Common use of Annual Equity Grants Clause in Contracts

Annual Equity Grants. During each year of the Term commencing with calendar year 2005, Fxxxxxx Mac shall make a grant to Executive of a long-term equity incentive award (the “Annual Equity Grant”) pursuant to the Stock Compensation Plan (or any successor plan) at the same time annual long-term equity incentive awards are granted to other senior executives. Each Annual Equity Grant shall have an aggregate value on the date of grant, as determined by the Committee, equal to $6,000,000. 50% of each Annual Equity Grant shall be restricted stock units (“RSUs”) and 50% of each Annual Equity Grant shall be stock options to acquire shares of Fxxxxxx Mac (“Options”), provided that the Committee may in its discretion from time to time, grant a higher percentage of the Annual Equity Grant in RSUs. The exercise price of the Options shall be determined by the Committee in accordance with the terms of the Stock Compensation Plan. The RSUs shall vest on the fourth anniversary of the date of grant, and the Options shall vest in four equal annual installments of approximately 25% each beginning on the first anniversary of the date of grant, in each case subject to Executive’s continued employment with Fxxxxxx Mac through the applicable vesting date, provided that the Committee may in its discretion from time to time (a) permit the acceleration of the vesting of the RSUs or the Options and (b) provide for a different vesting schedule for the RSUs or Options, provided, however, that in no event shall the vesting schedule applicable for the RSUs provide for a vesting period longer than four years and in no event shall the vesting schedule applicable to the Options provide for the Options to vest less frequently than 25% each year over a four year vesting period. In addition, the vesting of the Options and RSUs shall be subject to acceleration upon the terms and 3 conditions described in the following paragraph and Section 6 of this Agreement. Except as expressly provided in this Agreement, all other terms and conditions of the RSUs and Options shall be as set forth in the Stock Compensation Plan, the resolution making the grant and the related award agreement. In addition to the foregoing, upon the occurrence of a Change in Control (as defined below) during the Term: (a) the Initial RSUs, if they were granted to Executive at least twelve months prior to such Change in Control, and all other RSUs that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and be paid-out subject to any right of Executive to defer payment of the Initial RSUs and RSUs under any non-qualified deferred compensation arrangement in which senior executives of Fxxxxxx Mac are permitted to defer payment of restricted stock units, (b) all Options that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and remain exercisable until the scheduled expiration date applicable to such Options, (c) the Initial RSUs, if they were granted to Executive less than twelve months prior to such Change in Control, shall be cancelled immediately upon the occurrence of such Change in Control in consideration for a cash payment by Fxxxxxx Mac to Executive in the amount of $6,000,000, and (d) with respect to each Annual Equity Grant that was granted to Executive less than twelve months prior to such Change in Control, all Options and RSUs that formed part of such Annual Equity Grant shall be cancelled immediately upon the occurrence of the Change in Control and in consideration for such cancellation, Fxxxxxx Mac shall pay to Executive a lump sum cash payment in the amount of $6,000,000. For purposes of this Section 4.4, a Change in Control shall mean: (i) the acquisition by any person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of “beneficial ownership” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), whether direct or indirect, of securities of Fxxxxxx Mac representing 50% or more of the combined voting power of Fxxxxxx Mac’s then outstanding securities, provided, however, that any acquisition by (A) Fxxxxxx Mac, any employee benefit plan of Fxxxxxx Mac or any person or entity organized, appointed or established pursuant to the terms of any such benefit plan or (B) any corporation with respect to which, immediately following such acquisition, more than 50% of the total combined voting power of such corporation is then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of Fxxxxxx Mac’s outstanding voting securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of Fxxxxxx Mac’s outstanding voting securities, shall not constitute a Change in Control; or (ii) consummation of a merger of Fxxxxxx Mac unless securities representing more than 50% of the total combined voting power of the voting securities of the successor corporation are, immediately after the consummation of such merger, beneficially owned, directly or indirectly, in substantially the same proportion, by the persons who beneficially owned Fxxxxxx Mac’s outstanding voting securities immediately prior to such transaction; or (iii) if, during any period, a majority of the members of the Board of Directors are elected by any person or entity other than Fxxxxxx Mac’s shareholders or a majority of the members of the Board of Directors are appointed by any governmental entity, unless (A) such election or appointment of the Board of Directors by a governmental entity is a result of safety and soundness concerns and Executive’s continuing authority and role at Fxxxxxx Mac (as contemplated by this Agreement) has not been significantly diminished or adversely affected, or 4

