Document:

exv10w1

 

    Exhibit 10.1

 

 

    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    2004 STOCK COMPENSATION PLAN

 

 

    As
    Amended and Restated as of June 6, 2008

 

    TABLE OF
    CONTENTS

 

	 	 	 
	
 
	
 
	

    Page

	 

	

    ARTICLE I     Establishment of the Plan

	
 
	
    1

	

    1.1      Purposes

	
 
	
    1

	

    1.2      Effective Date

	
 
	
    1

	

    1.3      Plan Name

	
 
	
    1

	

    ARTICLE II     Definitions

	
 
	
    1

	

    2.1      Affiliate

	
 
	
    1

	

    2.2      Annual Limit

	
 
	
    1

	

    2.3      Award

	
 
	
    1

	

    2.4      Award Document

	
 
	
    1

	

    2.5      Beneficiary

	
 
	
    1

	

    2.6      Board

	
 
	
    1

	

    2.7      Code

	
 
	
    2

	

    2.8      Committee

	
 
	
    2

	

    2.9      Common Stock

	
 
	
    2

	

    2.10     Corporation

	
 
	
    2

	

    2.11     Deferred Stock

	
 
	
    2

	

    2.12     Disability

	
 
	
    2

	

    2.13     Dividend Equivalent

	
 
	
    2

	

    2.14     Employee

	
 
	
    2

	

    2.15     Fair Market Value

	
 
	
    2

	

    2.16     Incentive Awards

	
 
	
    2

	

    2.17     Incentive Stock Option or ISOs

	
 
	
    2

	

    2.18     1995 Plan

	
 
	
    2

	

    2.19     Nonqualified Stock Option

	
 
	
    2

	

    2.20     Option

	
 
	
    3

	

    2.21     Other Stock-Based Award

	
 
	
    3

	

    2.22     Participant

	
 
	
    3

	

    2.23     Performance Award

	
 
	
    3

	

    2.24     Plan

	
 
	
    3

	

    2.25     Restricted Stock

	
 
	
    3

	

    2.26     Restricted Stock Unit or RSU

	
 
	
    3

	

    2.27     Retirement

	
 
	
    3

	

    2.28     Senior Executive

	
 
	
    3

	

    2.29     Stock Appreciation Right or SAR

	
 
	
    3

	

    2.30     Stock Bonus

	
 
	
    3

	

    2.31     Termination

	
 
	
    3

	

    ARTICLE III     Administration

	
 
	
    4

	

    3.1      Authority of the
    Committee Generally

	
 
	
    4

	

    3.2      Scope of Committee
    Authority

	
 
	
    5

	

    3.3      Delegation of Committee
    Authority

	
 
	
    5

	

    3.4      Limitation on Repricing

	
 
	
    5

	

    3.5      Good Faith Reliance

	
 
	
    5

	

    3.6      Indemnification

	
 
	
    5

    

    i

 

	 	 	 
	
 
	
 
	

    Page

	 

	

    ARTICLE IV     Common Stock Available
    Under the Plan; Adjustments

	
 
	
    6

	

    4.1      Common Stock Available
    for Delivery

	
 
	
    6

	

    4.2      Share Counting

	
 
	
    6

	

    4.3      Source of Common Stock

	
 
	
    7

	

    4.4      Adjustments

	
 
	
    7

	

    ARTICLE V     Eligibility

	
 
	
    8

	

    5.1      Persons Eligible

	
 
	
    8

	

    5.2      Annual Per-Person Award
    Limitations

	
 
	
    8

	

    5.3      No Rights to Awards

	
 
	
    8

	

    ARTICLE VI     Terms of Awards

	
 
	
    8

	

    6.1      General

	
 
	
    8

	

    6.2      Minimum Vesting
    Requirements

	
 
	
    8

	

    6.3      Stand-Alone, Additional,
    Tandem, and Substitute Awards

	
 
	
    9

	

    6.4      Maximum Term Awards

	
 
	
    9

	

    6.5      Form of Payment Under
    Awards

	
 
	
    9

	

    6.6      Limitations on
    Transferability

	
 
	
    10

	

    6.7      No Stockholder Rights

	
 
	
    10

	

    6.8      Insider Trading Policies
    Apply; Additional Forfeiture Conditions

	
 
	
    10

	

    ARTICLE VII     Forms of Awards

	
 
	
    11

	

    7.1      Options

	
 
	
    11

	

    7.2      Stock Appreciation Rights

	
 
	
    11

	

    7.3      Restricted Stock

	
 
	
    11

	

    7.4      Deferred Stock

	
 
	
    12

	

    7.5      Stock Bonus; Awards in
    Lieu of Other Obligations

	
 
	
    13

	

    7.6      Dividend Equivalents

	
 
	
    13

	

    7.7      Other Stock-Based Awards

	
 
	
    13

	

    7.8      Incentive Awards

	
 
	
    13

	

    ARTICLE VIII     Performance Awards

	
 
	
    13

	

    8.1      Performance Awards
    Generally

	
 
	
    13

	

    8.2      Performance Awards
    Subject to Pre-Established Terms

	
 
	
    14

	

    8.3      Settlement of Performance
    Awards; Other Terms

	
 
	
    14

	

    8.4      Written Determinations

	
 
	
    15

	

    ARTICLE IX     General Provisions

	
 
	
    15

	

    9.1      Compliance With Laws and
    Obligations

	
 
	
    15

	

    9.2      Limitation of Participant
    Rights

	
 
	
    15

	

    9.3      Tax Provisions

	
 
	
    15

	

    9.4      Changes to the Plan and
    Awards

	
 
	
    16

	

    9.5      Unfunded Status of Awards
    other than Restricted Stock

	
 
	
    17

	

    9.6      Nonexclusivity of the Plan

	
 
	
    17

	

    9.7      Fractional Shares

	
 
	
    17

	

    9.8      Awards Not Compensation
    Under Plans

	
 
	
    18

	

    9.9      Repayments to
    Participants in Connection with Forfeitures

	
 
	
    18

	

    9.10     Governing Law

	
 
	
    18

	

    9.11     Termination of Authority to
    Grant Awards Under the 1995 Plan

	
 
	
    18

	

    9.12     Stockholder Approval,
    Termination of Authority to Grant Awards and Termination of the
    Plan

	
 
	
    18

    

    ii

 

 

    FEDERAL
    HOME LOAN MORTGAGE CORPORATION

    2004 STOCK COMPENSATION PLAN

    As Amended and Restated as of June 6, 2008

 

    ARTICLE
    I

    Establishment of the Plan

 

    1.1  Purposes.  The purposes of this
    2004 Stock Compensation Plan, as amended and restated, of the
    Federal Home Loan Mortgage Corporation are to promote the
    success of the Corporation and its stockholders by providing an
    additional means to attract, retain, motivate, and reward
    officers and employees of the Corporation and its Affiliates, to
    link compensation of such persons to measures of the
    Corporation’s performance in order to provide incentives
    for high levels of performance, to enable such persons to
    acquire or increase a proprietary interest in the Corporation in
    order to promote a closer identity of interests between such
    persons and the Corporation’s stockholders.

 

    1.2  Effective Date.  This Plan
    became effective upon the approval of the Corporation’s
    stockholders on November 4, 2004.

 

    1.3  Plan Name.  The name of the Plan
    is the Federal Home Loan Mortgage Corporation 2004 Stock
    Compensation Plan.

 

    ARTICLE
    II

    Definitions

 

    2.1  Affiliate.  An organization some
    or all of the employees of which are designated by the Committee
    as eligible to participate in this Plan.

 

    2.2  Annual Limit.  The number of
    shares used to determine a Participant’s per-person Award
    limitation for share-denominated Awards and the cash amount used
    to determine a Participant’s per-person Award limitation
    for other Awards under Section 5.2.

 

    2.3  Award.  Any Option, Stock
    Appreciation Right, Restricted Stock, Deferred Stock, Stock
    Bonus, Dividend Equivalent, Performance Award, Other Stock-Based
    Award or Incentive Award, or any combination thereof, granted
    under the Plan.

 

    2.4  Award Document.  Any written or
    electronic agreement, contract, notice, or other instrument or
    document evidencing an Award. The use of an “electronic
    record” and an “electronic signature” in
    connection with any Award Document shall be governed by the
    federal Electronic Signatures in Global and National Commerce
    Act of 2000
    (E-SIGN) or
    the Uniform Electronic Transactions Act (UETA) as enacted by the
    Commonwealth of Virginia, as applicable. The terms
    “electronic records” and “electronic
    signature” shall have the meanings ascribed to such terms
    in E-SIGN or
    the Virginia UETA, as applicable.

