Document:

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EXHIBIT 4.6

CERTIFICATE OF DESIGNATION OF TERMS OF

5.375% NON-CUMULATIVE PREFERRED STOCK, SERIES I

	1.	 	Designation, Par Value and Number of Shares.

     The designation of the series of preferred stock of the Federal National
Mortgage Association (“Fannie Mae”) created by this resolution shall be “5.375%
Non-Cumulative Preferred Stock, Series I” (the “Series I Preferred Stock”), and
the number of shares initially constituting the Series I Preferred Stock is
6,000,000*. Shares of Series I Preferred Stock will have no par value and a
stated value and liquidation preference of $50 per share. The Board of
Directors of Fannie Mae, or a duly authorized committee thereof, in its sole
discretion, may reduce the number of shares of Series I Preferred Stock,
provided such reduction is not below the number of shares of Series I Preferred
Stock then outstanding.

	2.	 	Dividends.

     (a)   Holders of record of Series I Preferred Stock (each individually a
“Holder”, or collectively the “Holders”) will be entitled to receive, when, as
and if declared by the Board of Directors of Fannie Mae, or a duly authorized
committee thereof, in its sole discretion out of funds legally available
therefor, non-cumulative quarterly cash dividends which will accrue from and
including October 28, 2002 and will be payable on March 31, June 30, September
30 and December 31 of each year (each, a “Dividend Payment Date”), commencing
December 31, 2002 at the annual rate of $2.6875 per share or 5.375% of the
stated value and liquidation preference of $50 per share (without taking into
account any adjustments referred to in clause (b) below). If a Dividend Payment
Date is not a Business Day, the related dividend (if declared) will be paid on
the next succeeding Business Day with the same force and effect as though paid
on the Dividend Payment Date, without any increase to account for the period
from such Dividend Payment Date through the date of actual payment. A “Business
Day” shall mean any day other than a Saturday, Sunday, or a day on which
banking institutions in New York, New York are authorized by law to close.
Dividends will be paid to Holders on the record date fixed by the Board of
Directors or a duly authorized committee thereof, which may not be earlier than
45 days or later than 10 days prior to the applicable Dividend Payment Date. If
declared, the initial dividend, which will be for the period from and including
October 28, 2002 to but excluding December 31, 2002, will be $0.4703 per share
and will be payable on December 31, 2002 and, thereafter, if declared,
quarterly dividends will be $0.6719 per share. After the initial dividend, the
dividend period relating to a Dividend Payment Date will be the period from and
including the preceding Dividend Payment Date to but excluding the related
Dividend Payment Date. If Fannie Mae redeems the Series I Preferred Stock, the
dividend that would otherwise be payable for the then-current quarterly
dividend period accrued to but excluding the date of redemption will be
included in the redemption price of the shares redeemed and will not be
separately payable. Dividends payable on the Series I Preferred Stock for any
period greater or less than a full dividend period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends per share payable at redemption will be rounded to the fourth digit
after the decimal point. (If the fifth digit to the right of the decimal point
is five or greater, the fourth digit will be rounded up by one.)

     (b)   If, prior to April 28, 2004, one or more amendments to the Internal
Revenue Code of 1986, as amended (the “Code”), are enacted that eliminate or
reduce the percentage of the dividends-received deduction applicable to the
Series I Preferred Stock as specified in section 243(a)(1) of the Code or any
successor provision thereto (the “Dividends-Received Percentage”), certain
adjustments may be made in respect of the dividends payable by Fannie Mae, and
Post Declaration Date Dividends and Retroactive Dividends (as such terms are
defined below) may become payable, as described below.

* Plus up to 900,000 additional shares pursuant to the Underwriters’
overallotment option.

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     The amount of each dividend payable (if declared) per share of Series I
Preferred Stock for dividend payments made on or after the effective date of
such change in the Code will be adjusted by multiplying the amount of the
dividend payable pursuant to clause (a) of this Section 2 (before adjustment)
by a factor, which will be the number determined in accordance with the
following formula (the “DRD Formula”), and rounding the result to the nearest
cent (with one-half cent rounded up):

1–.35(1–.70)

1–.35(1–DRP)

For purposes of the DRD Formula, “DRP” means the Dividends-Received Percentage
(expressed as a decimal) applicable to the dividend in question; provided,
however, that if the Dividends-Received Percentage applicable to the dividend
in question shall be less than 50%, then the DRP shall equal .50. No amendment
to the Code, other than a change in the percentage of the dividends-received
deduction applicable to the Series I Preferred Stock as set forth in section
243(a)(1) of the Code or any successor provision thereto, will give rise to an
adjustment. Notwithstanding the foregoing provisions, if, with respect to any
such amendment, Fannie Mae receives either an unqualified opinion of nationally
recognized independent tax counsel selected by Fannie Mae or a private letter
ruling or similar form of assurance from the Internal Revenue Service (the
“IRS”) to the effect that such an amendment does not apply to a dividend
payable on the Series I Preferred Stock, then such amendment will not result in
the adjustment provided for pursuant to the DRD Formula with respect to such
dividend. The opinion referenced in the previous sentence shall be based upon
the legislation amending or establishing the DRP or upon a published
pronouncement of the IRS addressing such legislation. Unless the context
otherwise requires, references to dividends herein will mean dividends as
adjusted by the DRD Formula. Fannie Mae’s calculation of the dividends payable
as so adjusted shall be final and not subject to review.

     Notwithstanding the foregoing, if any such amendment to the Code is
enacted after the dividend payable on a Dividend Payment Date has been declared
but before such dividend is paid, the amount of the dividend payable on such
Dividend Payment Date will not be increased; instead, additional dividends (the
“Post Declaration Date Dividends”), equal to the excess, if any, of (1) the
product of the dividend paid by Fannie Mae on such Dividend Payment Date and
the DRD Formula (where the DRP used in the DRD Formula would be equal to the
greater of the Dividends-Received Percentage applicable to the dividend in
question and .50) over (2) the dividend paid by Fannie Mae on such Dividend
Payment Date, will be payable (if declared) to Holders on the record date
applicable to the next succeeding Dividend Payment Date. If any such amendment
to the Code is enacted and the reduction in the Dividends-Received Percentage
retroactively applies to a Dividend Payment Date as to which Fannie Mae
previously paid dividends on the Series I Preferred Stock (each, an “Affected
Dividend Payment Date”), Fannie Mae will pay (if declared) additional dividends
(the “Retroactive Dividends”) to Holders on the record date applicable to the
next succeeding Dividend Payment Date (or, if such amendment is enacted after
the dividend payable on such Dividend Payment Date has been declared, to
Holders on the record date applicable to the second succeeding Dividend Payment
Date following the date of enactment), in an amount equal to the excess of (1)
the product of the dividend paid by Fannie Mae on each Affected Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula would
be equal to the greater of the Dividends-Received Percentage and .50 applied to
each Affected Dividend Payment Date) over (2) the sum of the dividend paid by
Fannie Mae on each Affected Dividend Payment Date. Fannie Mae will only make
one payment of Retroactive Dividends for any such amendment. Notwithstanding
the foregoing provisions, if, with respect to any such amendment, Fannie Mae
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by Fannie Mae or a private letter ruling or similar form of
assurance from the IRS to the effect that such amendment does not apply to a
dividend payable on an Affected Dividend Payment Date for the Series I
Preferred Stock, then such amendment will not result in the payment of
Retroactive Dividends with respect to such Affected Dividend Payment Date. The
opinion referenced in the previous sentence shall be based upon legislation
amending or establishing the DRP or upon a published pronouncement of the IRS
addressing such legislation.