Annual Equity Grants. During each year of the Term commencing with calendar year 2005Term, Fxxxxxx Mac shall make a grant to Executive of a long-term equity incentive award (the “Annual Equity Grant”) pursuant to the Stock Compensation Plan (or any successor plan) at the same time annual long-term equity incentive awards are granted to other senior executives. Each Annual Equity Grant shall have an aggregate value on the date of grant, as determined by the Committee, equal to $6,000,0008,800,000. 50% of each Annual Equity Grant shall be restricted stock units (“RSUs”) and 50% of each Annual Equity Grant shall be stock options to acquire shares of Fxxxxxx Mac (“Options”), provided that the Committee may in its discretion from time to time, grant a higher percentage of the Annual Equity Grant in RSUs. The exercise price of the Options shall be determined by the Committee in accordance with the terms of the Stock Compensation Plan. The RSUs shall vest on the fourth fifth anniversary of the date of grant, and the Options shall vest in four equal annual installments of approximately 25% each beginning on the first anniversary of the date of grant, in each case subject to Executive’s continued employment with Fxxxxxx Mac through the applicable vesting date, provided that the Committee may in its discretion from time to time (a) permit the acceleration of the vesting of the RSUs or the Options and (b) provide for a different vesting schedule for the RSUs or Options, provided, however, that in no event shall the vesting schedule applicable for the RSUs provide for a vesting period longer than four five years and in no event shall the vesting schedule applicable to the Options provide for the Options to vest less frequently than 25% each year over a four year vesting period. In addition, the vesting of the Options and RSUs shall be subject to acceleration upon the terms and 3 conditions described in the following paragraph and Section 6 of this Agreement. Except as expressly provided in this Agreement, all other terms and conditions of the RSUs and Options shall be as set forth in the Stock Compensation Plan, the resolution making the grant and the related award agreement. In addition to the foregoing, upon the occurrence of a Change in Control (as defined below) during the Term: (a) the Initial RSUs, if they were granted to Executive at least twelve months prior to such Change in Control, and all other RSUs that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and be paid-out subject to any right of Executive to defer payment of the Initial RSUs and RSUs under any non-qualified deferred compensation arrangement in which senior executives of Fxxxxxx Mac are permitted to defer payment of restricted stock units, (b) all Options that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and remain exercisable until the scheduled expiration date applicable to such Options, (c) the Initial RSUs, if they were granted to Executive less than twelve months prior to such Change in Control, shall be cancelled immediately upon the occurrence of such Change in Control in consideration for a cash payment by Fxxxxxx Mac to Executive in the amount of $6,000,0008,800,000, and (d) with respect to each Annual Equity Grant that was granted to Executive less than twelve months prior to such Change in Control, all Options and RSUs that formed part of such Annual Equity Grant shall be cancelled immediately upon the occurrence of the Change in Control and in consideration for such cancellation, Fxxxxxx Mac shall pay to Executive a lump sum cash payment in the amount of $6,000,0008,800,000. For purposes of this Section 4.4, a Change in Control shall mean: (i) the acquisition by any person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of becomes the “beneficial ownershipowner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), whether direct directly or indirectindirectly, of securities of Fxxxxxx Mac representing 50% or more of the combined voting power of Fxxxxxx Mac’s then outstanding securities, provided, however, that any acquisition by other than (A) beneficial ownership by Fxxxxxx Mac, any employee benefit plan of Fxxxxxx Mac or any person or entity organized, appointed or established pursuant to the terms of any such benefit plan or and (B) beneficial ownership by any corporation person or group with respect to which, immediately following such acquisition, which more than 50% of the total combined voting power of such corporation person or group is then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of beneficially owned Fxxxxxx Mac’s outstanding voting securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of Fxxxxxx Mac’s outstanding voting securities, shall not constitute a Change in Control; or (ii) consummation of a merger of Fxxxxxx Mac unless securities representing more than 50% of the total combined voting power of the voting securities of the successor corporation are, immediately after the consummation of such merger, beneficially owned, directly or indirectly, in substantially the same proportion, by the persons who beneficially owned Fxxxxxx Mac’s outstanding voting securities immediately prior to such transaction; , or (iii) if, during any period, a majority of the members of the Board of Directors are elected by any person or entity other than Fxxxxxx Mac’s shareholders or a majority of the members of the Board of Directors are appointed by any governmental entity, unless (A) such election or appointment of the Board of Directors by a governmental entity is a result of safety and soundness concerns and Executive’s continuing authority and role at Fxxxxxx Mac (as contemplated by this Agreement) has not been significantly diminished or adversely affected, or 4.

