Document:

exv10w41

 

    Exhibit
    10.41

 

    Amendment
    Extending the Employment Agreement Between Federal Home
    Loan

    Mortgage Corporation and Richard F. Syron Dated
    December 6, 2003

 

    WHEREAS, the Federal Home Loan Mortgage Corporation, a
    government-sponsored enterprise created pursuant to the Federal
    Home Loan Corporation Act (Title III of the Emergency Home
    Finance Act of 1970, as amended) (“Freddie Mac” or
    “Company”) entered into an employment agreement with
    Richard F. Syron ( the “Executive”) dated
    December 3, 2003 for a period of five (5) years to end
    on December 31, 2008 (the “Original Employment
    Agreement”), with the expectation that Executive would
    transition his role as Chief Executive Officer to a successor
    Chief Executive Officer of Freddie Mac during that period:

 

    WHEREAS, Freddie Mac as of this date has not identified or
    recruited a successor to Executive as Chief Executive Officer of
    Freddie Mac:

 

    WHEREAS, Freddie Mac believes that it is in the best interest of
    the Company, its shareholders and the mission it serves to
    extend the Original Employment Agreement with Executive by an
    Amendment (the “Employment Agreement As Amended”) for
    a period of twelve (12) additional months to ensure
    continuity of leadership and to permit the recruitment of a new
    Chief Executive Officer and the transition Executive’s role
    and responsibilities in that regard:

 

    WHEREAS, the Executive’s agreement to enter into the
    Employment Agreement As Amended is contingent on OFHEO’s
    approval of the termination benefits of the Employment Agreement
    As Amended and OFHEO’s lack of objection to the
    arrangements set forth in Section 7.3(b).

 

    NOW, THEREFORE, it is agreed as follows:

 

    The Original Employment Agreement between Freddie Mac and the
    Executive dated December 3, 2003 is amended as set forth
    below (the “Employment Agreement As Amended”). The
    provisions of the Employment Agreement As Amended and the terms
    of

 

    the Original Employment Agreement not modified herein represent
    the understanding of Executive and Freddie Mac with respect to
    the duties, responsibilities, and terms of employment for
    Executive in his capacity as Chief Executive Officer of Freddie
    Mac and thereafter as Executive Chairman of the Board on the
    occasion of the appointment of a Successor Chief Executive
    Officer. In consideration of the mutual promises set forth in
    the Employment Agreement As Amended, and other valuable
    consideration, the receipt and adequacy of which is hereby
    acknowledged, Executive and Freddie Mac agree as follows:

 

    Section 1.
    Terms of Employment
    

 

    The Term of the Employment Agreement As Amended shall end on the
    earlier of (a) December 31, 2009 (the “Revised
    Scheduled Termination Date”) or (b) the occurrence of
    an event described in Section 5 (“Revised Term”).
    The revised compensation and other terms of the Executive’s
    employment as set forth in the Employment Agreement As Amended
    are contingent upon the approval of the Human Resources
    Committee of the Board of Directors (the “Committee”).
    The termination benefits of the Employment Agreement As Amended
    are also contingent upon the approval, as required, of OFHEO.
    Such approvals were obtained from the Committee on June 7,
    2007 and from OFHEO on November 8, 2007.

 

    Section 2.
    Position and Responsibilities
    

 

    During the Revised Term, Executive agrees to serve as Chief
    Executive Officer of Freddie Mac or as Executive Chairman of the
    Board of Directors of Freddie Mac (the “Board of
    Directors”). In such capacity, Executive shall have the
    same status, privileges and responsibilities normally inherent
    in such capacity in public corporations of similar size and
    character. Executive shall also perform such additional duties
    as the Board of Directors may from time to time reasonably
    assign him. During the Revised Term,

    

    2

 

    Executive shall actively assist Freddie Mac in the recruitment
    and retention of a replacement of Executive as Chief Executive
    Officer (the “Successor CEO”) of Freddie Mac to occur
    prior to the Revised Scheduled Termination Date. Upon the
    appointment of the Successor CEO, Executive shall cease to be
    Chief Executive Officer of Freddie Mac and shall become
    Executive Chairman of the Board of Directors and remain in that
    capacity through the Revised Scheduled Termination Date (the
    “Transition Period”) and shall continue to perform
    such duties and responsibilities as are customary for the
    Executive Chairman of the Board of Directors during such
    Transition Period. During the Transition Period, Executive shall
    continue to be an employee of Freddie Mac, subject to Freddie
    Mac’s Code of Conduct and any rules or restrictions
    applicable to senior executives of Freddie Mac regarding the
    purchase or sale of securities of Freddie Mac and shall be
    entitled to receive the compensation and benefits payable during
    the Revised Term. Executive agrees to cooperate fully with the
    Board in connection with the recruitment of the Successor CEO
    and the transition of his responsibilities to such Successor CEO.

