Document:

exv10w2

 

    Exhibit 10.2

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

    Subject:  Severance — Officers

 

    Policy Number:  3-254.1

 

    Control Point:  Director — Employee
    Relations

 

    Approval Authority:  EVP — Human
    Resources

 

    Signature:  /s/ Paul
    George               

                             Paul
    George

 

    Summary
    of this Policy

 

    This policy sets forth the eligibility requirements and amount
    of Severance Pay available to Eligible Officers.
    Defined terms are italicized. Please see Appendix A for
    definitions. Further details can be found in Freddie Mac’s
    Severance Plan Summary Plan Description.

 

		
	
    I.  
	
    Under
    what circumstances is Severance Pay provided?

 

    Freddie Mac provides Severance Pay to a Severance
    Eligible Officer pursuant to the terms of this Policy. In
    addition, in the event an employee becomes a Severance
    Eligible Officer as a result of a Reduction in Force,
    Freddie Mac also provides Notice Pay, even if the
    Severance Eligible Officer does not sign an agreement and
    release of claims.

 

    A Severance Eligible Officer’s employment is
    terminated as of the Separation Date. Such former
    officer’s eligibility to receive any benefit from or to
    continue participation in other plans maintained by the company
    is governed by the terms and provisions of those plans.

 

    In addition, the provision of Severance Pay to a
    Severance Eligible Officer is subject to the approval of
    Freddie Mac’s regulator.

 

		
	
    II.  
	
    What
    procedures are followed to determine severance
    eligibility?

 

    Business-area management will submit to their respective Human
    Resources Business Partner (“HRBP”) for review any
    proposed termination of employment (including any proposed
    voluntary separation that could result in Severance Pay)
    or proposed offer of Comparable Employment prior to
    discussing the same with the impacted officer. The Director of
    Employee Relations in the Human Resources Division determines
    whether the employee is a Severance Eligible Officer, and
    interprets and applies this policy.

 

    Employee Relations, after consulting with the HRBP, the Legal
    Division, and possibly business-area management, also determines
    whether a job position to be offered to an Eligible Officer
    is Comparable Employment. Eligible Officers will be
    evaluated for Comparable Employment, if at all, based on
    criteria including (but not limited to) their historical
    performance ratings and management’s assessment of relative
    skills.

 

    After Employee Relations determines that the employee is a
    Severance Eligible Officer, business-area management
    provides Notice to the Severance Eligible Officer.
    Business-area management will give Notice in advance of
    the

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

    Separation Date, if at all, to the extent that advance
    notification is consistent with business circumstances or
    required by law.

 

    Business-area management, after consulting with the HRBP, also
    establishes the Separation Date of a Severance
    Eligible Officer.

 

		
	
    III.  
	
    What is
    required for a Severance Eligible Officer to receive
    Severance Pay?

 

    As a condition of receiving Severance Pay, a Severance
    Eligible Officer must sign an agreement and release of
    claims. Freddie Mac has exclusive discretion to determine what
    terms will be included within the agreement and release of
    claims. Among other things, the agreement and release of claims
    may contain provisions related to the following:

 

			
	 	    • 
	
    Full release of claims

	 
	 	    • 
	
    Non-participation in claims against Freddie Mac

	 
	 	    • 
	
    Notice of receipt of subpoenas

	 
	 	    • 
	
    Treatment of confidential information

	 
	 	    • 
	
    Non-competition

	 
	 	    • 
	
    Non-solicitation of Freddie Mac employees

	 
	 	    • 
	
    Notice of future employment

	 
	 	    • 
	
    Return of Freddie Mac property

	 
	 	    • 
	
    Non-disparagement

	 
	 	    • 
	
    Obligation to reasonably cooperate

	 
	 	    • 
	
    Damages in the event of breach

	 
	 	    • 
	
    Preclusion
    and/or
    restriction from future Freddie Mac employment

 

    Business-area management may require an Eligible Officer
    to provide services to Freddie Mac up to and including the
    Separation Date as a condition of receiving Severance
    Pay.

 

    If a Severance Eligible Officer does not receive
    two-weeks of advance Notice of
    his/her
    Separation Date from Freddie Mac, and does not execute an
    agreement and release of claims proffered by the company, then
    the officer will receive Pay in Lieu of Notice for the
    two-week period following the date of Notice, and will
    receive no Severance Pay.

 

		
	
    IV.  
	
    How long
    is the Severance Period of a Severance Eligible
    Officer?

 

    The Severance Period of a Severance Eligible Officer
    is as specified in the Restrictive Covenant and
    Confidentiality Agreement between the Severance Eligible
    Officer and Freddie Mac. If the Severance Eligible
    Officer is entitled to receive Notice Pay, then
    his/her
    Severance Period shall be the Severance Period
    specified in the Restrictive Covenant and Confidentiality
    Agreement, minus the number of days of Notice Pay he/she
    is entitled to receive. In no event will a Severance Eligible
    Officer receive less than four weeks of Severance Pay
    in addition to Notice Pay.

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     2
    

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

		
	
    V.  
	