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     Notwithstanding the foregoing, no adjustment in the dividends payable by
Fannie Mae shall be made, and no Post Declaration Date Dividends or Retroactive
Dividends shall be payable by Fannie Mae, in respect of the enactment of any
amendment to the Code on or after April 28, 2004 that eliminates or reduces the
Dividends- Received Percentage.

     In the event that the amount of dividends payable per share of Series I
Preferred Stock is adjusted pursuant to the DRD Formula and/or Post Declaration
Date Dividends or Retroactive Dividends are to be paid, Fannie Mae will cause
notice of each such adjustment and, if applicable, Post Declaration Date
Dividends and Retroactive Dividends to be given as soon as practicable to the
Holders of Series I Preferred Stock.

     (c)   No dividend (other than dividends or distributions paid in shares of,
or options, warrants or rights to subscribe for or purchase shares of, the
common stock of Fannie Mae or any other stock of Fannie Mae ranking, as to the
payment of dividends and the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, junior to the Series I Preferred
Stock) may be declared or paid or set apart for payment on Fannie Mae’s common
stock (or on any other stock of Fannie Mae ranking, as to the payment of
dividends, junior to the Series I Preferred Stock) unless dividends have been
declared and paid or set apart (or ordered to be set apart) on the Series I
Preferred Stock for the then-current quarterly dividend period; provided,
however, that the foregoing dividend preference shall not be cumulative and
shall not in any way create any claim or right in favor of the Holders of
Series I Preferred Stock in the event that dividends have not been declared or
paid or set apart (or ordered to be set apart) on the Series I Preferred Stock
in respect of any prior dividend period. If the full dividend on the Series I
Preferred Stock is not paid for any quarterly dividend period, the Holders of
Series I Preferred Stock will have no claim in respect of the unpaid amount so
long as no dividend (other than those referred to above) is paid on Fannie
Mae’s common stock (or any other stock of Fannie Mae ranking, as to the payment
of dividends, junior to the Series I Preferred Stock) for such dividend period.

     (d)   The Board of Directors of Fannie Mae, or a duly authorized committee
thereof, may, in its discretion, choose to pay dividends on the Series I
Preferred Stock without the payment of any dividends on Fannie Mae’s common
stock (or any other stock of Fannie Mae ranking, as to the payment of
dividends, junior to the Series I Preferred Stock).

     (e)   No full dividends shall be declared or paid or set apart for payment
on any stock of Fannie Mae ranking, as to the payment of dividends, on a parity
with the Series I Preferred Stock for any period unless full dividends have
been declared and paid or set apart for payment on the Series I Preferred Stock
for the then-current quarterly dividend period. When dividends are not paid in
full upon the Series I Preferred Stock and all other classes or series of stock
of Fannie Mae, if any, ranking, as to the payment of dividends, on a parity
with the Series I Preferred Stock, all dividends declared upon shares of Series
I Preferred Stock and all such other stock of Fannie Mae will be declared pro
rata so that the amount of dividends declared per share of Series I Preferred
Stock and all such other stock will in all cases bear to each other the same
ratio that accrued dividends per share of Series I Preferred Stock (including
any adjustments in dividends payable due to changes in the Dividends-Received
Percentage but without, in the case of any noncumulative preferred stock,
accumulation of unpaid dividends for prior dividend periods) and such other
stock bear to each other.

     (f)   No dividends may be declared or paid or set apart for payment on any
shares of Series I Preferred Stock if at the same time any arrears exist or
default exists in the payment of dividends on any outstanding class or series
of stock of Fannie Mae ranking, as to the payment of dividends, prior to the
Series I Preferred Stock.

     (g)   Holders of Series I Preferred Stock will not be entitled to any
dividends, whether payable in cash or property, other than as herein provided
and will not be entitled to interest, or any sum in lieu of interest, in
respect of any dividend payment.

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	3.	 	Optional Redemption.

     (a)   The Series I Preferred Stock shall not be redeemable prior to October
28, 2007. On or after that date, subject to the notice provisions set forth in
Section 3(b) below and subject to any further limitations which may be imposed
by law, Fannie Mae may redeem the Series I Preferred Stock, in whole or in
part, at any time or from time to time, out of funds legally available
therefor, at the redemption price of $50 per share plus an amount equal to the
amount of the dividend (whether or not declared) for the then-current quarterly
dividend period accrued to but excluding the date of such redemption, including
any adjustments in dividends payable due to changes in the Dividends-Received
Percentage but without accumulation of unpaid dividends on the Series I
Preferred Stock for prior dividend periods. If less than all of the outstanding
shares of Series I Preferred Stock are to be redeemed, Fannie Mae will select
the shares to be redeemed from the outstanding shares not previously called for
redemption by lot or pro rata (as nearly as possible) or by any other method
that the Board of Directors of Fannie Mae, or a duly authorized committee
thereof, in its sole discretion deems equitable.

     (b)   In the event Fannie Mae shall redeem any or all of the Series I
Preferred Stock as aforesaid, Fannie Mae will give notice of any such
redemption to Holders of Series I Preferred Stock not less than 30 days prior
to the date fixed by the Board of Directors of Fannie Mae, or duly authorized
committee thereof, for such redemption. Each such notice will state: (1) the
number of shares of Series I Preferred Stock to be redeemed and, if fewer than
all of the shares of Series I Preferred Stock held by a Holder are to be
redeemed, the number of shares to be redeemed from such Holder; (2) the
redemption price; (3) the redemption date; and (4) the place at which a
Holder’s certificate(s) representing shares of Series I Preferred Stock must be
presented upon such redemption. Failure to give notice, or any defect in the
notice, to any Holder of Series I Preferred Stock shall not affect the validity
of the proceedings for the redemption of shares of any other Holder of Series I
Preferred Stock being redeemed.