 

    Section 4.
    Compensation
    

 

    In consideration for all services to be rendered by Executive
    under the Employment Agreement As Amended, Freddie Mac shall
    adjust Executive’s total compensation as follows:

 

    4.1 Base Salary. During the Revised Term, Freddie Mac
    shall increase Executive’s Base Salary from the annual rate
    of $1,100,000 (“Original Base Salary”) to $1,300,000
    effective July 1, 2007 (“Adjusted Base Salary”).

 

    4.2 Extension Bonus and Annual Bonus. In addition to the
    Base Salary, Executive shall be paid a special Extension Bonus
    for his agreement to extend the term of the Employment Agreement
    As Amended. Such bonus amount will be for the sum of

    

    3

 

    $3,500,000 and will be payable in installments of $1,250,000 on
    the first payroll period following the effective date of this
    Amended Agreement, $1,500,000 on the first payroll period after
    July 1, 2008 and $750,000 on the first payroll period after
    on July 1, 2009. Each such bonus installment will be
    payable only if Executive remains actively in the employ of
    Freddie Mac through the specified payment date of each
    applicable calendar year. Such extension bonus paid to Executive
    shall be repaid by him in the event his employment with Freddie
    Mac is terminated prior to December 31, 2009 other than for
    Good Reason, as defined herein. In addition, Executive will have
    the opportunity to earn an annual cash bonus (“Annual
    Bonus”) based on performance criteria determined by the
    Human Resources Committee of the Board of Directors or its
    successor (the “Committee”). The Annual Bonus set
    forth in the Original Employment Agreement will be increased for
    calendar year 2007 to a target of 278% of bonus eligible
    earnings (i.e., weighted average salary for 2007), and for
    calendar years 2008 and 2009 the target will be increased to
    302% and 322%, respectively, of Adjusted Base Salary
    (“Adjusted Annual Bonus”). The Annual Bonus in respect
    of a calendar year will only be payable if Executive remains
    actively employed with Freddie Mac through the end of the
    applicable calendar year, and shall be paid to Executive at the
    same time that other senior executives of Freddie Mac are paid
    their annual cash incentive awards. The minimum bonus in each
    year is 0% and the maximum bonus is 200% of the Adjusted Annual
    Bonus (i.e., 200% of the target for such year) and will be based
    on the Executive’s performance in each calendar year.
    During Executive’s employment with Freddie Mac, earned Base
    Salary and actual Annual Bonuses received will be considered for
    purposes of the FHLMC Employees’ Pension Plan
    (“Pension Plan”) and the non-qualified Supplemental
    Executive Retirement Plan (“SERP”), but the Extension
    Bonuses will not be considered under any benefit plan.

    

    4

 

    4.4 Annual Equity Grants. During calendar year 2007,
    Freddie Mac shall increase the 2007 grant for Executive relating
    to a long-term equity incentive award (the “Annual Equity
    Grant”) by $800,000. Said additional grant will be in the
    form of time vested restricted stock units (RSUs) and will be
    made as of the first regularly scheduled Committee meeting after
    the effective date of the Employment Agreement As Amended. In
    calendar year 2008 the Executive will be entitled to an Annual
    Equity Grant Target valued at $9,400,000, (the “Adjusted
    Annual Equity Grant”) $8,800,000 of which (the
    “Original Annual Equity Grant”) will be guaranteed. In
    calendar year 2009, Executive will be entitled to an Adjusted
    Annual Equity Grant Target valued at $10,000,000 none of which
    will be guaranteed. The size of the actual grant will be
    determined by an assessment of the performance criteria
    established by the Committee. In terms of the Adjusted Annual
    Equity Grants provided for under the Employment Agreement As
    Amended, no more than 25% of the awards will be in the form of
    performance-based RSUs.

 

    Options shall vest in four equal annual installments of
    approximately 25% each beginning on the first anniversary of the
    date of grant, in each case subject to Executive’s
    continued employment with Freddie Mac through the applicable
    vesting date, provided that the Committee may in its discretion
    from time to time (a) permit the acceleration of the
    vesting of Options and (b) provide for a different vesting
    schedule for Options, provided, however, that in no event shall
    the vesting schedule applicable to Options provide for the
    Options to vest less frequently than 25% each year over a four
    year vesting period. In addition, the vesting of the Options and
    RSUs shall be subject to acceleration upon the terms and
    conditions described in the following paragraph and
    Section 6 of the Employment Agreement As Amended. Except as
    expressly provided in the Employment Agreement As Amended, all
    other terms and conditions of the RSUs and Options shall be as
    set forth in the Stock Compensation Plan, the resolution making
    the grant and the related award agreement.