    How does
    a Severance Eligible Officer receive his/her Severance
    Pay?

 

    A Severance Eligible Officer has the option of receiving
    his/her
    Severance Pay in periodic payments over the specified
    Severance Period coinciding with Freddie Mac’s
    standard payroll procedures. Alternatively, the Severance
    Eligible Officer may receive
    his/her
    Severance Pay in a Lump Sum. If the Severance
    Eligible Officer elects periodic payments,
    he/she may
    be eligible to continue
    his/her
    participation in certain benefits plans at a reduced cost, in
    accordance with the terms of those plans.

 

    If a former officer receiving Severance Pay dies before
    receiving
    his/her
    entire Severance Pay, then Freddie Mac will pay the
    balance to the former employee’s estate or personal
    representative.

 

		
	
    VI.  
	
    When does
    a Severance Eligible Officer have to elect Lump
    Sum or Periodic Payments?

 

    A Severance Eligible Officer must elect whether to
    receive
    his/her
    Severance Pay in a Lump Sum or in periodic
    payments by the date
    he/she signs
    the required agreement and release of claims. Failure to make an
    election upon execution of the agreement and release of claims
    will result in the Severance Eligible Officer receiving
    his/her
    Severance Pay in a Lump Sum.

 

		
	
    VII.  
	
    When does
    Severance Pay begin?

 

    Severance Pay will be paid in accordance with the
    company’s standard payroll practices, and will begin within
    30 days after 1) the company’s receipt of the
    Severance Eligible Officer’s properly executed
    agreement and release of claims, 2) if applicable,
    expiration of the revocation period specified in the agreement
    and release of claims, and (3) (applicable only to Specified
    Employees) six months has elapsed since the Separation
    Date.

 

    If the consideration period noted in the agreement and release
    of claims extends beyond the Separation Date and the
    company has not received the Severance Eligible
    Officer’s properly executed agreement and release of
    claims as of the Separation Date, the company will place
    the Severance Eligible Officer on unpaid Leave of Absence
    until (1) receipt of the properly signed agreement and
    release of claims or (2) the end of the consideration
    period (whichever comes first).

 

    Failure by a Severance Eligible Officer to submit a
    properly executed agreement and release of claims within the
    time period specified in such agreement will result in the
    proffered agreement and release of claims being withdrawn by the
    company.

 

		
	
    VIII.  
	
    What
    happens to Severance Pay upon re-employment by Freddie
    Mac?

 

    If a former officer receiving Severance Pay is
    re-employed by Freddie Mac before the end of the Severance
    Period, the former officer will forfeit any remaining unpaid
    Severance Pay. If the former officer received
    his/her
    Severance Pay as a Lump Sum, and becomes
    re-employed by Freddie Mac before the end of what would have
    been the Severance Period, Freddie Mac reserves the right
    to require that some or all of the Severance Pay be
    repaid as a condition of re-employment.

 

		
	
    IX.  
	
    Restriction
    on Specified Employees.

 

    If a Severance Eligible Officer is a Specified
    Employee, then
    he/she will
    not begin receiving
    his/her
    Severance Pay until six (6) months following
    his/her
    Separation Date, consistent with Treas.
    Reg. § 1.409A-3(g)(2),
    or any successor thereto. If the Severance Eligible Officer
    elected to receive
    his/her
    Severance Pay in periodic payments within the required

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     3
    

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

    election period, then
    he/she shall
    receive six months of Severance Pay in a Lump Sum
    upon the expiration of the six-month wait period, and then
    will receive the balance of
    his/her
    Severance Pay in periodic payments according to the
    company’s standard payroll procedures.

 

		
	
    X.  
	
    Where can
    officers find additional information about Freddie Mac’s
    severance plan?

 

    Officers may find additional information about the
    company’s severance plan in Freddie Mac’s Severance
    Plan Summary Plan Description.

 

		
	
    XI.  
	
    Reservation
    of Rights

 

    Freddie Mac reserves the right to amend or terminate this Policy
    or any of its provisions at any time for any reason in its sole
    discretion without giving rise to legal liability. Nothing in
    this Policy is intended nor shall be interpreted to create a
    contract of employment or alter the at-will employment
    relationship that otherwise may exist between Freddie Mac and
    such employee, or otherwise limit the discretion of either
    Freddie Mac or such employee to terminate the employment
    relationship at any time for any reason.

 

    Effective
    Date:
    July 16,
    2010
    

 

    o
    New

    x
    Replaces Policy 3-254.1 dated August 17, 2009
    o
    Reviewed by Legal or Determined that No Legal Review Necessary
    

 

    Appendix A
    Definitions

 

    Comparable
    Employment

 

    Comparable Employment will be assessed on a
    case-by-case
    basis. Exact criteria the company will use include each of the
    following, all of which must be met for the position to be
    deemed comparable.

 

			
	 	    • 
	
    The content of the job to which the employee may be assigned. To
    be comparable, the new position must require substantially the
    same skill set and technical knowledge.

