exv10w7






Exhibit 10.7




FANNIE MAE

ELECTIVE DEFERRED COMPENSATION PLAN I




Amendment




     Pursuant to Section 7.2 of the Fannie Mae Elective Deferred Compensation Plan I (the “Plan”),
as authorized by the Conservator of Fannie Mae (the Federal Housing Finance Agency), the Benefit
Plans Committee, 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
October 27, 2008:



     1. Section 7.7 is hereby amended in its entirety to read as follows:



     “7.7 Plan Frozen as of December 31, 2004. On November 15, 2004, the Plan was divided into two
plans: the legacy Plan and the Fannie Mae Elective Deferred Compensation Plan II (the “EDC II”).
As a result, the provisions of the Plan are effective as of December 31, 2004 only with respect to
Awards under the Plan that were fully earned and vested on or prior to December 31, 2004 and not
materially modified after October 3, 2004, plus notional earnings thereon (“Grandfathered
Amounts”). Such Grandfathered Amounts shall be administered and distributed pursuant to the terms
of the Plan, subject only to such amendments, if any, as do not constitute a “material
modification” for purposes of Treas. Regs. §1.409A-6(a)(4). Such Grandfathered Amounts are intended
to be grandfathered for purposes of Section 409A of the Internal Revenue Code (the “Code”) and
therefore exempt from Section 409A of the Code. In determining what amounts were earned and vested
as of December 31, 2004, the applicable regulations and other guidance issued under Section 409A of
the Code will apply. For the avoidance of doubt, no deferrals of any Award shall be permitted under
the Plan after December 31, 2004 except for the continued deferral of any Grandfathered Amounts
consistent with the requirements of Section 409A of the Code.



     The EDC II is intended to comply with the requirements of Section 409A of the Code, including
the transition relief provisions thereunder, and shall be construed consistent with that intent.
Deferrals made after December 31, 2004 shall be made under the EDC II and the rights and
obligations of the Company, such Participants and their beneficiaries with respect to such
deferrals shall be determined under the EDC II.”



     2. A new Section 7.8 is hereby added to read as follows:



     “7.8 Section 409A Transition Relief. Notwithstanding Section 7.7 above, with respect
only to those amounts that have not been paid as of October 27, 2008 and that, for the avoidance of
doubt, are not scheduled to be paid prior to January 1, 2009 (“Degrandfathered Benefits”), the
Company may authorize changes to time and form of payment elections, but only to the extent
consistent with the transition rules, and during the transition
relief period, provided under Section 409A of the Code and guidance issued thereunder by the Internal Revenue Service. Without
limiting the foregoing, the senior ranking officer in Human Resources is authorized to designate an
election window, commencing and ending on such dates during the transition relief period as he or
she shall determine, during which Participants shall be permitted, with respect to such
Degrandfathered Benefits only, to change any or all outstanding payment elections in accordance
with those transition rules and such procedures as may be prescribed by the senior ranking officer
in Human Resources or his or her delegate.



 









 








     Effective October 27, 2008, the Degrandfathered Benefits shall no longer be governed by the
Plan and the rights and obligations of the Company, such Participants and their beneficiaries with
respect to such Degrandfathered Benefits shall be determined under the EDC II consistent with the
requirements of Section 409A of the Code. Nothing in this Section 7.8 shall affect the
administration and distribution of those amounts earned and vested on or prior to December 31, 2004
and paid prior to January 1, 2009, which shall continue to be grandfathered for purposes of Section
409A of the Code and therefore exempt from Section 409A of the Code.



     The amendment of the Plan to add this Section 7.8 is intended to constitute a “material
modification” of the Degrandfathered Benefits for purposes of Section 1.409A-6(a)(4) of the
Treasury Regulations. For purposes of Section 1.409A-2(b)(2) of the Treasury Regulations, a
Participant’s entitlement to have his or her Degrandfathered Benefits paid in a series of
installments shall be treated as an entitlement to a series of separate payments.