    

    5

 

    In addition to the foregoing, upon the occurrence of a Change in
    Control (as defined below) during the Revised Term: (a) all
    RSUs that were granted to Executive pursuant to the Employment
    Agreement and this Amendment at least twelve months prior to
    such Change in Control shall immediately vest and be settled
    subject to any right of Executive to defer payment of the RSUs
    under any non-qualified deferred compensation arrangement in
    which senior executives of Freddie Mac are permitted to defer
    payment of restricted stock units, (b) all Options that
    were granted to Executive pursuant to this Agreement at least
    twelve months prior to such Change in Control shall immediately
    vest and remain exercisable until the scheduled expiration date
    applicable to such Options, (c) with respect to each Annual
    Equity Grant that was granted to Executive less than twelve
    months prior to such Change in Control, all Options and RSUs
    that formed part of such Annual Equity Grant or Adjusted Annual
    Equity Grant shall be cancelled immediately upon the occurrence
    of the Change in Control and in consideration for such
    cancellation, Freddie Mac shall pay to Executive a lump sum cash
    payment in the amount of $8,800,000.

 

    Section 5.
    Termination of Employment
    

 

    5.3 Termination for Good Reason. Prior to the Revised
    Scheduled Termination Date, Executive may terminate the Revised
    Term and his employment under the Agreement for Good Reason by
    giving the Board of Directors sixty (60) days prior written
    notice of his intent to terminate stating in reasonable detail
    and particularity the factual basis Executive claims to support
    his claim for a Good Reason basis for termination as defined in
    the Employment Agreement As Amended. After receipt of
    Executive’s sixty (60) day written notice, Freddie Mac
    will have thirty (30) days in which to cure the basis for
    such claim. The Revised Term and Executive’s employment
    under the Employment Agreement As Amended shall terminate upon
    the expiration of the
    60-day
    notice period unless Freddie Mac cures such basis in the good
    faith opinion of the Board of Directors.

    

    6

 

    For purposes of the Employment Agreement As Amended, “Good
    Reason” shall mean, without Executive’s express
    written consent, the occurrence of anyone or more of the
    following:

 

    (i) A reduction in Executive’s then current Adjusted
    Base Salary or Adjusted Annual Target Bonus or Maximum Bonus
    opportunity;

 

    (ii) The removal by the Board of Directors of Executive
    from the position of Chief Executive Officer of Freddie Mac or
    Chairman of the Board of Directors or otherwise from the Board
    of Directors unless such removal is for “Cause”:

 

    (iii) A material diminution or change in Executive’s
    duties or responsibilities as contemplated by Section 2 of
    the Employment Agreement;

 

    (iv) A change in the reporting structure so that Executive
    reports to any person or entity other than the Board of
    Directors;

 

    (v) A request by Freddie Mac that Executive resign his
    employment, unless such resignation is requested as a result of
    conduct by Executive that would constitute Cause (as defined
    below);

 

    (vi) Executive is not elected to the Board of Directors or,
    if Executive is so elected, Executive is not appointed as
    Chairman or Executive Chairman of the Board of Directors unless
    such action is for “Cause”;

 

    (vii) The failure of Freddie Mac to obtain the assumption
    in writing of its obligation to perform the Employment Agreement
    and by any successor to all or substantially all of the assets
    of Freddie Mac within 15 days after the occurrence of a
    Change in Control (as defined in Section 4.4);

 

    (viii) A material breach of the Employment Agreement As
    Amended by Freddie Mac;

    

    7

 

    (ix) Good Reason shall include the removal by the Board of
    Directors of Executive from the position as Executive Chairman
    of the Board of Directors after the appointment of a Successor
    CEO and prior to the Revised Scheduled Termination Date unless
    such removal is for “Cause”:

 

    Notwithstanding the “Good Reason” terms set forth in
    the Employment Agreement and herein, Executive expressly
    acknowledges and agrees that it shall not constitute Good Reason
    as defined in Section 5.3 [(including without limitation
    under 5.3 (ii), (iii), (vi) or (viii)] if during the
    Revised Term, a Successor CEO is appointed by the Board and
    Executive ceases to be Chief Executive Officer and Chairman of
    the Board of Directors and becomes Executive Chairman of the
    Board of Directors under the circumstances described in
    Section 2 above.