 

    2.5  Beneficiary.  The person(s) or
    trust(s) which have been designated by a Participant in his or
    her most recent written beneficiary designation filed with the
    Committee to receive the benefits in connection with an Award
    upon such Participant’s death, or to whom or to which an
    Award or rights relating thereto are transferred if and to the
    extent permitted under Section 6.6. If, upon a
    Participant’s death, there is no designated Beneficiary or
    surviving designated Beneficiary, then the term Beneficiary
    means the person(s) or trust(s) entitled by will or the laws of
    descent and distribution to receive such benefits.

 

    2.6  Board.  The Board of Directors
    of the Corporation.

    

    1

 

    2.7  Code.  The Internal Revenue Code
    of 1986, as amended from time to time.

 

    2.8  Committee.  The Compensation and
    Human Resources Committee of the Board, or such other Board
    committee as may be designated by the Board to administer the
    Plan. The composition and governance of the Committee shall be
    established in the Committee’s Charter as approved from
    time to time by the Board, and other corporate governance
    documents of the company. The full Board may perform any
    function of the Committee hereunder in which case the term
    “Committee” shall refer to the Board.

 

    2.9  Common Stock.  The Common Stock,
    $0.21 par value, of the Corporation and such other common stock
    as may be substituted or resubstituted for Common Stock pursuant
    to an adjustment under Section 4.4.

 

    2.10  Corporation.  The Federal Home
    Loan Mortgage Corporation.

 

    2.11  Deferred Stock.  An Award under
    Section 7.4 representing a contractual right to receive
    delivery of a specified number of shares of Common Stock, or
    shares of Common Stock having a specified Fair Market Value at a
    specified date, at the expiration of a period or periods of
    deferral, and subject to terms and conditions as the Committee
    may specify. These terms and conditions can include a risk of
    forfeiture, which need not extend for the entire period of
    deferral; in such case, for purposes of the Plan the Award will
    be referred to as a “Restricted Stock Unit.”

 

    2.12  Disability.  A condition
    resulting in a Participant’s Termination and which is a
    disability under the terms of the Corporation’s Long-Term
    Disability Plan as in effect at the time of the
    Participant’s termination of employment; provided,
    however, that the Committee may specify a different
    definition of “Disability” in the Award Document.

 

    2.13  Dividend Equivalent.  An Award
    under Section 7.6 giving the Participant a right (which may
    be conditional) to receive cash, Common Stock, other Awards, or
    other property equal in value to dividends paid with respect to
    a specified number of shares of Common Stock, and subject to
    such other conditions as the Committee may specify.

 

    2.14  Employee.  Any officer or
    employee of the Corporation or an Affiliate who is not a Senior
    Executive.

 

    2.15  Fair Market Value.  The average
    of the high and the low sale prices of a share of Common Stock
    reported for composite transactions in the New York Stock
    Exchange listed securities in print or electronically by The
    Wall Street Journal or by another recognized provider designated
    by the Committee for such date or, if no such prices are
    reported for such date, on the most recent trading day prior to
    such date for which such prices were reported; provided,
    however, that the Committee may, in good faith, establish
    alternative methods or procedures for determining Fair Market
    Value.

 

    2.16  Incentive Award.  An Award
    under Section 7.8 denominated and/or payable in cash. An
    Incentive Award with a performance period of up to one year may
    be designated an “Annual Incentive Award,” and an
    incentive award with a performance period longer than one year
    may be designated a “Long-Term Incentive Award.”

 

    2.17  Incentive Stock Option or
    ISOs.  Any Option that is designated as an
    incentive stock option and qualifies as such within the meaning
    of Section 422 of the Code.

 

    2.18  1995 Plan.  The
    Corporation’s 1995 Stock Compensation Plan that became
    effective May 2, 1995.

 

    2.19  Nonqualified Stock Option.  Any
    Option which is not an Incentive Stock Option.

    

    2

 

    2.20  Option.  An Award under
    Section 7.1 representing a conditional right to purchase,
    upon the exercise of the right by the Participant or his or her
    Beneficiary, a specified number of shares of Common Stock at a
    fixed price during a specified period or periods, and subject to
    such other conditions as the Committee may specify.

 

    2.21  Other Stock-Based Award.  An
    Award under Section 7.7 denominated or payable in, valued
    in whole or in part by reference to, or otherwise based on, or
    related to, Common Stock or factors that may influence the value
    of Common Stock, as determined by the Committee, and subject to
    such other conditions as may be specified by the Committee.

 

    2.22  Participant.  A person who, as
    a Senior Executive or Employee of the Corporation or any
    Affiliate, has been granted an Award under the Plan.

 

    2.23  Performance Award.  An Award
    that is subject to any performance condition or conditions
    imposed by the Committee under Article VIII.

 

    2.24  Plan.  This 2004 Stock
    Compensation Plan.

 

    2.25  Restricted Stock.  An Award
    under Section 7.3 pursuant to which a specified number of
    shares of Common Stock are granted to the Participant, subject
    to a risk of forfeiture and restrictions on transferability
    until the expiration of a specified restricted period or
    periods, and subject to such other conditions as the Committee
    may specify.

 

    2.26  Restricted Stock Unit or
    RSU.  An Award of Deferred Stock that is subject
    to a risk of forfeiture until the expiration of a specified
    restricted period or periods, with settlement on the date the
    risk of forfeiture lapses or at a later specified date.

 

    2.27  Retirement.  A Termination that
    is a retirement in accordance with the eligibility provisions
    and retirement benefit provisions of Articles V and VI,
    respectively, of the Federal Home Loan Mortgage Corporation
    Employees’ Pension Plan as in effect at the time of the
    Participant’s termination of employment; provided,
    however, the Committee may specify a different definition of
    Retirement in the Award Document.

 

    2.28  Senior Executive.  An employee
    of the Corporation or an Affiliate who is a Senior Vice
    President or who is senior to such an officer.

 

    2.29  Stock Appreciation Right or
    SAR.  An Award under Section 7.2 representing
    a right to receive cash, Common Stock, other Awards, or other
    property equal in value to the excess of (a) the Fair
    Market Value of one share of Common Stock on the date of
    exercise, over (b) the grant price of the SAR as determined
    by the Committee as of the date of grant of the SAR. SARs shall
    be subject to such other conditions as the Committee may specify.

 

    2.30  Stock Bonus.  An Award of
    Common Stock granted as a bonus under Section 7.5, subject
    to such conditions as the Committee may specify.

 

    2.31  Termination.  A termination of
    employment of the Participant immediately after which the
    Participant is not an employee of either the Corporation or any
    Affiliate. Conversion from full-time to part-time employment
    shall not be deemed to be a Termination. The foregoing
    notwithstanding, the Committee may specify a different
    definition of “Termination” in the Award Document,
    including for purposes of compliance with Code Section 409A.

    

    3

 

    ARTICLE
    III

    Administration

 

    3.1  Authority of the Committee
    Generally.  The Plan shall be administered by the
    Committee. The Committee shall have full and final authority to
    take the following actions, in each case subject to and
    consistent with the provisions of the Plan:

 

    (a) to select Senior Executives and Employees to whom
    Awards may be granted;

 

    (b) to determine the type or types of Awards to be granted
    to each person selected to become a Participant, and the time or
    times at which Awards may be granted;

 

    (c) to determine the number of Awards to be granted, the
    number of shares of Common Stock subject to an Award, the terms
    and conditions of any Award granted under the Plan including,
    but not limited to, any exercise price, grant price, or purchase
    price, automatic exercise of Options, any restriction or
    condition, any schedule or performance conditions for the lapse
    of restrictions or conditions relating to transferability,
    forfeiture, exercisability, or settlement of an Award (subject
    to Section 6.2), and waivers, accelerations, or
    modifications of any such schedule or performance conditions
    (subject to Section 9.4(b)), based in each case on such
    considerations as the Committee shall determine, and all other
    matters to be determined in connection with an Award;

 

    (d) to determine whether, to what extent, and under what
    circumstances an Award may be settled or an Award may be
    canceled, forfeited, or surrendered, and the method of payment
    of the exercise price or purchase price of an Award, including
    but not limited to cash, Common Stock, other Awards, or other
    property;

 

    (e) to determine whether, to what extent, and under what
    circumstances cash, Common Stock, other Awards, or other
    property payable with respect to an Award will be deferred
    either automatically, at the election of the Committee, or at
    the election of the Participant;

 

    (f) to prescribe the form of each Award Document, which
    need not be identical for each Participant;

 

    (g) to adopt, amend, suspend, waive, and rescind such rules
    and regulations as the Committee may deem necessary or advisable
    to administer the Plan;

 

    (h) to correct any defect or supply any omission or
    reconcile any inconsistency in the Plan;

 

    (i) to construe and interpret the Plan and any Award, rules
    and regulations, Award Document, or other instrument hereunder,
    and to determine the rights and benefits pertaining to any
    Participant or Beneficiary;

 

    (j) to retain experts to advise and assist the Committee in
    performing its functions hereunder and otherwise in the
    administration of the Plan; and

 

    (k) to make all other decisions and determinations as may
    be required under the terms of the Plan or as the Committee may
    deem necessary or advisable for the administration of the Plan.

