Document:

dirresticted.htm

  

  

  

Director Version 05/26/2010

 

NU SKIN ENTERPRISES, INC.

2010 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK UNIT GRANT NOTICE

 

Nu Skin Enterprises, Inc. (“Company”), pursuant to its 2010 Omnibus Incentive Plan (“Plan”) and the 2010 Omnibus Incentive Plan Master Restricted Stock Unit Agreement (“Master Agreement”) previously entered into by the parties, hereby grants to the “Director” identified below the number of Restricted Stock Units set forth below.  The Restricted Stock Units are subject to all of the terms and conditions as set forth herein and in the Master Agreement and the Plan, both of which are incorporated herein in their entirety.  Any capitalized terms not defined herein shall have the meaning provided to such terms in the Plan.

 

Director:

Date of Grant:

Number of Restricted Stock Units:

Vesting Schedule:

Additional Terms/Acknowledgements:  The Director acknowledges receipt of, and understands and agrees to, this Grant Notice, the Master Agreement and the Plan.  The Director further acknowledges that as of the Date of Grant, this Grant Notice, the Master Agreement and the Plan set forth the entire understanding between the Director and the Company regarding the Restricted Stock Units granted pursuant hereto and supersede all prior oral and written agreements on that subject with the exception of the agreements, if any, listed below.  To the extent that this Grant Notice varies from the terms of the Master Agreement, this Grant Notice will prevail only with respect to Restricted Stock Units granted pursuant to this Grant Notice.

 

Other Agreements:

 

	  	
NU SKIN ENTERPRISES, INC.

 

	
By:

	  ____________________________
	
Title:

	  
	
Date:

	  

 

 

 

  

  

  

 

 

  

Director Version 05/26/2010

NU SKIN ENTERPRISES, INC.

2010 OMNIBUS INCENTIVE PLAN

MASTER RESTRICTED STOCK UNIT AGREEMENT

 

This Master Restricted Stock Unit Agreement (the “Agreement”) is entered into effective as of the “Effective Date” set forth below, by and between Nu Skin Enterprises, Inc., a Delaware corporation (the “Company” ), and the undersigned “Director,” subject to the terms and conditions of the Nu Skin Enterprises, Inc. 2010 Omnibus Incentive Plan (the “Plan”).  In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan shall prevail.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Agreement.

 

1.           Grant of Restricted Stock Units.

 

1.1           Master Agreement.  By executing this Agreement, Director agrees that this Agreement shall govern the term of all Restricted Stock Units granted to Director under the Plan pursuant to a Restricted Stock Unit Grant Notice (“Grant Notice”) that incorporates by reference the terms of this Agreement.  Each Restricted Stock Unit grant that is intended to be governed by this Agreement shall incorporate all of the terms and conditions of this Agreement and shall contain such other terms and conditions as the Committee shall establish for the grant of Restricted Stock Units covered by such Grant Notice.  In the event of a conflict between the language of this Agreement and any Grant Notice, the language of the Grant Notice shall prevail with respect to that Grant Notice.  In order to be effective, the Grant Notice must be executed by a duly authorized executive officer of the Company. Director will not be required to sign each Grant Notice, but Director shall be deemed to have accepted the Grant Notice (and all of the terms and conditions set forth therein) unless Director provides written notice to the Plan Administrator of Director’s rejection of the Grant Notice and all of the Restricted Stock Units granted thereunder within 20 days after receipt of the Grant Notice.

 

1.2           Grant of Restricted Stock Units.  The Company grants to Director an award of the number of Restricted Stock Units as set forth in each applicable Grant Notice.  Each Restricted Stock Unit is a bookkeeping entry representing the Company’s unfunded promise to deliver one (1) share of the Company’s Common Stock (the “Share”), on the terms provided herein and in the Plan.

 

1.3           Vesting of Restricted Stock Units.  Unless other vesting dates and schedules are provided in the Grant Notice, the Restricted Stock Units shall vest in full on the date immediately preceding the next annual meeting of stockholders following the Date of Grant (the “Vesting Dates”) provided that Director remains in the Continuous Service of the Company during the period commencing on the date of grant and ending on each of the respective Vesting Dates (the “Vesting Period”) except as otherwise provided in Section 4.

 

“Continuous Service” means that the Director’s service with the Company is not interrupted or terminated.  Subject to the requirements of applicable law, the Committee, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by the Company, including sick leave, military leave or any other personal leave.

 

 

 

 

  

  

  

 

 

1.4           Settlement of Restricted Stock Units.  Subject to the terms of the Plan and this Agreement, Restricted Stock Units shall be settled in Shares, provided that Director has satisfied any tax withholding obligations, if any, pursuant to Section 9 below. Shares will be issued to Director within a reasonable time following each Vesting Date (as evidenced by the appropriate entry in the books of the Company or a duly authorized transfer agent of the Company), but in no event shall the Shares be issued after the period ending on the later to occur of the date that is 2 1/2 months from the end of (i) Director’s tax year that includes the applicable Vesting Date, or (ii) the Company’s tax year that includes the applicable Vesting Date.