 

    Section 6.
    Compensation Upon Termination
    

 

    6.1 Disability or Death. In the event the Revised Term
    and Executive’s employment under the Employment Agreement
    and this Amendment is terminated prior to the Revised Scheduled
    Termination Date by reason of Executive’s Disability (under
    Section 5.1 of the Employment Agreement) or by reason of
    Executive’s death (under Section 5.2 of the Employment
    Agreement), Freddie Mac’s obligations to Executive (or his
    assigns as provided in Section 8.2 of the Employment
    Agreement) shall be as follows:

 

    (i) Base Salary. Executive’s Base Salary shall
    be paid to Executive (or his assigns) through the end of the
    month in which the termination of employment occurs within five
    (5) days following such termination. Freddie Mac shall have
    no further obligation to make payments of Base Salary to
    Executive (or his assigns). For purposes of this clause, Base
    Salary shall be defined as the current Base Salary at the time
    of such disability or death.

 

    (ii) Bonus. Freddie Mac shall pay Executive (or his
    assigns) any and all earned but unpaid bonus amounts from the
    most recent completed calendar year of Freddie

    

    8

 

    Mac. In addition, Freddie Mac shall pay Executive (or his
    assigns) a prorated percentage of Executive’s Target Bonus
    of $1,320,000 for the calendar year in which the employment
    termination occurs, based upon the number of months elapsed in
    such year through the last day of the month in which such
    termination occurs. All such amounts shall be paid to Executive
    (or his assigns) within thirty (30) days after the
    termination of the Revised Term and Executive’s employment
    under the Employment Agreement. For purposes of this clause,
    Target Bonus shall be defined as the Target Bonus in the
    Original Employment Agreement.

 

    (iii) Long-Term Incentives. At the date of
    termination of the Revised Term and Executive’s employment
    under the Employment Agreement As Amended for Disability or
    death, all RSUs that are outstanding pursuant to the Employment
    Agreement As Amended shall immediately vest and be settled in
    shares, subject to any right of Executive to defer payment of
    such RSUs under any non-qualified deferred compensation
    arrangement in which senior executives of Freddie Mac are
    permitted to defer payment of restricted stock units, and all
    Options granted to Executive pursuant to the Employment
    Agreement As Amended shall become immediately exercisable and
    shall remain outstanding: (A) in the event such termination
    occurs as a result of Executive’s death, until the earlier
    to occur of (1) the third anniversary of such termination
    of employment and (2) the scheduled expiration date
    applicable to such Options, and (B) in the event such
    termination occurs as a result of Executive’s Disability,
    until the scheduled expiration date applicable to such Options.

 

    (iv) Timing of Payments for Disability. Payments
    under paragraphs (i) — (iii) of
    subsection 6.1 due to termination for Disability, including
    payments of vested RSUs, shall be paid immediately upon
    Executive’s termination of employment, or if required for
    compliance with section 409A of the Internal Revenue Code
    of 1986 (the “IRC”), the date that is six months
    following the date of the termination of Executive’s
    employment, or, if

    

    9

 

    earlier date of the Executive’s death after his termination
    of employment (the “Six-month Payment Date”).

 

    6.2 For Good Reason or by Freddie Mac Without Cause. In
    the event the Revised Term and Executive’s employment under
    the Employment Agreement As Amended is terminated prior to
    December 31, 2009 by Executive for Good Reason (under
    Section 5.3 of the Employment Agreement As Amended), or by
    Freddie Mac without Cause (under Section 5.4 of the
    Employment Agreement As Amended), Freddie Mac’s obligations
    to Executive shall be as follows, in each case, subject to
    Executive’s execution of a general release and waiver in a
    form provided to Executive by Freddie Mac which conforms to the
    requirements of the officer severance policy in effect as of the
    date hereof (the “Release”):

 

    (i) Base Salary. Freddie Mac shall pay Executive a
    lump sum cash payment equal to the Base Salary that would have
    been payable to Executive for the period beginning on the
    termination of the Revised Term and Executive’s employment
    under the Employment Agreement and ending on December 31,
    2008 as if the Executive had remained employed during such
    period. All such amounts shall be paid to Executive on the
    effective date of Executive’s Release. For purposes of this
    clause, Base Salary shall be defined as the Base Salary in the
    Original Employment Agreement. In the event of a termination
    under this section at any time in calendar year 2009, Executive
    will receive only his Adjusted Base Salary up to the date of
    termination.

