Freddie Mac 2015 Annual Report Download - page 204

Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Freddie Mac 2015 Form 10-K 202
with respect to the senior preferred stock or warrant) without the prior written consent of Treasury.
• Restrictions Under the GSE Act - Under the GSE Act, FHFA has authority to prohibit capital
distributions, including payment of dividends, if we fail to meet applicable capital requirements.
However, our capital requirements have been suspended during conservatorship.
• Restrictions Under our Charter - Without regard to our capital classification, we must obtain prior
written approval of FHFA to make any capital distribution that would decrease total capital to an
amount less than the risk-based capital level or that would decrease core capital to an amount less
than the minimum capital level. As noted above, our capital requirements have been suspended
during conservatorship.
• Restrictions Relating to Subordinated Debt - During any period in which we defer payment of
interest on qualifying subordinated debt, we may not declare or pay dividends on, or redeem,
purchase or acquire, our common stock or preferred stock. Our qualifying subordinated debt provides
for the deferral of the payment of interest for up to five years if either our core capital is below 125%
of our critical capital requirement or our core capital is below our statutory minimum capital
requirement, and the Secretary of the Treasury, acting on our request, exercises his or her
discretionary authority pursuant to Section 306(c) of our Charter to purchase our debt obligations.
FHFA has directed us to make interest and principal payments on our subordinated debt, even if we
fail to maintain required capital levels. As a result, the terms of any of our subordinated debt that
provide for us to defer payments of interest under certain circumstances, including our failure to
maintain specified capital levels, are no longer applicable.
• Restrictions Relating to Preferred Stock - Payment of dividends on our common stock is also
subject to the prior payment of dividends on our 24 series of preferred stock and one series of senior
preferred stock, representing an aggregate of 464,170,000 shares and 1,000,000 shares,
respectively, outstanding as of December 31, 2015. Payment of dividends on all outstanding
preferred stock, other than the senior preferred stock, is subject to the prior payment of dividends on
the senior preferred stock. We paid dividends on the senior preferred stock during 2015 at the
direction of the Conservator, as discussed in “MD&A - LIQUIDITY AND CAPITAL RESOURCES” and
Note 10. We did not declare or pay dividends on any other series of preferred stock outstanding in
2015.
RECENT SALES OF UNREGISTERED SECURITIES
The securities we issue are “exempted securities” under the Securities Act of 1933. As a result, we do not
file registration statements with the SEC with respect to offerings of our securities.
Following our entry into conservatorship, we suspended the operation of, and ceased making grants
under, equity compensation plans. Previously, we had provided equity compensation under these plans to
employees and members of our Board of Directors. Under the Purchase Agreement, we cannot issue any
new options, rights to purchase, participations, or other equity interests without Treasury’s prior approval.
However, grants outstanding as of the date of the Purchase Agreement remain in effect in accordance
with their terms. No stock options were exercised during the three months ended December 31, 2015.
See Note 10 for more information.
ISSUER PURCHASES OF EQUITY SECURITIES
We did not repurchase any of our common or preferred stock during 2015. Additionally, we do not
currently have any outstanding authorizations to repurchase common or preferred stock. Under the