     (c)   Notice having been given as herein provided, from and after the
redemption date, dividends on the Series I Preferred Stock called for
redemption shall cease to accrue and such Series I Preferred Stock called for
redemption will no longer be deemed outstanding, and all rights of the Holders
thereof as registered holders of such shares of Series I Preferred Stock will
cease. Upon surrender in accordance with said notice of the certificate(s)
representing shares of Series I Preferred Stock so redeemed (properly endorsed
or assigned for transfer, if the Board of Directors of Fannie Mae, or a duly
authorized committee thereof, shall so require and the notice shall so state),
such shares shall be redeemed by Fannie Mae at the redemption price aforesaid.
Any shares of Series I Preferred Stock that shall at any time have been
redeemed shall, after such redemption, be cancelled and not reissued. In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares without cost
to the Holder thereof.

     (d)   The Series I Preferred Stock will not be subject to any mandatory
redemption, sinking fund or other similar provisions. In addition, Holders of
Series I Preferred Stock will have no right to require redemption of any shares
of Series I Preferred Stock.

	4.	 	Liquidation Rights.

     (a)   Upon any voluntary or involuntary dissolution, liquidation or winding
up of Fannie Mae, after payment or provision for the liabilities of Fannie Mae
and the expenses of such dissolution, liquidation or winding up, the Holders of
outstanding shares of the Series I Preferred Stock will be entitled to receive
out of the assets of Fannie Mae or proceeds thereof available for distribution
to stockholders, before any payment or distribution of assets is made to
holders of Fannie Mae’s common stock (or any other stock of Fannie Mae ranking,
as to the distribution of assets upon dissolution, liquidation or winding up of
Fannie Mae, junior to the Series I Preferred Stock), the amount of $50 per
share plus an amount equal to the dividend (whether or not declared) for the
then-current quarterly dividend period accrued to but excluding the date of
such liquidation payment, including any adjustments in dividends payable due to
changes in the Dividends-Received Percentage but without accumulation of unpaid
dividends on the Series I Preferred Stock for prior dividend periods.

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     (b)   If the assets of Fannie Mae available for distribution in such event
are insufficient to pay in full the aggregate amount payable to Holders of
Series I Preferred Stock and holders of all other classes or series of stock of
Fannie Mae, if any, ranking, as to the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, on a parity with the Series I
Preferred Stock, the assets will be distributed to the Holders of Series I
Preferred Stock and holders of all such other stock pro rata, based on the full
respective preferential amounts to which they are entitled (including any
adjustments in dividends payable due to changes in the Dividends-Received
Percentage but without, in the case of any noncumulative preferred stock,
accumulation of unpaid dividends for prior dividend periods).

     (c)   Notwithstanding the foregoing, Holders of Series I Preferred Stock
will not be entitled to be paid any amount in respect of a dissolution,
liquidation or winding up of Fannie Mae until holders of any classes or series
of stock of Fannie Mae ranking, as to the distribution of assets upon
dissolution, liquidation or winding up of Fannie Mae, prior to the Series I
Preferred Stock have been paid all amounts to which such classes or series are
entitled.

     (d)   Neither the sale, lease or exchange (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
and assets of Fannie Mae, nor the merger, consolidation or combination of
Fannie Mae into or with any other corporation or the merger, consolidation or
combination of any other corporation or entity into or with Fannie Mae, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 4.

     (e)   After payment of the full amount of the distribution of assets upon
dissolution, liquidation or winding up of Fannie Mae to which they are entitled
pursuant to paragraphs (a), (b) and (c) of this Section 4, the Holders of
Series I Preferred Stock will not be entitled to any further participation in
any distribution of assets by Fannie Mae.

	5.	 	No Conversion or Exchange Rights.

     The Holders of shares of Series I Preferred Stock will not have any rights
to convert such shares into or exchange such shares for shares of any other
class or classes, or of any other series of any class or classes, of stock or
obligations of Fannie Mae.

	6.	 	No Pre-Emptive Rights.

     No Holder of Series I Preferred Stock shall be entitled as a matter of
right to subscribe for or purchase, or have any pre-emptive right with respect
to, any part of any new or additional issue of stock of any class whatsoever,
or of securities convertible into any stock of any class whatsoever, or any
other shares, rights, options or other securities of any class whatsoever,
whether now or hereafter authorized and whether issued for cash or other
consideration or by way of dividend.

	7.	 	Voting Rights; Amendments.

     (a)   Except as provided below, the Holders of Series I Preferred Stock
will not be entitled to any voting rights, either general or special.

     (b)   Without the consent of the Holders of Series I Preferred Stock,
Fannie Mae will have the right to amend, alter, supplement or repeal any terms
of this Certificate or the Series I Preferred Stock (1) to cure any ambiguity,
or to cure, correct or supplement any provision contained in this Certificate
of Designation that may be defective or inconsistent with any other provision
herein or (2) to make any other provision with respect to matters or questions
arising with respect to the Series I Preferred Stock that is not inconsistent
with the provisions of this Certificate of Designation so long as such action
does not materially and adversely affect the interests of the Holders of Series
I Preferred Stock; provided, however, that any increase in the amount of
authorized or issued Series I Preferred Stock or the creation and issuance, or
an increase in the authorized or issued amount, of any other class or series of
stock of Fannie Mae, whether ranking prior to, on a parity with or junior to
the Series I Preferred Stock, as to the payment of dividends or

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the distribution of assets upon dissolution, liquidation or winding up of
Fannie Mae, or otherwise, will not be deemed to materially and adversely affect
the interests of the Holders of Series I Preferred Stock.

     (c)   Except as set forth in paragraph (b) of this Section 7, the terms of
this Certificate or the Series I Preferred Stock may be amended, altered,
supplemented, or repealed only with the consent of the Holders of at least
two-thirds of the shares of Series I Preferred Stock then outstanding, given in
person or by proxy, either in writing or at a meeting of stockholders at which
the Holders of Series I Preferred Stock shall vote separately as a class. On
matters requiring their consent, Holders of Series I Preferred Stock will be
entitled to one vote per share.

     (d)   The rules and procedures for calling and conducting any meeting of
Holders (including, without limitation, the fixing of a record date in
connection therewith), the solicitation and use of proxies at such a meeting,
the obtaining of written consents, and any other aspect or matter with regard
to such a meeting or such consents shall be governed by any rules that the
Board of Directors of Fannie Mae, or a duly authorized committee thereof, in
its discretion, may adopt from time to time, which rules and procedures shall
conform to the requirements of any national securities exchange on which the
Series I Preferred Stock are listed at the time.

	8.	 	Additional Classes or Series of Stock.

     The Board of Directors of Fannie Mae, or a duly authorized committee
thereof, shall have the right at any time in the future to authorize, create
and issue, by resolution or resolutions, one or more additional classes or
series of stock of Fannie Mae, and to determine and fix the distinguishing
characteristics and the relative rights, preferences, privileges and other
terms of the shares thereof. Any such class or series of stock may rank prior
to, on a parity with or junior to the Series I Preferred Stock as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, or otherwise.