 

    (ii) Bonus. Freddie Mac shall pay Executive any and
    all earned but unpaid bonus amounts from the most recent
    complete calendar year of Freddie Mac. In addition, Freddie Mac
    shall pay Executive a lump sum cash payment equal to the sum of
    the Target Bonuses that would have been paid to Executive in
    respect of each calendar year of Freddie Mac that ends during
    the period beginning on the termination of the Revised Term and
    Executive’s employment under the Employment Agreement and
    ending on December 31,

    

    10

 

    2008. All such amounts shall be paid to Executive on the
    effective date of Executive’s Release. For purposes of this
    clause, Target Bonus shall be defined as the Target Bonus in the
    Original Employment Agreement. In the event of a termination
    under this section at any time in calendar year 2009, Executive
    will not be eligible to receive either a Target Bonus or an
    Adjusted Target Bonus.

 

    (iii) Long Term Incentives. On the effective date of
    Executive’s Release, (a) all RSUs that were granted to
    Executive pursuant to the Employment Agreement As Amended at
    least twelve months prior to such termination but prior to the
    Scheduled Termination Date, shall immediately vest and be
    settled subject to any right of Executive to defer payment of
    the Initial RSUs and RSUs under any non-qualified deferred
    compensation arrangement in which senior executives of Freddie
    Mac are permitted to defer payment of restricted stock units,
    (b) all Options that were granted to Executive pursuant to
    the Employment Agreement or this Amendment at least twelve
    months prior to such termination but prior to the Scheduled
    Termination Date shall vest and become immediately exercisable
    and shall remain outstanding until the earlier to occur of
    (A) three (3) years following such termination of the
    Revised Term and Executive’s employment under the
    Employment Agreement and (B) the scheduled expiration date
    applicable to such Options, and (c) with respect to each
    Annual Equity Grant that was granted to Executive less than
    twelve months prior to such termination and prior to the
    Scheduled Termination Date, all Options and RSUs that formed
    part of such Annual Equity Grant or Adjusted Annual Equity Grant
    shall be cancelled immediately upon the occurrence of the
    termination and in consideration for such cancellation, Freddie
    Mac shall pay to Executive on the effective date of
    Executive’s Release a lump sum cash payment in the amount
    of $8,800,000. Any option or RSU, other than performance-based
    RSUs, granted less than twelve months prior to Executive’s
    termination but after the Scheduled Termination Date shall
    continue to vest. Performance-based RSUs

    

    11

 

    will be governed by the terms of their grant. To the extent
    there is any inconsistency between the terms of the stock
    compensation plan under which the Initial RSUs, the RSUs and the
    Options were granted on the one hand and this
    Section 6.2(iii), on the other hand, this
    Section 6.2(iii) shall supersede such plans.

 

    (iv) Supplemental Nonqualified Retirement Plans. The
    terms of the Pension Plan shall not be affected by the
    Employment Agreement As Amended, and the Employment Agreement As
    Amended does not contemplate a payment of unvested Pension Plan
    benefits (or any equivalent thereof).

 

    (v) Health Benefits. Executive shall notify Freddie
    Mac promptly upon his employment with a subsequent employer, and
    shall provide Freddie Mac with such information as Freddie Mac
    reasonably requests regarding his coverage under medical, dental
    and life insurance plans of such employer. In all events, the
    Continued Benefits shall cease as to both Executive and his
    spouse as of the date each attains age 65.

 

    (vi) Timing of Payments. All such amounts under
    paragraphs (i)-(iv)
    of this Section 6.2 shall be paid to the Executive, subject
    to the Executive’s Release, during the period beginning
    with the Effective Date of the Release and ending on the 53rd
    day after the termination of Executive’s employment under
    the Employment Agreement As Amended. Notwithstanding the
    preceding sentence, if required for compliance with
    section 409A of the IRC, amounts under
    paragraphs (i)-(iv)
    of this Section 6.2 shall be paid on the Six-month Payment
    Date.

 

    6.3. Termination for Cause. In the event the Revised Term
    and Executive’s employment under the Employment Agreement
    As Amended is terminated by Freddie Mac for Cause (under
    Section 5.5 of the Employment Agreement As Amended),
    Freddie Mac’s obligations to Executive shall be as follows:

    

    12

 

    (i) Base Salary. Freddie Mac shall pay Executive
    within five (5) days following such termination his earned
    but unpaid Base Salary through the date of the termination of
    the Revised Term and Executive’s employment under the
    Employment Agreement.

