exv10w25






Exhibit 10.25




EXECUTIVE PENSION PLAN

OF THE FEDERAL NATIONAL MORTGAGE ASSOCIATION




Amendment




     Pursuant to Section 20 of the Executive Pension Plan of The Federal National Mortgage
Association (the “Plan”), as authorized by the Conservator of Fannie Mae (the Federal Housing
Finance Agency) and in accordance with the authority delegated to the Vice President & Deputy
General Counsel for Tax & Benefits to approve amendments to benefit plans to the extent necessary
to comply with Internal Revenue Code Section 409A, the Plan is hereby amended as follows, effective
as of January 1, 2009 or, as to any provision hereof required under Section 409A to be effective
January 1, 2008, as of January 1, 2008, except as otherwise provided herein:



     1. Section 2 is hereby amended by adding the following definitions:




     ““Actuarial Equivalent” means a benefit which is of equal value to a benefit otherwise
payable in a different form or commencing at a different time under the Plan, based on the
applicable mortality tables and interest factors (or other reduction factors) set forth in
the Qualified Plan.




     “Separation from Service” means and correlative terms mean a “separation from service”
(as that term is defined at Section 1.409A-1(h) of the Treasury Regulations) from the
Corporation and from all other corporations and trades or businesses, if any, that would be
treated as a single “service recipient” with the Corporation under Section 1.409A-1(h)(3)
of the Treasury Regulations. Subject to the applicable limitations under Section 409A of
the Code (“Section 409A”), any of the special elective rules prescribed in Section
1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation
from service” has occurred may, but need not, elect in writing. Any such written election
shall be deemed part of the Plan. Whenever appearing in the Plan, references to a
“termination of employment” and similar terms shall be construed to require a Separation
from Service.




     “Specified Employee” means an individual determined to be a specified employee as
defined in subsection (a)(2)(B)(i) of Section 409A. Subject to the applicable limitations
under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of
the Treasury Regulations for purposes of determining “specified employee” status may, but
need not, elect in writing. Any such written election shall be deemed part of the Plan.”



     2. The definition of “Total Compensation” in Section 2 is hereby amended and restated to read
as follows:



 









 






““Total Compensation” means the sum of annual base salary, including amounts deferred by
the Participant under the Federal National Mortgage Association Optional Deferred
Compensation Plan, and its successor plans, and amounts which, pursuant to the election of
the Participant, the Corporation has contributed to any cash or deferred arrangement
qualified under Section 401(k) of the Code; plus:




(a) for compensation earned prior to March 1, 2007, the Participant’s
other taxable compensation paid by the Corporation with respect to the
calendar year for which the determination is made; provided, however, that
such other taxable compensation shall be allocated equally over the years
in which it is earned.




(b) for compensation earned on or after March 1, 2007, the cash bonus
earned by the Participant under the Corporation’s Annual Incentive Plan,
or its successor with respect to the calendar year for which the
determination is made.




(c) Effective October 8, 2008, retention bonus awards paid under the
program established in October 2008 and approved by the Conservator of
Fannie Mae (“Retention Bonus Awards”); provided, however, that:




(i) Any Retention Bonus Awards paid in December 2008, April 2009,
and November 2009 will be allocated (A) equally over the 12-month
period commencing on January 1, 2008 and ending on December 31,
2008 or (B) in the event the Participant works fewer than the full
12-month period, over the actual number of months worked during
such 12-month period.




(ii) Any Retention Bonus Awards paid in February 2010 will be
allocated equally (A) over the 12-month period commencing on
January 1, 2009 and ending on December 31, 2009 or (B) in the
event the Participant works fewer than the full 12-month period,
over the actual number of months worked during such 12-month
period.




(iii) Amounts paid as severance in lieu of Retention Bonus Awards
are not Retention Bonus Awards and therefore are not included in
calculating Total Compensation for purposes of the Plan.




Notwithstanding paragraphs (a), (b) and (c) above, except as otherwise provided in
an employment agreement, the portion of Total Compensation that is not annual base salary shall be limited in each year to 50 percent of the
Participant’s annual base salary for such year.