 

    3.2  Scope of Committee
    Authority.  Unless authority is specifically
    reserved to the Board under the terms of the Plan, the
    Corporation’s Charter or Bylaws, or applicable law, the
    Committee may exercise its authority under the Plan in its sole
    discretion. Any action of the Committee with respect to the Plan
    shall be final, conclusive, and binding on all persons,
    including the Corporation,

    

    4

 

    Participants, any Beneficiary or other person claiming any
    rights under the Plan from or through any Participant, and
    stockholders. The express grant of any specific power to the
    Committee, and the taking of any action by the Committee, shall
    not be construed as limiting any power or authority of the
    Committee. The foregoing notwithstanding, a grant made by the
    Committee or other action taken by the Committee may be made
    contingent upon approval of the Board or a majority of the
    independent directors serving on the Board as a condition of the
    effectiveness of such grant or action.

 

    3.3  Delegation of Committee
    Authority.  The Committee may delegate any or all
    of its authority under this Article III relating to the
    selection of Employees for participation, the grant of Awards to
    Employees, and other actions under the Plan relating to
    Employees, to the extent permitted by applicable law. Such
    delegation shall be made only to the Chief Executive Officer,
    another Senior Executive or a committee of two or more Senior
    Executives (which may include the Chief Executive Officer). In
    the case of any such delegation, references in the Plan to the
    Committee shall be deemed to include the Chief Executive
    Officer, Senior Executive or committee to which authority has
    been delegated with respect to Employees; provided, however,
    that the Committee may impose any term or limitation upon the
    exercise of such delegated authority hereunder not inconsistent
    with the Plan. The Committee may not make such delegation with
    respect to any Senior Executive, except as to ministerial
    functions. In this regard, the Committee may delegate to
    officers or other employees of the Corporation, subject to such
    terms as the Committee shall determine, the duty to perform
    ministerial functions under the Plan.

 

    3.4  Limitation on
    Repricing.  Without the prior approval of the
    Corporation’s stockholders, the Committee will not amend or
    replace previously granted Options or SARs in a transaction that
    constitutes a “repricing.” “Repricing”
    means: (a) lowering the exercise price of an Option or
    grant price of a SAR after it is granted, (b) canceling an
    Option or SAR at a time when its exercise price or grant price
    exceeds the fair market value of the underlying stock, in
    exchange for another Option, SAR, Restricted Stock, other
    equity, or cash unless the cancellation and exchange occurs in
    connection with a merger, acquisition, spin-off or other similar
    corporate transaction, (c) any other action that is treated
    as a repricing under generally accepted accounting principles,
    or (d) any other action that has the same effect as those
    itemized in (a) — (c); provided, however, that any
    adjustment authorized by Section 4.4 shall under no
    circumstances be considered a “repricing.”

 

    3.5  Good Faith Reliance.  Each
    member of the Committee shall be entitled to, in good faith,
    rely or act upon any report or other information furnished to
    him or her by any officer or other employee of the Corporation,
    the Corporation’s independent public accountants, or any
    compensation consultant, legal counsel, or other professional
    retained by the Corporation to assist in the administration of
    the Plan.

 

    3.6  Indemnification.  In the event
    and to the extent the members of the Committee, and any Employee
    or Senior Executive acting on behalf of the Committee, are not
    insured by any insurance company pursuant to provisions of any
    applicable insurance policy, the Corporation shall indemnify and
    hold harmless each such person against all liability (including
    the obligation to pay a judgment, settlement, penalty or fine,
    including any excise tax assessed with respect to an employee
    benefit plan) and expense (including attorneys’ fees)
    reasonably incurred by him, her or it in connection with any and
    all claims, demands, suits or proceedings in connection with the
    Plan that may be brought by the Corporation’s Senior
    Executives, Employees, Participants or their Beneficiaries or
    legal representatives, or by any other person, corporation,
    entity, government or agency thereof, except such liabilities
    and expenses as are incurred because of the Committee
    member’s, Senior Executive’s or Employee’s
    willful misconduct or knowing violation of the criminal law;
    provided, however, that the Corporation may not indemnify any
    person in connection with any proceeding

    

    5

 

    charging improper personal benefit to the person, whether or not
    involving action in his or her official capacity, to the extent
    that such person is adjudged liable on the basis that the
    personal benefit was improperly received by such person. This
    right of indemnification shall be in addition to any other
    rights to which any member of the Committee may be entitled to
    as a matter of law.

 

    ARTICLE
    IV

    Common Stock Available Under the Plan; Adjustments

 

    4.1  Common Stock Available for
    Delivery.  Subject to adjustment as hereinafter
    provided, the number of shares of Common Stock authorized for
    delivery in connection with Awards under the Plan shall be
    (i) 25,000,000 plus (ii) that number of shares of
    Common Stock that, immediately prior to the effectiveness of
    this Plan, remain authorized and available for awards under the
    1995 Plan (without regard to the termination of the 1995 Plan)
    or thereafter become available as provided in Section 4.2
    below.

 

    4.2  Share Counting.

 

    (a) Generally.  No Award may be granted if
    the number of shares the Committee determines to be deliverable
    under such Award, when added to the number of shares determined
    to be deliverable under then-outstanding Awards, exceeds the
    Committee’s determination of the number of shares then
    remaining available for delivery or other applicable limitation
    under this Article IV. Thus, the Committee may determine
    that Awards may be outstanding that relate to more shares than
    the aggregate remaining available under the Plan so long as
    Awards will not in fact result in delivery and vesting of shares
    in excess of the number then available under the Plan. The
    Committee’s determinations under this Section 4.2 may
    be based on its good faith estimates of the shares deliverable
    and remaining available for delivery under this Article IV.

 

    (b) Shares Available for Grants.  Only the
    number of shares actually delivered to the Participant upon
    exercise of an Option or SAR or upon settlement of other Awards,
    or, in the case of Restricted Stock, the number of shares that
    have been delivered to the Participant and which have become
    non-forfeitable, will be counted against the number of shares
    reserved under the Plan. Thus, for example, if an Award expires
    or is forfeited, an Award is settled in cash, shares are
    withheld from an Award or separately surrendered to pay the
    exercise price of an Option or to satisfy tax withholding
    obligations relating to an Award, fewer shares are delivered
    upon exercise of a SAR than the number to which the SAR related,
    or shares that had been issued as Restricted Stock are
    forfeited, those shares will again be available for Awards under
    the Plan and will not count against share limitations under
    Section 4.1. Shares subject to outstanding awards under the
    1995 Plan will be counted and deemed available in accordance
    with the share counting provisions set forth in this
    Section 4.2. The Committee may adopt procedures for the
    counting of shares relating to any Award to ensure appropriate
    counting and avoid double counting (as in the case of tandem or
    substitute awards), and, for administrative convenience, the
    Corporation may implement share counting under this
    Section 4.2(b) in a manner that diverges from the share
    counting rules set forth herein so long as any such divergence
    results only in a greater number of shares being counted against
    the share limitations under Section 4.1. Shares will be
    available under clause (ii) of Section 4.1 and this
    Section 4.2 for the grant of ISOs only to the extent
    consistent with applicable regulations relating to ISOs under
    the Code.

    

    6

 

    4.3  Source of Common Stock.  Any
    shares of Common Stock delivered pursuant to an Award may
    consist, in whole or in part, of authorized but previously
    unissued shares, treasury shares, or shares acquired in market
    transactions on behalf of the Participant.