 

    (ii) Bonus. Freddie Mac shall pay Executive within
    thirty (30) days following such termination any earned but
    unpaid bonus from the most recent complete calendar year of
    Freddie Mac. Executive shall not be entitled to any portion of
    his bonus in the year in which employment termination occurs.
    Notwithstanding the preceding, if such unpaid bonus constitutes
    deferred compensation for purposes of section 409A of the
    IRC, and if required for compliance with section IRC 409A,
    such bonus shall not be paid prior to the Six-month Payment Date.

 

    Except as provided in this Section 6.3 and for any vested
    benefits to which Executive is entitled under any benefit plans
    maintained by Freddie Mac in which Executive participated during
    the Revised Term (other than the Freddie Mac Severance Policy
    and any other plan providing for benefits in the nature of
    severance, which Executive is not entitled to participate in by
    virtue of having entered into the Employment Agreement and the
    Amendment), continuation of health insurance benefits under the
    law commonly referred to as “COBRA” and any other
    similar benefits required to be provided by law, Freddie Mac
    shall have no additional obligations to Executive. For purposes
    of this clause, Bonus shall be defined as the Target Bonus in
    the Original Employment Agreement.

 

    6.4 Employment Through the Scheduled Termination Date. In
    the event Executive remains employed by Freddie Mac through
    December 31, 2008 (and Freddie Mac as of that date could
    not have terminated the employment of Executive for Cause),
    (a) all RSUs awarded to Executive under the Original
    Employment Agreement as a part of the Original Annual Equity
    Grant (i.e., all grants prior to the date hereof and the
    guaranteed portion of the

    

    13

 

    2008 Annual Equity Grant), with the exception of performance
    based RSUs that have been voided because of the failure to
    achieve performance standards, shall vest immediately as of
    December 31, 2008, but such RSUs shall be settled in shares
    at the time the RSUs would have been settled to Executive as a
    consequence of his continued employment with Freddie Mac,
    subject to any right of Executive to defer payment of such RSUs
    under any non-qualified deferred compensation arrangement in
    which senior executives of Freddie Mac are permitted to defer
    payment of restricted stock units and (b) all Options
    granted to Executive pursuant to the Original Employment
    Agreement as a part of the Original Annual Equity Grant (i.e.,
    all grants prior to the date hereof and the guaranteed portion
    of the 2008 Annual Equity Grant) shall become immediately
    exercisable as of December 31, 2008 and shall remain
    outstanding until the scheduled expiration date applicable to
    such Options.

 

    The RSUs or Options granted under the Employment Agreement As
    Amended for calendar years 2007 and 2008 but not under the
    Original Employment Agreement or as a part of the Original
    Annual Equity Grant shall vest or be settled pursuant to the
    terms of each of those grants or awards.

 

    6.5 Termination on or after the Revised Scheduled Termination
    Date. In the event Executive remains employed by Freddie Mac
    through the Revised Scheduled Termination Date and the
    termination of the Revised Term and, thereafter, Executive
    terminates his employment with Freddie Mac by reason of his
    retirement (and Freddie Mac at the time of such termination of
    employment by reason of Executive’s retirement could not
    have terminated the employment of Executive for Cause),
    (a) all RSUs awarded to Executive pursuant to the
    Employment Agreement As Amended shall vest immediately as of the
    date of Executive’s termination of employment, but such
    RSUs shall be settled in shares at the time such RSUs would have
    been settled to Executive had Executive’s employment with
    Freddie Mac not been terminated, subject to any right of
    Executive to defer payment of such RSUs

    

    14

 

    under any non-qualified deferred compensation arrangement in
    which senior executives of Freddie Mac are permitted to defer
    payment of restricted stock units and (b) all Options
    granted to Executive pursuant to the Employment Agreement As
    Amended shall become immediately exercisable and shall remain
    outstanding until the scheduled expiration date applicable to
    such Options. Notwithstanding the preceding, if required for
    compliance with section 409A of the IRC, no RSUs shall be
    settled prior to the Six-month Payment Date.

 

    Freddie Mac shall provide continued access to coverage for
    Executive and his eligible dependents under Freddie Mac’s
    medical and dental benefit plans in which Executive and such
    dependents participated immediately prior to the termination of
    the Revised Term and Executive’s employment under the
    Employment Agreement As Amended (the “Continued
    Benefits”) or, in the event that Executive’s
    participation in such plans is prohibited or impracticable under
    the terms of those plans, Freddie Mac shall arrange to provide
    Executive with benefits substantially similar to those available
    under the applicable medical and dental plan in which Executive
    participated prior to the termination of the Revised Term and
    Executive’s employment under the Employment Agreement As
    Amended. In either case, the provision of such benefits by
    Freddie Mac shall be subject to the timely payment by Executive
    of all premiums, contributions and other co-payments required to
    be paid by senior executives of Freddie Mac under the terms of
    such plans as in effect from time to time (or the equivalent
    thereto in the case Freddie Mac arranges to provide Executive
    with substantially similar benefits to those available under the
    Freddie Mac plans) and shall be considered to be part of, and
    not in addition to, the benefit continuation required under
    federal law commonly referred to as “COBRA”
    Notwithstanding the foregoing, such continued coverage described
    herein shall cease with respect to any plan at the time that
    Executive is eligible to obtain substantially similar coverage
    to that provided by such plan from a subsequent employer. To the
    extent that such Continued Benefits are paid beyond the COBRA
    continuation period,