	 
	 	    • 
	
    The commuting distance associated with the new position. To be
    comparable, the new position must not increase the commuting
    distance for the employee by more than 50 miles each way,
    or increase the commuting distance for the employee such that
    the total commuting distance exceeds 90 miles each way.

	 
	 	    • 
	
    To be comparable, the employee’s base salary must not
    decrease by more than 10%.

 

    Eligible
    Officer

 

    An employee who is appointed by Freddie Mac as an officer of the
    company.

 

    Gross
    Misconduct

 

    The occurrence or existence of any of the following:

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     4
    

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

			
	 	    • 
	
    Recurrent or flagrant insubordination related to core job duties
    and responsibilities;

	 
	 	    • 
	
    Stealing property belonging to Freddie Mac, another employee, or
    other theft in connection with employment;

	 
	 	    • 
	
    Committing fraud, including computer fraud;

	 
	 	    • 
	
    Willfully destroying property;

	 
	 	    • 
	
    Inflicting bodily harm on another employee, threatening another
    employee with a weapon, or conviction (including any plea of
    nolo contendere) of a crime;

	 
	 	    • 
	
    Committing harassment;

	 
	 	    • 
	
    Engaging in discriminatory behavior;

	 
	 	    • 
	
    Engaging in dishonesty, including failure to cooperate fully,
    promptly and truthfully in an investigation;

	 
	 	    • 
	
    Recurring or habitual tardiness or absenteeism which has
    resulted in a written reprimand;

	 
	 	    • 
	
    Intentionally disclosing or intentionally misusing Confidential
    Information (as that term is defined in Freddie Mac policy, Code
    of Conduct, or applicable restrictive covenant
    and/or
    confidentiality agreement between the employee and Freddie Mac);

	 
	 	    • 
	
    Negligently disclosing or negligently misusing Confidential
    Information (as that term is defined in Freddie Mac policy, Code
    of Conduct, or applicable restrictive covenant
    and/or
    confidentiality agreement between the employee and Freddie Mac)
    resulting in a significant adverse impact on Freddie Mac or on
    the business of Freddie Mac; or

	 
	 	    • 
	
    A material breach of any provision of any written policy of
    Freddie Mac required by law or established to maintain
    compliance with applicable legal or regulatory requirements.

 

    Loss of
    Confidence

 

    Determination by senior executive management in its sole
    discretion that it no longer maintains a high level of
    confidence in an Eligible Officer’s decisions,
    judgment
    and/or
    conduct.

 

    Lump
    Sum

 

    The payment to a Severance Eligible Officer of the entire
    amount of Severance Pay in the form of a single payment,
    minus lawful deductions (rather than periodic payments over the
    span of the Severance Period).

 

    Notice

 

    Oral or written communication from business-area management or
    an HRBP to a Severance Eligible Officer about the
    termination of the officer’s employment, Separation
    Date, terms of the proffered agreement and release of
    claims, and expectations concerning
    his/her
    continued provision of services to Freddie Mac during the period
    between the Notice and the Separation Date.

 

    Notice
    Pay

 

    The dollar amount of pay based on the number of days of
    continued pay required by applicable federal
    and/or state
    law upon triggering events, such as group layoffs that occur
    within a legally defined period of time. Laws that would trigger
    Notice Pay include, but are not limited to, the federal
    Worker Adjustment and Retraining Notification (“WARN”)
    Act.

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     5
    

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

    Pay in
    Lieu of Notice

 

    If a Severance Eligible Officer does not receive
    two-weeks of advance Notice of
    his/her
    Separation Date from Freddie Mac, and does not execute an
    agreement and release of claims proffered by the company, then
    the employee will receive pay for the two-week period following
    the date of Notice, and will receive no Severance
    Pay.

 

    Position
    Elimination

 

    Loss of job due to company reorganization or job abolishment.

 

    Reduction
    in Force

 

    An elimination of a certain minimum number of jobs that occurs
    within a defined time-period and triggers a requirement to pay
    Notice Pay. Laws that would require Notice Pay
    include (but are not limited to) the federal WARN Act.

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     6
    

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

    Senior
    Executive Officer

 

    An employee who is appointed by Freddie Mac to be employed in
    the position of Senior Vice President or above of the company.

 

    Separation
    Date

 

    The last date on which a Severance Eligible Officer is
    considered an active employee with Freddie Mac; also known as
    the Termination Date.

 

    Severance
    Eligible Officer

 

    An Eligible Officer whose position is eliminated due to a
    Position Elimination, Reduction in Force, or
    Loss of Confidence.