 

    4.4  Adjustments.

 

    (a) Adjustments In Response to Corporate
    Events.  In the event that the Committee shall
    determine that any large, special and non-recurring dividend or
    other distribution (whether in the form of cash or other
    property), recapitalization, forward or reverse split, dividend
    of Common Stock, reorganization, merger, consolidation,
    spin-off, combination, repurchase or share exchange, rights
    offering, or other similar corporate transaction or event
    affects the Common Stock, then the Committee shall, in such
    manner as it may deem equitable, adjust any or all of
    (i) the number and kind of shares of Common Stock then
    authorized for delivery for Awards under Section 4.1 and
    under each Participant’s Annual Limit under
    Section 5.2, and (ii), if an adjustment is necessary in
    order to prevent dilution or enlargement of the rights of
    Participants under the Plan, as determined by the Committee,
    (A) the number and kind of shares of outstanding Restricted
    Stock or other outstanding Award in connection with which shares
    have been issued or delivered, (B) the number and kind of
    shares that may be issued or delivered in respect of other
    outstanding Awards, (C) the exercise price, grant price, or
    purchase price relating to any Award (or, if deemed appropriate,
    the Committee may make provision for a cash payment with respect
    to any outstanding Award) and (D) any other term relating
    to an Award. In furtherance of this authorization, with respect
    to outstanding Awards, upon the occurrence of an event
    constituting an “equity restructuring” as defined
    under Statement of Financial Accounting Standards No. 123R
    with respect to Shares, each Participant shall have a legal
    right to the equitable adjustment of the Participant’s
    outstanding Awards, with the manner of such adjustment to be
    determined by the Committee as provided in this
    Section 4.4. Unless otherwise determined by the Committee,
    in the event of a forward split of Common Stock or a dividend in
    the form of Common Stock, each adjustment specified in 4.4(a)(i)
    and (ii)(A), (B) and (C) shall be effected
    automatically by multiplying the relevant pre-transaction number
    of shares by the ratio of the number of shares deliverable in
    respect of each outstanding share, and multiplying the exercise
    price of each outstanding Option by the inverse of that ratio.
    If, in a transaction triggering an adjustment hereunder, public
    shareholders of the Corporation receive cash for their entire
    equity interest in the Corporation, an adjustment providing for
    cancellation of a share-denominated Award in exchange for a cash
    payment based solely on the then intrinsic value of the Award
    shall be deemed to meet the requirements of this Article IV.

 

    (b) Other Adjustments to Award Terms.  The
    Committee is further authorized to make adjustments in the terms
    and conditions of, and the criteria included in, Awards in
    recognition of unusual or nonrecurring events (including,
    without limitation, events described in the preceding Section)
    affecting the Corporation or any Affiliate or the financial
    statements of the Corporation or any Affiliate, or in response
    to changes in applicable laws, regulations, or accounting
    principles.

 

    (c) Limitation on Adjustments Affecting
    ISOs.  The foregoing notwithstanding, no
    adjustments shall be authorized under this Section 4.4 with
    respect to Incentive Stock Options or Awards in tandem therewith
    to the extent that such authority would cause an Incentive Stock
    Option to fail to comply with Section 422(b) of the Code.

    

    7

 

    ARTICLE
    V

    Eligibility

 

    5.1  Persons Eligible.  Senior
    Executives and Employees, including directors of the Corporation
    who are also employees, are eligible to be granted Awards under
    the Plan.

 

    5.2  Annual Per-Person Award
    Limitations.  In each calendar year during any
    part of which the Plan is in effect, an eligible person may be
    granted Awards relating to shares up to but not exceeding his or
    her Annual Limit. A Participant’s Annual Limit shall equal
    two million shares plus the amount, if any, of the
    Participant’s unused Annual Limit relating to such
    share-denominated Awards as of the close of the previous year,
    subject to adjustment as provided in Section 4.4. In the
    case of a cash-denominated Award (for which the limitation on
    Awards relating to shares would not be calculable at the time of
    grant), a Participant may not be granted Awards authorizing the
    earning during any calendar year of an amount that exceeds the
    Participant’s Annual Limit, which for this purpose shall
    equal $8 million plus the amount of the Participant’s
    unused cash Annual Limit as of the close of the previous year
    (this limitation is separate and not affected by the number of
    Awards granted during such calendar year subject to the
    limitation on Awards relating to shares). For this purpose,
    (i) “earning” means satisfying performance
    conditions so that an amount becomes payable under an Award,
    without regard to whether the amount is to be paid currently or
    on a deferred basis or continues to be subject to any service
    requirement or other non-performance condition, and (ii) a
    Participant’s Annual Limit is used to the extent a number
    of shares or other amount may be potentially earned or paid
    under an Award, regardless of whether such shares or amount are
    in fact earned or paid.

 

    5.3  No Rights to Awards.  No Senior
    Executive or Employee shall have any claim to be granted any
    Award under the Plan, absent a valid written commitment or
    electronic record of commitment of the Committee or an
    authorized delegate to grant such Award, and there is no
    obligation for uniformity of treatment of Participants. Any such
    commitment shall contain the written or “electronic
    signatures” (as defined in Section 2.4) of an
    authorized representative of the Corporation.

 

    ARTICLE
    VI

    Terms of Awards

 

    6.1  General.  Awards may be granted
    generally on the terms and conditions set forth in
    Articles VI and VII. In addition, the Committee may impose
    on any Award or the exercise thereof, at the date of grant or
    thereafter, subject to Section 9.4 and Article III,
    such additional terms and conditions, not inconsistent with the
    provisions of the Plan, as the Committee shall determine and
    specify in an Award Document whether in writing or in electronic
    form.

 

    6.2  Minimum Vesting Requirements.

 

    (a) Options and SARs.  Options, SARs and
    any other Award carrying a right to exercise shall be
    forfeitable for at least one year after the date of grant,
    except in the event of a Participant’s death, Disability or
    Retirement or in the event of a change in control of the
    Corporation (as such change may be defined by the Committee) or
    other special circumstances. Except as provided herein, Options,
    SARs and any other Award carrying a right to exercise shall not
    be exercisable prior to the time the risk of forfeiture on the
    Award shall lapse, except in cases in which all net proceeds of
    exercise remain subject to substantially the same risk of
    forfeiture.

    

    8

 

    (b) Restricted Stock, RSUs and Other Non-Option/Non-SAR
    Awards.  If the vesting of Restricted Stock, RSUs,
    and other non-Option/non-SAR Awards for which the Participant
    does not make a payment or surrender rights to payment having
    substantial value is not based on the achievement of one or more
    performance conditions, such Awards will vest (i.e.,
    become non-forfeitable) over a minimum period of three years
    after the date of the grant, except in the event of a
    Participant’s death, Disability, or Retirement, or in the
    event of a change in control of the Corporation (as such change
    may be defined by the Committee) or other special circumstances.
    If the vesting of such Awards is based on the achievement of one
    or more performance conditions, such Awards will vest
    (i.e., become non-forfeitable upon the satisfaction of a
    performance condition) over a minimum period of one year after
    the date of the grant, except in the event of a
    Participant’s death, Disability or Retirement, or in the
    event of a change in control of the Corporation (as such change
    may be defined by the Committee) or other special circumstances.

 

    (c) Other Vesting Terms.  For purposes of
    this Section 6.2, (i) vesting over a three-year period
    will include periodic vesting over such period, (ii) a
    pre-announced period in which service is required as a condition
    to the grant of any Award may count toward the minimum vesting
    period required under this Section 6.2, if so determined by
    the Committee, or (iii) with respect to Awards that
    otherwise would be subject to the minimum vesting requirements
    of Section 6.2(b) and notwithstanding those requirements, up to
    15% of the shares of Common Stock authorized for issuance under
    the Plan may be granted as non-performance based Awards with
    vesting terms not conforming to the three-year minimum vesting
    requirement of this Section 6.2 and instead may be granted
    with a one-year minimum vesting requirement identical to the
    requirement in Section 6.2(a).

 

    6.3  Stand-Alone, Additional, Tandem, and
    Substitute Awards.  Awards granted under the Plan
    may, in the discretion of the Committee, be granted on a
    stand-alone basis or in addition to, in tandem with, or in
    substitution for any other Award, for any option or other equity
    award granted under another plan, or for any other right of a
    Participant to receive payment from the Corporation or an
    Affiliate, subject to Section 3.4 (relating to repricing)
    and Section 9.4(b). Thus, Awards may be granted in
    substitution for outstanding options or other equity awards of a
    business entity being acquired by the Corporation or an
    Affiliate. Subject to Section 3.4 and Section 9.4(b),
    the Committee may determine that, in granting a new Award, an
    amount not exceeding the in-the-money value of any surrendered
    Award or award granted under another plan may be applied to
    reduce the exercise price of any Option, grant price of any SAR,
    or purchase price of any other Award, or that the fair value of
    any surrendered Award or award may be applied to reduce the
    fair-value purchase price of any other Award, and the vesting
    requirement of the new Award may be reduced by taking into
    account the vesting period that has been satisfied with respect
    to the surrendered Award or award (in proportion to the value of
    the awards).