	9.	 	Priority.

     For purposes of this Certificate of Designation, any stock of any class or
series of Fannie Mae shall be deemed to rank:

     (a)   Prior to the shares of Series I Preferred Stock, either as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, if the holders of such class or series
shall be entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of Fannie Mae, as the case may be, in
preference or priority to the Holders of shares of Series I Preferred Stock.

     (b)   On a parity with shares of Series I Preferred Stock, either as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, whether or not the dividend rates or
amounts, dividend payment dates or redemption or liquidation prices per share,
if any, be different from those of the Series I Preferred Stock, if the holders
of such class or series shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of Fannie
Mae, as the case may be, in proportion to their respective dividend rates or
amounts or liquidation prices, without preference or priority, one over the
other, as between the holders of such class or series and the Holders of shares
of Series I Preferred Stock.

     (c)   Junior to shares of Series I Preferred Stock, either as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, if such class shall be common stock of
Fannie Mae or if the Holders of shares of Series I Preferred Stock shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of Fannie Mae, as the case may be, in
preference or priority over the holders of such class or series.

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     (d)   The shares of Preferred Stock of Fannie Mae designated “5.25%
Non-Cumulative Preferred Stock, Series D” (the “Series D Preferred Stock”),
“5.10% Non-Cumulative Preferred Stock, Series E” (the “Series E Preferred
Stock”), “Variable Rate Non-Cumulative Preferred Stock, Series F” (the “Series
F Preferred Stock”), “Variable Rate Non-Cumulative Preferred Stock, Series G”
(the “Series G Preferred Stock”) and “5.81% Non-Cumulative Preferred Stock,
Series H” (the “Series H Preferred Stock”) shall be deemed to rank on a parity
with shares of Series I Preferred Stock as to the payment of dividends and the
distribution of assets upon dissolution, liquidation or winding up of Fannie
Mae. Accordingly, the holders of record of Series D Preferred Stock, the
holders of record of Series E Preferred Stock, the holders of record of Series
F Preferred Stock, the holders of record of Series G Preferred Stock, the
Holders of Series H Preferred Stock and the Holders of Series I Preferred Stock
shall be entitled to the receipt of dividends and of amounts distributable upon
dissolution, liquidation or winding up of Fannie Mae, as the case may be, in
proportion to their respective dividend rates or amounts or liquidation prices,
without preference or priority, one over the other.

	10.	 	Transfer Agent, Dividend Disbursing Agent and Registrar.

     Fannie Mae hereby appoints EquiServe Trust Company, N.A., as its initial
transfer agent, dividend disbursing agent and registrar for the Series I
Preferred Stock. Fannie Mae may at any time designate an additional or
substitute transfer agent, dividend disbursing agent and registrar for the
Series I Preferred Stock.

	11.	 	Notices.

     Any notice provided or permitted by this Certificate of Designation to be
made upon, or given or furnished to, the Holders of Series I Preferred Stock by
Fannie Mae shall be made by first-class mail, postage prepaid, to the addresses
of such Holders as they appear on the books and records of Fannie Mae. Such
notice shall be deemed to have been sufficiently made upon deposit thereof in
the United States mail. Notwithstanding anything to the contrary contained
herein, in the case of the suspension of regular mail service or by reason of
any other cause it shall be impracticable, in Fannie Mae’s judgment, to give
notice by mail, then such notification may be made, in Fannie Mae’s discretion,
by publication in a newspaper of general circulation in The City of New York or
by hand delivery to the addresses of Holders as they appear on the books and
records of Fannie Mae.

     Receipt and acceptance of a share or shares of the Series I Preferred
Stock by or on behalf of a Holder shall constitute the unconditional acceptance
by such Holder (and all others having beneficial ownership of such share or
shares) of all of the terms and provisions of this Certificate of Designation.
No signature or other further manifestation of assent to the terms and
provisions of this Certificate of Designation shall be necessary for its
operation or effect as between Fannie Mae and the Holder (and all such others).

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EXHIBIT 4.7

CERTIFICATE OF DESIGNATION OF TERMS OF

VARIABLE RATE NON-CUMULATIVE PREFERRED STOCK, SERIES J

	1.	 	Designation, Par Value and Number of Shares.

     The designation of the series of preferred stock of the Federal National
Mortgage Association (“Fannie Mae”) created by this resolution shall be
“Variable Rate Non-Cumulative Preferred Stock, Series J” (the “Series J
Preferred Stock”), and the number of shares initially constituting the Series J
Preferred Stock is 12,500,000*. Shares of Series J Preferred Stock will have no
par value and a stated value and liquidation preference of $50 per share. The
Board of Directors of Fannie Mae, or a duly authorized committee thereof, in
its sole discretion, may reduce the number of shares of Series J Preferred
Stock, provided such reduction is not below the number of shares of Series J
Preferred Stock then outstanding.

	2.	 	Dividends.

     (a)   Holders of record of Series J Preferred Stock (each individually a
“Holder”, or collectively the “Holders”) will be entitled to receive, when, as
and if declared by the Board of Directors of Fannie Mae, or a duly authorized
committee thereof, in its sole discretion out of funds legally available
therefor, non-cumulative quarterly cash dividends which will accrue from and
including November 26, 2002 and will be payable on March 31, June 30, September
30 and December 31 of each year (each, a “Dividend Payment Date”), commencing
March 31, 2003. If a Dividend Payment Date is not a Business Day, the related
dividend (if declared) will be paid on the next succeeding Business Day with
the same force and effect as though paid on the Dividend Payment Date, without
any increase to account for the period from such Dividend Payment Date through
the date of actual payment. A “Business Day” shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in New York, New York
are authorized by law to close. Dividends will be paid to Holders on the record
date fixed by the Board of Directors or a duly authorized committee thereof,
which may not be earlier than 45 days or later than 10 days prior to the
applicable Dividend Payment Date.

     If declared, the dividend rate for the period from and including November
26, 2002 to but excluding November 26, 2004 will be 3.78% per annum.
Thereafter, dividends will accrue at a per annum rate equal to the “Swap Rate”
(as defined below) plus 1.38% without taking into account any adjustments
described below, subject to a cap of 8.00% per annum. On November 26, 2004 and
every two years thereafter until any redemption, the previous dividend rate
will be replaced by the applicable Swap Rate plus 1.38%, subject to a cap of
8.00% per annum. The Swap Rate for each two-year period will be determined by
Fannie Mae on the second Business Day immediately preceding the first day of
such period (each, a “Swap Determination Date”). If declared, the initial
dividend for the dividend period from and including November 26, 2002 to but
excluding March 31, 2003, will be $0.6563 per share and will be payable on
March 31, 2003. Thereafter, the dividend period related to a Dividend Payment
Date will be the period from and including the preceding Dividend Payment Date
to but excluding the applicable Dividend Payment Date. If Fannie Mae redeems
the Series J Preferred Stock, the dividend that would otherwise be payable for
the then-current quarterly dividend period accrued to but excluding the date of
redemption will be included in the redemption price of the shares redeemed and
will not be separately payable.