Annual Equity Grants. During each year of the Term commencing with calendar year 20052007, Fxxxxxx Freddie Mac shall make a increase the 2007 grant for Executive relating to Executive of a long-term equity incentive award (the “Annual Equity Grant”) pursuant to by $800,000. Said additional grant will be in the Stock Compensation Plan (or any successor plan) at the same form of time annual long-term equity incentive awards are granted to other senior executives. Each Annual Equity Grant shall have an aggregate value on the date of grant, as determined by the Committee, equal to $6,000,000. 50% of each Annual Equity Grant shall be vested restricted stock units (“RSUs”) and 50% will be made as of each the first regularly scheduled Committee meeting after the effective date of the Employment Agreement As Amended. In calendar year 2008 the Executive will be entitled to an Annual Equity Grant shall Target valued at $9,400,000, (the “Adjusted Annual Equity Grant”) $8,800,000 of which (the “Original Annual Equity Grant”) will be stock options guaranteed. In calendar year 2009, Executive will be entitled to acquire shares of Fxxxxxx Mac (“Options”), provided that the Committee may in its discretion from time to time, grant a higher percentage of the an Adjusted Annual Equity Grant in RSUsTarget valued at $10,000,000 none of which will be guaranteed. The exercise price size of the Options shall actual grant will be determined by an assessment of the Committee in accordance with performance criteria established by the Committee. In terms of the Stock Compensation Plan. The RSUs shall vest on Adjusted Annual Equity Grants provided for under the fourth anniversary Employment Agreement As Amended, no more than 25% of the date awards will be in the form of grant, and the performance-based RSUs. Options shall vest in four equal annual installments of approximately 25% each beginning on the first anniversary of the date of grant, in each case subject to Executive’s continued employment with Fxxxxxx Freddie Mac through the applicable vesting date, provided that the Committee may in its discretion from time to time (a) permit the acceleration of the vesting of the RSUs or the Options and (b) provide for a different vesting schedule for the RSUs or Options, provided, however, that in no event shall the vesting schedule applicable for the RSUs provide for a vesting period longer than four years and in no event shall the vesting schedule applicable to the Options provide for the Options to vest less frequently than 25% each year over a four year vesting period. In addition, the vesting of the Options and RSUs shall be subject to acceleration upon the terms and 3 conditions described in the following paragraph and Section 6 of this Agreementthe Employment Agreement As Amended. Except as expressly provided in this Agreementthe Employment Agreement As Amended, all other terms and conditions of the RSUs and Options shall be as set forth in the Stock Compensation Plan, the resolution making the grant and the related award agreement. 5 In addition to the foregoing, upon the occurrence of a Change in Control (as defined below) during the Revised Term: (a) the Initial RSUs, if they were granted to Executive at least twelve months prior to such Change in Control, and all other RSUs that were granted to Executive pursuant to the Employment Agreement and this Agreement Amendment at least twelve months prior to such Change in Control shall immediately vest and be paid-out settled subject to any right of Executive to defer payment of the Initial RSUs and RSUs under any non-qualified deferred compensation arrangement in which senior executives of Fxxxxxx Freddie Mac are permitted to defer payment of restricted stock units, (b) all Options that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and remain exercisable until the scheduled expiration date applicable to such Options, (c) the Initial RSUs, if they were granted to Executive less than twelve months prior to such Change in Control, shall be cancelled immediately upon the occurrence of such Change in Control in consideration for a cash payment by Fxxxxxx Mac to Executive in the amount of $6,000,000, and (d) with respect to each Annual Equity Grant that was granted to Executive less than twelve months prior to such Change in Control, all Options and RSUs that formed part of such Annual Equity Grant or Adjusted Annual Equity Grant shall be cancelled immediately upon the occurrence of the Change in Control and in consideration for such cancellation, Fxxxxxx Freddie Mac shall pay to Executive a lump sum cash payment in the amount of $6,000,000. For purposes of this Section 4.4, a Change in Control shall mean: (i) the acquisition by any person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of “beneficial ownership” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), whether direct or indirect, of securities of Fxxxxxx Mac representing 50% or more