in cases in which such shares are not delivered to the participant

and vested, and such recaptures will continue in the future. Shares available under the amended

and restated 2004 Employee Plan may be delivered in connection with any type of award; a 50% cap

on the portion of plan shares that could be used for full-value awards (that is, non-option/nonSAR awards) will not be continued under the amended and restated 2004 Employee Plan.

Only the number of shares actually delivered to participants upon exercise of an option or SAR

or upon settlement of other awards, or, in the case of restricted stock, the number of shares that

have been delivered to the participant and which have become non-forfeitable, count against the

number of shares reserved under the 2004 Employee Plan. Thus, shares become available again for

new awards in the following cases:

‚ an award expires or is forfeited;

‚ an award is settled in cash or is otherwise terminated without issuance of shares to the

participant, in whole or in part;

‚ shares are withheld from an award or separately surrendered to pay the exercise price of an

option or to satisfy tax withholding obligations for an award;

‚ fewer shares are delivered upon exercise of an SAR than the number to which the SAR

related; or

‚ shares issued as restricted stock are forfeited.

Shares subject to outstanding 1995 Plan awards will be counted and deemed available in

accordance with the share counting rules of the 2004 Employee Plan.

Shares delivered under the 2004 Employee Plan may be either newly issued or treasury shares.

On April 18, 2008, the closing sale price of our common stock in consolidated trading of NYSElisted securities was $27.06 per share.

Per-Person Award Limitations. The 2004 Employee Plan includes limitations on the amount

of awards that may be granted to a participant in a given year. Under the annual per-person

limitations, a participant may in any year be granted share-based awards under the 2004 Employee

Plan relating to no more than his or her ""Annual Limit.'' This Annual Limit equals two million

shares plus the amount of the participant's unused Annual Limit relating to share-based awards as

of the close of the previous year, subject to adjustment for splits and other extraordinary corporate

events. The amendment and restatement of the 2004 Employee Plan will add an Annual Limit for

each participant applicable to the amount that may be earned under cash-based incentive awards.

Proposal 3: 2004 Stock Compensation Plan

91
This Annual Limit will be $8 million plus the amount of the Participant's unused cash Annual

Limit as of the close of the previous year. A share-based award will count against only the sharebased Annual Limit and a cash incentive award will count only against the cash-based Annual

Limit.

Adjustments to Shares Reserved, Awards and Award Limits. Adjustments to the number and

kind of shares subject to the share limitations and speciÑed in the share-based Annual Limit are

authorized under the 2004 Employee Plan if a large, special or non-recurring dividend or

distribution, recapitalization, stock split, stock dividend, reorganization, merger, consolidation, spinoÅ, combination, repurchase or share exchange, rights oÅering, or other similar corporate

transaction or event aÅects the common stock. Where such an event, including any ""equity

restructuring'' as deÑned under FAS 123R, aÅects participants such that an adjustment is necessary

to prevent dilution or enlargement of the rights of participants, the CHRC is obligated to equitably

adjust outstanding awards, including adjustments to the number of shares subject to an award, any

exercise price or grant price, and other terms of the award to preserve the value of the award without

enhancing this value. The CHRC also is authorized to provide a cash payment relating to an

outstanding award if that is deemed an appropriate means to eÅect an adjustment. The CHRC is

also authorized to adjust performance conditions and other terms of awards in response to these

kinds of events or to changes in applicable laws, regulations, or accounting principles.

Eligibility. All of our executive oÇcers and other employees of Freddie Mac and our

subsidiaries and aÇliates, including directors who are also employees, or approximately

5,361 persons as of March 31, 2008, are eligible for awards under the 2004 Employee Plan. For this

purpose, an aÇliate is an organization where the employees are designated by the CHRC as eligible

to participate in the 2004 Employee Plan.

Administration. The CHRC will continue to administer the amended and restated 2004

Employee Plan, except that the Board may appoint any other committee to administer the plan and

may itself act to administer the plan. The composition and governance of the committee

administering the amended and restated 2004 Employee Plan will be established in the committee's

charter as approved from time to time by the Board, and other corporate governance documents of

Freddie Mac. The CHRC's charter provides that it must consist of at least three directors, each of

whom shall be independent under NYSE rules. You may obtain a copy of the CHRC's charter

from our website, www.freddiemac.com. Subject to the terms and conditions of the amended and

restated 2004 Employee Plan, the CHRC is authorized to select participants, determine the type

and number of awards to be granted and the number of shares to which awards will relate or the

amount of a share-based performance award or cash-based incentive award, specify times at which

awards will be exercisable or settled, including performance conditions that may be required as a

condition thereof, set other terms and conditions of such awards, prescribe forms of award

agreements, interpret and specify rules and regulations relating to the 2004 Employee Plan, and

make all other determinations which may be necessary or advisable for the administration of the

2004 Employee Plan. Nothing in the 2004 Employee Plan precludes the CHRC from authorizing

payment of other compensation to executive oÇcers and employees outside of the 2004 Employee

Plan. The CHRC is permitted to delegate authority to our senior executives for the granting of

awards to employees who are below the senior executive level. The 2004 Employee Plan provides

that CHRC members and others acting on behalf of the CHRC shall not be personally liable, and

shall be fully indemniÑed, in connection with any action, determination, or interpretation taken or

made in good faith under the 2004 Employee Plan.

Proposal 3: 2004 Stock Compensation Plan

92
Minimum Vesting Requirements. The amended and restated 2004 Employee Plan will

continue the minimum vesting rules under the 2004 Employee Plan with one modiÑcation, as

follows:

‚ Options and SARs and the proceeds of exercise will be forfeitable for at least one year after

the date of grant if the participant terminates employment for reasons other than death,

disability or retirement.

‚ Restricted stock, RSUs and other non-option/non-SAR awards for which a participant does

not pay substantial value (in addition to any service requirement) will vest (that is, become

non-forfeitable) as follows:

‚ if the grant or vesting of the award is not performance-based, over a minimum period of

three years, except that:

‚ vesting over a three-year period can include periodic vesting throughout the period; and

‚ to preserve Öexibility, up to 15% of the shares authorized under the amended and

restated 2004 Employee Plan may be delivered with a one-year minimum vesting

requirement, an increase from the 5% level currently permitted under the 2004

Employee Plan.

‚ if the grant or vesting of the award is performance-based, over a minimum period of one

year, which may include the performance period where the award is granted at the end of

a pre-set performance period.

‚ the award may vest earlier in the event of the participant's death, disability, or retirement,

or in the event of a change in control of Freddie Mac (as deÑned by the CHRC) or other

special circumstances.

‚ Shares and share-based awards paid for by participants with substantial consideration

other than continuing services may have diÅerent vesting terms.

Stock Options and SARs. The CHRC is authorized to grant stock options, including both

incentive stock options, or ISOs, which can result in potentially favorable tax treatment to the

participant, and non-qualiÑed stock options. SARs may also be granted, entitling the participant to

receive the excess of the fair market value of a share on the date of exercise over the SAR's

designated ""grant price.'' The exercise price of an option and the grant price of an SAR are

determined by the CHRC, but generally may not be less than the fair market value of the shares on

the date of grant (except as described below). The maximum term of each option or SAR will be

ten years. Subject to this limit and to the minimum vesting terms described above, the times at

which each option or SAR will be exercisable and provisions requiring forfeiture of unexercised

options at or following termination of employment or upon the occurrence of other events generally

are Ñxed by the CHRC. Options may be exercised by payment of the exercise price in cash, shares

or other property (which may include through broker-assisted cashless exercise procedures), or by

withholding of option shares or the surrender of other outstanding awards having a fair market

value equal to the exercise price. Methods of exercise and settlement and other terms of SARs will

be determined by the CHRC. SARs may be exercisable for shares or for cash, as determined by the

CHRC.

Restricted Stock and Deferred Stock/Restricted Stock Units. The CHRC is authorized to

grant restricted stock and deferred stock (which includes restricted stock units). Prior to the end of

Proposal 3: 2004 Stock Compensation Plan

93
the restricted period, shares granted as restricted stock may not be sold, and may be forfeited in the

event of termination of employment. The minimum vesting periods described above apply to

restricted stock granted for continuing services, and the CHRC can establish additional restricted

periods for those awards or set restricted periods for other awards of restricted stock. Aside from the

risk of forfeiture and non-transferability, an award of restricted stock entitles the participant to the

rights of a stockholder of Freddie Mac, including the right to vote the shares and to receive

dividends or equivalents, unless otherwise determined by the CHRC.

Deferred stock gives a participant the right to receive shares at the end of a speciÑed deferral

period. Deferred stock subject to forfeiture conditions constitutes an award of RSUs. The minimum

vesting periods described above apply to deferred stock/RSUs granted for continuing services, and

the CHRC can establish additional vesting periods for those awards or set vesting periods for other

awards of RSUs. One advantage of RSUs, as compared to restricted stock, is that the period during

which the award is forfeitable need not extend as long as the deferral period, so the CHRC can

require or permit a participant to continue to hold an interest in our stock on a tax-deferred basis.

Prior to settlement, deferred stock awards, including RSUs, carry no voting or dividend rights or

other rights associated with stock ownership, but dividend equivalents generally will be paid.

Other Stock-Based Awards, Stock Bonus Awards, and Awards in Lieu of Other Obligations.

The 2004 Employee Plan authorizes the CHRC to grant awards denominated or payable in, valued

in whole or in part by reference to, or otherwise based on or related to shares of our common stock.

The CHRC will determine the terms and conditions of such awards, including the consideration to

be paid to exercise awards in the nature of purchase rights, the periods during which awards will be

outstanding, and any forfeiture conditions and restrictions on awards. In addition, the CHRC is

authorized to grant shares as a bonus free of restrictions, or to grant shares or other awards in lieu of

our obligations under other plans or compensatory arrangements, subject to such terms as the

CHRC may specify. Under the minimum vesting requirements described above, bonus shares

generally can be granted without a minimum vesting period only if granted in substitution for other

awards or rights to payment having substantial value.

Performance Awards. The CHRC may grant share-based and cash-based performance

awards under the amended and restated 2004 Employee Plan (also referred to as incentive awards).

Generally, performance awards require satisfaction of pre-established performance goals, consisting

of one or more business criteria and a targeted performance level with respect to such criteria, as a

condition of awards being granted or becoming exercisable or settleable, or as a condition to

accelerating the timing of such events. Performance may be measured over a period speciÑed by the

CHRC. Cash-based performance awards could include annual incentive awards or long-term

incentive awards.