 

1.5           Stockholder Rights.  Unless and until the Shares are issued by the Company after the Vesting Date, Director shall have none of the rights or privileges of a shareholder of the Company (including voting, dividend and liquidation rights) with respect to the Shares covered by the Restricted Stock Units.

 

2.           Securities Law Compliance.  Director represents that Director has received and carefully read a copy of the Prospectus for the Plan, together with the Company’s most recent Annual Report to Stockholders.  Director hereby acknowledges that Director is aware of the risks associated with the Shares and that there can be no assurance the price of the Common Stock will not decrease in the future.  Director hereby acknowledges no representations or statements have been made to Director concerning the value or potential value of the Common Stock.  Director acknowledges that Director has relied only on information contained in the Prospectus and has received no representations, written or oral, from the Company or its Directors, attorneys or agents, other than those contained in the Prospectus or this Agreement.  Director acknowledges that the Company has made no representations concerning the tax and other effects of the Restricted Stock Units and Director represents that Director has consulted with Director’s own tax and other advisors concerning the tax and other effects of the Restricted Stock Units.

 

3.           Transfer Restrictions.  Director shall not transfer, assign, sell, encumber, pledge, grant a security interest in or otherwise dispose of the Restricted Stock Units subject to this Agreement in any manner other than by the laws of descent or distribution.  Any such transfer, assignment, sale, encumbrance, pledge, security interest or disposition shall be void and shall result in the automatic termination of the Restricted Stock Units and this Agreement.

 

4.           Termination of Continuous Service.  In the event Director’s Continuous Service is terminated for any reason prior to the full vesting of the Restricted Stock Units, the Restricted Stock Units granted hereunder shall terminate to the extent they are not vested as of the termination of Director’s Continuous Service (as described in Section 10(g)), and Director shall not have any right to receive any Shares subject to such unvested Restricted Stock Units.

 

5.           Forfeiture.  If at any time during Director’s Continuous Service or at any time during the 12-month period following termination of Director’s Continuous Service, a Forfeiture Event (as defined below) occurs, then at the election of the Committee, (a) this Agreement and all unvested Restricted Stock Units granted hereunder shall terminate, and (b) Director shall return to the Company for cancellation all Shares held by Director plus pay the Company the amount of any proceeds received from the sale of any Shares to the extent such Shares were issued pursuant to Restricted Stock Units granted under this Agreement that vested (i) during the 12-month period immediately preceding the Forfeiture Event, or (ii) on the date of or at any time after such Forfeiture Event.

 

 

 

 

  

  

  

 

 

"Forfeiture Event" means the following:

 

(a) an act of fraud or intentional misrepresentation related to his or her services as a director;

 

(b) disclosure or use of confidential information in a manner detrimental to the Company;

 

(c) competing with the Company; or

 

(d) any other action of the Director that is materially harmful to the interests of the Company. The Committee, in its sole discretion, may waive at any time in writing this forfeiture provision and release Director from liability hereunder.

 

6.           Governing Plan Document.  This Agreement incorporates by reference all of the terms and conditions of the Plan, as presently existing and as hereafter amended.  Director expressly acknowledges and agrees that the terms and provisions of this Agreement are subject in all respects to the provisions of the Plan.  Director also expressly acknowledges, agrees and represents as follows:

 

(a) Acknowledges receipt of the Plan and represents that Director is familiar with the provisions of the Plan, and that Director enters into this Agreement subject to all of the provisions of the Plan;

 

(b) Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Director and upon all persons at any time claiming any interest through Director in the Restricted Stock Units or the Shares subject to this Agreement; and

 

(c) Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Director from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Director (to the extent Section 16(b) applies to Director) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Director shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Director must not sell or otherwise dispose of any Share acquired hereby unless and until a period of at least six months shall have elapsed between the date upon which such Restricted Stock Unit was granted to Director and the date upon which Director desires to sell or otherwise dispose of any Share acquired under such Restricted Stock Unit.

 

 

 

 

  

  

  

 

 

7.           Representations and Warranties.  As a condition to the receipt of any Shares upon vesting, the Company may require Director to make any representations and warranties to the Company that legal counsel to the Company may determine to be required or advisable under any applicable law or regulation, including without limitation, representations and warranties that the Shares are being acquired only for investment and without any present intention or view to sell or distribute any such shares.

 

8.           Compliance With Law And Regulations.  The obligations of the Company hereunder are subject to all applicable federal and state laws and to the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed and any other government or regulatory agency.

 

9.           Taxes.  Regardless of any action the Company takes with respect to any or all income tax (including federal, state and other taxes), social insurance, payroll tax or other tax-related withholding (“Tax-Related Items”), Director acknowledges that the ultimate liability for all Tax-Related Items legally due by Director is and remains his or her responsibility and that the Company (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the grant of the Restricted Stock Units, the vesting of the Restricted Stock Units, the settlement of the Restricted Stock Units, the subsequent sale of any Shares acquired at settlement and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate the Director’s liability for Tax-Related Items.