 

    An Eligible Officer is not a Severance Eligible
    Officer if such employee:

 

			
	 	    • 
	
    at the time of Notice is classified as a temporary
    employee pursuant to
    Policy 3-221,
    Worker Classifications (as may be amended, replaced or
    redesignated from time to time);

	 
	 	    • 
	
    is terminated for engaging in Gross Misconduct;

	 
	 	    • 
	
    is regularly scheduled to work fewer than twenty (20) hours
    per week as of
    his/her
    receipt of Notice;

	 
	 	    • 
	
    is on “Leave of Absence” status as defined in
    Policy 3-236,
    Other Excused Absences (as may be amended, replaced or
    redesignated from time to time) for thirty (30) or more
    calendar days as of
    his/her
    receipt of Notice unless otherwise provided by law;

	 
	 	    • 
	
    fails to provide services to Freddie Mac in accordance with the
    Notice;

	 
	 	    • 
	
    resigned employment as a result of a new assignment or reporting
    relationship;

	 
	 	    • 
	
    received a written offer of employment from a Successor, which
    is an entity that acquires (through consolidation,
    reorganization, transfer, sublease, assignment or otherwise) all
    or substantially all of the business or assets of any business
    unit of Freddie Mac, or an entity that contracts with Freddie
    Mac to perform activities of the business unit in which the
    employee is assigned contemporaneous with the commencement of
    the contractual relationship; or

	 
	 	    • 
	
    received a written offer of Comparable Employment from
    Freddie Mac.

 

    In addition, an Eligible Officer who serves as a Senior
    Executive Officer is not a Severance Eligible Officer
    unless the company’s regulator approves payment of
    severance pay, and the amount thereof, to such Senior Executive
    Officer at the time of termination.

 

    Severance
    Pay

 

    The dollar amount that will be paid to a Severance Eligible
    Officer pursuant to the terms of this Policy. Severance
    Pay is equal to the Severance Eligible Officer’s
    base salary (not including items such as overtime, bonus,
    retention payments,
    and/or
    commissions) as of the Separation Date that would
    normally be paid over the length of time designated as the
    Severance Period, minus lawful deductions. Alternatively,
    Severance Pay may be paid in the form of a Lump
    Sum.

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     7
    

 

	 	 	 	 	 
	
    
	
 
	
    CORPORATE POLICY
    
	
 
	
     

 

    Severance
    Period

 

    The length of the Severance Period is as specified in the
    Restrictive Covenant and Confidentiality Agreement between the
    Severance Eligible Officer and the company. The
    Severance Period begins the day following the
    Separation Date.

 

    Specified
    Employee

 

    A Severance Eligible Officer who is identified by Freddie
    Mac in its sole discretion as of the Separation Date as a
    “specified employee” as defined in Treas.
    Reg. § 1.409A-1(i),
    or any successor thereto, and whose Severance Pay is
    determined by Freddie Mac to be subject to section 409A of
    the Internal Revenue Code.

 

		
	    Policy
    3-254.1 dated July 16, 2010
    	     8exv10w3

 

    Exhibit 10.3

 

    2010
    VICE PRESIDENT AND NON-OFFICER LONG-TERM INCENTIVE
    AWARD

 

    Parameters
    Document

 

	 	 	 
	
    Objective
	
 
	
    The long-term incentive award (LTI), which is paid in cash, is
    intended to provide a “forward-looking” incentive
    award to eligible vice presidents and non-officers.

	
     
	
 
	
 

	
    Grant Date
	
 
	
    March 15, 2010

	
     
	
 
	
 

	
    Performance Period
	
 
	
    LTI awards granted in March 2010 with performance measures
    covering the 2010 and 2011 performance periods.

	
     
	
 
	
 

	
    General Eligibility
	
 
	
    An employee who, as of the LTI grant date, is classified by
    Freddie Mac (in its sole discretion) as either (i) an
    active, full-time or part-time vice president or director, or a
    vice president or director on short-term disability and/or an
    approved leave of absence or (ii) an LTI eligible
    non-officer in a market-priced position.

	
     
	
 
	
 

	
 
	
 
	
    Senior Vice Presidents, Executive Vice Presidents, the Chief
    Operating Officer and the Chief Executive Officer are not
    eligible to participate in this program.

	
     
	
 
	
 

	
    Individual LTI Targets
	
 
	
    Vice Presidents:  The LTI target is the employee’s
    target in effect on the Grant Date.

	
     
	
 
	
 

	
 
	
 
	
    Non-Officers: For director-level employees in salary
    grades, the LTI target is the LTI target applicable to the
    position’s salary grade. For LTI eligible employees in a
    market priced position, the LTI target generally is the salary
    grade target that is closest to the median of the base salary
    Estimated Market
    Distribution1

    of such position, subject to the protocol established by the
    Human Resources Division for market-priced positions’ LTI
    eligibility and targets.

	
     
	
 
	
 

	
    Individual LTI Grant

    Amount
	
 
	
    For LTI awards granted in 2010, an eligible employee’s
    grant amount shall be equal to his/her individual LTI target,
    except: (a) an employee who receives a Business Results
    Rating (BRR) or Leadership Effectiveness Rating (LER) of 1 is
    not eligible to receive an LTI grant; and, (b) an employee
    who receives a BRR or LER of 2 may, at the discretion of
    the Division Head, either not receive an LTI grant or receive a
    grant that is less than his/her individual LTI target.