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3. Section 6 is hereby amended and restated in its entirety to read as follows:




“6. Normal Retirement Benefit




The normal retirement benefit under the Plan of a Participant who Separates from Service at
age sixty (60) shall be payable in a form specified in Section 11 commencing at the time
specified in Section 9 and shall be the Actuarial Equivalent of (A) minus (B), calculated
as of the date of the Participant’s Separation from Service or the Participant’s attainment
of age fifty-five (55) if later, where (A) is:




     (1) in the case of a Participant who first became a Participant in the Plan
prior to March 1, 2007, a 100% Contingent Annuity (as defined in Section 11(b)(iv)
below) with the Participant’s Surviving Spouse commencing on the Participant’s 60th
birthday with annual payments equal to the Participant’s vested Pension Goal; or




     (2) in the case of a Participant who first became a Participant in the Plan on
or after March 1, 2007, a single life annuity for the Participant’s life commencing
on the Participant’s 60th birthday with annual payments equal to the Participant’s
vested Pension Goal; and




     (B) is the sum of the Actuarial Equivalents of each of the following benefit offset
amounts, in each case as determined by the Committee or its delegate: (i) the annual
amount of any benefit to which Participant is then entitled to receive under the Qualified
Plan (including for this purpose the annual amount of any payment which the Participant is
then entitled to receive from the Corporation pursuant to Section 4.1(g) of the Federal
National Mortgage Association Optional Deferred Compensation Plan or any successor
provision to said section of said plan), (ii) the annual amount of any benefit not
attributable to the Participant’s own contributions which the Participant is then entitled
to receive under the Civil Service Retirement Act, solely to the extent such benefits are
attributable to periods of employment with the Corporation, and (iii) for any Participant
listed on the attached Schedule A (if any), any benefits not attributable to the
Participant’s own contributions which the Participant is then entitled to receive under the
Plan listed next to such Participant’s name on such Schedule A.”




4. Section 7 is hereby amended and restated in its entirety to read as follows:




“7. Early Retirement Benefits



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A Participant who Separates from Service prior to age 60 shall receive an early retirement
benefit under this Section 7. The amount of a Participant’s annual early retirement
benefit shall be computed in the same manner as the Participant’s annual normal retirement
benefit, but shall be adjusted by reducing the Pension Goal in which the Participant is
vested by 1/12 of 2 percentage points for each full month by which the commencement of
payments precedes the Participant’s attainment of age 60 (which for the avoidance of doubt
means a percentage reduction in the dollar amount of the benefit that would otherwise have
been paid). A Participant’s early retirement benefit, if any, shall be payable in a form
specified in Section 11 commencing at the time specified in Section 9.”




5. Section 8 is hereby amended and restated in its entirety to read as follows:




“8. Deferred Retirement Benefit




     There shall be no actuarial increase or, except as provided in Section 5, other
adjustment of the Pension Goal of a Participant who remains in the employ of the
Corporation after attaining age 60. Instead, the amount of the Participant’s deferred
retirement benefit shall be determined as though the Participant had Separated from Service
and begun receiving a benefit at age sixty (60). Such benefit shall be payable in a form
specified in Section 11 commencing at the time specified in Section 9.”




6. Section 9 is hereby amended and restated in its entirety to read as follows:




“9. Commencement of Benefit Payments




     Payment of a Participant’s benefit under the Plan shall commence within thirty (30)
days of the date the Participant attains age 55 or, if later, the date of his or her
Separation from Service with the Corporation. Notwithstanding the foregoing or any
provision of the Plan to the contrary, in the case of a Participant who is a Specified
Employee, payment of such Participant’s benefit owing to a Separation from Service with the
Corporation shall not commence before the date which is six (6) months and one (1) day
after the date of such Separation from Service or, if earlier than the end of such period,
the date of death of such Participant; provided, that any payments delayed by reason of
this sentence shall be accumulated and paid in a single lump sum at the end of such
six-month and one day period.






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     Notwithstanding any other provision of the Plan to the contrary and at the sole
discretion of the Company, if at the time a Participant’s benefits are scheduled to
commence under this Section 9 or a Surviving Spouse’s benefits are scheduled to commence
under Section 12 (the “determination date”), the present value of the benefit payable
hereunder (including any amounts payable to a Participant pursuant to another “nonaccount balance
plan” (as defined in Section
1.409A-1(c)(2)(i)(C) of the Treasury Regulations) with which the Plan is required to be
aggregated under Section 1.409A-1(c)(2) of the Treasury Regulations) is less than the
applicable dollar amount under Section 402(g)(1)(B) of the Code, the benefit may be
distributed (consistent with the cashout rules under Section 409A) in the form of a single
lump sum equal to such present value as soon as administratively practicable, but in no
event later than ninety (90) days after the determination date; provided, however, that the
present value of the benefit shall be determined taking into account the amount of any
bonus payable after the determination date, if the amount is known on the determination
date, and if a bonus is payable after the determination date but the amount of such bonus
is not known on the determination date, if the present value of the Participant’s benefit
as of the determination date is less than the applicable dollar amount under Section
402(g)(1)(B), then the present value of the Participant’s unpaid benefit for purposes of
this Section 9 shall be determined instead as of the date such bonus is paid, and the
foregoing provisions of this Section 9 shall be applied treating the bonus payment date as
the determination date.”