 

    6.4  Maximum Term of Awards.  The
    term of each Award shall be for such period as may be determined
    by the Committee, except that the term of any Option or SAR
    shall not exceed ten years from the date of grant of the Award.

 

    6.5  Form of Payment Under
    Awards.  Subject to the terms of the Plan and any
    applicable Award Document, payments to be made by the
    Corporation or an Affiliate upon the grant, exercise, or
    settlement of an Award may be made in such forms as the
    Committee shall determine, including, without limitation, cash,
    Common Stock, other Awards, or other property, and may be made
    in a single payment or transfer, in installments, or on a
    deferred basis as determined by the Committee. Such payments may
    include, without limitation, provisions for (i) the payment
    or

    

    9

 

    crediting of reasonable interest on installment or deferred
    payments or (ii) the grant or crediting of Dividend
    Equivalents in respect of installment or deferred payments
    denominated in Common Stock.

 

    6.6  Limitations on
    Transferability.  Awards and any other rights
    under the Plan will not be transferable by a Participant except
    by will or the laws of descent and distribution (or to a
    designated Beneficiary in the event of the Participant’s
    death), and, if exercisable, shall be exercisable during the
    lifetime of a Participant only by such Participant or his
    guardian or legal representative. No transfer by will or the
    laws of descent and distribution shall be effective to bind the
    Corporation unless the Corporation shall have been furnished
    with a copy of such will or other evidence as the Corporation
    may deem necessary to establish the validity of the transfer.
    Awards and other rights under the Plan may not be pledged,
    mortgaged, hypothecated, or otherwise encumbered, and shall not
    be subject to the claims of creditors. The foregoing
    notwithstanding, if and to the extent expressly permitted by the
    Committee, and subject to such terms and conditions as
    established by the Committee, such Awards and other rights
    (other than Incentive Stock Options, Awards in tandem therewith,
    and Awards that constitute a deferral of compensation under Code
    Section 409A) may be transferred by a Participant to one or
    more Beneficiaries, and may be exercised by such Beneficiaries
    in accordance with the terms of such Award, except that no such
    transfers may be made to any third party for value unless
    separately approved by stockholders of the Corporation. Awards
    that constitute a deferral of compensation under Code
    Section 409A shall be subject to the additional limitations
    on transferability specified in Treasury Regulation
    § 1.409A-3(f).

 

    6.7  No Stockholder Rights.  No Award
    shall confer on any Participant any of the rights of a
    stockholder of the Corporation unless and until Common Stock is
    duly issued or transferred to the Participant in accordance with
    the terms of the Award or, in the case of an Option, at such
    time at or after the exercise of the Option as may be specified
    by the Committee in order to facilitate exercise procedures.

 

    6.8  Insider Trading Policies Apply; Additional
    Forfeiture Conditions.  A Participant’s
    rights under any Award, including rights to exercise or receive
    settlement and rights to sell any Common Stock delivered in
    connection with an Award, are subject to the terms of the
    Corporation’s Code of Conduct (or any successor thereof)
    and related policies on insider trading and may be restricted by
    those documents. Such restrictions currently include limitations
    on the times at which the Participant may engage in such
    transactions. In addition, the Committee may impose on any Award
    additional forfeiture conditions that protect the Corporation
    and its Affiliates. Such additional forfeiture conditions may
    include provisions that the Award, or amounts of cash, Common
    Stock, or other property realized by the Participant as income
    or gain as a result of the Award, shall be forfeited or repaid
    to the Corporation if the Participant fails to comply with
    conditions relating to non-solicitation of employees, customers
    and suppliers, non-competition, preservation and appropriate use
    of proprietary and confidential information of the Corporation
    and Affiliates, return of property, non-disparagement of the
    Corporation and Affiliates, cooperation in litigation, and other
    restrictions protecting the Corporation and Affiliates. Such
    conditions may apply to events occurring following Termination.

    

    10

 

    ARTICLE
    VII

    Forms of Awards

 

    7.1  Options.  The Committee is
    authorized to grant Options, which may be either Incentive Stock
    Options or Nonqualified Stock Options, to Participants on the
    following terms and conditions:

 

    (a) Exercise Price.  The exercise price
    per share of Common Stock purchasable under an Option shall be
    determined by the Committee; provided, however, that such
    exercise price shall be not less than the Fair Market Value of a
    share on the date of grant of such Option (subject to
    Section 6.3).

 

    (b) Time and Method of Exercise.  The
    Committee shall determine the time or times at which an Option
    may be exercised in whole or in part (subject to
    Section 6.2 and Section 6.4); the methods by which
    such exercise price may be paid or deemed to be paid, the form
    of such payment, including, without limitation, cash, Common
    Stock (including through withholding of Common Stock deliverable
    upon exercise, if such withholding will not result in additional
    accounting expense to the Corporation), other Awards or awards
    granted under other plans of the Corporation, or other property,
    or through broker-assisted “cashless exercise”
    arrangements to the extent permitted by applicable law (subject
    to Section 3.4); and the methods by which Common Stock will
    be delivered or deemed to be delivered to Participants.

 

    (c) Incentive Stock Options.  The terms of
    any Incentive Stock Option granted under the Plan shall comply
    in all respects with the provisions of Section 422 of the
    Code.

 

    7.2  Stock Appreciation Rights.  The
    Committee is authorized to grant SARs to Participants on the
    following terms and conditions:

 

    (a) Grant Price.  The grant price of a SAR
    shall be determined by the Committee as of the date of grant of
    the SAR, provided, however, that the grant price of a SAR shall
    be not less than the Fair Market Value of one share of Common
    Stock on the date of grant (subject to Section 6.3).

 

    (b) Exercise of SAR and Other Terms.  The
    Committee shall determine the time or times at which a SAR may
    be exercised in whole or in part (subject to Section 6.2
    and Section 6.4), the method of exercise, method of
    settlement, form of consideration payable in settlement, method
    by which Common Stock will be delivered or deemed to be
    delivered to Participants, whether a SAR shall be in tandem with
    any other Award or shall be free-standing, and any other terms
    and conditions of any SAR. A SAR may be exercised by the
    Participant, his or her Beneficiary, or automatically during a
    specified period or periods.

 

    7.3  Restricted Stock.  The Committee
    is authorized to grant Restricted Stock to Participants on the
    following terms and conditions:

 

    (a) Restrictions Generally.  Restricted
    Stock shall be subject to such restrictions on transferability
    and other restrictions, if any, as the Committee may impose,
    which restrictions may lapse separately or in combination at
    such times, under such circumstances, in such installments, or
    otherwise as the Committee may determine (subject to
    Section 6.2). Except to the extent restricted under the
    terms of the Plan and any Award Document relating to the
    Restricted Stock, a Participant granted Restricted Stock shall
    have all of the rights of a stockholder including, without
    limitation, the right to vote Restricted Stock and the right to
    receive dividends thereon.

    

    11

 

    (b) Forfeiture.  In addition to the risk
    of forfeiture imposed under Section 6.2, upon Termination
    during the applicable restriction period Restricted Stock that
    is at that time subject to restrictions shall be forfeited and
    reacquired by the Corporation; provided, however, that the
    Committee may provide, by rule or regulation or in any Award
    Document, or may determine in any individual case, that
    restrictions or forfeiture conditions relating to Restricted
    Stock will be waived in whole or in part in the event of death,
    Disability, Retirement or other Terminations resulting from
    specified causes or in the event of a change in control of the
    Corporation (as such change may be defined by the Committee),
    except as otherwise provided in Section 6.2.

 

    (c) Certificates or other Evidence of Ownership of
    Common Stock.  Restricted Stock granted under the
    Plan may be evidenced in such manner as the Committee shall
    determine. If certificates representing Restricted Stock are
    registered in the name of the Participant, such certificates
    shall bear an appropriate legend referring to the terms,
    conditions, and restrictions applicable to such Restricted
    Stock, or shall be required to be transferred into the name of a
    custodian designated by the Corporation. In either case, the
    Corporation or such custodian shall retain physical possession
    of the certificate, and the Participant shall, upon the request
    of the Corporation at any time, deliver a stock power to the
    Corporation, endorsed in blank if so requested by the
    Corporation, relating to the Restricted Stock.