	
     
	
 
	
 

	
    Corporate LTI Payout

    Pool Funding
	
 
	
    Management shall provide a recommendation to the Compensation
    Committee (the “Committee”) regarding the level of
    achievement of the performance
    measure(s)
    described in Exhibit A prior to the first and the second
    anniversaries of the grant date. The Committee shall approve a
    level of achievement and the aggregate LTI dollar amount that
    can be paid (the “Corporate LTI Payout Pool Funding”)
    after considering the level of achievement of the performance
    measures,

 

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

    

    Page 1 of 10

 

	 	 	 
	
 
	
 
	
    all other relevant internal and external factors and
    non-performance measure developments that affect our corporate
    condition and mission fulfillment, and achievement of
    significant accomplishments beyond the performance measures or
    adverse developments. The date on which the Committee approves
    the level of achievement is referred to as the
    “Determination Date.”

	
     
	
 
	
 

	
 
	
 
	
    The Committee’s approval of both the level of achievement
    and the Corporate LTI Payout Pool Funding are subject to review
    and approval by the Federal Housing Finance Agency
    (“FHFA”).

	
     
	
 
	
 

	
    Performance
    Measure(s)

    and Level of

    Achievement
	
 
	
    See Exhibit A.

	
     
	
 
	
 

	
    Threshold Performance
	
 
	
    In order for the Corporate LTI Payout Pool to be funded for a
    particular performance period, the Committee, subject to review
    and approval by FHFA, must determine that the Company achieves
    threshold performance, which is defined as an overall level of
    achievement equal to or greater than 40%.

	
     
	
 
	
 

	
 
	
 
	
    If threshold performance is not achieved for a particular
    performance period, no payments will be made under the Plan.

	
     
	
 
	
 

	
    LTI Vesting and

    Employee LTI Payment

    Amount
	
 
	
    Except as set forth below under “Treatment of Award Upon
    Termination,” upon the Committee’s and FHFA’s
    approval of the Corporate LTI Payout Pool Funding an
    employee’s right to payment of that portion of the LTI
    award, if any, shall vest, provided the employee is an active
    Freddie Mac
    employee2

    on the payment date. The actual amount of an employee’s LTI
    award that is paid can be more or less than the LTI grant
    amount, based on the level of achievement and Corporate LTI
    Payout Pool Funding approved by the Committee. Unless the Chief
    Executive Officer (“CEO”) exercises his/her
    discretionary authority described below, the actual amount paid
    to an employee, expressed as a percentage of their LTI grant
    amount, will be the same for all employees who receive a 2010
    LTI grant.

	
     
	
 
	
 

	
 
	
 
	
    The CEO shall have the authority to adjust the amount paid to
    any employee, so long as the aggregate amount paid to all
    employees does not exceed the Corporate LTI Payout Pool Funding
    approved by the Committee.

 

			
	
    2		
    For purposes of this program, “active” is defined as
    an employee that is classified by Freddie Mac (in its sole
    discretion) as a full-time or part-time employee, or an employee
    on short-term disability and/or approved leave of absence. An
    individual who is in terminated status (for whatever reason) as
    of the payment date is not an “active” employee.
    However, a terminated employee’s participation can be
    authorized by the CEO or the EVP — HR&CS or is
    permitted under the terms of this program in the section
    “Treatment of Award Upon Termination.”

    

    Page 2 of 10

 

	 	 	 
	
    Payment Timing
	
 
	
    Any payment shall occur as soon as administratively practicable,
    but no later than March 15 of the calendar year following
    each calendar year performance period.

	
     
	
 
	
 

	
    Form of Payout
	
 
	
    Payment will be in cash less applicable withholding.

	
     
	
 
	
 

	
    Treatment of Award

    Upon Termination
	
 
	
    Death and Long-Term
    Disability3:

    If an employee’s employment is terminated due to either
    death or long-term disability, any vested but unpaid portion of
    the LTI grant amount will be paid as soon as administratively
    possible. The actual amount that is paid will be based on the
    level of achievement and Corporate LTI Payout Pool Funding
    approved by the Committee.

	
     
	
 
	
 

	
 
	
 
	
    Any portion of the LTI grant that is unvested at the time of the
    employee’s death or long-term disability will remain
    outstanding until the Committee approves the level of
    achievement and the Corporate LTI Payout Pool Funding. As soon
    as administratively possible after the Determination Date, but
    no later than March 15 of the calendar year following each
    calendar year performance period, the employee, or the
    employee’s
    beneficiary(ies)
    will receive all unpaid portions of the LTI grant based on the
    level of achievement and Corporate LTI Payout Pool Funding
    approved by the Committee.

	
     
	
 
	
 

	
 
	
 
	
    Retirement: If an employee terminates employment due to
    retirement4,

    any vested but unpaid portion of the LTI grant will be paid as
    soon as administratively possible. The amount paid will be based
    on the level of achievement and Corporate LTI Payout Pool
    Funding approved by the Committee.