The 2004 Employee Plan authorizes the CHRC to grant performance awards that have the

performance terms speciÑed in advance, and which limit our discretion to make payouts except

based on the level of performance achieved. The business criteria to be used by the CHRC in

establishing performance goals applicable to those performance awards will be selected from among

the following:

1) Mission measures: aÅordable housing goals, low-cost Ñnancing initiatives, quality-ofbusiness measures, customer initiatives and customer satisfaction;

Proposal 3: 2004 Stock Compensation Plan

94
2) Operational improvement measures: risk management, enhancing operational stability,

improving or otherwise advancing disclosure controls, cost reductions, productivity, and

legal and regulatory compliance;

3) Capital management measures; and

4) Financial measures: interest income, revenues, income before income taxes, extraordinary

items and/or cumulative eÅect of changes in accounting principles, revenues, net income

or net income per common share (basic or diluted), return on assets (gross or net), return

on investment, return on capital, or return on equity, cash Öow, free cash Öow, cash Öow

return on investment (discounted or otherwise), net cash provided by operations, or cash

Öow in excess of cost of capital, interest expense or non-interest expense, non-GAAP

metrics including economic value created or other measurement of maximizing long-term

value, operating margin or proÑt margin, and stock price or total stockholder return.

The CHRC may set the levels of performance required in connection with performance awards

as Ñxed amounts, goals relative to performance in prior periods, goals compared to the performance

of one or more comparable companies or an index covering multiple companies, or in any other

way the CHRC may determine.

Other Terms of Awards. Awards may be settled in cash, shares, other awards or other

property, in the discretion of the CHRC. The CHRC may require or permit participants to defer the

settlement of all or part of an award, including shares issued upon exercise of an option or SAR, in

accordance with such terms and conditions as the CHRC may establish, including payment or

crediting of interest or dividend equivalents on any deferred amounts. The CHRC may condition

awards on the payment of taxes, which may include by withholding a portion of the shares or other

property to be distributed in order to satisfy tax obligations. Awards granted under the 2004

Employee Plan generally may not be pledged or otherwise encumbered and are not transferable

except by will or by the laws of descent and distribution, or to a designated beneÑciary upon the

participant's death, except that, under the amended and restated 2004 Employee Plan, the CHRC

may permit transfers during the participant's lifetime other than transfers to third parties for value.

The CHRC may impose forfeiture conditions on any award, including provisions that the award, or

amounts of cash, common stock or other property realized by the participant as income or gain as a

result of the award, shall be forfeited or repaid to us if the participant fails to comply with

conditions relating to non-solicitation of employees, customers and suppliers, non-competition,

preservation and appropriate use of proprietary and conÑdential information of Freddie Mac and our

aÇliates, return of property, non-disparagement of Freddie Mac and our aÇliates, cooperation in

litigation, and other restrictions protecting us and our aÇliates. Such forfeiture conditions may

apply to events occurring following termination.

Awards under the 2004 Employee Plan generally will be granted without a requirement that the

participant pay consideration in the form of cash or property for the grant (as distinguished from

the exercise). The CHRC could require payment of consideration, however, or grant awards in

substitution for, exchange for or as a buyout of other awards under the 2004 Employee Plan, awards

under our other plans, or other rights to payment from us, or may exchange or buy out outstanding

awards for cash or other property. The CHRC also may grant awards in addition to and in tandem

with other awards or rights. In granting a new award, the CHRC may determine that the in-themoney value of any surrendered award may be applied to reduce the exercise price of any option,

grant price of any SAR, or purchase price of any other award, and the fair value of a surrendered

Proposal 3: 2004 Stock Compensation Plan

95
award may be applied to the purchase price based on fair value of any new award. Any of these

transactions that would be a ""repricing'' would be subject to the stockholder approval requirement

described under the caption ""Restriction on Repricing'' above.

Dividend Equivalents. The CHRC may grant dividend equivalents. These are rights to receive

payments equal in value to the amount of dividends paid on a speciÑed number of shares of

common stock while an award is outstanding. These amounts may be in the form of cash or rights to

receive additional awards or additional shares of common stock having a value equal to the cash

amount. The awards may be granted on a stand-alone basis or in conjunction with another award.

Typically, we have granted rights to dividend equivalents in connection with options and RSUs, so

that the participant can earn amounts equal to dividends paid on the number of shares covered by

the award while the award is outstanding. Under our current practice, dividend equivalents on stock

options are accrued on options that vested on or prior to December 31, 2004 and are payable in cash

upon exercise or expiration of the option, and dividend equivalents on RSUs and stock options

unvested on December 31, 2004 and outstanding December 31, 2005 are paid in cash at the time

dividends are paid on common stock. Stock options granted after December 31, 2005 are not

entitled to receive dividend equivalents.

Amendment and Termination of the 2004 Employee Plan. The CHRC may amend, alter,

suspend, discontinue, or terminate the 2004 Employee Plan without stockholder approval, except

that an amendment would require stockholder approval if it is required to be approved by

stockholders under NYSE rules, our bylaws or any applicable law or regulation. The CHRC may, in

its discretion, submit other amendments to stockholders for approval. Board approval is required

also for any amendment that requires stockholder approval or exceeds the authority of the CHRC

under its charter and other corporate governance documents. Under these provisions, stockholder

approval will not be required for all possible amendments that might increase the cost of the 2004

Employee Plan. Outstanding awards may be amended, but the CHRC cannot modify or waive

award terms that would be mandatory if it were then granting a new award, and modiÑcations

remain subject to the provision governing repricing. In addition, for awards that are intended to be

settled in common stock according to their written terms, cash settlements under the amended and

restated 2004 Employee Plan must receive prior approval by our Chief Financial OÇcer. A

restriction on such cash settlements, requiring that they be rare and in response to unique

circumstances outside of the participant's control and constituting a hardship to the participant,

would be eliminated in the amended and restated 2004 Employee Plan, as not necessary in order to

ensure share-based awards meet applicable accounting standards.

No new award may be granted under the 2004 Employee Plan after the tenth anniversary of the

most recent approval of the 2004 Employee Plan, including an amendment and restatement of the

2004 Employee Plan, by stockholders. Unless earlier terminated by the Board, the 2004 Employee

Plan will terminate thereafter at such time that we have no further rights or obligations with respect

to any outstanding award.

Federal Income Tax Consequences

We believe that under current law the following federal income tax consequences generally

would arise with respect to awards under the amended and restated 2004 Employee Plan. The grant

of an option or an SAR will create no federal income tax consequences for the participant or for us.

A participant will not have taxable income upon exercising an option that is an ISO, except that

Proposal 3: 2004 Stock Compensation Plan

96
the alternative minimum tax may apply. Upon exercising an option that is not an ISO, the

participant generally must recognize ordinary income equal to the diÅerence between the exercise

price and the fair market value of the freely transferable or nonforfeitable shares acquired on the

date of exercise. Upon exercising an SAR, the participant must generally recognize ordinary

income equal to the cash or the fair market value of the shares received. This discussion assumes

that the option or SAR would not be deemed to be a deferral arrangement subject to Section 409A.

Upon a disposition of shares acquired upon exercise of an ISO before the end of the applicable

ISO holding periods, the participant must generally recognize ordinary income equal to the lesser of

(i) the fair market value of the ISO shares at the date of exercise minus the exercise price or

(ii) the amount realized upon the disposition of the ISO shares minus the exercise price. Otherwise,

a participant's sale of shares acquired by exercise of an option generally will result in short-term or

long-term capital gain or loss measured by the diÅerence between the sale price and the

participant's tax ""basis'' in such shares. The tax ""basis'' normally is the exercise price plus any

amount the participant recognized as ordinary income in connection with the option's exercise. A

participant's sale of shares acquired by exercise of an SAR generally will result in short-term or

long-term capital gain or loss measured by the diÅerence between the sale price and the tax ""basis''

in the shares, which normally is the amount that the participant recognized as ordinary income in

connection with the SAR's exercise.

We normally can claim a tax deduction equal to the amount recognized as ordinary income by

a participant in connection with an option or SAR, but no tax deduction relating to a participant's

capital gains. Accordingly, we will not be entitled to any tax deduction with respect to an ISO if

the participant holds the shares for the applicable ISO holding periods before selling the shares.

Awards other than options and SARs that result in a transfer to the participant of cash or

shares or other property generally will be structured under the amended and restated 2004 Employee

Plan to meet applicable requirements under Code Section 409A. If no restriction on transferability

or substantial risk of forfeiture applies to amounts distributed to a participant, the participant

generally must recognize ordinary income equal to the cash or the fair market value of shares

actually received. Thus, for example, if we grant an award of deferred stock or RSUs, the participant

should not become subject to income tax until the time at which shares or cash are actually

distributed, and we will become entitled to claim a tax deduction at that time.

On the other hand, if a restriction on transferability and substantial risk of forfeiture applies to

shares or other property actually distributed under an award (as in the case of restricted stock, for

example), the participant generally must recognize ordinary income equal to the fair market value

of the distributed amounts at the earliest time either the transferability restriction or risk of

forfeiture lapses. In the usual case, we can claim a tax deduction in an amount equal to the ordinary

income recognized by the participant. A participant may elect to be taxed at the time of grant of

restricted stock or other property rather than upon lapse of restrictions on transferability or the risk

of forfeiture, but if the participant subsequently forfeits such shares or property he or she would not

be entitled to any tax deduction, including as a capital loss, for the value of the shares or property

on which he or she previously paid tax.

Any award that is deemed to be a deferral arrangement (excluding certain exempted shortterm deferrals) will be subject to Section 409A. Participant elections to defer compensation under

such awards and the timing of distributions relating to such awards must meet requirements under

Proposal 3: 2004 Stock Compensation Plan

97
Section 409A in order for income taxation to be deferred upon vesting of the award and tax

penalties to be avoided by the participant.

The foregoing provides only a general description of the application of federal income tax laws

to certain types of awards under the amended and restated 2004 Employee Plan. This discussion is

intended for the information of stockholders considering how to vote at the annual meeting and not

as tax guidance to participants with respect to the 2004 Employee Plan, as the consequences may

vary with the types of awards made, the tax status of the participant, variations on transactions as

permitted under the amended and restated 2004 Employee Plan, and other circumstances.

DiÅerent tax rules may apply, including in the case of variations in transactions that are permitted

under the amended and restated 2004 Employee Plan (such as payment of the exercise price of an

option by surrender of previously acquired shares). This summary does not address the eÅects of

other federal taxes, including possible ""golden parachute'' excise taxes, FICA and taxes imposed

under state, local, or foreign tax laws. Because of the complexities of the tax laws, a participant

should consult a tax advisor as to his or her individual circumstances.