     7. Section 11 is hereby amended and restated in its entirety to read as follows:



     “11. Form of Benefit Payments




     (a) In the case of a Participant who first became a Participant in the Plan prior to
March 1, 2007, the normal form of payment shall be an annuity paid monthly to the
Participant for as long as the Participant shall live in an amount equal to one-twelfth of
the annual normal or early retirement benefit, as applicable, in which the Participant is
vested. In addition, if the Participant dies after the Participant’s payments under the
Plan commence, the Participant’s Surviving Spouse (regardless of the Participant’s age at
the time of the Participant’s death) shall be entitled to monthly payments, commencing on
the first day of the month coincident with or next following the date of the Participant’s
death and continuing for the duration of the Surviving Spouse’s life, of 100% of the
monthly amount which was being paid to the Participant at the time of the Participant’s
death.




     (b) In the case of a Participant who first became a Participant in the Plan on or
after March 1, 2007, the normal form of benefit payment under the Plan is a single life
annuity (i.e., an annuity which provides an amount of monthly income for the life of the
Participant, with the last payment to be made on the first day of the month in which the
Participant’s death occurs). Notwithstanding the foregoing, such a Participant may elect to
receive, in lieu of the normal form of benefit payment set forth above, the Actuarial
Equivalent of such normal form of benefit payment, payable in one of the following forms:



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     (i) Single Life Annuity (i.e., an annuity which provides an amount of monthly
income for the life of the Participant, with the last payment to be made on the
first day of the month in which the Participant’s death occurs);




     (ii) 50% Joint and Survivor Annuity (i.e., an annuity which is the Actuarial
Equivalent of the single life annuity, which provides an amount of monthly income
for the life of the Participant with a survivor annuity for the life of the person
designated by the Participant to receive an annuity upon the Participant’s death
(“co-annuitant”) which is equal to fifty percent (50%) of the monthly amount of
benefit payable during the joint lives of the Participant and his or her
co-annuitant);




     (iii) 75% Joint and Survivor Annuity (i.e., an annuity which is the Actuarial
Equivalent of the single life annuity, which provides an amount of monthly income
for the life of the Participant and in the event the Participant predeceases his or
her co-annuitant, a monthly benefit for the life of the co-annuitant that is 75% of
the monthly amount of benefit payable during the Participant’s life);




     (iv) 100% Contingent Annuity (i.e., an annuity which is the Actuarial
Equivalent of the single life annuity, which provides an amount of monthly income
for the life of the Participant and in the event the Participant predeceases his or
her co-annuitant, a monthly benefit for the life of the co-annuitant that is 100%
of the monthly amount of benefit payable during the Participant’s life); or




     (v) 10 Year Certain and Continuous Annuity (i.e., an annuity which is the
Actuarial Equivalent of the single life annuity, which provides an amount of
monthly income for the life of the Participant with the provision that not less
than one hundred twenty (120) monthly payments shall be made in any event to the
Participant and the person properly designated by the Participant to receive a
benefit from the Plan upon the Participant’s death (“beneficiary”)). If the
Participant’s designated beneficiary predeceases the Participant and the
Participant dies before having received the entire benefit to which the Participant
is entitled, the beneficiary of the lump sum Actuarial Equivalent of the remainder
of such benefit shall be the estate of the Participant. If the beneficiary survives
the Participant but dies before having received the entire benefit to which such
beneficiary is entitled, the beneficiary of the lump sum Actuarial Equivalent of
the remainder of such benefit shall be the estate of the beneficiary.




A Participant may, to the extent consistent with Section 409A, elect in writing, in a form
and manner acceptable to the Company, to have his or her benefit hereunder payable in
another such annuity form that is available to such Participant under this Section 11(b), provided that no such change of election shall be
effective if made on or after the date on which the first annuity payment is made and
further provided that no such change of election shall be effective if such change would
result in a form of benefit payment under the Plan that when considered together with
payments under other “nonaccount balance plans” (as defined in Section 1.409A-1(c)(2)(i)(C)
of the Treasury Regulations) with which the Plan is required to be aggregated under Section
1.409A-1(c)(2) of the Treasury Regulations would be inconsistent with the applicable
payment rules (including without limitation the “life annuity” rules at Section
1.409A-2(b)(2)(ii)) under Section 409A.”