 

Prior to vesting of the Restricted Stock Units, Director agrees to make arrangements satisfactory to the Company to satisfy any applicable Tax-Related Items in connection with the Restricted Stock Units.  In this regard, if permissible under local law and regulations, Director authorizes the Company, at their discretion, to satisfy the obligations with respect to Tax-Related Items by one or a combination of the following: (i) selling or arranging for the sale of Shares otherwise deliverable to Director in settlement of the Restricted Stock Units; (ii) withholding from Director’s wages or other cash compensation payable to Director by the Company; (iii) withholding from proceeds of the sale of Shares acquired upon vesting of the Restricted Stock Units; or (iv) withholding in Shares, provided that the Company only withholds the amount of Shares necessary to satisfy the minimum withholding amount.  Finally, Director will pay to the Company any amount of Tax-Related Items that the Company may be required to withhold as a result of Director’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver any of the Shares if Director fails to comply with his or her obligations in connection with the Tax-Related Items described in this Section.

 

10.           Nature of Grant.  In accepting the Restricted Stock Units and signing this Agreement, the Director acknowledges that:

 

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan;

 

(b) the grant of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been awarded repeatedly in the past;

 

 

 

 

  

  

  

 

 

 

(c) nothing in this Agreement or in the Plan shall confer upon Director any right to continue in the service of the Company as a director or in any other capacity;

 

(d) all decisions with respect to future grants of Restricted Stock Units, if any, will be at the sole discretion of the Company;

 

(e) Director’s participation in the Plan is voluntary;

 

(f) in consideration of the grant of Restricted Stock Units, no claim or entitlement to compensation or damages arises from termination of the Restricted Stock Units or diminution in value of the Restricted Stock Units or Shares received upon vesting of Restricted Stock Units resulting from termination of the Director’s Continuous Service (for any reason whatsoever and whether or not in breach of local labor laws) and Director irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, Director shall be deemed irrevocably to have waived his or her entitlement to pursue such claim; and

 

(g) in the event of the termination of Director’s Continuous Service, whether or not in breach of local labor laws, Director’s right to receive Restricted Stock Units and vest under the Plan, if any, will terminate effective as of the date that Director’s Continuous Service terminated, as determined by the Committee in its sole discretion.

 

11.           Miscellaneous Provisions.

 

11.1           Notices.  Any notice required to be given under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, registered or certified, postage prepaid and properly addressed to the party entitled to such notice at the address indicated below such party's signature line on this Agreement or at such other address as such party may designate by ten (10) days advance written notice under this Section to all other parties to this Agreement.

 

11.2           No Waiver.  The failure of the Company in any instance to exercise any rights under this Agreement, including the forfeiture rights under Section 5, shall not constitute a waiver of any other rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and Director.  No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

 

11.3           Director Undertaking.  Director hereby agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either Director or the Shares pursuant to the provisions of this Agreement.

 

 

 

 

 

  

  

  

 

 

 

11.4           Entire Contract.  This Agreement and the Plan constitute the entire understanding and agreement of the parties with respect to the subject matter contained herein.  This Agreement is made pursuant to, and incorporates by reference, the provisions of the Plan and shall in all respects be construed in conformity with the terms of the Plan (which is attached as Exhibit A).

 

11.5           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

11.6           Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan, Restricted Stock Units granted under the Plan or future Restricted Stock Units that may be granted under the Plan by electronic means or to request Director’s consent to participate in the Plan by electronic means.  Director hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

11.7           Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon Director, Director's permitted assigns and the legal representatives, heirs and legatees of Director's estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms hereof.  Director may not assign this Agreement other than by the laws of decent and distribution.

 

11.8           Severability.  In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

 

11.9           Governing Law.  Restricted Stock Units and the provisions of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah without resort to that State's conflict-of-laws rules, as provided in the Plan.  In the event of any legal proceeding involving this Agreement, the prevailing party shall be entitled to recover its legal fees and expenses (including reasonable attorneys’ fees).

 

 

  

  

  

  

By Director’s signature and the signature of the Company’s representative below, Director and the Company agree that this Restricted Stock Unit is granted under and governed by the terms and conditions of the Plan and this Agreement.  Director has read and understands the Plan and this Agreement.  Director hereby agrees to accept as binding and conclusive all decisions or interpretations of the Board and/or the Committee related to the Plan.

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of [EFFECTIVE DATE] (the “Effective Date”).

 

 

 

	  	
NU SKIN ENTERPRISES, INC.

	
 

By:

	  
	
Name:

	
[REPRESENTATIVE NAME]

	
Title:

	
[REPRESENTATIVE TITLE]

 

 

	  	
DIRECTOR

	  	  
	
Name:

	
[DIRECTOR NAME]

	
Address:

	
[DIRECTOR ADDRESS]exv10w1

 

    Exhibit
    10.1

 

    EXECUTIVE
    MANAGEMENT COMPENSATION PROGRAM

 

    Program
    Description

    Amended and Restated as of July 16, 2010

 

	 	 	 
	
    Objective
	
 
	
    To provide a compensation structure that addresses the
    Company’s and the Federal Housing Finance Agency’s
    (“FHFA”) shared interests of motivating, retaining,
    and, in some instances, recruiting members of Executive
    Management while Freddie Mac is in conservatorship.