New Plan BeneÑts Under the Amended and Restated 2004 Employee Plan

Because future awards under the amended and restated 2004 Employee Plan will be granted at

the discretion of the CHRC, the type, number, recipients, and other terms of such awards cannot be

determined at this time. Information regarding our recent practices with respect to stock-based

compensation under the current 2004 Employee Plan is presented elsewhere in this Proxy

Statement and in our Ñnancial statements for the Ñscal year ended December 31, 2007, included in

our Annual Report. If stockholders decline to approve the amended and restated 2004 Employee

Plan, the amendment and restatement will not become eÅective, but the current 2004 Employee

Plan will remain in eÅect in accordance with its terms.

Currently, we grant equity awards to employees only under the 2004 Employee Plan, although

some awards granted under the 1995 Plan before the 2004 Employee Plan became eÅective remain

outstanding. The adoption of the amended and restated 2004 Employee Plan would not restrict us

from adopting other plans providing for grants of equity-based compensation or cash-based

incentive awards in the future.

Vote Required for Approval

Approval of the amended and restated 2004 Employee Plan will require the aÇrmative vote of

a majority of the votes cast on the proposal at the annual meeting, provided that the total vote cast

on the proposal (both for and against) represents over 50% in interest of all securities entitled to

vote on the proposal.

The Board considers the amended and restated 2004 Employee Plan to be in the best interests of

Freddie Mac and its stockholders and therefore recommends that the stockholders vote to approve

the amended and restated 2004 Employee Plan at the annual meeting.

Proposal 3: 2004 Stock Compensation Plan

98
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information about our common stock that may be issued upon the

exercise of options, warrants and rights under our existing equity compensation plans at

December 31, 2007. Our stockholders have approved the ESPP, the 2004 Employee Plan, the 1995

Stock Compensation Plan, or 1995 Plan, and the Directors' Plan.

(c)

(a) Number of securities

Number of securities remaining available for

to be issued (b) future issuance under

upon exercise Weighted average equity compensation

of outstanding exercise price of plans (excluding

options, warrants outstanding options, securities reÖected

Plan Category and rights warrants and rights in column (a))

Equity compensation plans approved by stockholdersÏÏÏÏ 8,075,314(1) $37.62(2) 17,935,055(3)

Equity compensation plans not approved by stockholders ÏÏÏ None N/A None

(1) Includes 2,897,893 RSUs issued under the Directors' Plan, the 1995 Plan and the 2004 Employee Plan and options to purchase

82,566 shares under the ESPP.

(2) For the purpose of calculating this amount, the RSUs are assigned a value of zero.

(3) Includes 10,323,179 shares, 6,135,671 shares and 1,476,205 shares available for issuance under the 2004 Employee Plan, the ESPP

and the Directors' Plan, respectively. No shares are available for issuance under the 1995 Plan.

OTHER PROPOSED ACTIONS

As of the date of this Proxy Statement, there are no matters that the Board intends to present,

or has reason to believe others will present, for a vote at the annual meeting other than those

described in this Proxy Statement. If any other matters come before the annual meeting, the

persons designated as proxies will vote on those matters in accordance with their best judgment.

AVAILABILITY OF ANNUAL REPORT

Our Information Statement and Annual Report, which contains audited consolidated Ñnancial

statements for 2007 and other information, accompanies this Proxy Statement. Additional copies of

the Information Statement and Annual Report and any Information Statement Supplements may

be obtained without charge by visiting our Internet website (www.freddiemac.com/investors) or by

writing or calling us at:

Freddie Mac

Investor Relations Department

Mailstop 486

8200 Jones Branch Drive

McLean, VA 22102-3110

Telephone: (703) 903-3883 or 1-800-FREDDIE (800-373-3343)

shareholder@freddiemac.com

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING

Section 16(a) of the Exchange Act requires directors and certain oÇcers of reporting

companies, and persons who own more than 10% of a registered class of such company's equity

securities, to Ñle reports of ownership and changes in ownership with the SEC and the exchange on

which such company's securities trade, and to furnish the company with copies of the reports. Until

we complete voluntary registration with the SEC, our directors and executive oÇcers are not

Other Matters

99
subject to these requirements. However, our directors and executive oÇcers provide the equivalent

of Section 16(a) reports to us, and we make them available on our website at www.freddiemac.com

within the same time frames required for Section 16(a) reports. Based solely on a review of such

reports, we believe that during 2007, our directors and executive oÇcers complied with such

reporting obligations.

STOCKHOLDER PROPOSALS AND NOMINATIONS FOR

NEXT ANNUAL MEETING OF STOCKHOLDERS

To be considered for inclusion in the next proxy statement, stockholder proposals must be

submitted in writing to the Corporate Secretary, Freddie Mac, 8200 Jones Branch Drive, McLean,

Virginia 22102 no later than December 30, 2008. The written notice must be accompanied by

speciÑc information regarding the proposal and the interest of the stockholder. If the stockholder

does not comply with the requirements as set forth in applicable SEC rules and regulations, the

chair of the next annual meeting may declare the proposal not properly brought before the meeting.

In order for business not included in the proxy statement for the 2009 annual meeting to be

brought before the meeting by a stockholder, the stockholder must, pursuant to our bylaws, give

timely written notice to the Corporate Secretary, Freddie Mac, 8200 Jones Branch Drive, McLean,

Virginia 22102. To be timely, the Corporate Secretary must receive written notice of the proposal

no fewer than 75 days prior to the 2009 annual meeting. If fewer than 90 days' notice or prior public

disclosure of the 2009 annual meeting is given or made to the stockholders, to be timely, notice by

the stockholder must be received no later than the close of business on the 15th day following the

day on which such notice of the date of the annual meeting was mailed or such public disclosure was

made, whichever Ñrst occurs. The written notice must include or be accompanied by a brief

description of the proposal, the reasons for bringing the proposal before the annual meeting, the

stockholder's name and address, any material interest of the stockholder in the proposal and

documentation to verify the class and number of shares beneÑcially owned by the stockholder. If a

stockholder does not comply with our bylaws, the chair of the annual meeting may declare the

proposal defective and it will be disregarded.

Stockholder nominations of candidates for election as directors must be submitted in writing to

the Corporate Secretary, Freddie Mac, 8200 Jones Branch Drive, McLean, Virginia 22102 by the

same deadlines as for stockholder proposals to be introduced from the Öoor of the 2009 annual

meeting. The written notice must include (i) the name, age, business address and residential

address of the nominee, (ii) the principal occupation or employment of the nominee, (iii) a

description of all arrangements or understandings between the stockholder and the nominee and any

other person relating to the nomination, and (iv) all other information about the nominee that

would be required to be included in a proxy statement soliciting proxies for the election of directors

under the rules promulgated under the Exchange Act, including a written consent from the

nominee to being named in the proxy statement and to serve if elected. The stockholder also must

provide his, her or its name and record address, the number of shares beneÑcially owned and a

representation that the stockholder intends to appear in person or by proxy at the meeting to make

the nomination. If the stockholder does not comply with the requirements of our bylaws, the chair

of the annual meeting may declare the nomination defective and it will be disregarded.

Other Matters

100
SOLICITATION BY BOARD; EXPENSES OF SOLICITATION

Our Board has sent you this Proxy Statement. We will pay all expenses in connection with the

solicitation of the enclosed proxy. In addition to solicitation by mail, our oÇcers and employees,

who will receive no extra compensation for their services, may solicit proxies by telephone, in

writing or in person. We also have retained Morrow & Co. Inc., a proxy soliciting Ñrm, to assist in

the solicitation of proxies for an estimated fee of $15,000, plus reimbursement of reasonable out-ofpocket expenses. We also will reimburse brokers and nominees who hold shares in their names for

their reasonable out-of-pocket expenses to furnish proxy materials to the beneÑcial owners of such

shares.

By Order of the Board of Directors,

Robert E. Bostrom

Executive Vice President, General Counsel and Corporate Secretary

April 29, 2008

Other Matters

101
APPENDIX A

FEDERAL HOME LOAN MORTGAGE CORPORATION

2004 STOCK COMPENSATION PLAN

As Amended and Restated as of June 6, 2008

A-1
TABLE OF CONTENTS

Page

ARTICLE I Ì Establishment of the Plan ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

1.1 Purposes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

1.2 EÅective DateÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

1.3 Plan Name ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

ARTICLE II Ì DeÑnitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.1 AÇliate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.2 Annual Limit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.3 Award ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.4 Award Document ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.5 BeneÑciary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.6 Board ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-4

2.7 Code ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.8 Committee ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.9 Common Stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.10 Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.11 Deferred Stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.12 Disability ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.13 Dividend EquivalentÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.14 Employee ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.15 Fair Market Value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.16 Incentive Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.17 Incentive Stock Option or ISO ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.18 1995 Plan ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.19 NonqualiÑed Stock Option ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-5

2.20 Option ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.21 Other Stock-Based Award ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.22 ParticipantÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.23 Performance Award ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.24 Plan ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.25 Restricted Stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.26 Restricted Stock Unit or RSU ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.27 Retirement ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.28 Senior Executive ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.29 Stock Appreciation Right or SAR ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.30 Stock Bonus ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

2.31 Termination ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-6

ARTICLE III Ì Administration ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-7

3.1 Authority of the Committee Generally ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-7

3.2 Scope of Committee Authority ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-7

3.3 Delegation of Committee Authority ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-8

3.4 Limitation on Repricing ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-8

3.5 Good Faith Reliance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-8

3.6 IndemniÑcationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-8

A-2
Page

ARTICLE IV Ì Common Stock Available Under the Plan; Adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏ A-9

4.1 Common Stock Available for Delivery ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-9

4.2 Share Counting ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-9

4.3 Source of Common StockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-10

4.4 Adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-10

ARTICLE V Ì Eligibility ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

5.1 Persons Eligible ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

5.2 Annual Per-Person Award Limitations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

5.3 No Rights to AwardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

ARTICLE VI Ì Terms of Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

6.1 General ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

6.2 Minimum Vesting Requirements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-11

6.3 Stand-Alone, Additional, Tandem, and Substitute AwardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-12

6.4 Maximum Term AwardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-12

6.5 Form of Payment Under Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-12

6.6 Limitations on TransferabilityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-13

6.7 No Stockholder Rights ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-13

6.8 Insider Trading Policies Apply; Additional Forfeiture Conditions ÏÏÏÏÏÏÏÏÏÏÏÏÏ A-13

ARTICLE VII Ì Forms of Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-14

7.1 Options ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-14

7.2 Stock Appreciation Rights ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-14

7.3 Restricted Stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-14

7.4 Deferred Stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-15

7.5 Stock Bonus; Awards in Lieu of Other ObligationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-16

7.6 Dividend Equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-16

7.7 Other Stock-Based AwardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-16

7.8 Incentive Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-16

ARTICLE VIII Ì Performance Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-16