     Dividends payable on the Series J Preferred Stock for any period greater
or less than a full dividend period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. Dividends payable on the Series J
Preferred Stock for each full dividend period will be computed by dividing the
per annum dividend rate by four. The amount of dividends per share payable at
redemption will be rounded to the fourth digit after the decimal point. (If the
fifth digit to the right of the decimal point is five or greater, the fourth
digit will be rounded up by one.)

	* Plus up to 1,500,000 additional shares pursuant to the Underwriters’
overallotment option.

1

 

     (b)   The “Swap Rate” for any Swap Determination Date will be the rate
equal to (in the following order of priority):

		
	 	     (1)   the average rate for two-year U.S. Dollar swaps, expressed as a
percentage, which appears on the Reuters Screen ISDAFIX3 Page at 11:30 a.m.,
New York City time, available on the applicable Swap Determination Date,
with respect to such dividend period;

		
	 	     (2)   if the average rate for two-year U.S. Dollar swaps described in
clause (1) does not appear on the Reuters Screen ISDAFIX3 Page at 11:30 a.m.
on the applicable Swap Determination Date, the Swap Rate will be the
mid-market rate for two-year U.S. Dollar swaps, expressed as a percentage,
which appears on the Moneyline Telerate Page 19901 at 11:30 a.m., New York
City time, available on the applicable Swap Determination Date with respect
to such dividend period;

		
	 	     (3)   if the mid-market rate for two year U.S. Dollar swaps described in
clause (2) does not appear on the Moneyline Telerate Page 19901 at 11:30
a.m. on the applicable Swap Determination Date, the Swap Rate will be a
percentage determined by Fannie Mae, based on the arithmetic mean of the
mid-market rate for two-year U.S. Dollar swap quotations provided by five
leading primary securities dealers in The City of New York selected by
Fannie Mae, at approximately 3:00 p.m., New York City time, on the
applicable Swap Determination Date with respect to such dividend period. If
four or five of such dealers are quoting as described in this clause, the
Swap Rate will be the arithmetic mean of the quotations, without regard to
the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Swap Rate will be the quotation remaining after
disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of
such quotations shall be disregarded. The Swap Rate determined pursuant to
clause (3) will be rounded to the third digit after the decimal (if the
fourth digit is five or greater, the third digit will be rounded up by one);
or

		
	 	     (4)   if fewer than three dealers selected by Fannie Mae are quoting as
described in clause (3), the Swap Rate will be the Swap Rate determined on
the immediately preceding Swap Determination Date, which will be replaced by
the applicable Swap Rate on the first day on which it can be determined as
described above in clause (1), clause (2) or clause (3) (in that order of
priority).

     If the rate of interest will reset within a dividend period, accrued
dividends will be calculated by multiplying the stated value of the Preferred
Stock by an accrual factor. This accrual factor will be computed by the
totaling of the factors calculated for each day in the dividend period. The
daily dividend period factor for each day will be computed by dividing the
annual dividend rate applicable for that day by 360. If the same annual
dividend rate is applicable for all days of a calendar month, the daily
dividend period factor is multiplied by 30. If different annual dividend rates
are applicable for one or more days in a calendar month and the entire calendar
month is within the dividend period, a weighted average is to be calculated for
the sum of the daily dividend period factors in that month divided by the
actual number of days in that month. The weighted average daily dividend period
factor then is multiplied by 30.

     If the format of a page, screen, display, press release or other source
related to an index to be used in determining the dividend rate of the
Preferred Stock changes but, in the discretion of Fannie Mae, the source
continues to disclose the information necessary to determine the rate
substantially as described in this section, then the procedure for obtaining
information from the source shall be deemed to be amended by Fannie Mae.

     Fannie Mae’s determination of the Swap Rate and dividend rate will be
final and binding on all parties, absent manifest error.

     “Moneyline Telerate” means, when used in connection with any designated
page and any Swap Rate, the display page so designated on Moneyline Telerate
(or such other page as may replace that page on that service, or such other
service as may be nominated as the information vendor, for the purpose of
displaying rates or prices comparable to that Swap Rate).

2

 

     “Moneyline Telerate Page 19901” means page 19901 (or any other page as may
replace such page) on the display of Moneyline Telerate (or any successor
service).

     “Reuters Screen” means, when used in connection with any designated page
and any Swap Rate, the display page so designated on the Reuters Money 3000
Service (or such other page as may replace that page on that service, or such
other service as may be nominated as the information vendor, for the purpose of
displaying rates or prices comparable to that Swap Rate).

     “Reuters Screen ISDAFIX3 Page” means page ISDAFIX3 (or any other page as
may replace such page) on the display of Reuters Screen (or any successor
service);

     (c)   If, prior to May 26, 2004, one or more amendments to the Internal
Revenue Code of 1986, as amended (the “Code”), are enacted that eliminate or
reduce the percentage of the dividends-received deduction applicable to the
Series J Preferred Stock as specified in section 243(a)(1) of the Code or any
successor provision thereto (the “Dividends-Received Percentage”), certain
adjustments may be made in respect of the dividends payable by Fannie Mae, and
Post Declaration Date Dividends and Retroactive Dividends (as such terms are
defined below) may become payable, as described below.

     The amount of each dividend payable (if declared) per share of Series J
Preferred Stock for dividend payments made on or after the effective date of
such change in the Code will be adjusted by multiplying the amount of the
dividend payable pursuant to clause (a) of this Section 2 (before adjustment)
by a factor, which will be the number determined in accordance with the
following formula (the “DRD Formula”), and rounding the result to the nearest
cent (with one-half cent rounded up):

1–.35(1–.70)

1–.35(1–DRP)

For purposes of the DRD Formula, “DRP” means the Dividends-Received Percentage
(expressed as a decimal) applicable to the dividend in question; provided,
however, that if the Dividends-Received Percentage applicable to the dividend
in question shall be less than 50%, then the DRP shall equal .50. No amendment
to the Code, other than a change in the percentage of the dividends-received
deduction applicable to the Series J Preferred Stock as set forth in section
243(a)(1) of the Code or any successor provision thereto, will give rise to an
adjustment. Notwithstanding the foregoing provisions, if, with respect to any
such amendment, Fannie Mae receives either an unqualified opinion of nationally
recognized independent tax counsel selected by Fannie Mae or a private letter
ruling or similar form of assurance from the Internal Revenue Service (the
“IRS”) to the effect that such an amendment does not apply to a dividend
payable on the Series J Preferred Stock, then such amendment will not result in
the adjustment provided for pursuant to the DRD Formula with respect to such
dividend. The opinion referenced in the previous sentence shall be based upon
the legislation amending or establishing the DRP or upon a published
pronouncement of the IRS addressing such legislation. Unless the context
otherwise requires, references to dividends herein will mean dividends as
adjusted by the DRD Formula. Fannie Mae’s calculation of the dividends payable
as so adjusted shall be final and not subject to review.