	
     
	
 
	
 

	
 
	
 
	
    Any unvested portion of the LTI grant will remain outstanding
    until the Committee approves the level of achievement and the
    Corporate LTI Payout Pool Funding. Upon such approval, the
    employee’s right to receive a pro-rata payment shall vest.
    The pro rata payment shall be based on the following methodology:

	
     
	
 
	
 

	
 
	
 
	

    Step 1. The number of whole months employed in
    the performance year

	
     
	
 
	
 

	
 
	
 
	

    Step 2. Divided by twelve

	
     
	
 
	
 

	
 
	
 
	

    Step 3. Multiplied by the portion of the LTI
    grant scheduled to vest and to be paid for that performance year
    and the level of achievement and Corporate LTI Payout Pool
    Funding approved by the Committee

 

			
	
    3		
    For the purposes of this program, “long-term
    disability” is as defined in Freddie Mac’s Long-Term
    Disability Plan.
	 
	
    4		
    For the purposes of this program, “retirement” is
    defined as an employee (i) whose age/years of service is
    62/5 or greater; or (ii) whose sum of age and years of
    service equals no less than 70, with a minimum age of 55.
    Further, “years of service” is defined (and
    calculated) in the same manner as “years of qualifying
    service” under the Federal Home Loan Mortgage Corporation
    Employees’ Pension Plan.

 

    

    Page 3 of 10

 

	 	 	 
	
 
	
 
	
    Other Terminations: If an employee’s employment
    terminates for any reason other than Death, Long-Term
    Disability, or Retirement, any unpaid portion of the LTI award
    will be forfeited.

	
     
	
 
	
 

	
    Additional Forfeiture

    Provision
	
 
	
    Upon a “Forfeiture Event” (as defined below), any
    unvested or any unpaid LTI award will be cancelled and the
    employee or former employee will be required to immediately
    repay Freddie Mac the gross value of any LTI award payment that
    was made within 12 months prior to the Forfeiture Event.

	
     
	
 
	
 

	
 
	
 
	
    A Forfeiture Event occurs if the employee or former employee
    directly or indirectly seeks or accepts employment with, or
    provides professional services to, a “Competitor,” as
    that term is defined in any non-competition covenant agreement
    between the employee and Freddie Mac in effect as of the grant
    date.

	
     
	
 
	
 

	
    Regulatory Approval and

    Reservation of Rights
	
 
	
    Notwithstanding the terms set forth above, Freddie Mac’s
    Conservator is required to approve the actual payment of
    compensation with respect to certain designated officers,
    including payment of this LTI grant. Therefore, as appropriate,
    such officer’s right to payment of the LTI grant set forth
    herein is conditioned on the Conservator’s approval after
    the Committee’s determination of the level of achievement
    and Corporate LTI Payout Pool Funding.

	
     
	
 
	
 

	
 
	
 
	
    Amounts paid pursuant to this plan will not be considered
    compensation for purposes of the tax qualified
    Thrift/401(k)
    Savings Plan, the tax qualified Employees’ Pension Plan and
    the non-qualified Supplemental Executive Retirement Plan.

	
     
	
 
	
 

	
 
	
 
	
    Nothing in this program is intended to create a contract to
    employ any employee for any particular term or period of time or
    otherwise abrogate Freddie Mac’s or the employee’s
    right to terminate the employment relationship at any time for
    any lawful reason.

	
     
	
 
	
 

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

	
     
	
 
	
 

	
 
	
 
	
    The terms of this plan are subject to and shall be construed in
    accordance with applicable law and any regulation, guidance or
    interpretation issued by FHFA or the U.S. Department of the
    Treasury.

    Page 4 of 10

 

    Exhibit A

 

    2010
    Long-Term Incentive Award Performance Measures

    and Performance Multiplier

 

    Performance
    Measures

 

    The 2010 LTI grant is scheduled to vest and be paid in equal
    installments prior to each of the first and second anniversaries
    of the grant date. Unless the CEO exercises his discretionary
    authority as described below, the value that a participant
    ultimately receives is determined based on Freddie Mac’s
    level of achievement against the performance measures for each
    vesting cycle (identified below), all other relevant internal
    and external factors and non-performance measure developments
    that affect our corporate condition and mission fulfillment, and
    achievement of significant accomplishments beyond the
    performance measures or adverse developments.

 

    Performance
    Measures That Will Be Considered and The Level of Achievement
    for 1st LTI Vesting Cycle — Portion Scheduled to Vest
    in March 2011

 

    The Performance Measures:

 

			
	 	    • 
	
    Mission — Achieve Mission objectives as
    defined in the 2010 Short-Term Incentive Scorecard

	 
	 	    • 
	
    Controls Remediation and Sarbanes-Oxley
    Compliance — 

 

			
	 	    1. 
	
    Controls Remediation — Strengthen the control
    environment. In making this assessment, the Committee will take
    into consideration the Company’s progress in remediating
    Significant Deficiencies / Material Weaknesses,
    Internal Audit Critical and Major issues, and FHFA Matters
    Requiring Attention scheduled to be remediated during 2010.

	 
	 	    2. 
	
    Sarbanes-Oxley Compliance — By March 31,
    2010, Management will submit to the Audit Committee of Freddie
    Mac’s Board of Directors a plan outlining actions it will
    take to assure more efficient and effective processes are in
    place to maintain Sarbanes-Oxley compliance. Management issues
    Sarbanes-Oxley certification in 2011 for the 2010 fiscal year.