	
     
	
 
	
 

	
    Effective Period
	
 
	
    The Executive Management Compensation Program is intended to be
    effective for calendar years 2009, 2010, and thereafter as long
    as Freddie Mac remains in Conservatorship. The specific
    parameters of the Executive Management Compensation Program may
    be amended from time to time by the Compensation Committee of
    Freddie Mac’s Board of Directors (the
    “Committee”), if approved by FHFA after consulting
    with the U.S. Department of the Treasury (“Treasury”),
    as appropriate.

	
     
	
 
	
 

	
    Covered Positions
	
 
	
    Freddie Mac’s Chief Executive Officer (“CEO”),
    Chief Operating Officer (“COO”), Chief Financial
    Officer (“CFO”), Executive Vice Presidents
    (“EVPs”), and Senior Vice Presidents
    (“SVPs”), collectively referred to as “Executive
    Management,” and, individually referred to as a
    “Covered Officer.”

	
     
	
 
	
 

	
    Covered Position

    Participation

    Requirement
	
 
	
    Participation of a Covered Officer in the Executive Management
    Compensation Program is contingent upon the Covered Officer
    agreeing to be bound by the terms of a the Executive Management
    Compensation Recapture Policy (the “Recapture Policy”)
    that has been approved by both the Committee and FHFA.

	
     
	
 
	
 

	
    Composition of Total

    Direct Compensation
	
 
	
    The total direct compensation (“TDC”) shall be
    comprised of two components, a “Base Salary” and a
    “Target Incentive Opportunity”. Two-thirds (2/3) of
    the TDC amount shall be delivered in Base Salary and one-third
    (1/3) of the TDC shall be delivered in a Target Incentive
    Opportunity. The TDC for all participants will be approved by
    the Committee, FHFA, or the CEO, as appropriate, as of the
    effective date of this program.

	
     
	
 
	
 

	
 
	
 
	
    For an employee hired or promoted into a Covered Officer
    position subsequent to approval of the Executive Management
    Compensation Program, the Committee or the CEO will recommend a
    TDC for such employee, which will be subject to approval by FHFA
    after consulting with Treasury, as appropriate.

	
     
	
 
	
 

	
    Adjustments to TDC
	
 
	
    The Committee or the CEO may recommend adjustments to TDC for
    Covered Officers. Any such recommendations are subject to
    approval by FHFA after consulting with Treasury, as appropriate.
    An approved adjustment to a Covered Officer’s TDC shall
    become effective as of the date specified in the approval
    document.

	
     
	
 
	
 

	
    Base Salary
	
 
	
    The Base Salary will consist of two components. One component
    will be paid in cash on a semi-monthly basis during each
    calendar year (the “Semi-Monthly Base Salary”) and the
    other component will be earned on a semi-monthly basis during
    each calendar year, but subject to a deferral and payment
    schedule (the “Deferred Base Salary”) as discussed
    below.

 

	 	 	 
	
     
	
 
	
 

	
    Executive Management Compensation Program

    Page 2 of 8

    July 16, 2010

	
     
	
 
	
 

	
 
	
 
	
    Effective Date for Base Salary

	
     
	
 
	
 

	
 
	
 
	
    For each employee who was a Covered Officer as of January 1,
    2009, the Semi-Monthly Base Salary and Deferred Base Salary will
    be effective retroactive to January 1, 2009, subject to the
    exception provided in the section “Semi-Monthly Base
    Salary” below. For an employee who is hired into a Covered
    Officer position after January 1, 2009, the Semi-Monthly Base
    Salary and Deferred Base Salary shall be pro-rated effective as
    of the date of hire. For an employee who is promoted after
    January 1, 2009 into either a Covered Position or a Covered
    Position with increased scope and responsibility, the
    Semi-Monthly Base Salary and Deferred Base Salary shall be
    pro-rated effective as of the date of promotion.

	
     
	
 
	
 

	
    Semi-Monthly Base

    Salary
	
 
	
    Semi-Monthly Base Salary for any Covered Officer cannot exceed
    $500,000, except for the CEO, COO, and CFO, or other exceptions
    as approved from time to time by FHFA. In those instances, the
    Semi-Monthly Base Salary will be the amount approved by FHFA
    after consultation with Treasury, as appropriate, as of the
    Covered Officer’s date of hire or promotion.

	
     
	
 
	
 

	
 
	
 
	
    For any Covered Officer other than the CEO, COO, and CFO, with a
    Semi-Monthly Base Salary greater than $500,000 immediately prior
    to the adoption of the Executive Management Compensation
    Program, that Covered Officer’s Semi-Monthly Base Salary
    will be reduced to $500,000 effective January 1, 2010.