    

    15

 

    Freddie Mac shall make all premium or other payments necessary
    to provide such Continued Benefits annually, on or before
    December 31 of each year. In all events, the Continued
    Benefits shall cease as to both Executive and his spouse as of
    the date each attains age 65.

 

    Section 7.
    Restrictions on Executive
    

 

    7.3. Restrictions on Payments.

 

    a. IRC Section 409A. Payments under the
    Employment Agreement As Amended, including distributions with
    respect to vested RSUs, are intended to satisfy the requirements
    of IRC Section 409A, and all provisions of the Employment
    Agreement As Amended shall be interpreted consistent with this
    intent.

 

    b. Escrow Arrangement. Section III.a.3 D
    and F of the OFHEO’s Examination Guidance shall be fully
    satisfied by Executive acknowledging that if, for a period of
    one year after the grant of an award under the Special
    Performance Award opportunity afforded to him, OFHEO
    communicates allegations of misconduct by the Executive to the
    Company by filing a Notice of Charges alleging conduct that was
    knowing and caused or would be likely to cause a substantial
    loss to the Company and directs the Company to escrow up to a
    maximum of $4 million of the Special Performance Award
    actually paid, the Company will comply with any such valid
    directive or order, provided that nothing herein shall prevent
    Executive from seeking judicial or administrative review of such
    action. The Special Performance Award is a discretionary,
    one-time cash award for the Executive established by the
    Compensation and Human Resource Committee of the Freddie Mac
    Board of Directors designed to recognize the successful
    completion of key tasks by Executive over the twenty-nine
    (29) month period starting June 1, 2007 through
    September 30, 2009.

 

    Remainder
    of this page intentionally left blank.

    

    16

 

    IN WITNESS WHEREOF, the parties have executed this Amended
    Agreement as of November 9, 2007.

 

	 	 	 
	
 
	
 
	
    FEDERAL HOME LOAN

    MORTGAGE CORPORATION

	
 
	
 
	
 

	
    ATTEST: /s/  Kristen
    Brewer

    

	
 
	
    By: /s/  Geoffrey
    T. Boisi

    
Geoffrey
    T. Boisi, Chairman 

    Compensation and Human Resources

      Committee of the Board of Directors

	
 
	
 
	
 

	
 
	
 
	
    /s/  Richard
    F. Syron

    
Richard
    F. Syron

    

    17exv10w42

 

    Exhibit
    10.42

 

    Chief
    Executive Officer Special Performance Award

    Opportunity —
    Parameter Document

 

    Purpose

 

    The Compensation and Human Resources Committee (CHRC) and other
    non-employee members of the Board of Directors (Outside
    Directors) of Freddie Mac approved the establishment of a
    special, one-time cash performance award opportunity for its
    Chief Executive Officer, Richard Syron. The award opportunity
    was designed to provide additional incentive and recognition for
    the completion of key tasks over the 29 month-period
    starting June 1, 2007 through September 30, 2009.
    These key tasks are beyond the performance measures established
    by the 2007 Scorecard used for the corporate annual incentive
    plan. This award is consistent with our pay-for-performance
    philosophy, which requires the demonstration and evaluation of
    performance prior to payment.

 

    Timing of
    Award

 

    This award will be based on performance over the
    29-month
    period starting June 1, 2007 through September 30,
    2009. The performance determination will be approved by the CHRC
    at a meeting in the third quarter of 2009 after considering the
    views of the Outside Directors. The actual payment, if any, will
    be made as soon as administratively practicable following the
    determination of performance (see below) but no later than
    October 31, 2009.

 

    Main
    Design Provisions

 

    The maximum award is $6,000,000 and the specific award amount
    will be determined by the CHRC, in its sole discretion, based on
    a reasonable relationship to the number and relative
    significance
    and/or
    strategic value of “Performance Milestones” (described
    below) that the Company achieves either in whole or part. In
    determining the award amount, the CHRC shall obtain and consider
    the view of the Outside Directors. The CHRC will also consider
    Mr. Syron’s actual compensation under Freddie
    Mac’s standard annual compensation program during the
    performance period, and how it compares to the compensation of
    Chief Executive Officers in the Comparator Group.