8.1 Performance Awards Generally ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-16

8.2 Performance Awards Subject to Pre-Established Terms ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-17

8.3 Settlement of Performance Awards; Other Terms ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-17

8.4 Written Determinations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-18

ARTICLE IX Ì General Provisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-18

9.1 Compliance With Laws and Obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-18

9.2 Limitation of Participant RightsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-18

9.3 Tax Provisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-18

9.4 Changes to the Plan and Awards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-19

9.5 Unfunded Status of Awards other than Restricted Stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-20

9.6 Nonexclusivity of the Plan ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-20

9.7 Fractional Shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-20

9.8 Awards Not Compensation Under PlansÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-21

9.9 Repayments to Participants in Connection with Forfeitures ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-21

9.10 Governing Law ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-21

9.11 Termination of Authority to Grant Awards Under the 1995 Plan ÏÏÏÏÏÏÏÏÏÏÏÏÏ A-21

9.12 Stockholder Approval, Termination of Authority to Grant Awards and

Termination of the Plan ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A-21

A-3
FEDERAL HOME LOAN MORTGAGE CORPORATION

2004 STOCK COMPENSATION PLAN

As Amended and Restated as of June 6, 2008

ARTICLE I

Establishment of the Plan

1.1 Purposes. The purposes of this 2004 Stock Compensation Plan, as amended and

restated, of the Federal Home Loan Mortgage Corporation are to promote the success of the

Corporation and its stockholders by providing an additional means to attract, retain, motivate, and

reward oÇcers and employees of the Corporation and its AÇliates, to link compensation of such

persons to measures of the Corporation's performance in order to provide incentives for high levels

of performance, to enable such persons to acquire or increase a proprietary interest in the

Corporation in order to promote a closer identity of interests between such persons and the

Corporation's stockholders.

1.2 EÅective Date. This Plan became eÅective upon the approval of the Corporation's

stockholders on November 4, 2004.

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

2004 Stock Compensation Plan.

ARTICLE II

DeÑnitions

2.1 AÇliate. An organization some or all of the employees of which are designated by the

Committee as eligible to participate in this Plan.

2.2 Annual Limit. The number of shares used to determine a Participant's per-person

Award limitation for share-denominated Awards and the cash amount used to determine a

Participant's per-person Award limitation for other Awards under Section 5.2.

2.3 Award. Any Option, Stock Appreciation Right, Restricted Stock, Deferred Stock, Stock

Bonus, Dividend Equivalent, Performance Award, Other Stock-Based Award or Incentive Award,

or any combination thereof, granted under the Plan.

2.4 Award Document. Any written or electronic agreement, contract, notice, or other

instrument or document evidencing an Award. The use of an ""electronic record'' and an ""electronic

signature'' in connection with any Award Document shall be governed by the federal Electronic

Signatures in Global and National Commerce Act of 2000 (E-SIGN) or the Uniform Electronic

Transactions Act (UETA) as enacted by the Commonwealth of Virginia, as applicable. The terms

""electronic records'' and ""electronic signature'' shall have the meanings ascribed to such terms in

E-SIGN or the Virginia UETA, as applicable.

2.5 BeneÑciary. The person(s) or trust(s) which have been designated by a Participant in

his or her most recent written beneÑciary designation Ñled with the Committee to receive the

beneÑts in connection with an Award upon such Participant's death, or to whom or to which an

Award or rights relating thereto are transferred if and to the extent permitted under Section 6.6. If,

upon a Participant's death, there is no designated BeneÑciary or surviving designated BeneÑciary,

then the term BeneÑciary means the person(s) or trust(s) entitled by will or the laws of descent

and distribution to receive such beneÑts.

2.6 Board. The Board of Directors of the Corporation.

A-4
2.7 Code. The Internal Revenue Code of 1986, as amended from time to time.

2.8 Committee. The Compensation and Human Resources Committee of the Board, or

such other Board committee as may be designated by the Board to administer the Plan. The

composition and governance of the Committee shall be established in the Committee's Charter as

approved from time to time by the Board, and other corporate governance documents of the

company. The full Board may perform any function of the Committee hereunder in which case the

term ""Committee'' shall refer to the Board.

2.9 Common Stock. The Common Stock, $0.21 par value, of the Corporation and such

other common stock as may be substituted or resubstituted for Common Stock pursuant to an

adjustment under Section 4.4.

2.10 Corporation. The Federal Home Loan Mortgage Corporation.

2.11 Deferred Stock. An Award under Section 7.4 representing a contractual right to receive

delivery of a speciÑed number of shares of Common Stock, or shares of Common Stock having a

speciÑed Fair Market Value at a speciÑed date, at the expiration of a period or periods of deferral,

and subject to terms and conditions as the Committee may specify. These terms and conditions can

include a risk of forfeiture, which need not extend for the entire period of deferral; in such case, for

purposes of the Plan the Award will be referred to as a ""Restricted Stock Unit.''

2.12 Disability. A condition resulting in a Participant's Termination and which is a disability

under the terms of the Corporation's Long-Term Disability Plan as in eÅect at the time of the

Participant's termination of employment; provided, however, that the Committee may specify a

diÅerent deÑnition of ""Disability'' in the Award Document.

2.13 Dividend Equivalent. An Award under Section 7.6 giving the Participant a right

(which may be conditional) to receive cash, Common Stock, other Awards, or other property equal

in value to dividends paid with respect to a speciÑed number of shares of Common Stock, and

subject to such other conditions as the Committee may specify.

2.14 Employee. Any oÇcer or employee of the Corporation or an AÇliate who is not a

Senior Executive.

2.15 Fair Market Value. The average of the high and the low sale prices of a share of

Common Stock reported for composite transactions in the New York Stock Exchange listed

securities in print or electronically by The Wall Street Journal or by another recognized provider

designated by the Committee for such date or, if no such prices are reported for such date, on the

most recent trading day prior to such date for which such prices were reported; provided, however,

that the Committee may, in good faith, establish alternative methods or procedures for determining

Fair Market Value.

2.16 Incentive Award. An Award under Section 7.8 denominated and/or payable in cash.

An Incentive Award with a performance period of up to one year may be designated an ""Annual

Incentive Award,'' and an incentive award with a performance period longer than one year may be

designated a ""Long-Term Incentive Award.''

2.17 Incentive Stock Option or ISOs. Any Option that is designated as an incentive stock

option and qualiÑes as such within the meaning of Section 422 of the Code.

2.18 1995 Plan. The Corporation's 1995 Stock Compensation Plan that became eÅective

May 2, 1995.

2.19 NonqualiÑed Stock Option. Any Option which is not an Incentive Stock Option.

A-5
2.20 Option. An Award under Section 7.1 representing a conditional right to purchase, upon

the exercise of the right by the Participant or his or her BeneÑciary, a speciÑed number of shares of

Common Stock at a Ñxed price during a speciÑed period or periods, and subject to such other

conditions as the Committee may specify.

2.21 Other Stock-Based Award. An Award under Section 7.7 denominated or payable in,

valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock or

factors that may inÖuence the value of Common Stock, as determined by the Committee, and

subject to such other conditions as may be speciÑed by the Committee.

2.22 Participant. A person who, as a Senior Executive or Employee of the Corporation or

any AÇliate, has been granted an Award under the Plan.

2.23 Performance Award. An Award that is subject to any performance condition or

conditions imposed by the Committee under Article VIII.

2.24 Plan. This 2004 Stock Compensation Plan.

2.25 Restricted Stock. An Award under Section 7.3 pursuant to which a speciÑed number of

shares of Common Stock are granted to the Participant, subject to a risk of forfeiture and

restrictions on transferability until the expiration of a speciÑed restricted period or periods, and

subject to such other conditions as the Committee may specify.

2.26 Restricted Stock Unit or RSU. An Award of Deferred Stock that is subject to a risk of

forfeiture until the expiration of a speciÑed restricted period or periods, with settlement on the date

the risk of forfeiture lapses or at a later speciÑed date.

2.27 Retirement. A Termination that is a retirement in accordance with the eligibility

provisions and retirement beneÑt provisions of Articles V and VI, respectively, of the Federal Home

Loan Mortgage Corporation Employees' Pension Plan as in eÅect at the time of the Participant's

termination of employment; provided, however, the Committee may specify a diÅerent deÑnition of

Retirement in the Award Document.

2.28 Senior Executive. An employee of the Corporation or an AÇliate who is a Senior Vice

President or who is senior to such an oÇcer.

2.29 Stock Appreciation Right or SAR. An Award under Section 7.2 representing a right to

receive cash, Common Stock, other Awards, or other property equal in value to the excess of

(a) the Fair Market Value of one share of Common Stock on the date of exercise, over (b) the

grant price of the SAR as determined by the Committee as of the date of grant of the SAR. SARs

shall be subject to such other conditions as the Committee may specify.

2.30 Stock Bonus. An Award of Common Stock granted as a bonus under Section 7.5,

subject to such conditions as the Committee may specify.

2.31 Termination. A termination of employment of the Participant immediately after which

the Participant is not an employee of either the Corporation or any AÇliate. Conversion from fulltime to part-time employment shall not be deemed to be a Termination. The foregoing

notwithstanding, the Committee may specify a diÅerent deÑnition of ""Termination'' in the Award

Document, including for purposes of compliance with Code Section 409A.

A-6
ARTICLE III

Administration

3.1 Authority of the Committee Generally. The Plan shall be administered by the

Committee. The Committee shall have full and Ñnal authority to take the following actions, in each

case subject to and consistent with the provisions of the Plan:

(a) to select Senior Executives and Employees to whom Awards may be granted;

(b) to determine the type or types of Awards to be granted to each person selected to

become a Participant, and the time or times at which Awards may be granted;

(c) to determine the number of Awards to be granted, the number of shares of Common

Stock subject to an Award, the terms and conditions of any Award granted under the Plan

including, but not limited to, any exercise price, grant price, or purchase price, automatic

exercise of Options, any restriction or condition, any schedule or performance conditions for the

lapse of restrictions or conditions relating to transferability, forfeiture, exercisability, or

settlement of an Award (subject to Section 6.2), and waivers, accelerations, or modiÑcations

of any such schedule or performance conditions (subject to Section 9.4(b)), based in each case

on such considerations as the Committee shall determine, and all other matters to be

determined in connection with an Award;

(d) to determine whether, to what extent, and under what circumstances an Award may

be settled or an Award may be canceled, forfeited, or surrendered, and the method of payment

of the exercise price or purchase price of an Award, including but not limited to cash,

Common Stock, other Awards, or other property;

(e) to determine whether, to what extent, and under what circumstances cash, Common

Stock, other Awards, or other property payable with respect to an Award will be deferred

either automatically, at the election of the Committee, or at the election of the Participant;

(f) to prescribe the form of each Award Document, which need not be identical for each

Participant;

(g) to adopt, amend, suspend, waive, and rescind such rules and regulations as the

Committee may deem necessary or advisable to administer the Plan;

(h) to correct any defect or supply any omission or reconcile any inconsistency in the

Plan;

(i) to construe and interpret the Plan and any Award, rules and regulations, Award

Document, or other instrument hereunder, and to determine the rights and beneÑts pertaining

to any Participant or BeneÑciary;

(j) to retain experts to advise and assist the Committee in performing its functions

hereunder and otherwise in the administration of the Plan; and

(k) to make all other decisions and determinations as may be required under the terms of

the Plan or as the Committee may deem necessary or advisable for the administration of the

Plan.