	
     
	
 
	
 

	
 
	
 
	
    Form of Payout

	
     
	
 
	
 

	
 
	
 
	
    Cash less applicable withholdings

	
     
	
 
	
 

	
 
	
 
	
    Treatment of Base Salary Under Freddie Mac’s Benefit
    Plans

	
     
	
 
	
 

	
 
	
 
	
    Semi-Monthly Base Salary will be considered compensation for
    purposes of the following Freddie Mac retirement or executive
    benefit plans that take base salary into consideration: the tax
    qualified Thrift/401(k) Savings Plan, the tax qualified
    Employees’ Pension Plan, the non-qualified Supplemental
    Executive Retirement Plan the Executive Deferred Compensation
    Plan, and the following welfare benefit plans: (1) the Flexible
    Benefits Plan (for purposes of calculating FlexDollars); (2) the
    Group Term Life Insurance Plan; (3) the
    Group Universal Life Insurance Program; (4) the Long-Term
    Disability Plan; (5) the Accidental Death and Personal Loss
    Plan; and (6) the purchase and payout of vacation

 

	 	 	 
	
     
	
 
	
 

	
    Executive Management Compensation Program

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    July 16, 2010

	
     
	
 
	
 

	
    Deferred Base Salary
	
 
	
    The portion of Base Salary that is not paid in Semi-Monthly Base
    Salary shall be delivered in the form of Deferred Base Salary.
    The Deferred Base Salary, which is earned on a semi-monthly
    basis during each calendar year, shall be deferred and paid
    according to the applicable Approved Payment Schedule below.

	
     
	
 
	
 

	
 
	
 
	
    Approved Payment Schedule: Calendar Year 2009

	
     
	
 
	
 

	
 
	
 
	
    Deferred Base Salary earned during each quarter of 2009 will be
    paid on the last business day of the corresponding quarter of
    2010, provided the Covered Officer is actively employed by the
    Company on such payment date, or in the event that the Covered
    Officer dies, has a Long-Term Disability or Retires in 2010. For
    clarity, the 2009 Deferred Base Salary will not become
    non-forfeitable upon the Covered Officer’s death, Long-Term
    Disability or Retirement, as provided below under
    “Treatment Upon Termination” if such event occurs in
    2009. The 2009 Deferred Base Salary will, however, become
    non-forfeitable, subject to the Recapture Policy, if such event
    occurs in 2010.

	
     
	
 
	
 

	
 
	
 
	
    Approved Payment Schedule: Calendar Year 2010 and
    Subsequent Years

	
     
	
 
	
 

	
 
	
 
	
    Fifty percent (50%) of Deferred Base Salary earned during each
    quarter of a calendar year will be paid in a fixed amount on the
    last business day of the corresponding quarter of the
    immediately following calendar year.

	
     
	
 
	
 

	
 
	
 
	
    The amount that will be paid for the remaining fifty percent
    (50%) of Deferred Base Salary earned during each quarter of a
    calendar year will be determined by the Committee’s
    approved Deferred Base Salary funding level. The approved
    performance-based portion Deferred Base Salary funding level
    will be determined by the Committee’s assessment of
    performance against the Corporate Scorecard for the year in
    which the Deferred Base Salary is earned. The performance-based
    portion of Deferred Base Salary funding level shall be equal to
    the Committee’s approved short-term incentive
    (“STI”) funding level for the STI plan applicable to
    employees at the level of Vice President and below for the
    performance year in which the performance-based portion of
    Deferred Base Salary is earned. It will be 0% if performance
    goals are not achieved, and in no event can the
    performance-based portion of Deferred Base Salary funding level
    exceed 125%. The STI funding level, expressed as a percentage,
    will be equal to the amount of STI funds approved for
    distribution to employees at the level of Vice President and
    below divided by the aggregate STI targets for those same
    employees.

	
     
	
 
	
 

	
 
	
 
	
    The amount of the performance-based portion of Deferred Base
    Salary that will be paid to a Covered Officer will be equal to
    the performance-based portion of Deferred Base Salary earned
    multiplied by Deferred Base Salary funding level.

	
     
	
 
	
 

	
 
	
 
	
    For any Covered Officer for whom a separate division scorecard
    is approved by a Board committee, the performance-based portion
    of the Deferred Base Salary funding level will be based on the
    appropriate Board committee’s assessment of performance
    against such separate division scorecard.

	
     
	
 
	
 

	
 
	
 
	
    The performance-based portion of the Deferred Base Salary earned
    during each quarter of a calendar year will be adjusted in a
    manner consistent with the approved Deferred Base Salary funding
    level, and will be paid on the last business day of the

 

	 	 	 
	
     
	
 
	
 

	
    Executive Management Compensation Program

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    July 16, 2010

	
     
	
 
	
 

	
 
	
 
	
    corresponding quarter in the immediately following calendar year.

	
     
	
 
	
 

	
 
	
 
	
    Form of Payout

	
     
	
 
	
 

	
 
	
 
	
    Cash less applicable withholdings.

	
     
	
 
	
 

	
 
	
 
	
    Treatment Under Freddie Mac’s Benefit Plans

	
     
	
 
	
 

	
 
	
 
	
    Deferred Base Salary will be considered compensation for
    purposes of the Federal Home Loan Mortgage Corporation
    Supplemental Executive Retirement Plan (Thrift 401(k) and
    Pension SERP) when paid to an active Covered Officer, subject to
    the maximum described in “Impact on Freddie Mac’s
    Supplemental Executive Retirement Plan.”