 

			
	 	    • 
	
    Financial Execution — Achieve
    Single-Family, Investment and Multifamily new purchase financial
    execution objectives and the Conservation of Assets objective as
    outlined in the 2010 Short-Term Incentive Scorecard.

	 
	 	    • 
	
    Business Infrastructure — Implement 2010
    Advantage milestones as defined in the 2010 Short-Term Incentive
    Scorecard. In addition, operate the existing technology and
    operations infrastructure in an efficient fashion and maintain
    normal service and quality standards.

    

    Page 5 of 10

 

    Level of Achievement and Corporate LTI Payout Pool
    Funding:

 

    Based on the Company’s level of achievement against the
    Performance Measures, all other relevant internal and external
    factors and non-performance measure developments that affect our
    corporate condition and mission fulfillment, and achievement of
    significant accomplishments beyond the performance measures or
    adverse developments, the Committee will determine the aggregate
    dollar amount that can be paid out (the “Corporate LTI
    Payout Pool Funding”).

 

    An aggregate level of achievement of less than 40% will result
    in a Corporate LTI Payout Pool Funding of $0 and a level of
    achievement equal to 100% will result in a Corporate LTI Payout
    Pool Funding at the maximum funding level. In the event that the
    aggregate actual level of achievement is between 40% and 100%,
    linear interpolation will be used to determine the Corporate LTI
    Payout Pool Funding.

 

    As illustrated in Chart A below, the level of achievement for
    the Performance Measures (Column C) is equal to the actual
    percentage of the Performance Measure Accomplished
    (Column B) multiplied by the weighting for each Performance
    Measure (Column A).

 

    The Committee reserves the right to adjust the Corporate LTI
    Payout Pool Funding level for any reason.

 

    Unless the Chief Executive Officer exercises
    his/her
    authority to vary the allocation of the Corporate LTI Payout
    Pool Funding, the actual amount paid, expressed as a percentage
    of the employee’s target, will be the same for all
    employees who received a 2010 LTI grant. Once a Corporate LTI
    Payout Pool Funding is approved, it applies to 50% of the LTI
    grant date value (i.e., the portion scheduled to vest and be
    paid in March 2011).

 

	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Chart A: 2010 Corporate Performance Measures

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

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

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Performance Measures
	
 
	
 
	
    Weighting
	
 
	
 
	
    Percentage of Performance

    Measure Accomplished
	
 
	
 
	
    Level of Achievement

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Mission
	
 
	
 
	
    35%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Controls Remediation/

    Sarbanes-Oxley Compliance
	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Financial Execution
	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Business Infrastructure
	
 
	
 
	
    25%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Total:
	
 
	
 
	
    100%
	
 
	
 
	
 
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

    

    Page 6 of 10

 

    Performance
    Measures That Will Be Considered and Level of The Achievement
    for 2nd LTI Vesting — Portion Scheduled to Vest in
    March 2012:

 

    The Performance Measures are:

 

			
	 	    • 
	
    Mission — Achieve Mission objectives
    defined fin the 2011 Short-Term Incentive Scorecard.

	 
	 	    • 
	
    Controls Remediation — Strengthen the
    control environment. In making this assessment, the Committee
    will take into consideration the Company’s progress in
    remediating Significant Deficiencies / Material
    Weaknesses, Internal Audit Critical and Major issues, and FHFA
    Matters Requiring Attention scheduled to be remediated during
    2011.

	 
	 	    • 
	
    Financial Execution — Achieve
    Single-Family, Investment and Multifamily new purchase financial
    execution objectives, as well as the Conservation of Assets
    objective, as outlined in the 2011 Short-Term Incentive
    Scorecard.

	 
	 	    • 
	
    Business Infrastructure - Implement 2011 Advantage
    milestones as defined in the 2011 Plan developed per the 2010
    Short-Term Incentive Scorecard. In addition, operate the
    existing technology and operations infrastructure in an
    efficient fashion and maintain normal service and quality
    standards.

 

    Level of Achievement and Corporate LTI Payout Pool
    Funding:

 

    Based on the Company’s aggregate level of achievement
    against the Performance Measures, and all other relevant
    internal and external factors and non-performance measure
    developments that affect our corporate condition and mission
    fulfillment, and achievement of significant accomplishments
    beyond the performance measures or adverse developments, the
    Committee will determine the aggregate dollar amount that can be
    paid out (the “Corporate LTI Payout Pool Funding”).

 

    A level of achievement of less than 40% will result in a
    Corporate LTI Payout Pool Funding of $0 and a level of
    achievement equal to 100% will result in a Corporate LTI Payout
    Pool Funding at the maximum funding level. In the event that the
    actual level of achievement is between 40% and 100%, linear
    interpolation will be used to determine the Corporate LTI Payout
    Pool Funding.

 

    As illustrated in Chart B below, the aggregate level of
    achievement for the Performance Measures (Column C) is
    equal to the actual percentage of the Performance Measure
    Accomplished (Column B) multiplied by the weighting for
    each Performance Measure (Column A).