3.2 Scope of Committee Authority. Unless authority is speciÑcally reserved to the Board

under the terms of the Plan, the Corporation's Charter or Bylaws, or applicable law, the Committee

may exercise its authority under the Plan in its sole discretion. Any action of the Committee with

respect to the Plan shall be Ñnal, conclusive, and binding on all persons, including the Corporation,

A-7
Participants, any BeneÑciary or other person claiming any rights under the Plan from or through any

Participant, and stockholders. The express grant of any speciÑc power to the Committee, and the

taking of any action by the Committee, shall not be construed as limiting any power or authority of

the Committee. The foregoing notwithstanding, a grant made by the Committee or other action

taken by the Committee may be made contingent upon approval of the Board or a majority of the

independent directors serving on the Board as a condition of the eÅectiveness of such grant or action.

3.3 Delegation of Committee Authority. The Committee may delegate any or all of its

authority under this Article III relating to the selection of Employees for participation, the grant of

Awards to Employees, and other actions under the Plan relating to Employees, to the extent

permitted by applicable law. Such delegation shall be made only to the Chief Executive OÇcer,

another Senior Executive or a committee of two or more Senior Executives (which may include the

Chief Executive OÇcer). In the case of any such delegation, references in the Plan to the

Committee shall be deemed to include the Chief Executive OÇcer, Senior Executive or committee

to which authority has been delegated with respect to Employees; provided, however, that the

Committee may impose any term or limitation upon the exercise of such delegated authority

hereunder not inconsistent with the Plan. The Committee may not make such delegation with

respect to any Senior Executive, except as to ministerial functions. In this regard, the Committee

may delegate to oÇcers or other employees of the Corporation, subject to such terms as the

Committee shall determine, the duty to perform ministerial functions under the Plan.

3.4 Limitation on Repricing. Without the prior approval of the Corporation's stockholders,

the Committee will not amend or replace previously granted Options or SARs in a transaction that

constitutes a ""repricing.'' ""Repricing'' means: (a) lowering the exercise price of an Option or grant

price of a SAR after it is granted, (b) canceling an Option or SAR at a time when its exercise price

or grant price exceeds the fair market value of the underlying stock, in exchange for another

Option, SAR, Restricted Stock, other equity, or cash unless the cancellation and exchange occurs

in connection with a merger, acquisition, spin-oÅ or other similar corporate transaction, (c) any

other action that is treated as a repricing under generally accepted accounting principles, or (d) any

other action that has the same eÅect as those itemized in (a) Ì (c); provided, however, that any

adjustment authorized by Section 4.4 shall under no circumstances be considered a ""repricing.''

3.5 Good Faith Reliance. Each member of the Committee shall be entitled to, in good faith,

rely or act upon any report or other information furnished to him or her by any oÇcer or other

employee of the Corporation, the Corporation's independent public accountants, or any

compensation consultant, legal counsel, or other professional retained by the Corporation to assist in

the administration of the Plan.

3.6 IndemniÑcation. In the event and to the extent the members of the Committee, and any

Employee or Senior Executive acting on behalf of the Committee, are not insured by any insurance

company pursuant to provisions of any applicable insurance policy, the Corporation shall indemnify

and hold harmless each such person against all liability (including the obligation to pay a judgment,

settlement, penalty or Ñne, including any excise tax assessed with respect to an employee beneÑt

plan) and expense (including attorneys' fees) reasonably incurred by him, her or it in connection

with any and all claims, demands, suits or proceedings in connection with the Plan that may be

brought by the Corporation's Senior Executives, Employees, Participants or their BeneÑciaries or

legal representatives, or by any other person, corporation, entity, government or agency thereof,

except such liabilities and expenses as are incurred because of the Committee member's, Senior

Executive's or Employee's willful misconduct or knowing violation of the criminal law; provided,

however, that the Corporation may not indemnify any person in connection with any proceeding

A-8
charging improper personal beneÑt to the person, whether or not involving action in his or her oÇcial

capacity, to the extent that such person is adjudged liable on the basis that the personal beneÑt was

improperly received by such person. This right of indemniÑcation shall be in addition to any other

rights to which any member of the Committee may be entitled to as a matter of law.

ARTICLE IV

Common Stock Available Under the Plan; Adjustments

4.1 Common Stock Available for Delivery. Subject to adjustment as hereinafter provided,

the number of shares of Common Stock authorized for delivery in connection with Awards under

the Plan shall be (i) 25,000,000 plus (ii) that number of shares of Common Stock that,

immediately prior to the eÅectiveness of this Plan, remain authorized and available for awards under

the 1995 Plan (without regard to the termination of the 1995 Plan) or thereafter become available

as provided in Section 4.2 below.

4.2 Share Counting.

(a) Generally. No Award may be granted if the number of shares the Committee

determines to be deliverable under such Award, when added to the number of shares

determined to be deliverable under then-outstanding Awards, exceeds the Committee's

determination of the number of shares then remaining available for delivery or other applicable

limitation under this Article IV. Thus, the Committee may determine that Awards may be

outstanding that relate to more shares than the aggregate remaining available under the Plan so

long as Awards will not in fact result in delivery and vesting of shares in excess of the number

then available under the Plan. The Committee's determinations under this Section 4.2 may be

based on its good faith estimates of the shares deliverable and remaining available for delivery

under this Article IV.

(b) Shares Available for Grants. Only the number of shares actually delivered to the

Participant upon exercise of an Option or SAR or upon settlement of other Awards, or, in the

case of Restricted Stock, the number of shares that have been delivered to the Participant and

which have become non-forfeitable, will be counted against the number of shares reserved

under the Plan. Thus, for example, if an Award expires or is forfeited, an Award is settled in

cash, shares are withheld from an Award or separately surrendered to pay the exercise price of

an Option or to satisfy tax withholding obligations relating to an Award, fewer shares are

delivered upon exercise of a SAR than the number to which the SAR related, or shares that

had been issued as Restricted Stock are forfeited, those shares will again be available for

Awards under the Plan and will not count against share limitations under Section 4.1. Shares

subject to outstanding awards under the 1995 Plan will be counted and deemed available in

accordance with the share counting provisions set forth in this Section 4.2. The Committee

may adopt procedures for the counting of shares relating to any Award to ensure appropriate

counting and avoid double counting (as in the case of tandem or substitute awards), and, for

administrative convenience, the Corporation may implement share counting under this

Section 4.2(b) in a manner that diverges from the share counting rules set forth herein so long

as any such divergence results only in a greater number of shares being counted against the

share limitations under Section 4.1. Shares will be available under clause (ii) of Section 4.1

and this Section 4.2 for the grant of ISOs only to the extent consistent with applicable

regulations relating to ISOs under the Code.

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4.3 Source of Common Stock. Any shares of Common Stock delivered pursuant to an

Award may consist, in whole or in part, of authorized but previously unissued shares, treasury

shares, or shares acquired in market transactions on behalf of the Participant.

4.4 Adjustments.

(a) Adjustments In Response to Corporate Events. In the event that the Committee

shall determine that any large, special and non-recurring dividend or other distribution

(whether in the form of cash or other property), recapitalization, forward or reverse split,

dividend of Common Stock, reorganization, merger, consolidation, spin-oÅ, combination,

repurchase or share exchange, rights oÅering, or other similar corporate transaction or event

aÅects the Common Stock, then the Committee shall, in such manner as it may deem

equitable, adjust any or all of (i) the number and kind of shares of Common Stock then

authorized for delivery for Awards under Section 4.1 and under each Participant's Annual

Limit under Section 5.2, and (ii), if an adjustment is necessary in order to prevent dilution or

enlargement of the rights of Participants under the Plan, as determined by the Committee,

(A) the number and kind of shares of outstanding Restricted Stock or other outstanding

Award in connection with which shares have been issued or delivered, (B) the number and

kind of shares that may be issued or delivered in respect of other outstanding Awards, (C) the

exercise price, grant price, or purchase price relating to any Award (or, if deemed appropriate,

the Committee may make provision for a cash payment with respect to any outstanding

Award) and (D) any other term relating to an Award. In furtherance of this authorization,

with respect to outstanding Awards, upon the occurrence of an event constituting an ""equity

restructuring'' as deÑned under Statement of Financial Accounting Standards No. 123R with

respect to Shares, each Participant shall have a legal right to the equitable adjustment of the

Participant's outstanding Awards, with the manner of such adjustment to be determined by the

Committee as provided in this Section 4.4. Unless otherwise determined by the Committee,

in the event of a forward split of Common Stock or a dividend in the form of Common Stock,

each adjustment speciÑed in 4.4(a)(i) and (ii)(A), (B) and (C) shall be eÅected

automatically by multiplying the relevant pre-transaction number of shares by the ratio of the

number of shares deliverable in respect of each outstanding share, and multiplying the exercise

price of each outstanding Option by the inverse of that ratio. If, in a transaction triggering an

adjustment hereunder, public shareholders of the Corporation receive cash for their entire

equity interest in the Corporation, an adjustment providing for cancellation of a sharedenominated Award in exchange for a cash payment based solely on the then intrinsic value of

the Award shall be deemed to meet the requirements of this Article IV.

(b) Other Adjustments to Award Terms. The Committee is further authorized to make

adjustments in the terms and conditions of, and the criteria included in, Awards in recognition

of unusual or nonrecurring events (including, without limitation, events described in the

preceding Section) aÅecting the Corporation or any AÇliate or the Ñnancial statements of the

Corporation or any AÇliate, or in response to changes in applicable laws, regulations, or

accounting principles.

(c) Limitation on Adjustments AÅecting ISOs. The foregoing notwithstanding, no

adjustments shall be authorized under this Section 4.4 with respect to Incentive Stock Options

or Awards in tandem therewith to the extent that such authority would cause an Incentive

Stock Option to fail to comply with Section 422(b) of the Code.