     Notwithstanding the foregoing, if any such amendment to the Code is
enacted after the dividend payable on a Dividend Payment Date has been declared
but before such dividend is paid, the amount of the dividend payable on such
Dividend Payment Date will not be increased; instead, additional dividends (the
“Post Declaration Date Dividends”), equal to the excess, if any, of (1) the
product of the dividend paid by Fannie Mae on such Dividend Payment Date and
the DRD Formula (where the DRP used in the DRD Formula would be equal to the
greater of the Dividends-Received Percentage applicable to the dividend in
question and .50) over (2) the dividend paid by Fannie Mae on such Dividend
Payment Date, will be payable (if declared) to Holders on the record date
applicable to the next succeeding Dividend Payment Date.

     If any such amendment to the Code is enacted and the reduction in the
Dividends-Received Percentage retroactively applies to a Dividend Payment Date
as to which Fannie Mae previously paid dividends on the

3

 

Series J Preferred Stock (each, an “Affected Dividend Payment Date”),
Fannie Mae will pay (if declared) additional dividends (the “Retroactive
Dividends”) to Holders on the record date applicable to the next succeeding
Dividend Payment Date (or, if such amendment is enacted after the dividend
payable on such Dividend Payment Date has been declared, to Holders on the
record date applicable to the second succeeding Dividend Payment Date following
the date of enactment), in an amount equal to the excess of (1) the product of
the dividend paid by Fannie Mae on each Affected Dividend Payment Date and the
DRD Formula (where the DRP used in the DRD Formula would be equal to the
greater of the Dividends-Received Percentage and .50 applied to each Affected
Dividend Payment Date) over (2) the sum of the dividend paid by Fannie Mae on
each Affected Dividend Payment Date. Fannie Mae will only make one payment of
Retroactive Dividends for any such amendment. Notwithstanding the foregoing
provisions, if, with respect to any such amendment, Fannie Mae receives either
an unqualified opinion of nationally recognized independent tax counsel
selected by Fannie Mae or a private letter ruling or similar form of assurance
from the IRS to the effect that such amendment does not apply to a dividend
payable on an Affected Dividend Payment Date for the Series J Preferred Stock,
then such amendment will not result in the payment of Retroactive Dividends
with respect to such Affected Dividend Payment Date. The opinion referenced in
the previous sentence shall be based upon legislation amending or establishing
the DRP or upon a published pronouncement of the IRS addressing such
legislation.

     Notwithstanding the foregoing, no adjustment in the dividends payable by
Fannie Mae shall be made, and no Post Declaration Date Dividends or Retroactive
Dividends shall be payable by Fannie Mae, in respect of the enactment of any
amendment to the Code on or after May 26, 2004 that eliminates or reduces the
Dividends-Received Percentage.

     In the event that the amount of dividends payable per share of Series J
Preferred Stock is adjusted pursuant to the DRD Formula and/or Post Declaration
Date Dividends or Retroactive Dividends are to be paid, Fannie Mae will cause
notice of each such adjustment and, if applicable, Post Declaration Date
Dividends and Retroactive Dividends to be given as soon as practicable to the
Holders of Series J Preferred Stock.

     (d)   No dividend (other than dividends or distributions paid in shares of,
or options, warrants or rights to subscribe for or purchase shares of, the
common stock of Fannie Mae or any other stock of Fannie Mae ranking, as to the
payment of dividends and the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, junior to the Series J Preferred
Stock) may be declared or paid or set apart for payment on Fannie Mae’s common
stock (or on any other stock of Fannie Mae ranking, as to the payment of
dividends, junior to the Series J Preferred Stock) unless dividends have been
declared and paid or set apart (or ordered to be set apart) on the Series J
Preferred Stock for the then-current quarterly dividend period; provided,
however, that the foregoing dividend preference shall not be cumulative and
shall not in any way create any claim or right in favor of the Holders of
Series J Preferred Stock in the event that dividends have not been declared or
paid or set apart (or ordered to be set apart) on the Series J Preferred Stock
in respect of any prior dividend period. If the full dividend on the Series J
Preferred Stock is not paid for any quarterly dividend period, the Holders of
Series J Preferred Stock will have no claim in respect of the unpaid amount so
long as no dividend (other than those referred to above) is paid on Fannie
Mae’s common stock (or any other stock of Fannie Mae ranking, as to the payment
of dividends, junior to the Series J Preferred Stock) for such dividend period.

     (e)   The Board of Directors of Fannie Mae, or a duly authorized committee
thereof, may, in its discretion, choose to pay dividends on the Series J
Preferred Stock without the payment of any dividends on Fannie Mae’s common
stock (or any other stock of Fannie Mae ranking, as to the payment of
dividends, junior to the Series J Preferred Stock).

     (f)   No full dividends shall be declared or paid or set apart for payment
on any stock of Fannie Mae ranking, as to the payment of dividends, on a parity
with the Series J Preferred Stock for any period unless full dividends have
been declared and paid or set apart for payment on the Series J Preferred Stock
for the then-current quarterly dividend period. When dividends are not paid in
full upon the Series J Preferred Stock and all other classes or series of stock
of Fannie Mae, if any, ranking, as to the payment of dividends, on a parity
with the Series J Preferred Stock, all dividends declared upon shares of Series
J Preferred Stock

4

 

and all such other stock of Fannie Mae will be declared pro rata so that
the amount of dividends declared per share of Series J Preferred Stock and all
such other stock will in all cases bear to each other the same ratio that
accrued dividends per share of Series J Preferred Stock (including any
adjustments in dividends payable due to changes in the Dividends-Received
Percentage but without, in the case of any noncumulative preferred stock,
accumulation of unpaid dividends for prior dividend periods) and such other
stock bear to each other.

     (g)   No dividends may be declared or paid or set apart for payment on any
shares of Series J Preferred Stock if at the same time any arrears exist or
default exists in the payment of dividends on any outstanding class or series
of stock of Fannie Mae ranking, as to the payment of dividends, prior to the
Series J Preferred Stock.