	
     
	
 
	
 

	
 
	
 
	
    Deferred Base Salary will not be considered compensation for
    purposes of any of Freddie Mac’s tax qualified retirement
    or executive benefit or welfare plans.

	
     
	
 
	
 

	
    Target Incentive

    Opportunity
	
 
	
    For each performance year, every Covered Officer will be
    provided an annual Target Incentive Opportunity, which will be
    equal to 1/3 of TDC.

	
     
	
 
	
 

	
 
	
 
	
    Effective Date for 2009 Target Incentive
    Opportunity

	
     
	
 
	
 

	
 
	
 
	
    For each employee who was in a Covered Officer position on
    January 1, 2009, the 2009 Target Incentive Opportunity will be
    effective retroactive to January 1, 2009 and will be equal to
    1/3 of their TDC (i.e., the 2009 Target Incentive Opportunity
    will not be pro-rated).

	
     
	
 
	
 

	
 
	
 
	
    For an employee who was hired into a Covered Officer position
    after January 1, 2009, the 2009 Target Incentive Opportunity
    shall be pro-rated based on their date of hire. For an employee
    who is promoted after January 1, 2009 into either a Covered
    Position or a Covered Position with increased scope and
    responsibility, the 2009 Target Incentive Opportunity shall be
    pro-rated effective as of the date of promotion.

	
     
	
 
	
 

	
 
	
 
	
    Effective Date for Target Incentive Opportunity in 2010
    and Subsequent Years

	
     
	
 
	
 

	
 
	
 
	
    For each employee who is in a Covered Officer position as of
    January 1 of any calendar year, the Target Incentive Opportunity
    will be effective on January 1 of that calendar year and will be
    equal to 1/3 of their TDC.

	
     
	
 
	
 

	
 
	
 
	
    For an employee who is hired into a Covered Officer position
    after January 1 of any calendar year, the Target Incentive
    Opportunity for that calendar year shall be pro-rated based on
    the date of promotion or hire. For an employee who is promoted
    after January 1 of any calendar year into either a Covered
    Position or a Covered Position with increased scope and
    responsibility, the Target Incentive Opportunity shall be
    pro-rated effective as of the date of promotion.

	
     
	
 
	
 

	
 
	
 
	
    Target Incentive Opportunity Payouts

	
     
	
 
	
 

	
 
	
 
	
    A Covered Officer will be eligible to be paid 50% of their
    annual Target Incentive Opportunity no later than March 15 of
    the calendar year immediately following the performance year
    (the “First Incentive Opportunity Payment”), and the
    remaining 50% no later than March 15 of the second calendar year
    immediately following the

 

	 	 	 
	
     
	
 
	
 

	
    Executive Management Compensation Program

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    July 16, 2010

	
     
	
 
	
 

	
 
	
 
	
    performance year (the “Second Incentive Opportunity
    Payment”).

	
     
	
 
	
 

	
 
	
 
	
    The amount of the annual Target Incentive Opportunity that is
    actually paid will be determined by the Committee’s
    approved long-term incentive (“LTI”) funding level
    (i.e., for the LTI plan applicable to employees at the level of
    Vice President and below) for the LTI grant made in the same
    calendar year of the Covered Officer’s annual Target
    Incentive Opportunity. The approved LTI funding level, expressed
    as a percentage, is determined by the level of achievement
    against the LTI program objectives and will be equal to the
    amount of LTI funds approved for distribution to employees at
    the level of Vice President and below divided by the aggregate
    LTI targets for those same employees. The LTI funding level can
    range from 0% up to a maximum of 120%.

	
     
	
 
	
 

	
 
	
 
	

    First Incentive Opportunity
    Payment — The amount actually paid will be
    equal 50% of the Covered Officer’s annual Target Incentive
    Opportunity multiplied by the approved LTI funding level for the
    first vesting.

	
     
	
 
	
 

	
 
	
 
	

    Second Incentive Opportunity
    Payment — The amount actually paid will be
    equal to 50% of the Covered Officer’s annual Target
    Incentive Opportunity multiplied by the approved LTI funding
    level for the second vesting.

	
     
	
 
	
 

	
 
	
 
	
    For Covered Officers who are members of the Freddie Mac
    Management Committee on the date the Committee approves the LTI
    funding level, the amount of the Target Incentive Opportunity
    that is paid is also subject to an assessment of division and/or
    individual performance as determined by the CEO, for Covered
    Officers other than the CEO. For the CEO, Freddie Mac’s
    Board of Directors conducts the assessment. This assessment can
    result in an increase or decrease to the amount payable of up to
    25%. However, in no event can the aggregate amount paid to the
    Covered Officers who are members of the Management Committee for
    any First or Second Incentive Opportunity Payment exceed the
    aggregate Target Incentive Opportunities for those Covered
    Officers multiplied by the LTI funding level.

	
     
	
 
	
 

	
 
	
 
	
    Form of Payout

	
     
	
 
	
 

	
 
	
 
	
    Cash less applicable withholdings

	
     
	
 
	
 

	
 
	
 
	
    Treatment Under Freddie Mac’s Benefit Plans

	
     
	
 
	
 

	
 
	
 
	
    The Target Incentive Opportunity will not be considered
    compensation for purposes of any Freddie Mac retirement benefit
    or welfare plans.