 

    The Committee reserves the right to adjust the Corporate LTI
    Payout Pool Funding level for any reason.

 

    Additionally, in determining the funding level for the
    2nd LTI

    vesting, the Committee can take into account any developments
    that occur subsequent to the determination of the Corporate LTI
    Payout Pool Funding for
    1st vesting

    that would have influenced the Committee’s funding level
    determination had it been aware of these developments at the
    time of the determination.

    

    Page 7 of 10

 

    Unless the Chief Executive Officer exercises
    his/her
    authority to vary the allocation of the Corporate LTI Payout
    Pool Funding, the actual amount paid, expressed as a percentage
    of the employee’s target, will be the same for all
    employees who received a 2010 LTI award. Once a Corporate LTI
    Payout Pool Funding is approved, it applies to 50% of the LTI
    grant date value (i.e., the portion scheduled to vest and be
    paid in March 2012).

 

	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Chart B: 2011 Corporate Performance Measures

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

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

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Performance Measures
	
 
	
 
	
    Weighting
	
 
	
 
	
    Percentage of Performance

    Measure Accomplished
	
 
	
 
	
    Level of

    Achievement

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Mission
	
 
	
 
	
    35%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Controls Remediation
	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Financial Execution
	
 
	
 
	
    20%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Business Infrastructure
	
 
	
 
	
    25%
	
 
	
 
	
    X%

    (To Be Determined)
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Total:
	
 
	
 
	
    100%
	
 
	
 
	
 
	
 
	
 
	
    X%

    (To Be Determined)

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

    

    Page 8 of 10

 

    2010
    Long-Term Incentive Definitions for Controls
    Remediation

 

			
	 	    1. 
	
    Remediation of an MRA

 

			
	 	    a. 
	
    For MRAs, the “Scheduled to be Remediated” date will
    be the date the deficiency owner commits to complete remediation
    actions (management’s target remediation date), as given by
    an action plan developed in accordance with the governance
    process established by the Remediation Committee, plus
    90 days to allow FHFA sufficient time to close or otherwise
    respond to management’s assertion of remediation.

	 
	 	    b. 
	
    FHFA will determine whether an MRA has been closed when FHFA
    issues a written
    follow-up
    report. FHFA is committed to complete timely
    follow-ups
    and issuing a
    follow-up
    report within 90 days of management’s target
    remediation date. In the event that FHFA does not issue a
    follow-up
    report by year-end for any MRA that is “scheduled to be
    remediated” in 2010, then the MRA will be treated as an
    open item that needs to be remediated and closed in the
    subsequent year. In that instance, the MRA will be removed from
    consideration in the current performance year.

 

			
	 	    2. 
	
    Remediation definition for Major and Critical Audit
    findings:

 

			
	 	    a. 
	
    For Critical/Major audit issues, the “Scheduled to be
    Remediated” date will be based on the date Internal Audit
    identifies as its
    follow-up
    report issuance date. Generally, this date will be 90 days
    after management’s target remediation date, provided that
    Management’s target remediation date includes a sufficient
    period to demonstrate operating effectiveness for an appropriate
    assessment of whether such remediated activities were
    implemented and operate effectively.

	 
	 	    b. 
	
    Internal Audit Division (“IAD”) will determine whether
    a Major or Critical finding has been closed or downgraded in
    severity from Major or Critical to Other when IA issues a
    written
    follow-up
    report. (IAD’s Scorecard includes an objective to complete
    timely
    follow-ups
    by beginning
    follow-up
    work within 30 days of management’s target remediation
    date and issuing a
    follow-up
    report within 90 days of management’s remediation
    date. Management’s target remediation dates will be
    determined based on the latest date for
    agreed-upon
    actions documented in the audit report identifying the Major or
    Critical finding, or if remediation dates for open findings have
    been extended, then the current target remediation date as of
    January 1, 2010.)

 

			
	 	    3. 
	
    Remediation definition for Significant Deficiencies or Material
    Weaknesses

	 
	 	       
	
    After a sufficient period of operation of the remediation
    activities, an independent oversight function within Freddie Mac
    (typically IAD or the Finance Division’s
    Controls & Change Management department) validates
    that the remediation activities were implemented and operate
    effectively. Upon issuance of a report or memo by the oversight
    function, the Significant Deficiencies or Material Weaknesses is
    deemed to be remediated.

	 
	 	    4. 
	
    There may be appropriate business reasons (e.g. —
    changes in regulatory
    and/or
    accounting requirements and changes in corporate priorities),
    when it may be reasonable to defer

    

    Page 9 of 10

 

    management’s target remediation dates without causing
    negative implications for this scorecard factor. The
    determination of whether such extensions of management
    remediation dates are valid will be subject to the review and
    approval of the responsible division head and:

 

			
	 	    • 
	
    MRAs — Chief Compliance Officer

	 
	 	    • 
	
    Critical/Major Audit findings — General Auditor

	 
	 	    • 
	
    Significant Deficiencies or Material Weaknesses —
    Chief Financial Officer and, if appropriate, the Chair of the
    Audit Committee

    

    Page 10 of 10

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