A-10
ARTICLE V

Eligibility

5.1 Persons Eligible. Senior Executives and Employees, including directors of the

Corporation who are also employees, are eligible to be granted Awards under the Plan.

5.2 Annual Per-Person Award Limitations. In each calendar year during any part of which

the Plan is in eÅect, an eligible person may be granted Awards relating to shares up to but not

exceeding his or her Annual Limit. A Participant's Annual Limit shall equal two million shares plus

the amount, if any, of the Participant's unused Annual Limit relating to such share-denominated

Awards as of the close of the previous year, subject to adjustment as provided in Section 4.4. In the

case of a cash-denominated Award (for which the limitation on Awards relating to shares would

not be calculable at the time of grant), a Participant may not be granted Awards authorizing the

earning during any calendar year of an amount that exceeds the Participant's Annual Limit, which

for this purpose shall equal $8 million plus the amount of the Participant's unused cash Annual

Limit as of the close of the previous year (this limitation is separate and not aÅected by the number

of Awards granted during such calendar year subject to the limitation on Awards relating to

shares). For this purpose, (i) ""earning'' means satisfying performance conditions so that an amount

becomes payable under an Award, without regard to whether the amount is to be paid currently or

on a deferred basis or continues to be subject to any service requirement or other non-performance

condition, and (ii) a Participant's Annual Limit is used to the extent a number of shares or other

amount may be potentially earned or paid under an Award, regardless of whether such shares or

amount are in fact earned or paid.

5.3 No Rights to Awards. No Senior Executive or Employee shall have any claim to be

granted any Award under the Plan, absent a valid written commitment or electronic record of

commitment of the Committee or an authorized delegate to grant such Award, and there is no

obligation for uniformity of treatment of Participants. Any such commitment shall contain the

written or ""electronic signatures'' (as deÑned in Section 2.4) of an authorized representative of the

Corporation.

ARTICLE VI

Terms of Awards

6.1 General. Awards may be granted generally on the terms and conditions set forth in

Articles VI and VII. In addition, the Committee may impose on any Award or the exercise thereof,

at the date of grant or thereafter, subject to Section 9.4 and Article III, such additional terms and

conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine and

specify in an Award Document whether in writing or in electronic form.

6.2 Minimum Vesting Requirements.

(a) Options and SARs. Options, SARs and any other Award carrying a right to exercise

shall be forfeitable for at least one year after the date of grant, except in the event of a

Participant's death, Disability or Retirement or in the event of a change in control of the

Corporation (as such change may be deÑned by the Committee) or other special

circumstances. Except as provided herein, Options, SARs and any other Award carrying a right

to exercise shall not be exercisable prior to the time the risk of forfeiture on the Award shall

lapse, except in cases in which all net proceeds of exercise remain subject to substantially the

same risk of forfeiture.

A-11
(b) Restricted Stock, RSUs and Other Non-Option/Non-SAR Awards. If the vesting of

Restricted Stock, RSUs, and other non-Option/non-SAR Awards for which the Participant

does not make a payment or surrender rights to payment having substantial value is not based

on the achievement of one or more performance conditions, such Awards will vest (i.e.,

become non-forfeitable) over a minimum period of three years after the date of the grant,

except in the event of a Participant's death, Disability, or Retirement, or in the event of a

change in control of the Corporation (as such change may be deÑned by the Committee) or

other special circumstances. If the vesting of such Awards is based on the achievement of one

or more performance conditions, such Awards will vest (i.e., become non-forfeitable upon the

satisfaction of a performance condition) over a minimum period of one year after the date of

the grant, except in the event of a Participant's death, Disability or Retirement, or in the event

of a change in control of the Corporation (as such change may be deÑned by the Committee)

or other special circumstances.

(c) Other Vesting Terms. For purposes of this Section 6.2, (i) vesting over a three-year

period will include periodic vesting over such period, (ii) a pre-announced period in which

service is required as a condition to the grant of any Award may count toward the minimum

vesting period required under this Section 6.2, if so determined by the Committee, or

(iii) with respect to Awards that otherwise would be subject to the minimum vesting

requirements of Section 6.2(b) and notwithstanding those requirements, up to 15% of the

shares of Common Stock authorized for issuance under the Plan may be granted as nonperformance based Awards with vesting terms not conforming to the three-year minimum

vesting requirement of this Section 6.2 and instead may be granted with a one-year minimum

vesting requirement identical to the requirement in Section 6.2(a).

6.3 Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the

Plan may, in the discretion of the Committee, be granted on a stand-alone basis or in addition to, in

tandem with, or in substitution for any other Award, for any option or other equity award granted

under another plan, or for any other right of a Participant to receive payment from the Corporation

or an AÇliate, subject to Section 3.4 (relating to repricing) and Section 9.4(b). Thus, Awards may

be granted in substitution for outstanding options or other equity awards of a business entity being

acquired by the Corporation or an AÇliate. Subject to Section 3.4 and Section 9.4(b), the

Committee may determine that, in granting a new Award, an amount not exceeding the in-themoney value of any surrendered Award or award granted under another plan may be applied to

reduce the exercise price of any Option, grant price of any SAR, or purchase price of any other

Award, or that the fair value of any surrendered Award or award may be applied to reduce the fairvalue purchase price of any other Award, and the vesting requirement of the new Award may be

reduced by taking into account the vesting period that has been satisÑed with respect to the

surrendered Award or award (in proportion to the value of the awards).

6.4 Maximum Term of Awards. The term of each Award shall be for such period as may be

determined by the Committee, except that the term of any Option or SAR shall not exceed ten

years from the date of grant of the Award.

6.5 Form of Payment Under Awards. Subject to the terms of the Plan and any applicable

Award Document, payments to be made by the Corporation or an AÇliate upon the grant, exercise,

or settlement of an Award may be made in such forms as the Committee shall determine,

including, without limitation, cash, Common Stock, other Awards, or other property, and may be

made in a single payment or transfer, in installments, or on a deferred basis as determined by the

Committee. Such payments may include, without limitation, provisions for (i) the payment or

A-12
crediting of reasonable interest on installment or deferred payments or (ii) the grant or crediting of

Dividend Equivalents in respect of installment or deferred payments denominated in Common

Stock.

6.6 Limitations on Transferability. Awards and any other rights under the Plan will not be

transferable by a Participant except by will or the laws of descent and distribution (or to a

designated BeneÑciary in the event of the Participant's death), and, if exercisable, shall be

exercisable during the lifetime of a Participant only by such Participant or his guardian or legal

representative. No transfer by will or the laws of descent and distribution shall be eÅective to bind

the Corporation unless the Corporation shall have been furnished with a copy of such will or other

evidence as the Corporation may deem necessary to establish the validity of the transfer. Awards

and other rights under the Plan may not be pledged, mortgaged, hypothecated, or otherwise

encumbered, and shall not be subject to the claims of creditors. The foregoing notwithstanding, if

and to the extent expressly permitted by the Committee, and subject to such terms and conditions

as established by the Committee, such Awards and other rights (other than Incentive Stock

Options, Awards in tandem therewith, and Awards that constitute a deferral of compensation under

Code Section 409A) may be transferred by a Participant to one or more BeneÑciaries, and may be

exercised by such BeneÑciaries in accordance with the terms of such Award, except that no such

transfers may be made to any third party for value unless separately approved by stockholders of the

Corporation. Awards that constitute a deferral of compensation under Code Section 409A shall be

subject to the additional limitations on transferability speciÑed in Treasury Regulation

Û 1.409A-3(f).

6.7 No Stockholder Rights. No Award shall confer on any Participant any of the rights of a

stockholder of the Corporation unless and until Common Stock is duly issued or transferred to the

Participant in accordance with the terms of the Award or, in the case of an Option, at such time at

or after the exercise of the Option as may be speciÑed by the Committee in order to facilitate

exercise procedures.

6.8 Insider Trading Policies Apply; Additional Forfeiture Conditions. A Participant's rights

under any Award, including rights to exercise or receive settlement and rights to sell any Common

Stock delivered in connection with an Award, are subject to the terms of the Corporation's Code of

Conduct (or any successor thereof) and related policies on insider trading and may be restricted by

those documents. Such restrictions currently include limitations on the times at which the

Participant may engage in such transactions. In addition, the Committee may impose on any Award

additional forfeiture conditions that protect the Corporation and its AÇliates. Such additional

forfeiture conditions may include provisions that the Award, or amounts of cash, Common Stock, or

other property realized by the Participant as income or gain as a result of the Award, shall be

forfeited or repaid to the Corporation if the Participant fails to comply with conditions relating to

non-solicitation of employees, customers and suppliers, non-competition, preservation and

appropriate use of proprietary and conÑdential information of the Corporation and AÇliates, return

of property, non-disparagement of the Corporation and AÇliates, cooperation in litigation, and

other restrictions protecting the Corporation and AÇliates. Such conditions may apply to events

occurring following Termination.

A-13
ARTICLE VII

Forms of Awards

7.1 Options. The Committee is authorized to grant Options, which may be either Incentive

Stock Options or NonqualiÑed Stock Options, to Participants on the following terms and

conditions:

(a) Exercise Price. The exercise price per share of Common Stock purchasable under

an Option shall be determined by the Committee; provided, however, that such exercise price

shall be not less than the Fair Market Value of a share on the date of grant of such Option

(subject to Section 6.3).

(b) Time and Method of Exercise. The Committee shall determine the time or times at

which an Option may be exercised in whole or in part (subject to Section 6.2 and Section 6.4);

the methods by which such exercise price may be paid or deemed to be paid, the form of such

payment, including, without limitation, cash, Common Stock (including through withholding

of Common Stock deliverable upon exercise, if such withholding will not result in additional

accounting expense to the Corporation), other Awards or awards granted under other plans of

the Corporation, or other property, or through broker-assisted ""cashless exercise'' arrangements

to the extent permitted by applicable law (subject to Section 3.4); and the methods by which

Common Stock will be delivered or deemed to be delivered to Participants.

(c) Incentive Stock Options. The terms of any Incentive Stock Option granted under the

Plan shall comply in all respects with the provisions of Section 422 of the Code.

7.2 Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants

on the following terms and conditions:

(a) Grant Price. The grant price of a SAR shall be determined by the Committee as of

the date of grant of the SAR, provided, however, that the grant price of a SAR shall be not less

than the Fair Market Value of one share of Common Stock on the date of grant (subject to

Section 6.3).

(b) Exercise of SAR and Other Terms. The Committee shall determine the time or

times at which a SAR may be exercised in whole or in part (subject to Section 6.2 and

Section 6.4), the method of exercise, method of settlement, form of consideration payable in

settlement, method by which Common Stock will be delivered or deemed to be delivered to

Participants, whether a SAR shall be in tandem with any other Award or shall be freestanding, and any other terms and conditions of any SAR. A SAR may be exercised by the

Participant, his or her BeneÑciary, or automatically during a speciÑed period or periods.