	
     
	
 
	
 

	
    Impact on Freddie Mac’s

    Supplemental Executive

    Retirement Plan
	
 
	
    The Supplemental Executive Retirement Plan (“SERP”)
    shall be modified effective January 1, 2010 to provide that the
    maximum covered compensation, for purposes of the plan, relative
    to Covered Officer only, may not exceed two times the Covered
    Officer’s Semi-Monthly Base Salary. It is the intent of
    Freddie Mac and FHFA that, upon the conclusion of
    Conservatorship, the definition of “compensation” for
    purposes of accruals under the SERP will revert to the
    definition of “compensation” in place prior to the
    amendment to the SERP made to conform its terms to this
    Executive Management Compensation Program.

 

	 	 	 
	
     
	
 
	
 

	
    Executive Management Compensation Program

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    Treatment Upon

    Termination:
 

    Semi-Monthly Base

    Salary
	
 
	
    Under all termination events except death, Semi-Monthly Base
    Salary will terminate as of the date employment terminates. In
    the event of death, Semi-Monthly Base Salary will terminate at
    the end of the month in which the death occurs.

	
     
	
 
	
 

	
    Treatment Upon

    Termination:
 

    Deferred Base Salary
	
 
	
    Death: If a Covered Officer’s employment is
    terminated due to death, any unpaid Deferred Base Salary will be
    paid as soon as administratively possible. If, at the time of
    the Covered Officer’s death, the Deferred Base Salary
    funding level has not been determined, the performance-based
    portion of Deferred Base Salary will remain outstanding until
    such determination is made. The actual amount paid for the
    performance-based portion will be determined by the approved
    Deferred Base Salary funding level.

	
     
	
 
	
 

	
 
	
 
	
    The date on which the Committee approves the Deferred Base
    Salary funding level is referred to as the “Deferred Base
    Salary Determination Date.” Payment of any
    performance-based Deferred Base Salary will occur as soon as
    administratively possible after the Deferred Base Salary
    Determination Date.

	
     
	
 
	
 

	
 
	
 
	
    Long-Term Disability: If a Covered Officer’s
    employment is terminated due to Long-Term Disability, the
    Covered Officer’s right to receive any unpaid Deferred Base
    Salary will become non-forfeitable, subject to the Recapture
    Policy, but will be paid no earlier than as called for in the
    Approved Payment Schedule above. The actual amount paid for the
    performance-based portion of Deferred Base Salary earned will be
    determined by the approved Deferred Base Salary funding level.

	
     
	
 
	
 

	
 
	
 
	
    Retirement: If a Covered Officer terminates
    employment due to retirement (as defined in Definitions),
    the Covered Officer’s right to receive any unpaid Deferred
    Base Salary will become non-forfeitable, subject to the
    Recapture Policy, and the Deferred Base Salary will be paid no
    earlier than as called for in the Approved Payment Schedule
    above. The actual amount paid for the performance-based portion
    of Deferred Base Salary will be determined by the approved
    Deferred Base Salary funding level.

	
     
	
 
	
 

	
 
	
 
	
    Involuntary Termination: If a Covered Officer is
    involuntarily terminated, any unpaid Deferred Base Salary will
    be forfeited unless the Committee recommends that the Covered
    Officer receive either all or a portion of the unpaid Deferred
    Base Salary and the Committee’s recommendation is approved
    by FHFA after consulting with Treasury, as appropriate.

	
     
	
 
	
 

	
 
	
 
	
    Voluntary Termination: If a Covered Officer
    voluntarily terminates employment, any unpaid Deferred Base
    Salary will be forfeited.

	
     
	
 
	
 

	
    Treatment Upon

    Termination:
 

    Target Incentive

    Opportunity
	
 
	
    Minimum Service Required: In order to be eligible to
    receive any portion of an annual Target Incentive Opportunity
    upon termination, a Covered Officer must have been employed for
    a minimum of four (4) whole calendar months during the
    performance year for which the incentive is being earned.

	
     
	
 
	
 

	
 
	
 
	
    Death and Long-Term Disability: If a Covered
    Officer’s employment is terminated due to either death or
    Long-Term Disability, any earned but unpaid portion of the
    Target Incentive Opportunity will be paid as soon as
    administratively possible

 

	 	 	 
	
     
	
 
	
 

	
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    following the date of death or the first day of Long-Term
    Disability. The actual amount that is paid will be determined by
    the approved LTI funding level.

	
     
	
 
	
 

	
 
	
 
	
    If, at the time of the Covered Officer’s death or Long-Term
    Disability, the LTI funding level has not been
    determined, the award will remain outstanding until such
    determination is made. As soon as administratively possible
    after the LTI Payment Determination Date (which is the date on
    which the Committee approves the LTI funding level), but no
    later than March 15 of the calendar year following each calendar
    year performance period, the Covered Officer, or the Covered
    Officer’s beneficiary(ies), will receive all unpaid
    portions of their Target Incentive Opportunity determined by the
    approved LTI funding level.

