OFFICER SHORT-TERM INCENTIVE PROGRAM Parameters Document March 2008

by Freddie Mac
July 18th, 2008
 
Exhibit 10.29
 
OFFICER SHORT-TERM INCENTIVE PROGRAM
Parameters Document
March 2008
 
Objective The Officer Short-term Incentive Program is intended to align executive compensation with the performance of the corporation. The program provides cash awards to eligible officers based on a combination of corporate, division, and individual performance during the performance year. Bonus pool funding is based on the Compensation and Human Resources Committee’s determination of the Company’s performance against annual Corporate Scorecard objectives and other relevant unplanned accomplishments. The allocation of these funds to divisions is determined at the Chief Executive Officer’s discretion, and will take into account the division’s performance. The allocation of an award to individual officers will take into account performance against their objectives and available funds.
 
Performance Period The performance period runs from January 1 — December 31.
 
General Eligibility An officer is eligible to participate in the program if:
 
• As of the last business day of the performance period, s/he is classified by Freddie Mac (in its sole discretion) as an active, full-time or part-time officer, or an officer on short-term disability and/or approved leaves of absence. Individuals who are in terminated status (for whatever reason) as of the last business day of the performance period are not eligible to participate in the bonus program for that year unless their participation is authorized by the Chief Executive Officer (the “CEO”), the President and Chief Operating Officer (the “President”), or the Executive Vice President-Human Resources and Corporate Services. Individuals on terminated status include those on severance, retirement and long-term disability.
 
• On the bonus payment date (typically in February or March of the year following the performance period), s/he is classified by Freddie Mac (in its sole discretion) as an active, full-time or part-time officer, or an officer on short-term disability and/or approved leave of absence. Individuals who are in terminated status (other than as described in the proviso below) on the bonus payment date are not eligible to participate in the bonus program for that year. Individuals on terminated status include those on severance, retirement and long-term disability; provided, however, that an officer who retires (terminates and commences an immediate annuity under the FHLMC Employees’ Pension Plan) after the last business day of the performance period, but before the bonus payout date, is eligible to participate in the program; and, provided further, that an officer is eligible to participate in the program if his/her participation is authorized by the CEO, the President or the Executive Vice President-Human Resources and Corporate Services.


 

• S/He is not eligible to participate in a separate compensation, incentive and/or bonus plan or individually negotiated arrangement that provides separate bonus treatment.
 
Individualized eligibility criteria may be negotiated with officers and is subject to appropriate approval.
 
Bonus Targets Each year, a bonus target is developed for and communicated to each eligible officer. The targets may be expressed as a percent of base salary or a fixed dollar amount. Bonus targets are subject to appropriate approvals.
 
Discretionary Nature of the Program Freddie Mac’s officer short-term incentive program is discretionary — a payout under the program is not guaranteed and is only payable if the appropriate authority decides to award the bonus. Key performance areas are defined in the Corporate Scorecard and represent corporate performance goals for the year. The CHRC approves the Corporate Scorecard applicable to the performance period.
 
The amount of funding for the program is determined by the CHRC based upon an evaluation of the Company’s performance against the Corporate Scorecard objectives and other items, as the CHRC deems appropriate.
 
The Corporate Scorecard Objectives are generally communicated to eligible officers generally in the first quarter of the Performance Year.
 
Bonus Pool Funding Calculation The formula used to calculate the bonus pool funding is
 
Corporate Performance (0 – 200 percent), multiplied by either (a) agreed upon aggregate funding level or (b) aggregate bonus targets of participants, plus guaranteed minimum bonus commitments
 
= Officer Short-term Incentive Program Funding


 

Bonus Award Guidelines +
• Each division receives a bonus pool to allocate to participants.
 
• Bonus targets are calculated based on either a fixed dollar amount or actual base salary earnings (not annual salaries). If calculated on actual base salary earnings, this calculation does not include items such as the prior year’s bonus, other incentive or cash awards, FlexDollars or vacation payouts. If calculated on a fixed dollar amount, this calculation will be prorated using base salary earnings.
 
• Bonuses are calculated based on the bonus target developed for the officer.
 
• An officer’s total bonus cannot exceed two times his/her target absent approval of the CHRC for Executive Officers or an Authorized Officers for non-Executive Officers.
 
Payout Other Officers: Generally, bonuses are recommended by the division heads, approved by an Authorized Officer and paid no later than March in the year following the performance year.
 
Executive Officers: Bonuses are recommended by the CEO, approved by the CHRC (the Audit Committee for the Senior Vice President — General Auditor), and paid no later than March in the year following the performance year
 
CEO/President: Bonuses are approved by the CHRC, with input from the other independent members of the Board, and paid no later than March in the year following the performance year. The CEO, the CHRC, or the Audit Committee, as appropriate, may change payout dates noted above.
 
General Bonus amounts paid pursuant to this arrangement are considered compensation for purposes of the 401(k) plan, the pension plan and the SERP.
 
Nothing in this program is intended to create a contract to employ any employee for any particular term or period of time or otherwise abrogate Freddie Mac’s right to terminate an employee at any time for any reason.
 
Freddie Mac reserves the right to terminate this program or modify its provisions at anytime for any reason at the corporation’s sole discretion.