     (h)   Holders of Series J Preferred Stock will not be entitled to any
dividends, whether payable in cash or property, other than as herein provided
and will not be entitled to interest, or any sum in lieu of interest, in
respect of any dividend payment.

	3.	 	Optional Redemption.

     (a)   The Series J Preferred Stock shall not be redeemable prior to
November 26, 2004. On or after that date, subject to the notice provisions set
forth in Section 3(b) below and subject to any further limitations which may be
imposed by law, Fannie Mae may redeem the Series J Preferred Stock, in whole or
in part, at any time or from time to time, out of funds legally available
therefor, at the redemption price of $50 per share plus an amount equal to the
amount of the dividend (whether or not declared) for the then-current quarterly
dividend period accrued to but excluding the date of such redemption, including
any adjustments in dividends payable due to changes in the Dividends-Received
Percentage but without accumulation of unpaid dividends on the Series J
Preferred Stock for prior dividend periods. If less than all of the outstanding
shares of Series J Preferred Stock are to be redeemed, Fannie Mae will select
the shares to be redeemed from the outstanding shares not previously called for
redemption by lot or pro rata (as nearly as possible) or by any other method
that the Board of Directors of Fannie Mae, or a duly authorized committee
thereof, in its sole discretion deems equitable.

     (b)   In the event Fannie Mae shall redeem any or all of the Series J
Preferred Stock as aforesaid, Fannie Mae will give notice of any such
redemption to Holders of Series J Preferred Stock not less than 30 days prior
to the date fixed by the Board of Directors of Fannie Mae, or duly authorized
committee thereof, for such redemption. Each such notice will state: (1) the
number of shares of Series J Preferred Stock to be redeemed and, if fewer than
all of the shares of Series J Preferred Stock held by a Holder are to be
redeemed, the number of shares to be redeemed from such Holder; (2) the
redemption price; (3) the redemption date; and (4) the place at which a
Holder’s certificate(s) representing shares of Series J Preferred Stock must be
presented upon such redemption. Failure to give notice, or any defect in the
notice, to any Holder of Series J Preferred Stock shall not affect the validity
of the proceedings for the redemption of shares of any other Holder of Series J
Preferred Stock being redeemed.

     (c)   Notice having been given as herein provided, from and after the
redemption date, dividends on the Series J Preferred Stock called for
redemption shall cease to accrue and such Series J Preferred Stock called for
redemption will no longer be deemed outstanding, and all rights of the Holders
thereof as registered holders of such shares of Series J Preferred Stock will
cease. Upon surrender in accordance with said notice of the certificate(s)
representing shares of Series J Preferred Stock so redeemed (properly endorsed
or assigned for transfer, if the Board of Directors of Fannie Mae, or a duly
authorized committee thereof, shall so require and the notice shall so state),
such shares shall be redeemed by Fannie Mae at the redemption price aforesaid.
Any shares of Series J Preferred Stock that shall at any time have been
redeemed shall, after such redemption, be cancelled and not reissued. In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares without cost
to the Holder thereof.

5

 

     (d)   The Series J Preferred Stock will not be subject to any mandatory
redemption, sinking fund or other similar provisions. In addition, Holders of
Series J Preferred Stock will have no right to require redemption of any shares
of Series J Preferred Stock.

	4.	 	Liquidation Rights.

     (a)   Upon any voluntary or involuntary dissolution, liquidation or winding
up of Fannie Mae, after payment or provision for the liabilities of Fannie Mae
and the expenses of such dissolution, liquidation or winding up, the Holders of
outstanding shares of the Series J Preferred Stock will be entitled to receive
out of the assets of Fannie Mae or proceeds thereof available for distribution
to stockholders, before any payment or distribution of assets is made to
holders of Fannie Mae’s common stock (or any other stock of Fannie Mae ranking,
as to the distribution of assets upon dissolution, liquidation or winding up of
Fannie Mae, junior to the Series J Preferred Stock), the amount of $50 per
share plus an amount equal to the dividend (whether or not declared) for the
then-current quarterly dividend period accrued to but excluding the date of
such liquidation payment, including any adjustments in dividends payable due to
changes in the Dividends-Received Percentage but without accumulation of unpaid
dividends on the Series J Preferred Stock for prior dividend periods.

     (b)   If the assets of Fannie Mae available for distribution in such event
are insufficient to pay in full the aggregate amount payable to Holders of
Series J Preferred Stock and holders of all other classes or series of stock of
Fannie Mae, if any, ranking, as to the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, on a parity with the Series J
Preferred Stock, the assets will be distributed to the Holders of Series J
Preferred Stock and holders of all such other stock pro rata, based on the full
respective preferential amounts to which they are entitled (including any
adjustments in dividends payable due to changes in the Dividends-Received
Percentage but without, in the case of any noncumulative preferred stock,
accumulation of unpaid dividends for prior dividend periods).

     (c)   Notwithstanding the foregoing, Holders of Series J Preferred Stock
will not be entitled to be paid any amount in respect of a dissolution,
liquidation or winding up of Fannie Mae until holders of any classes or series
of stock of Fannie Mae ranking, as to the distribution of assets upon
dissolution, liquidation or winding up of Fannie Mae, prior to the Series J
Preferred Stock have been paid all amounts to which such classes or series are
entitled.

     (d)   Neither the sale, lease or exchange (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
and assets of Fannie Mae, nor the merger, consolidation or combination of
Fannie Mae into or with any other corporation or the merger, consolidation or
combination of any other corporation or entity into or with Fannie Mae, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 4.

     (e)   After payment of the full amount of the distribution of assets upon
dissolution, liquidation or winding up of Fannie Mae to which they are entitled
pursuant to paragraphs (a), (b) and (c) of this Section 4, the Holders of
Series J Preferred Stock will not be entitled to any further participation in
any distribution of assets by Fannie Mae.

	5.	 	No Conversion or Exchange Rights.

     The Holders of shares of Series J Preferred Stock will not have any rights
to convert such shares into or exchange such shares for shares of any other
class or classes, or of any other series of any class or classes, of stock or
obligations of Fannie Mae.

	6.	 	No Pre-Emptive Rights.

     No Holder of Series J Preferred Stock shall be entitled as a matter of
right to subscribe for or purchase, or have any pre-emptive right with respect
to, any part of any new or additional issue of stock of any class whatsoever,
or of securities convertible into any stock of any class whatsoever, or any
other shares, rights,

6

 

options or other securities of any class whatsoever, whether now or
hereafter authorized and whether issued for cash or other consideration or by
way of dividend.

	7.	 	Voting Rights; Amendments.

     (a)   Except as provided below, the Holders of Series J Preferred Stock
will not be entitled to any voting rights, either general or special.