	
     
	
 
	
 

	
 
	
 
	
    The actual amount paid will also be subject to an assessment of
    division and/or individual performance as described above if the
    Covered Officer was a member of the Management Committee on the
    date of death or immediately prior to the first day of Long-Term
    Disability.

	
     
	
 
	
 

	
 
	
 
	
    Retirement: If a Covered Officer terminates
    employment due to Retirement (as defined in Definitions),
    any earned but unpaid portion of the Target Incentive
    Opportunity will be paid as soon as administratively possible.
    The actual amount paid will be determined by the approved LTI
    funding level.

	
     
	
 
	
 

	
 
	
 
	
    If, at the time of the Covered Officer’s termination,
    performance against the performance
    measure(s)
    has not been determined, the Target Incentive Opportunity will
    remain outstanding until the LTI Payment Determination Date. As
    soon as administratively possible after the LTI Determination
    Date, but no later than March 15 of the calendar year following
    each calendar year performance period, the Covered
    Officer’s right to receive a pro-rata payment shall become
    non-forfeitable, subject to the Recapture Policy. The Covered
    Officer is eligible to receive a pro-rata payment for the
    performance year in which the Covered Officer was employed. If
    the Covered Officer is employed for less than four (4) whole
    calendar months during a performance year, the Covered Officer
    will forfeit the Target Incentive Opportunity payment for that
    performance year. The pro-rata payment shall be calculated using
    the following methodology:

	
     
	
 
	
 

	
 
	
 
	

    Step 1. The number of whole
    months employed during the applicable performance year (minimum
    of four months required)

	
     
	
 
	
 

	
 
	
 
	

    Step 2. Divided by twelve (12),
    the number of whole months in the performance year

	
     
	
 
	
 

	
 
	
 
	

    Step 3. Multiplied by 50% of
    the Covered Officer’s annual Target Incentive Opportunity
    and adjusted for the approved LTI funding level for the
    Incentive Opportunity payment.

	
     
	
 
	
 

	
 
	
 
	
    The above formula will be applied separately to each of the of
    the performance years for which a Covered Officer is eligible
    for a pro-rata payment of the Target Incentive Opportunity.

	
     
	
 
	
 

	
 
	
 
	
    The actual amount paid will also be subject to an assessment of
    division and/or individual performance as described above if the
    Covered Officer was a member of

 

	 	 	 
	
     
	
 
	
 

	
    Executive Management Compensation Program

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    the Management Committee on the date of Retirement.

	
     
	
 
	
 

	
 
	
 
	
    Involuntary Termination: If a Covered Officer is
    involuntarily terminated, any unpaid portion of the Target
    Incentive Opportunity will be forfeited unless the Committee
    recommends that the Covered Officer receive either all or a
    portion of the unpaid Target Incentive Opportunity and the
    Committee’s recommendation is approved by FHFA after
    consulting with Treasury, as appropriate.

	
     
	
 
	
 

	
 
	
 
	
    Voluntary Termination: If a Covered Officer
    voluntarily terminates employment, any unpaid portion of the
    Target Incentive Opportunity will be forfeited.

	
     
	
 
	
 

	
    Additional Forfeiture

    Provision
	
 
	
    Upon a “Forfeiture Event” (as defined in
    Definitions), any unearned or any unpaid Total Incentive
    Opportunity will be cancelled and the Covered Officer or former
    Covered Officer will be required to immediately repay Freddie
    Mac the gross value of the Target Incentive Opportunity that was
    paid during the 12 month period immediately prior to the
    Forfeiture Event.

	
     
	
 
	
 

	
 
	
 
	
    In the event that a repayment is triggered under a current or
    former Covered Officer’s Recapture Policy, any earned but
    unpaid amounts that are subject to recapture under the terms of
    the Recapture Policy will be forfeited.

	
     
	
 
	
 

	
    Regulatory Approval and

    Reservation of Rights
	
 
	
    Actual payment of any Deferred Base Salary or any Target
    Incentive Opportunity at the time of termination is conditioned
    on the prior approval of FHFA at the time of any proposed
    payment.

	
     
	
 
	
 

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

	
     
	
 
	
 

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

	
     
	
 
	
 

	
    Definitions
	
 
	
    Forfeiture Event: A Forfeiture Event shall mean
    the Covered Officer or former Covered Officer directly or
    indirectly seeks or accepts employment with, or provides
    professional services to, a “Competitor” in violation
    of any non-competition covenant agreement between the Covered
    Officer and Freddie Mac in effect as of the date the Covered
    Officer receives a Target Incentive Opportunity.

	
     
	
 
	
 

	
 
	
 
	
    Long-Term Disability: A Long-Term Disability shall
    be as defined in Freddie Mac’s Long-Term Disability Plan.

	
     
	
 
	
 

	
 
	
 
	
    Retirement: A Covered Officer is eligible to
    retire when s/he has attained or exceeded the Normal Retirement
    Age in the Freddie Mac Employees’ Pension Plan, which is
    currently 65 years of age.

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