Freddie Mac 2010 Annual Report Download - page 326

interim guidance provided by FHFA, this provision is limited to awards scheduled to vest within 12 months of the
executive’s termination date.
•All Other Terminations. If the Named Executive Officer’s employment is terminated for any reason other than those
described above, all RSUs unvested as of the date of termination are forfeited.
Stock Options
The stock options granted to our employees, including our Named Executive Officers, all of which were exercisable as
of December 31, 2010, include alternative settlement provisions in the event of certain terminations which are similar to the
provisions for RSUs, with the following modifications:
•Death. The stock options remain exercisable for three years after the date of termination in the event of death.
•Disability. The stock options remain exercisable for the full balance of their term in the event of disability.
•Retirement. In the event of retirement, as defined in the 2004 Employee Plan, stock options will remain exercisable
for the full balance of their term, subject to the executive’s signing an agreement containing the same restrictive
covenants as described above for RSUs.
•All Other Terminations. If the individual’s employment is terminated for any reason other than those described
above, the stock options remain exercisable for 90 days following termination.
Employment and Separation Agreements
Messrs. Haldeman and Kari
The various agreements entered into in connection with the employment of Messrs. Haldeman and Kari are summarized
above. See “— Written Agreements Relating to Employment of CEO and CFO.”
Mr. Bostrom
We have no continuing obligations under the letter agreement entered into with Mr. Bostrom in January 2006. The final
installment of 3,000 shares pursuant to his sign-on RSU award, as set forth in his letter agreement, vested on March 3, 2010.
The agreement pertaining to Mr. Bostrom was filed as an exhibit to our Form 10-K/A filed on April 30, 2009.
Mr. Federico
We do not have an employment agreement with Mr. Federico.
Mr. Bisenius
We do not have an employment agreement with Mr. Bisenius.
Director Compensation
After we entered conservatorship, FHFA approved compensation for Board members in the form of cash retainers only,
paid on a quarterly basis. Under the terms of the Purchase Agreement, without Treasury’s consent, we are prohibited from
making stock grants to directors while this agreement remains in effect. We do not maintain any pension or retirement plans
for directors. Non-employee directors are reimbursed for reasonable out-of-pocket costs for attending each meeting of the
Board or a Board committee of which they are a member.
The reasons for this shift toward compensation delivered entirely in cash were similar, in the case of director
compensation, to some of those described above regarding the structural change in executive compensation (see
“Overview — Executive Management Compensation Program — Overview of Program Structure”). However, the
considerations underlying director and executive compensation differed in one key respect. There is no provision in the
director compensation program for pay that varies depending on business results. While such incentive compensation is
deemed appropriate to give management strong incentives to devise and execute business plans and achieve positive financial
results, it is viewed in the case of directors as inconsistent with their oversight role.
Board compensation levels during conservatorship are shown in the table below.
Table 85 — Board Compensation — 2010 Non-Employee Director Compensation Levels
Board Service
Cash Compensation
Annual Retainer ............................................................................... $160,000
Annual Retainer for Non-Executive Chairman ........................................................... 290,000
Committee Service (Cash)
Annual Retainer for Audit Committee Chair ............................................................ $ 25,000
Annual Retainer for Business and Risk Committee Chair . . . . . . . ............................................. 15,000
Annual Retainer for Committee Chairs (other than Audit or Business and Risk) . . .................................. 10,000
Annual Retainer for Audit Committee Members .......................................................... 10,000
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