 

    The amount of the actual award will range from $0 to
    $6 million, with no guarantee that any payment will be made.

 

	 	 	 	 	 
	
 
	
 
	
    Award Size

    
	
 
	
 

	

    Payout Level

	
 
	
    as % of Target
	
 
	
    Description

	 

	

    Minimum

	
 
	
    0%
	
 
	
    No milestones achieved

	
 
	
 
	
    1% - 99%
	
 
	
    Some, but not all milestones are achieved in whole or part as
    described above.

	

    Maximum

	
 
	
    100%
	
 
	
    All milestones achieved

    

    1

 

    Performance
    Milestones

 

    The performance milestones which shall be measured from June
    2007 through September 2009 are:

 

    (Note: Information/data listed in parentheses 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.)

 

    • Remediate all material weaknesses and significant
    deficiencies disclosed in 2006 annual report dated
    March 23, 2007.

 

    • Return to timely and sustainable financial reporting
    with the expectation that we will achieve Sox 404(a)
    compliance (with the issuance of our 2009 financial statements
    and substantial completion of each element of the Comprehensive
    Plan listed in the material presented to the Governance,
    Nominating and Risk Oversight Committee on September 6,
    2007).

 

    • Make material improvements in the information
    technology infrastructure. (Sustained and reliable operation of
    IT General Controls, remediation of all technology-related
    material weaknesses and significant deficiencies, consistent
    application of SDLC, progress on the development of mortgage
    conduit for distributing credit risk exceeding the
    company’s risk profile, 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 and become an SEC
    reporting company.

 

    • Manage a smooth Chief Executive Officer succession
    process. (Quality of the CEO search process, speed and success
    of integrating the new CEO into the company’s management
    team, success in transitioning day-to-day business operations
    responsibilities to the new CEO.)

 

    • Substantially enhance the leadership strength of
    Freddie Mac’s executive team and the Board. Enhance the
    level of alignment and collaboration within both Freddie
    Mac’s executive team and the Board. (Increase in ready-now
    candidates for
    Tier 1-3
    critical succession roles, increase success in filling critical
    succession roles with internal candidates, increase
    representation of minority and female officers, success
    expanding key experience/competency needs when new Board members
    are selected.)

 

    • Position the company to be more proactive in its
    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 efforts to improve its financial
    performance consistent with our mission, success helping shape
    the new affordable housing goals to focus on delivering housing
    opportunity directly to our Mission constituents, success
    developing and delivering to

    

    2

 

    market viable, non-predatory sub-prime loan products, providing
    liquidity, affordability and stability to residential mortgage
    markets.)

 

    • Demonstrate substantial progress toward imbedding a
    pay-for-performance culture. (Increasing the level of bonus
    differentiation 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
    officers.)

 

    • 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 fulfill 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
    effectiveness of profitability 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 Compensation and Human Resources Committee of the Board is
    responsible to exercise its judgment at the end of the
    performance period in a responsible and deliberate fashion 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 defined
    above), in deciding what amount, if any, of the award
    opportunity should be paid.

 

    Form of
    Award

 

    The award will be paid in cash.

 

    Termination
    Provisions

 

    This is a special award intended to recognize the achievement of
    specific performance criteria prior to September 30, 2009.
    Freddie Mac’s normal plan termination provisions do not
    apply to this opportunity. In the event of death, disability or
    involuntary termination by Freddie Mac without cause or
    termination by Mr. Syron for Good Reason (as such term is
    defined in Mr. Syron’s Employment Agreement), 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 Freddie Mac without
    cause or termination by Mr. Syron for Good Reason. In
    determining whether

    

    3

 

    any of the performance milestones were achieved, the CHRC shall
    obtain and consider the view of the Outside Directors. In the
    event of termination by Freddie Mac for cause or voluntary
    termination by Mr. Syron other than for Good Reason, the
    entire award will be forfeited.

 

    Additional
    Design Features

 

    The award will not be considered “earnings” or
    “base salary” for purposes of any bonus or short-term
    incentive program calculations or for calculating any qualified
    or nonqualified retirement or retirement-related benefit
    provided by Freddie Mac. The award is subject to the conditions
    outlined in the Amendment to the Employment Agreement between
    Federal Home Loan Mortgage Corporation and Richard F. Syron
    dated December 6, 2003.

 

    The award will not be eligible for a deferral opportunity.

    

    4

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