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     8. Sections 12(iii) and Section 12(iv) are hereby replaced with a single amended and restated
Section 12(iii), which shall read in its entirety as follows:




“(iii) The Surviving Spouse Benefit described in this Section 12 shall commence within
thirty (30) days of the date of the Participant’s death or, if later, the date the
Participant would have attained age 55.”



     9. Section 13 is hereby amended and restated in its entirety to read as follows:




“13. Optional Forms of Benefit Payments




In lieu of the form of payment described in Section 11 or 12 above, the Committee may
designate in writing another form of benefit for a Participant (or, in the event of the
Participant’s death, the Participant’s Surviving Spouse), provided (i) such written
designation is irrevocable and is made on or prior to the date he or she becomes a
Participant in the Plan pursuant to Section 4 and (ii) such form is the Actuarial
Equivalent to the prescribed form of payment; and (iii) such form is identical to that
which applies to the Participant’s benefit under any other “nonaccount balance plan” (as
defined in Section 1.409A-1(c)(2)(i)(C) of the Treasury Regulations) with which the Plan is
required to be aggregated under Section 1.409A-1(c)(2) of the Treasury Regulations).”



     10. Section 17 is hereby amended by adding the following two sentences to the end of the
section:




“If at any time the Plan fails to meet the requirements of Section 409A and the regulations
thereunder, the Committee or its delegate may accelerate the payment of benefits under the
Plan, in an amount not to exceed the amount required to be included in the Participants’
income as a result of such failure. For the avoidance of doubt, no Participant will have
any discretion, nor have any direct or indirect election, as to whether a payment will be
accelerated under this Section 17.”



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     11. Section 20 is hereby amended and restated in its entirety to read as follows:




“20. Amendment or Termination




     The Board may, with prospective or retroactive effect, amend, suspend or terminate the
Plan or any portion thereof at any time, and delegates to the Committee the authority to
adopt amendments which may be necessary or appropriate to facilitate the administration,
management and interpretation of the Plan or to conform the Plan thereto, provided any such
amendment does not significantly affect the cost to the Corporation of maintaining the
Plan. However, no amendment, suspension or termination of the Plan shall deprive any
Participant of any vested rights without his written consent. To the extent consistent
with Section 409A, the Plan shall be deemed amended to reflect the terms of any employment
agreement between the Corporation and a Participant that are specifically applicable to the
operation of this Plan.”




12. A new Section 26 is hereby added to read as follows:




“26. Compliance with Section 409A of the Code.




     (a) Notwithstanding any provision of the Plan to the contrary, any portion of a
Participant’s benefits under the Plan that were earned and vested on or prior to December
31, 2004 and not materially modified after October 3, 2004 (“grandfathered benefits”) shall
be administered and distributed pursuant to the terms of the Plan that were in effect on
December 31, 2004 and applicable to such benefits, subject only to such amendments, if any,
as do not constitute a “material modification” for purposes of Section 409A-6(a)(4) of the
Treasury Regulations and that are identified as applying to the grandfathered benefits. In
the case of any portion of a Participant’s benefits described in this Section 26, such
grandfathered benefits are intended to be grandfathered for purposes of Section 409A and
therefore exempt from Section 409A. In determining what amounts were earned and vested as
of December 31, 2004, the applicable regulations and other guidance issued under Section
409A will apply.




     (b) In the case of any benefits earned or vested on or after January 1, 2005, no
portion of such benefits shall be treated as a grandfathered benefit for purposes of
Section 409A and the entirety of such benefits shall be administered and distributed
pursuant to the Plan as it may be amended from time to time.




     (c) To the extent that benefits are not grandfathered, the Plan is intended to comply
with Section 409A and shall be construed and interpreted in accordance with such intent.
For purposes of administering the payment timing and form provisions in respect of benefits
that are not grandfathered, the Plan shall be construed as a “nonaccount balance plan” as
defined in Section 1.409A-1(c)(2)(i)(C) of the Treasury Regulations and aggregated with
such other nonaccount balance plans as are required to be aggregated under Section 1.409A-
1(c)(2) of the Treasury Regulations.”



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