7.3 Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants

on the following terms and conditions:

(a) Restrictions Generally. Restricted Stock shall be subject to such restrictions on

transferability and other restrictions, if any, as the Committee may impose, which restrictions

may lapse separately or in combination at such times, under such circumstances, in such

installments, or otherwise as the Committee may determine (subject to Section 6.2). Except to

the extent restricted under the terms of the Plan and any Award Document relating to the

Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a

stockholder including, without limitation, the right to vote Restricted Stock and the right to

receive dividends thereon.

A-14
(b) Forfeiture. In addition to the risk of forfeiture imposed under Section 6.2, upon

Termination during the applicable restriction period Restricted Stock that is at that time

subject to restrictions shall be forfeited and reacquired by the Corporation; provided, however,

that the Committee may provide, by rule or regulation or in any Award Document, or may

determine in any individual case, that restrictions or forfeiture conditions relating to Restricted

Stock will be waived in whole or in part in the event of death, Disability, Retirement or other

Terminations resulting from speciÑed causes or in the event of a change in control of the

Corporation (as such change may be deÑned by the Committee), except as otherwise provided

in Section 6.2.

(c) CertiÑcates or other Evidence of Ownership of Common Stock. Restricted Stock

granted under the Plan may be evidenced in such manner as the Committee shall determine. If

certiÑcates representing Restricted Stock are registered in the name of the Participant, such

certiÑcates shall bear an appropriate legend referring to the terms, conditions, and restrictions

applicable to such Restricted Stock, or shall be required to be transferred into the name of a

custodian designated by the Corporation. In either case, the Corporation or such custodian

shall retain physical possession of the certiÑcate, and the Participant shall, upon the request of

the Corporation at any time, deliver a stock power to the Corporation, endorsed in blank if so

requested by the Corporation, relating to the Restricted Stock.

(d) Dividends and Distributions. Dividends paid on Restricted Stock shall be either

paid at the dividend payment date in cash or in shares of unrestricted Common Stock having a

Fair Market Value equal to the amount of such dividends, or the payment of such dividends

shall be deferred and/or the amount or value thereof automatically reinvested in additional

Restricted Stock, other Awards, or other investment vehicles, as the Committee shall

determine or permit the Participant to elect. Unless otherwise determined by the Committee,

Common Stock distributed in connection with a Common Stock split or Common Stock

dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk

of forfeiture to the same extent as the Restricted Stock with respect to which such Common

Stock or other property is distributed.

7.4 Deferred Stock. The Committee is authorized to grant Deferred Stock to Participants,

subject to the following terms and conditions:

(a) Deferral of Delivery and Restrictions. Delivery of Common Stock will occur upon

expiration of the deferral period speciÑed for an Award of Deferred Stock by the Committee

(or, if permitted by the Committee, as elected by the Participant). In addition, Deferred

Stock shall be subject to such restrictions as the Committee may impose, if any, which

restrictions may lapse at the expiration of the deferral period or at earlier speciÑed times,

separately or in combination, under such circumstances, in such installments, or otherwise as

the Committee may determine.

(b) Forfeiture. Deferred Stock that is subject to a risk of forfeiture is referred to as

RSUs. In addition to the risk of forfeiture imposed under Section 6.2, upon Termination during

the applicable deferral period or portion thereof to which forfeiture conditions apply (as

speciÑed by the Committee in the Award Document evidencing the RSUs), all RSUs that are

at that time subject to such risk of forfeiture shall be forfeited; provided, however, that the

Committee may provide, by rule or regulation or in any Award Document, or may determine in

any individual case, that restrictions or forfeiture conditions relating to RSUs will be waived in

whole or in part in the event of death, Disability, Retirement or other Terminations resulting

A-15
from speciÑed causes or in the event of a change in control of the Corporation (as such change

may be deÑned by the Committee), except as otherwise provided in Section 6.2.

7.5 Stock Bonus; Awards in Lieu of Other Obligations. Stock Bonuses granted hereunder

shall be subject to the provisions of Section 6.2 and to other terms and conditions as shall be

determined by the Committee; provided, however, that the Committee is authorized to grant Stock

Bonuses (or other Awards) which are not subject to the provisions of Section 6.2, so long as the

Committee has determined that such Awards are in lieu of obligations that the Corporation or an

AÇliate otherwise owes to an Employee or Senior Executive who makes a payment or surrenders a

right to payment having substantial value.

7.6 Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a

Participant. Dividend Equivalents may be awarded on a free-standing basis or in connection with

another Award. The Committee may provide that Dividend Equivalents shall be paid or

distributed when accrued or upon the settlement of the underlying Award. The Committee also may

provide that Dividend Equivalents shall be reinvested or deemed reinvested in additional Common

Stock, Awards, or other investment vehicles, and shall be subject to such restrictions on

transferability and risks of forfeiture, as the Committee may specify.

7.7 Other Stock-Based Awards. The Committee is authorized, subject to limitations under

applicable law, to grant to Participants such other Awards that may be denominated or payable in,

valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock and

factors that may inÖuence the value of Common Stock, as deemed by the Committee to be

consistent with the purposes of the Plan. The Committee shall determine the terms and conditions

of such Awards. Common Stock delivered pursuant to an Award in the nature of a purchase right

granted under this Section 7.7 shall be purchased for such consideration, paid for at such times, by

such methods, and in such forms, including, without limitation, cash, Common Stock, other

Awards, or other property, as the Committee shall determine.

7.8 Incentive Awards. Incentive Awards, under which a Participant may earn a cash amount

through performance and/or service, may be granted pursuant to this Section 7.8. An Incentive

Award may be a stand-alone Award or an element of or supplement to another Award.

ARTICLE VIII

Performance Awards

8.1 Performance Awards Generally. The Committee is authorized to grant Performance

Awards on the terms and conditions speciÑed in this Article VIII. Performance Awards may be

denominated as a number of shares of Common Stock or a cash amount earnable under an

Incentive Award or a speciÑed number of shares under other Awards that may be earned upon

achievement or satisfaction of performance conditions speciÑed by the Committee (for example,

performance shares, where the number of RSUs or Deferred Shares earned can vary upward or

downward based on performance). In addition, the Committee may specify that any other Award

shall constitute a Performance Award by conditioning the right of a Participant to exercise the

Award or have it settled upon achievement or satisfaction of such performance conditions as may

be speciÑed by the Committee. The Committee may use such business criteria and other measures

of performance as it may deem appropriate in establishing any performance conditions, and may

exercise its discretion to reduce or increase the amounts payable under any Award subject to

performance conditions, except as limited under Sections 8.2.

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8.2 Performance Awards Subject to Pre-Established Terms. If the Committee determines

that a Performance Award to be granted to an eligible person should be subject to preestablished

terms that limit discretion, the grant, exercise and/or settlement of such Performance Award shall

be contingent upon achievement of a preestablished performance goal or goals and other terms set

forth in this Section 8.2.

(a) Performance Goal. The performance goal for such a Performance Award shall

consist of one or more business criteria and a targeted level or levels of performance with

respect to each of such criteria, as speciÑed by the Committee consistent with this Section 8.2.

The performance goal shall be objective, and, at the time such performance goal is established,

the type and levels of performance required shall be such that achievement of the

performance goal shall be substantially uncertain. The Committee may determine that such

Performance Awards shall be granted, exercised and/or settled upon achievement of any one

performance goal or upon achievement of two or more performance goals. Performance goals

may diÅer for Performance Awards granted to any one Participant or to diÅerent Participants.

(b) Business Criteria for Performance Goals. One or more of the following business

criteria relating to the Corporation, on a consolidated basis, and/or to speciÑed subsidiaries or

aÇliates or other business units of the Corporation, shall be used by the Committee in

establishing performance goals for such Performance Awards: (1) mission measures:

aÅordable housing goals, low-cost Ñnancing initiatives, quality-of-business measures, customer

initiatives and customer satisfaction; (2) operational improvement measures: risk

management, enhancing operational stability, improving or otherwise advancing disclosure

controls, cost reductions, productivity, and legal and regulatory compliance; (3) capital

management measures; and (4) Ñnancial measures: interest income, revenues, income before

income taxes, extraordinary items and/or cumulative eÅect of changes in accounting

principles, revenues, net income or net income per common share (basic or diluted), return on

assets (gross or net), return on investment, return on capital, or return on equity, cash Öow,

free cash Öow, cash Öow return on investment (discounted or otherwise), net cash provided by

operations, or cash Öow in excess of cost of capital, interest expense or non-interest expense,

economic value created or otherwise maximizing long-term value, operating margin or proÑt

margin, and stock price or total stockholder return. The targeted level or levels of performance

with respect to such business criteria may be established at such levels and in such terms as

the Committee may determine, in its discretion, including in absolute terms, as a goal relative

to performance in prior periods, or as a goal compared to the performance of one or more

comparable companies or an index covering multiple companies.

(c) Performance Period; Timing for Establishing Performance Goals; Per-Person Limit.

Achievement of performance goals in respect of such Performance Awards shall be measured

over a performance period speciÑed by the Committee. A performance goal shall be

established not later than the earlier of (i) 90 days after the beginning of any performance

period applicable to such Performance Award or (ii) the time 25% of such performance period

has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject

to the limitation set forth in Section 5.2.

8.3 Settlement of Performance Awards; Other Terms. Settlement of such Performance

Awards shall be in Stock, other Awards, cash or other property, in the discretion of the Committee.

The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to

be made in connection with such Performance Awards, except that, in the case of a Performance

Award subject to Section 8.2, the exercise of such discretion is limited to reducing the amount

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payable in respect of the Performance Award. The Committee may specify the circumstances in

which such Performance Awards shall be paid or forfeited in the event of termination of

employment by the Participant or other event (including a change in control) prior to the end of a

performance period or prior to settlement of such Performance Awards.

8.4 Written Determinations. Determinations by the Committee as to the establishment of

performance goals, the amount potentially payable in respect of Performance Awards, the level of

actual achievement of the speciÑed performance goals relating to Performance Awards, and the

amount of any Ñnal Performance Award shall be recorded in writing in the case of Performance

Awards subject to Section 8.2. SpeciÑcally, the Committee shall certify in writing, prior to

settlement of each such Performance Award, that the performance objective relating to the

Performance Award and other material terms of the Award upon which settlement of the Award

was conditioned have been satisÑed.