of the combined voting power of Fxxxxxx Mac’s then outstanding securities, provided, however, that any acquisition by (A) Fxxxxxx Mac, any employee benefit plan of Fxxxxxx Mac or any person or entity organized, appointed or established pursuant to the terms of any such benefit plan or (B) any corporation with respect to which, immediately following such acquisition, more than 50% of the total combined voting power of such corporation is then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of Fxxxxxx Mac’s outstanding voting securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of Fxxxxxx Mac’s outstanding voting securities, shall not constitute a Change in Control; or (ii) consummation of a merger of Fxxxxxx Mac unless securities representing more than 50% of the total combined voting power of the voting securities of the successor corporation are, immediately after the consummation of such merger, beneficially owned, directly or indirectly, in substantially the same proportion, by the persons who beneficially owned Fxxxxxx Mac’s outstanding voting securities immediately prior to such transaction; or (iii) if, during any period, a majority of the members of the Board of Directors are elected by any person or entity other than Fxxxxxx Mac’s shareholders or a majority of the members of the Board of Directors are appointed by any governmental entity, unless (A) such election or appointment of the Board of Directors by a governmental entity is a result of safety and soundness concerns and Executive’s continuing authority and role at Fxxxxxx Mac (as contemplated by this Agreement) has not been significantly diminished or adversely affected, or 48,800,000.

Annual Equity Grants. During each the Term, if Executive earns all or any portion of an Annual Bonus for any given fiscal year of the Term commencing with calendar year 2005Company, Fxxxxxx Mac then, at the meeting of the Compensation Committee in which such Annual Bonus amount is determined, Holdings shall make a also grant to Executive of a long-term Executive, at the same time as the Company confirms Executive’s final payout under the Bonus Plan, two equity incentive award awards pursuant to the Plan, having a total value on such grant date (based on the Fair Market Value) equal to $1,000,000 in the case of the achievement of 100% of the Target Bonus amount (the “Annual Equity GrantAwards”) pursuant ). In addition, the Compensation Committee may, in its discretion, establish minimum and maximum opportunities for Executive to the Stock Compensation Plan (earn a lesser or any successor plan) at the same time annual long-term greater amount of equity incentive awards are granted awards, based upon such performance targets as the Compensation Committee may, in its discretion, establish, in the event that the performance targets required to other senior executives. Each be achieved in order for the Annual Equity Grant shall have an aggregate value on the date of grant, as determined by the Committee, equal Awards to $6,000,000be granted are not achieved or are exceeded. At least fifty percent (50% of each Annual Equity Grant shall be restricted stock units (“RSUs”%) and 50% of each Annual Equity Grant shall be stock options to acquire shares of Fxxxxxx Mac (“Options”), provided that the Committee may in its discretion from time to time, grant a higher percentage of the Annual Equity Grant Awards to be paid upon achievement of 100% of the Target Bonus shall be granted in RSUsthe form of restricted Common Stock or restricted Common Stock units, with the actual percentage of such award value to be determined at the time of the grant by the Compensation Committee. The remainder of such Annual Equity Awards shall be granted in the form of Options, with a per share exercise price equal to the Fair Market Value per share on the grant date. These grants shall only be made so long as Executive continues to be employed by the Company and Holdings through the relevant grant date, with the number of shares of Common Stock subject to each such award determined by dividing the Options applicable dollar value of each such grant (as allocated by the Compensation Committee) by the Fair Market Value per share on the applicable grant date. The vesting, forfeiture and (for Options) exercise terms of these awards shall be determined by the Committee Compensation Committee, in accordance consultation with Executive, consistent with a new annual equity incentive program to be established generally for officers and key employees of the Company, subject in all instances to the terms of the Stock Compensation Plan, the Management Stockholder’s Agreement and the Sale Participation Agreement (as referenced below). The RSUs For the avoidance of doubt, except for the Annual Equity Awards provided for in this paragraph (iii), Executive shall vest on the fourth anniversary not be entitled to receive any other annual or periodic equity grants made to