 

    (d) Dividends and
    Distributions.  Dividends paid on Restricted Stock
    shall be either paid at the dividend payment date in cash or in
    shares of unrestricted Common Stock having a Fair Market Value
    equal to the amount of such dividends, or the payment of such
    dividends shall be deferred and/or the amount or value thereof
    automatically reinvested in additional Restricted Stock, other
    Awards, or other investment vehicles, as the Committee shall
    determine or permit the Participant to elect. Unless otherwise
    determined by the Committee, Common Stock distributed in
    connection with a Common Stock split or Common Stock dividend,
    and other property distributed as a dividend, shall be subject
    to restrictions and a risk of forfeiture to the same extent as
    the Restricted Stock with respect to which such Common Stock or
    other property is distributed.

 

    7.4  Deferred Stock.  The Committee
    is authorized to grant Deferred Stock to Participants, subject
    to the following terms and conditions:

 

    (a) Deferral of Delivery and
    Restrictions.  Delivery of Common Stock will occur
    upon expiration of the deferral period specified for an Award of
    Deferred Stock by the Committee (or, if permitted by the
    Committee, as elected by the Participant). In addition, Deferred
    Stock shall be subject to such restrictions as the Committee may
    impose, if any, which restrictions may lapse at the expiration
    of the deferral period or at earlier specified times, separately
    or in combination, under such circumstances, in such
    installments, or otherwise as the Committee may determine.

 

    (b) Forfeiture.  Deferred Stock that is
    subject to a risk of forfeiture is referred to as RSUs. In
    addition to the risk of forfeiture imposed under
    Section 6.2, upon Termination during the applicable
    deferral period or portion thereof to which forfeiture
    conditions apply (as specified by the Committee in the Award
    Document evidencing the RSUs), all RSUs that are at that time
    subject to such risk of forfeiture shall be forfeited; provided,
    however, that the Committee may provide, by rule or regulation
    or in any Award Document, or may determine in any individual
    case, that restrictions or forfeiture conditions relating to
    RSUs will be waived in whole or in part in the event of death,
    Disability, Retirement or other Terminations resulting

    

    12

 

    from specified causes or in the event of a change in control of
    the Corporation (as such change may be defined by the
    Committee), except as otherwise provided in Section 6.2.

 

    7.5  Stock Bonus; Awards in Lieu of Other
    Obligations.  Stock Bonuses granted hereunder
    shall be subject to the provisions of Section 6.2 and to
    other terms and conditions as shall be determined by the
    Committee; provided, however, that the Committee is
    authorized to grant Stock Bonuses (or other Awards) which are
    not subject to the provisions of Section 6.2, so long as
    the Committee has determined that such Awards are in lieu of
    obligations that the Corporation or an Affiliate otherwise owes
    to an Employee or Senior Executive who makes a payment or
    surrenders a right to payment having substantial value.

 

    7.6  Dividend Equivalents.  The
    Committee is authorized to grant Dividend Equivalents to a
    Participant. Dividend Equivalents may be awarded on a
    free-standing basis or in connection with another Award. The
    Committee may provide that Dividend Equivalents shall be paid or
    distributed when accrued or upon the settlement of the
    underlying Award. The Committee also may provide that Dividend
    Equivalents shall be reinvested or deemed reinvested in
    additional Common Stock, Awards, or other investment vehicles,
    and shall be subject to such restrictions on transferability and
    risks of forfeiture, as the Committee may specify.

 

    7.7  Other Stock-Based Awards.  The
    Committee is authorized, subject to limitations under applicable
    law, to grant to Participants such other Awards that may be
    denominated or payable in, valued in whole or in part by
    reference to, or otherwise based on, or related to, Common Stock
    and factors that may influence the value of Common Stock, as
    deemed by the Committee to be consistent with the purposes of
    the Plan. The Committee shall determine the terms and conditions
    of such Awards. Common Stock delivered pursuant to an Award in
    the nature of a purchase right granted under this
    Section 7.7 shall be purchased for such consideration, paid
    for at such times, by such methods, and in such forms,
    including, without limitation, cash, Common Stock, other Awards,
    or other property, as the Committee shall determine.

 

    7.8  Incentive Awards.  Incentive
    Awards, under which a Participant may earn a cash amount through
    performance and/or service, may be granted pursuant to this
    Section 7.8. An Incentive Award may be a stand-alone Award
    or an element of or supplement to another Award.

 

    ARTICLE
    VIII

    Performance Awards

 

    8.1  Performance Awards
    Generally.  The Committee is authorized to grant
    Performance Awards on the terms and conditions specified in this
    Article VIII. Performance Awards may be denominated as a
    number of shares of Common Stock or a cash amount earnable under
    an Incentive Award or a specified number of shares under other
    Awards that may be earned upon achievement or satisfaction of
    performance conditions specified by the Committee (for example,
    performance shares, where the number of RSUs or Deferred Shares
    earned can vary upward or downward based on performance). In
    addition, the Committee may specify that any other Award shall
    constitute a Performance Award by conditioning the right of a
    Participant to exercise the Award or have it settled upon
    achievement or satisfaction of such performance conditions as
    may be specified by the Committee. The Committee may use such
    business criteria and other measures of performance as it may
    deem appropriate in establishing any performance conditions, and
    may exercise its discretion to reduce or increase the amounts
    payable under any Award subject to performance conditions,
    except as limited under Sections 8.2.

    

    13

 

    8.2  Performance Awards Subject to Pre-Established
    Terms.  If the Committee determines that a
    Performance Award to be granted to an eligible person should be
    subject to preestablished terms that limit discretion, the
    grant, exercise and/or settlement of such Performance Award
    shall be contingent upon achievement of a preestablished
    performance goal or goals and other terms set forth in this
    Section 8.2.

 

    (a) Performance Goal.  The performance
    goal for such a Performance Award shall consist of one or more
    business criteria and a targeted level or levels of performance
    with respect to each of such criteria, as specified by the
    Committee consistent with this Section 8.2. The performance
    goal shall be objective, and, at the time such performance goal
    is established, the type and levels of performance required
    shall be such that achievement of the performance goal shall be
    substantially uncertain. The Committee may determine that such
    Performance Awards shall be granted, exercised and/or settled
    upon achievement of any one performance goal or upon achievement
    of two or more performance goals. Performance goals may differ
    for Performance Awards granted to any one Participant or to
    different Participants.

 

    (b) Business Criteria for Performance
    Goals.  One or more of the following business
    criteria relating to the Corporation, on a consolidated basis,
    and/or to specified subsidiaries or affiliates or other business
    units of the Corporation, shall be used by the Committee in
    establishing performance goals for such Performance Awards:
    (1) mission measures: affordable housing goals, low-cost
    financing initiatives, quality-of-business measures, customer
    initiatives and customer satisfaction; (2) operational
    improvement measures: risk management, enhancing operational
    stability, improving or otherwise advancing disclosure controls,
    cost reductions, productivity, and legal and regulatory
    compliance; (3) capital management measures; and
    (4) financial measures: interest income, revenues, income
    before income taxes, extraordinary items and/or cumulative
    effect of changes in accounting principles, revenues, net income
    or net income per common share (basic or diluted), return on
    assets (gross or net), return on investment, return on capital,
    or return on equity, cash flow, free cash flow, cash flow return
    on investment (discounted or otherwise), net cash provided by
    operations, or cash flow in excess of cost of capital, interest
    expense or non-interest expense, economic value created or
    otherwise maximizing long-term value, operating margin or profit
    margin, and stock price or total stockholder return. The
    targeted level or levels of performance with respect to such
    business criteria may be established at such levels and in such
    terms as the Committee may determine, in its discretion,
    including in absolute terms, as a goal relative to performance
    in prior periods, or as a goal compared to the performance of
    one or more comparable companies or an index covering multiple
    companies.

 

    (c) Performance Period; Timing for Establishing
    Performance Goals; Per-Person Limit.  Achievement
    of performance goals in respect of such Performance Awards shall
    be measured over a performance period specified by the
    Committee. A performance goal shall be established not later
    than the earlier of (i) 90 days after the beginning of
    any performance period applicable to such Performance Award or
    (ii) the time 25% of such performance period has elapsed.
    In all cases, the maximum Performance Award of any Participant
    shall be subject to the limitation set forth in Section 5.2.

 

    8.3  Settlement of Performance Awards; Other
    Terms.  Settlement of such Performance Awards
    shall be in Stock, other Awards, cash or other property, in the
    discretion of the Committee. The Committee may, in its
    discretion, increase or reduce the amount of a settlement
    otherwise to be made in connection with such Performance Awards,
    except that, in the case of a Performance Award subject to
    Section 8.2, the exercise of such discretion is limited to
    reducing the amount

    

    14

 

    payable in respect of the Performance Award. The Committee may
    specify the circumstances in which such Performance Awards shall
    be paid or forfeited in the event of termination of employment
    by the Participant or other event (including a change in
    control) prior to the end of a performance period or prior to
    settlement of such Performance Awards.