ARTICLE IX

General Provisions

9.1 Compliance With Laws and Obligations. The Corporation shall not be obligated to issue

or deliver Common Stock in connection with any Award or take any other action under the Plan in

a transaction subject to any federal or state law, any requirement under any listing agreement

between the Corporation and any national securities exchange or automated quotation system, or

any other law, regulation, or contractual obligation of the Corporation, until the Corporation is

satisÑed that such laws, regulations, and other obligations of the Corporation have been complied

with in full. CertiÑcates representing shares of Common Stock delivered under the Plan will be

subject to such stop transfer orders and other restrictions as may be applicable under such laws,

regulations, and other obligations of the Corporation, including any requirement that a legend or

legends be placed thereon. The Corporation shall make best eÅorts to satisfy the compliance

obligations relating to the Plan and Awards in order to avoid adverse eÅects on Participants under

this Section 9.1.

9.2 Limitation of Participant Rights. Neither the Plan nor any action taken hereunder shall

be construed as (i) giving any employee the right to be retained in the employ of the Corporation or

any AÇliate or (ii) interfering in any way with the right of the Corporation or any AÇliate to

terminate any employee's employment at any time. Except as expressly provided in the Plan and an

Award Document, neither the Plan nor any Award Document shall confer on any person other than

the Corporation and the Participant any rights or remedies hereunder or thereunder.

9.3 Tax Provisions.

(a) Withholding. The Corporation or any AÇliate is authorized to withhold from any

Award granted or to be settled, any delivery of Common Stock in connection with an Award,

any other payment relating to an Award, or any payroll or other payment to a Participant

amounts of federal, state, and local withholding taxes and other taxes due or potentially

payable in connection with any transaction involving an Award, and to take such other action as

the Committee may deem advisable to enable the Corporation and Participants to satisfy

obligations for the payment of withholding taxes and other tax obligations relating to any

Award. This authority shall include, but not be limited to, authority to withhold or receive

Common Stock or other property and to make cash payments in respect thereof in satisfaction

of a Participant's tax obligations; the Committee may require such withholding or permit the

Participant to elect withholding, provided that only the minimum amount of Common Stock

deliverable in connection with an Award necessary to satisfy statutory withholding

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requirements will be withheld unless withholding of a greater amount of Common Stock would

not result in additional accounting expense to the Corporation. Upon any withholding or

surrender of shares of Common Stock, the shares shall be valued at their Fair Market Value at

the date they are withheld or received by the Corporation, except that withheld shares may be

valued based on same-day market transactions by the Participant or otherwise for convenience

of administration of the Plan.

(b) Required NotiÑcations of Tax Events. If any Participant shall make a disqualifying

disposition of shares of Common Stock delivered pursuant to the exercise of an Incentive

Stock Option (i.e., a disposition described in Code Section 421(b)), such Participant shall

notify the Corporation of such disposition within ten days thereof. In any case in which a

Participant is permitted to make an election (and does make an election) under Section 83(b)

of the Code (to include in gross income in the year of transfer the amounts speciÑed in Code

Section 83(b)) in connection with an Award, the Participant shall notify the Corporation of

such election within ten days of Ñling notice of the election with the Internal Revenue Service,

in addition to any Ñling and notiÑcation required under Section 83(b) and regulations

thereunder. No Participant shall make a Section 83(b) election in connection with any Award

unless explicitly authorized in the Award Document or otherwise approved by the Committee.

(c) Rules for Compliance with Code Section 409A. The Committee or persons

exercising delegated authority under the Plan are authorized to specify rules and regulations to

ensure that Awards do not result in tax penalties for Participants under Code Section 409A. In

the case of any Award which constitutes a ""short-term deferral'' under Treasury Regulation

Û 1.409A-1(b)(4) and providing for a distribution upon the lapse of a substantial risk of

forfeiture, if the timing of such distribution is not otherwise speciÑed in the Plan or an Award

agreement or other governing document, the distribution shall be made not later than

March 15 of the year following the year in which the substantial risk of forfeiture lapsed. In the

case of an Award constituting a deferral of compensation under Code Section 409A, if the

timing of a distribution following a date or event triggering a distribution is not otherwise

speciÑed in the Plan or an Award agreement or other governing document, the distribution

shall be made within 60 days after such triggering event. In either case, the Participant shall

have no inÖuence on any determination as to the tax year in which the distribution will be

made. Any award that was both granted and vested before 2005 and which otherwise might

constitute a deferral of compensation under Section 409A is intended to be ""grandfathered''

under Section 409A, unless such Award is designated by the company as being subject to

Section 409A in 2008 or earlier. No amendment or change to the Plan or other change

(including an exercise of discretion) with respect to such a grandfathered award after

October 3, 2004, shall be eÅective if such change would constitute a ""material modiÑcation'' of

a grandfathered award within the meaning of applicable guidance or regulations under

Section 409A, except in the case of an award that is speciÑcally modiÑed before 2009 to

become compliant as a 409A Award or compliant with an exemption under Section 409A.

9.4 Changes to the Plan and Awards.

(a) Plan Amendments. The Committee may, with prospective or retroactive eÅect,

amend, alter, suspend, discontinue, or terminate the Plan without the consent of stockholders or

Participants, except that any amendment shall be subject to the approval of the Corporation's

stockholders at or before the Ñrst annual meeting of stockholders for which the record date

falls on or after the date of such Committee action if such amendment is required under

Section 303A.08 of the Listed Company Manual of the New York Stock Exchange or is

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otherwise subject to a requirement of stockholder approval under any applicable law or

regulation, the rules of any stock exchange or automated quotation system on which the

Common Stock may then be listed or quoted, or the Corporation's Bylaws. In addition, the

Committee may otherwise, in its discretion, determine to submit other such changes to the

Plan to stockholders for approval. The foregoing notwithstanding, without the consent of an

aÅected Participant, except to the extent required by Section 9.1 hereof, no such action may

materially impair the rights of such Participant under any Award therefore granted. The

foregoing notwithstanding, the Committee shall not amend this Section or Section 4.1, or

adopt an amendment that would be subject to stockholder approval under this Section or

otherwise would exceed the authority of the Committee under its charter and other corporate

governance documents of the Corporation, without the consent of the Board.

(b) Changes to the Terms of Outstanding Awards. The Committee may waive any

conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award

previously granted and any Award Document relating thereto; provided, however, that, except

to the extent required by Section 9.1 hereof, no such action may materially impair the rights of

a Participant under such Award without the consent of the aÅected Participant and provided

further that for Awards that are intended to be settled in Common Stock per their written

terms, cash settlement shall be permitted only with the prior approval of the Corporation's

Chief Financial OÇcer. ModiÑcations that are in substance cash settlements are subject to this

same requirement. The foregoing notwithstanding, the Committee shall have no authority to

waive or modify any Award term after the Award has been granted to the extent the waived or

modiÑed term would be inconsistent with Section 3.4 (relating to repricings) or Section 6.2 or

otherwise would not be within the discretion of the Committee if it were then granting a new

Award.

9.5 Unfunded Status of Awards other than Restricted Stock. The Plan is intended to

constitute a generally ""unfunded'' plan for incentive compensation, except with respect to Restricted

Stock. With respect to any payments not yet made to a Participant pursuant to an Award other than

Restricted Stock, nothing contained in the Plan or any such Award shall give any such Participant

any rights that are greater than those of a general creditor of the Corporation. No person shall, prior

to exercise or settlement of an Award other than Restricted Stock, acquire any right in or title to

any assets, funds, or property of the Corporation whatsoever, including, without limitation, any

speciÑc funds, assets, or other property, which the Corporation, in its sole discretion, may set aside

in anticipation of a liability under the Plan. Nothing contained in the Plan shall constitute a

guarantee that the assets of the Corporation shall be suÇcient to pay any beneÑts to any person.

9.6 Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its

submission to the stockholders of the Corporation for approval shall be construed as creating any

limitations on the power of the Board or Committee to adopt such other compensatory arrangements

as it may deem desirable, including, without limitation, the granting of equity or cash incentives

otherwise than under the Plan, and such arrangements may be either applicable generally or only in

speciÑc cases.

9.7 Fractional Shares. No fractional shares of Common Stock shall be issued or delivered

pursuant to the Plan or any Award, unless the Committee determines that it is administratively

feasible and desirable to deliver fractional shares (such as through an intermediary that can credit

accounts with fractional shares). In cases in which fractional shares are not delivered, the

Committee shall determine whether cash, other Awards, or other property shall be issued or paid in

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lieu of such fractional shares, whether such fractional shares or any rights thereto shall be forfeited

or otherwise eliminated, or other treatment accorded to such fractional shares.

9.8 Awards Not Compensation Under Plans. No Award shall be considered as

compensation under any employee beneÑt plan of the Corporation or an AÇliate except as

speciÑcally provided in any such plan or otherwise determined by the Committee.

9.9 Repayments to Participants in Connection with Forfeitures. Unless otherwise

determined by the Committee, in the event of a forfeiture of an Award with respect to which a

Participant paid cash consideration (for example, a forfeiture of an Option share, if forfeiture

conditions applied to shares after exercise), the Participant shall be repaid the amount of such cash

consideration.

9.10 Governing Law. The validity, construction, and eÅect of the Plan, any rules and

regulations under the Plan, and any Award Document will be determined in accordance with the

Federal Home Loan Mortgage Corporation Act of 1970, other federal laws regulating the

Corporation, and other laws of the United States. This Plan and the respective rights and obligations

of the Corporation and the Participants, except to the extent otherwise provided by Federal law,

shall be construed under the laws of the Commonwealth of Virginia (without giving eÅect to

principles of conÖicts of laws). The validity, enforceability and eÅectiveness of any electronic

records or electronic signatures used in connection with any Award Document shall be governed by

E-SIGN or the Virginia UETA, as applicable.

9.11 Termination of Authority to Grant Awards Under the 1995 Plan. Upon eÅectiveness of

the Plan as provided in Section 9.12, the authority to grant new awards under the 1995 Plan shall

terminate. In other respects, the 1995 Plan will remain in eÅect in accordance with its terms,

except as provided in Section 4.2 hereof.

9.12 Stockholder Approval, Termination of Authority to Grant Awards and Termination of

the Plan. The Plan became eÅective on November 4, 2004. This amendment and restatement of

the Plan shall become eÅective upon its approval by stockholders of the Corporation by an

aÇrmative vote that meets the requirements of the Corporation's Bylaws and of the Listed

Company Manual of the New York Stock Exchange as then in eÅect. No Award may be granted

after the tenth anniversary of the latest date upon which stockholders of the Corporation have

approved the Plan or an amendment and restatement of the Plan. The Plan will remain in eÅect

thereafter until such time as the Corporation has no further rights or obligations under the Plan with

respect to outstanding Awards under the Plan, unless the Plan is earlier terminated by the

Committee.

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