similarly situated executives of the date of grantCompany and Holdings, and unless otherwise determined by the Options shall vest in four equal annual installments of approximately 25% each beginning on the first anniversary of the date of grant, in each case subject to Executive’s continued employment with Fxxxxxx Mac through the applicable vesting date, provided that the Compensation Committee may in its discretion from time to time (a) permit the acceleration of the vesting of the RSUs or the Options and (b) provide for a different vesting schedule for the RSUs or Options, sole discretion; provided, however, that in no event shall the vesting schedule applicable that, for the RSUs provide avoidance of doubt, Executive shall be eligible for a vesting period longer than four years and in no event shall consideration for any such grants, with such eligibility to be on the vesting schedule applicable to the Options provide for the Options to vest less frequently than 25% each year over a four year vesting period. In addition, the vesting same terms as similarly situated executives of the Options Company and RSUs shall be subject to acceleration upon the terms and 3 conditions described in the following paragraph and Section 6 of this Agreement. Except as expressly provided in this Agreement, all other terms and conditions of the RSUs and Options shall be as set forth in the Stock Compensation Plan, the resolution making the grant and the related award agreement. In addition to the foregoing, upon the occurrence of a Change in Control (as defined below) during the Term: (a) the Initial RSUs, if they were granted to Executive at least twelve months prior to such Change in Control, and all other RSUs that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and be paid-out subject to any right of Executive to defer payment of the Initial RSUs and RSUs under any non-qualified deferred compensation arrangement in which senior executives of Fxxxxxx Mac are permitted to defer payment of restricted stock units, (b) all Options that were granted to Executive pursuant to this Agreement at least twelve months prior to such Change in Control shall immediately vest and remain exercisable until the scheduled expiration date applicable to such Options, (c) the Initial RSUs, if they were granted to Executive less than twelve months prior to such Change in Control, shall be cancelled immediately upon the occurrence of such Change in Control in consideration for a cash payment by Fxxxxxx Mac to Executive in the amount of $6,000,000, and (d) with respect to each Annual Equity Grant that was granted to Executive less than twelve months prior to such Change in Control, all Options and RSUs that formed part of such Annual Equity Grant shall be cancelled immediately upon the occurrence of the Change in Control and in consideration for such cancellation, Fxxxxxx Mac shall pay to Executive a lump sum cash payment in the amount of $6,000,000. For purposes of this Section 4.4, a Change in Control shall mean: (i) the acquisition by any person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of “beneficial ownership” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), whether direct or indirect, of securities of Fxxxxxx Mac representing 50% or more of the combined voting power of Fxxxxxx Mac’s then outstanding securities, provided, however, that any acquisition by (A) Fxxxxxx Mac, any employee benefit plan of Fxxxxxx Mac or any person or entity organized, appointed or established pursuant to the terms of any such benefit plan or (B) any corporation with respect to which, immediately following such acquisition, more than 50% of the total combined voting power of such corporation is then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of Fxxxxxx Mac’s outstanding voting securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of Fxxxxxx Mac’s outstanding voting securities, shall not constitute a Change in Control; or (ii) consummation of a merger of Fxxxxxx Mac unless securities representing more than 50% of the total combined voting power of the voting securities of the successor corporation are, immediately after the consummation of such merger, beneficially owned, directly or indirectly, in substantially the same proportion, by the persons who beneficially owned Fxxxxxx Mac’s outstanding voting securities immediately prior to such transaction; or (iii) if, during any period, a majority of the members of the Board of Directors are elected by any person or entity other than Fxxxxxx Mac’s shareholders or a majority of the members of the Board of Directors are appointed by any governmental entity, unless (A) such election or appointment of the Board of Directors by a governmental entity is a result of safety and soundness concerns and Executive’s continuing authority and role at Fxxxxxx Mac (as contemplated by this Agreement) has not been significantly diminished or adversely affected, or 4Holdings.