 

    8.4  Written
    Determinations.  Determinations by the Committee
    as to the establishment of performance goals, the amount
    potentially payable in respect of Performance Awards, the level
    of actual achievement of the specified performance goals
    relating to Performance Awards, and the amount of any final
    Performance Award shall be recorded in writing in the case of
    Performance Awards subject to Section 8.2. Specifically,
    the Committee shall certify in writing, prior to settlement of
    each such Performance Award, that the performance objective
    relating to the Performance Award and other material terms of
    the Award upon which settlement of the Award was conditioned
    have been satisfied.

 

    ARTICLE
    IX

    General Provisions

 

    9.1  Compliance With Laws and
    Obligations.  The Corporation shall not be
    obligated to issue or deliver Common Stock in connection with
    any Award or take any other action under the Plan in a
    transaction subject to any federal or state law, any requirement
    under any listing agreement between the Corporation and any
    national securities exchange or automated quotation system, or
    any other law, regulation, or contractual obligation of the
    Corporation, until the Corporation is satisfied that such laws,
    regulations, and other obligations of the Corporation have been
    complied with in full. Certificates representing shares of
    Common Stock delivered under the Plan will be subject to such
    stop transfer orders and other restrictions as may be applicable
    under such laws, regulations, and other obligations of the
    Corporation, including any requirement that a legend or legends
    be placed thereon. The Corporation shall make best efforts to
    satisfy the compliance obligations relating to the Plan and
    Awards in order to avoid adverse effects on Participants under
    this Section 9.1.

 

    9.2  Limitation of Participant
    Rights.  Neither the Plan nor any action taken
    hereunder shall be construed as (i) giving any employee the
    right to be retained in the employ of the Corporation or any
    Affiliate or (ii) interfering in any way with the right of
    the Corporation or any Affiliate to terminate any
    employee’s employment at any time. Except as expressly
    provided in the Plan and an Award Document, neither the Plan nor
    any Award Document shall confer on any person other than the
    Corporation and the Participant any rights or remedies hereunder
    or thereunder.

 

    9.3  Tax Provisions.

 

    (a) Withholding.  The Corporation or any
    Affiliate is authorized to withhold from any Award granted or to
    be settled, any delivery of Common Stock in connection with an
    Award, any other payment relating to an Award, or any payroll or
    other payment to a Participant amounts of federal, state, and
    local withholding taxes and other taxes due or potentially
    payable in connection with any transaction involving an Award,
    and to take such other action as the Committee may deem
    advisable to enable the Corporation and Participants to satisfy
    obligations for the payment of withholding taxes and other tax
    obligations relating to any Award. This authority shall include,
    but not be limited to, authority to withhold or receive Common
    Stock or other property and to make cash payments in respect
    thereof in satisfaction of a Participant’s tax obligations;
    the Committee may require such withholding or permit the
    Participant to elect withholding, provided that only the minimum
    amount of Common Stock deliverable in connection with an Award
    necessary to satisfy statutory withholding

    

    15

 

    requirements will be withheld unless withholding of a greater
    amount of Common Stock would not result in additional accounting
    expense to the Corporation. Upon any withholding or surrender of
    shares of Common Stock, the shares shall be valued at their Fair
    Market Value at the date they are withheld or received by the
    Corporation, except that withheld shares may be valued based on
    same-day market transactions by the Participant or otherwise for
    convenience of administration of the Plan.

 

    (b) Required Notifications of Tax
    Events.  If any Participant shall make a
    disqualifying disposition of shares of Common Stock delivered
    pursuant to the exercise of an Incentive Stock Option
    (i.e., a disposition described in Code
    Section 421(b)), such Participant shall notify the
    Corporation of such disposition within ten days thereof. In any
    case in which a Participant is permitted to make an election
    (and does make an election) under Section 83(b) of the Code
    (to include in gross income in the year of transfer the amounts
    specified in Code Section 83(b)) in connection with an
    Award, the Participant shall notify the Corporation of such
    election within ten days of filing notice of the election with
    the Internal Revenue Service, in addition to any filing and
    notification required under Section 83(b) and regulations
    thereunder. No Participant shall make a Section 83(b)
    election in connection with any Award unless explicitly
    authorized in the Award Document or otherwise approved by the
    Committee.

 

    (c) Rules for Compliance with Code
    Section 409A.  The Committee or persons
    exercising delegated authority under the Plan are authorized to
    specify rules and regulations to ensure that Awards do not
    result in tax penalties for Participants under Code
    Section 409A. In the case of any Award which constitutes a
    “short-term deferral” under Treasury Regulation
    § 1.409A-1(b)(4)
    and providing for a distribution upon the lapse of a substantial
    risk of forfeiture, if the timing of such distribution is not
    otherwise specified in the Plan or an Award agreement or other
    governing document, the distribution shall be made not later
    than March 15 of the year following the year in which the
    substantial risk of forfeiture lapsed. In the case of an Award
    constituting a deferral of compensation under Code
    Section 409A, if the timing of a distribution following a
    date or event triggering a distribution is not otherwise
    specified in the Plan or an Award agreement or other governing
    document, the distribution shall be made within 60 days
    after such triggering event. In either case, the Participant
    shall have no influence on any determination as to the tax year
    in which the distribution will be made. Any award that was both
    granted and vested before 2005 and which otherwise might
    constitute a deferral of compensation under Section 409A is
    intended to be “grandfathered” under
    Section 409A, unless such Award is designated by the
    company as being subject to Section 409A in 2008 or
    earlier. No amendment or change to the Plan or other change
    (including an exercise of discretion) with respect to such a
    grandfathered award after October 3, 2004, shall be
    effective if such change would constitute a “material
    modification” of a grandfathered award within the meaning
    of applicable guidance or regulations under Section 409A,
    except in the case of an award that is specifically modified
    before 2009 to become compliant as a 409A Award or compliant
    with an exemption under Section 409A.

 

    9.4  Changes to the Plan and Awards.

 

    (a) Plan Amendments.  The Committee may,
    with prospective or retroactive effect, amend, alter, suspend,
    discontinue, or terminate the Plan without the consent of
    stockholders or Participants, except that any amendment shall be
    subject to the approval of the Corporation’s stockholders
    at or before the first annual meeting of stockholders for which
    the record date falls on or after the date of such Committee
    action if such amendment is required under Section 303A.08
    of the Listed Company Manual of the New York Stock Exchange or
    is

    

    16

 

    otherwise subject to a requirement of stockholder approval under
    any applicable law or regulation, the rules of any stock
    exchange or automated quotation system on which the Common Stock
    may then be listed or quoted, or the Corporation’s Bylaws.
    In addition, the Committee may otherwise, in its discretion,
    determine to submit other such changes to the Plan to
    stockholders for approval. The foregoing notwithstanding,
    without the consent of an affected Participant, except to the
    extent required by Section 9.1 hereof, no such action may
    materially impair the rights of such Participant under any Award
    therefore granted. The foregoing notwithstanding, the Committee
    shall not amend this Section or Section 4.1, or adopt an
    amendment that would be subject to stockholder approval under
    this Section or otherwise would exceed the authority of the
    Committee under its charter and other corporate governance
    documents of the Corporation, without the consent of the Board.

 

    (b) Changes to the Terms of Outstanding
    Awards.  The Committee may waive any conditions or
    rights under, or amend, alter, suspend, discontinue, or
    terminate, any Award previously granted and any Award Document
    relating thereto; provided, however, that, except to the extent
    required by Section 9.1 hereof, no such action may
    materially impair the rights of a Participant under such Award
    without the consent of the affected Participant and provided
    further that for Awards that are intended to be settled in
    Common Stock per their written terms, cash settlement shall be
    permitted only with the prior approval of the Corporation’s
    Chief Financial Officer. Modifications that are in substance
    cash settlements are subject to this same requirement. The
    foregoing notwithstanding, the Committee shall have no authority
    to waive or modify any Award term after the Award has been
    granted to the extent the waived or modified term would be
    inconsistent with Section 3.4 (relating to repricings) or
    Section 6.2 or otherwise would not be within the discretion
    of the Committee if it were then granting a new Award.