     (b)   Without the consent of the Holders of Series J Preferred Stock,
Fannie Mae will have the right to amend, alter, supplement or repeal any terms
of this Certificate or the Series J Preferred Stock (1) to cure any ambiguity,
or to cure, correct or supplement any provision contained in this Certificate
of Designation that maybe defective or inconsistent with any other provision
herein or (2) to make any other provision with respect to matters or questions
arising with respect to the Series J Preferred Stock that is not inconsistent
with the provisions of this Certificate of Designation so long as such action
does not materially and adversely affect the interests of the Holders of Series
J Preferred Stock; provided, however, that any increase in the amount of
authorized or issued Series J Preferred Stock or the creation and issuance, or
an increase in the authorized or issued amount, of any other class or series of
stock of Fannie Mae, whether ranking prior to, on a parity with or junior to
the Series J Preferred Stock, as to the payment of dividends or the
distribution of assets upon dissolution, liquidation or winding up of Fannie
Mae, or otherwise, will not be deemed to materially and adversely affect the
interests of the Holders of Series J Preferred Stock.

     (c)   Except as set forth in paragraph (b) of this Section 7, the terms of
this Certificate or the Series J Preferred Stock maybe amended, altered,
supplemented, or repealed only with the consent of the Holders of at least
two-thirds of the shares of Series J Preferred Stock then outstanding, given in
person or by proxy , either in writing or at a meeting of stockholders at which
the Holders of Series J Preferred Stock shall vote separately as a class. On
matters requiring their consent, Holders of Series J Preferred Stock will be
entitled to one vote per share.

     (d)   The rules and procedures for calling and conducting any meeting of
Holders (including, without limitation, the fixing of a record date in
connection therewith), the solicitation and use of proxies at such a meeting,
the obtaining of written consents, and any other aspect or matter with regard
to such a meeting or such consents shall be governed by any rules that the
Board of Directors of Fannie Mae, or a duly authorized committee thereof, in
its discretion, may adopt from time to time, which rules and procedures shall
conform to the requirements of any national securities exchange on which the
Series J Preferred Stock are listed at the time.

	8.	 	Additional Classes or Series of Stock.

     The Board of Directors of Fannie Mae, or a duly authorized committee
thereof, shall have the right at any time in the future to authorize, create
and issue, by resolution or resolutions, one or more additional classes or
series of stock of Fannie Mae, and to determine and fix the distinguishing
characteristics and the relative rights, preferences, privileges and other
terms of the shares thereof. Any such class or series of stock may rank prior
to, on a parity with or junior to the Series J Preferred Stock as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, or otherwise.

	9.	 	Priority.

     For purposes of this Certificate of Designation, any stock of any class or
series of Fannie Mae shall be deemed to rank:

     (a)   Prior to the shares of Series J Preferred Stock, either as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, if the holders of such class or series
shall be entitled to the receipt of dividends or of amounts distributable upon
dissolution,

7

 

liquidation or winding up of Fannie Mae, as the case maybe, in preference
or priority to the Holders of shares of Series J Preferred Stock.

     (b)   On a parity with shares of Series J Preferred Stock, either as to the
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of Fannie Mae, whether or not the dividend rates or
amounts, dividend payment dates or redemption or liquidation prices per share,
if any, be different from those of the Series J Preferred Stock, if the holders
of such class or series shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of Fannie
Mae, as the case may be, in proportion to their respective dividend rates or
amounts or liquidation prices, without preference or priority, one over the
other, as between the holders of such class or series and the Holders of shares
of Series J Preferred Stock.

     (c)   Junior to shares of Series J Preferred Stock, either as to the payment
of dividends or the distribution of assets upon dissolution, liquidation or
winding up of Fannie Mae, if such class shall be common stock of Fannie Mae or
if the Holders of shares of Series J Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of Fannie Mae, as the case may be, in preference or priority over
the holders of such class or series.

     (d)   The shares of Preferred Stock of Fannie Mae designated “5.25%
Non-Cumulative Preferred Stock, Series D” (the “Series D Preferred Stock”),
“5.10% Non-Cumulative Preferred Stock, Series E” (the “Series E Preferred
Stock”), “Variable Rate Non-Cumulative Preferred Stock, Series F” (the “Series
F Preferred Stock”), “Variable Rate Non-Cumulative Preferred Stock, Series G”
(the “Series G Preferred Stock”), “5.81% Non-Cumulative Preferred Stock, Series
H” (the “Series H Preferred Stock”) and “5.375% Non-Cumulative Preferred Stock,
Series I” (the “Series I Preferred Stock”) shall be deemed to rank on a parity
with shares of Series J Preferred Stock as to the payment of dividends and the
distribution of assets upon dissolution, liquidation or winding up of Fannie
Mae. Accordingly, the holders of record of Series D Preferred Stock, the
holders of record of Series E Preferred Stock, the holders of record of Series
F Preferred Stock, the holders of record of Series G Preferred Stock, the
Holders of Series H Preferred Stock, the Holders of Series I Preferred Stock
and the Holders of Series J Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon dissolution, liquidation or winding
up of Fannie Mae, as the case may be, in proportion to their respective
dividend rates or amounts or liquidation prices, without preference or
priority, one over the other.

	10.	 	Transfer Agent, Dividend Disbursing Agent and Registrar.

     Fannie Mae hereby appoints EquiServe Trust Company, N.A., as its initial
transfer agent, dividend disbursing agent and registrar for the Series J
Preferred Stock. Fannie Mae may at any time designate an additional or
substitute transfer agent, dividend disbursing agent and registrar for the
Series J Preferred Stock.

	11.	 	Notices.

     Any notice provided or permitted by this Certificate of Designation to be
made upon, or given or furnished to, the Holders of Series J Preferred Stock by
Fannie Mae shall be made by first-class mail, postage prepaid, to the addresses
of such Holders as they appear on the books and records of Fannie Mae. Such
notice shall be deemed to have been sufficiently made upon deposit thereof in
the United States mail. Notwithstanding anything to the contrary contained
herein, in the case of the suspension of regular mail service or by reason of
any other cause it shall be impracticable, in Fannie Mae’s judgment, to give
notice by mail, then such notification may be made, in Fannie Mae’s discretion,
by publication in a newspaper of general circulation in The City of New York or
by hand delivery to the addresses of Holders as they appear on the books and
records of Fannie Mae.

8

 

     Receipt and acceptance of a share or shares of the Series J Preferred
Stock by or on behalf of a Holder shall constitute the unconditional acceptance
by such Holder (and all others having beneficial ownership of such share or
shares) of all of the terms and provisions of this Certificate of Designation.
No signature or other further manifestation of assent to the terms and
provisions of this Certificate of Designation shall be necessary for its
operation or effect as between Fannie Mae and the Holder (and all such others).

9

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