 

    9.5  Unfunded Status of Awards other than
    Restricted Stock.  The Plan is intended to
    constitute a generally “unfunded” plan for incentive
    compensation, except with respect to Restricted Stock. With
    respect to any payments not yet made to a Participant pursuant
    to an Award other than Restricted Stock, nothing contained in
    the Plan or any such Award shall give any such Participant any
    rights that are greater than those of a general creditor of the
    Corporation. No person shall, prior to exercise or settlement of
    an Award other than Restricted Stock, acquire any right in or
    title to any assets, funds, or property of the Corporation
    whatsoever, including, without limitation, any specific funds,
    assets, or other property, which the Corporation, in its sole
    discretion, may set aside in anticipation of a liability under
    the Plan. Nothing contained in the Plan shall constitute a
    guarantee that the assets of the Corporation shall be sufficient
    to pay any benefits to any person.

 

    9.6  Nonexclusivity of the
    Plan.  Neither the adoption of the Plan by the
    Board nor its submission to the stockholders of the Corporation
    for approval shall be construed as creating any limitations on
    the power of the Board or Committee to adopt such other
    compensatory arrangements as it may deem desirable, including,
    without limitation, the granting of equity or cash incentives
    otherwise than under the Plan, and such arrangements may be
    either applicable generally or only in specific cases.

 

    9.7  Fractional Shares.  No
    fractional shares of Common Stock shall be issued or delivered
    pursuant to the Plan or any Award, unless the Committee
    determines that it is administratively feasible and desirable to
    deliver fractional shares (such as through an intermediary that
    can credit accounts with fractional shares). In cases in which
    fractional shares are not delivered, the Committee shall
    determine whether cash, other Awards, or other property shall be
    issued or paid in

    

    17

 

    lieu of such fractional shares, whether such fractional shares
    or any rights thereto shall be forfeited or otherwise
    eliminated, or other treatment accorded to such fractional
    shares.

 

    9.8  Awards Not Compensation Under
    Plans.  No Award shall be considered as
    compensation under any employee benefit plan of the Corporation
    or an Affiliate except as specifically provided in any such plan
    or otherwise determined by the Committee.

 

    9.9  Repayments to Participants in Connection with
    Forfeitures.  Unless otherwise determined by the
    Committee, in the event of a forfeiture of an Award with respect
    to which a Participant paid cash consideration (for example, a
    forfeiture of an Option share, if forfeiture conditions applied
    to shares after exercise), the Participant shall be repaid the
    amount of such cash consideration.

 

    9.10  Governing Law.  The validity,
    construction, and effect of the Plan, any rules and regulations
    under the Plan, and any Award Document will be determined in
    accordance with the Federal Home Loan Mortgage Corporation Act
    of 1970, other federal laws regulating the Corporation, and
    other laws of the United States. This Plan and the respective
    rights and obligations of the Corporation and the Participants,
    except to the extent otherwise provided by Federal law, shall be
    construed under the laws of the Commonwealth of Virginia
    (without giving effect to principles of conflicts of laws). The
    validity, enforceability and effectiveness of any electronic
    records or electronic signatures used in connection with any
    Award Document shall be governed by
    E-SIGN or
    the Virginia UETA, as applicable.

 

    9.11  Termination of Authority to Grant Awards
    Under the 1995 Plan.  Upon effectiveness of the
    Plan as provided in Section 9.12, the authority to grant
    new awards under the 1995 Plan shall terminate. In other
    respects, the 1995 Plan will remain in effect in accordance with
    its terms, except as provided in Section 4.2 hereof.

 

    9.12  Stockholder Approval, Termination of
    Authority to Grant Awards and Termination of the
    Plan.  The Plan became effective on
    November 4, 2004. This amendment and restatement of the
    Plan shall become effective upon its approval by stockholders of
    the Corporation by an affirmative vote that meets the
    requirements of the Corporation’s Bylaws and of the Listed
    Company Manual of the New York Stock Exchange as then in effect.
    No Award may be granted after the tenth anniversary of the
    latest date upon which stockholders of the Corporation have
    approved the Plan or an amendment and restatement of the Plan.
    The Plan will remain in effect thereafter until such time as the
    Corporation has no further rights or obligations under the Plan
    with respect to outstanding Awards under the Plan, unless the
    Plan is earlier terminated by the Committee.

    

    18exv10w2

 

    Exhibit 10.2

 

    FIRST
    AMENDMENT TO THE

    FEDERAL HOME LOAN MORTGAGE CORPORATION

    2004 STOCK COMPENSATION PLAN

 

    (as amended
    and restated as of June 6, 2008)
    

 

    FIRST AMENDMENT to the FEDERAL HOME LOAN MORTGAGE 2004 STOCK
    COMPENSATION PLAN (as amended and restated as of June 6,
    2008) (the “Plan”) by the FEDERAL HOME LOAN MORTGAGE
    CORPORATION (“Freddie Mac”), a corporation organized
    and existing under the laws of the United States of America.

 

    W I T N E
    S S E T H:

 

    WHEREAS, the Plan was submitted to stockholders for
    approval in the Proxy Statement dated April 29, 2008 and
    will be voted upon by stockholders at the Annual Meeting of
    Stockholders scheduled for June 6, 2008 (“Annual
    Meeting”);

 

    WHEREAS, Freddie Mac desires to amend the Plan to update
    certain definitions and make other changes;

 

    WHEREAS, Section 9.4(a) of the Plan permits the
    Compensation and Human Resources Committee of Freddie Mac’s
    Board of Directors to amend the Plan; and

 

    WHEREAS, an appropriate officer of Freddie Mac has been
    duly authorized to execute this amendment.

 

    NOW, THEREFORE, provided that the Plan is approved at the
    Annual Meeting, the Plan is hereby amended effective
    June 6, 2008 as follows:

 

    1.  Plan Section 2.15 is amended to read as
    follows:

 

    2.15.  Fair Market Value.  The
    closing sales price of a share of Common Stock reported for
    composite transactions in the New York Stock Exchange listed
    securities in print or electronically by The Wall Street Journal
    or by another recognized provider designated by the Committee
    for such date or, if no such prices are reported for such date,
    on the most recent trading day prior to such date for which such
    prices were reported;

 

    provided, however, that the Committee may, in good faith,
    establish alternative methods or procedures for determining Fair
    Market Value.

 

    2.  Plan Section 2.28 is amended to read as
    follows:

 

    2.28  Senior Executive.  An employee
    of the Corporation or an Affiliate who is the Chief Executive
    Officer, President, Chief Operating Officer, Chief Financial
    Officer, principal accounting officer, any officer in charge of
    a principal business unit, division or function, or any other
    officer who performs a significant policy-making function, as
    determined by the Committee.

 

    3.  Plan Section 3.3 is amended to read as
    follows:

 

    3.3  Delegation of Committee
    Authority.  The Committee may delegate any or all
    of its authority under this Article III relating to the
    selection of Employees for participation, the grant of Awards to
    Employees, and other actions under the Plan relating to
    Employees, to the extent permitted by applicable law. Such
    delegation shall be made only to the Chief Executive Officer,
    another Senior Executive, the Executive Vice President-Human
    Resources or a committee of two or more of such officers (which
    may include the Chief Executive Officer). In the case of any
    such delegation, references in the Plan to the Committee shall
    be deemed to include the Chief Executive Officer, Senior
    Executive, Executive Vice President-Human Resources or committee
    to which authority has been delegated with respect to Employees;
    provided, however, that the Committee may impose any term or
    limitation upon the exercise of such delegated authority
    hereunder not inconsistent with the Plan; and provided further
    that no officer acting pursuant to the authority delegated
    hereunder may take any action under the Plan with respect to his
    or her own compensation. The Committee may not make such
    delegation with respect to any Senior Executive, except as to
    ministerial functions. In this regard, the Committee may
    delegate to officers or other employees of the Corporation,
    subject to such terms as the Committee shall determine, the duty
    to perform ministerial functions under the Plan.

 

    IN WITNESS WHEREOF, Freddie Mac has caused this FIRST
    AMENDMENT TO THE FEDERAL HOME LOAN MORTGAGE CORPORATION 2004
    STOCK COMPENSATION PLAN (as amended and restated as of
    June 6, 2008) to be executed by its duly authorized
    officer, this 6th day of June 2008.

    

    2

 

    FEDERAL HOME LOAN

    MORTGAGE CORPORATION

 

    /s/  Paul
    G. George

    Paul G. George

    Executive Vice President — Human

    Resources and Corporate Services

 

 

    ATTEST:
    

 

    /s/  Mollie
    D. Roy

    Mollie D. Roy

    Assistant Secretary

    

    3

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