Document:

exv10w20

 

Exhibit 10.20

AMENDMENT TO THE

EXECUTIVE PENSION PLAN OF THE

FEDERAL NATIONAL MORTGAGE ASSOCIATION,

AS AMENDED AND RESTATED

     WHEREAS, Fannie Mae has established the Executive Pension Plan of the Federal National
Mortgage Association, as amended and restated, effective as of September 16, 1986 (the “Plan”);

     WHEREAS, the Board of Directors of Fannie Mae (the “Board”), pursuant to Section 20 of the
Plan, has the authority to amend the Plan; and

     WHEREAS, the Board has determined that it is advisable and in the best interests of Fannie Mae
to amend the Plan in the manner hereinafter set forth.

     NOW THEREFORE, the Plan is amended effective March 1, 2007 in the following respects:

	 	1.	 	The definition of “Total Compensation” in Section 2 — Definitions — is
amended and restated in its entirety 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.

Notwithstanding paragraphs (a) and (b) 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.

	 	2.	 	Section 11 — Form of Benefit Payments — is amended and restated in its
entirety to read as follows:

Payments under this Plan shall be made monthly to a 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 a 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 Participant’s life, of 100% of the monthly amount which was
being paid to the Participant at the time of the Participant’s death.

Notwithstanding the preceding paragraph, for those employees who first become
Participants in the Plan on or after March 1, 2007:

	 	(a)	 	The normal form of benefit payment under the Plan is
a single life annuity (i.e., a monthly payment 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). Each Participant may elect to receive in lieu of
the normal form of benefit payment an actuarially equivalent annuity in
one of the following forms:

	 	i.	 	100% joint and
survivor annuity with the Participant’s Surviving Spouse
(i.e., an annuity which is the actuarial equivalent of
the benefit in the normal form which provides monthly
income for the life of the Participant with a survivor
annuity for the life of the Participant’s Surviving
Spouse which is equal to 100% of the monthly amount of
benefit payable during the joint lives of the Participant
and the Participant’s Surviving Spouse); or

 

 

	 	ii.	 	50% joint and
survivor annuity with the Participant’s Surviving Spouse
(i.e., an annuity which is the actuarial equivalent of
the benefit in the normal form which provides monthly
income for the life of the Participant with a survivor
annuity for the life of the Participant’s Surviving
Spouse which is equal to 50% of the monthly amount of
benefit payable during the joint lives of the Participant
and the Participant’s Surviving Spouse).

A Participant who wishes to elect an optional form of benefit
under this Section 11(a) shall make application therefore in
accordance with the procedures established by the Committee,
which procedures shall require that such election be made
prior to the date benefits commence, and at a time and in a
manner that complies with Section 409A of the Internal Revenue
Code.

	 	(b)	 	An appropriate adjustment using reasonable actuarial
assumptions shall be made to the Participant’s annual normal or early
retirement benefit based on the form of benefit elected by the
Participant. For the purpose of this Section 11, the actuarial adjustment
shall be calculated using the same mortality assumptions used by the
Federal National Mortgage Association Retirement Plan For Employees Not
Covered Under Civil Service Retirement Law.

	 	3.	 	A new section 26 is added to the Plan to read as follows:

	 	26.	 	Compliance with Section 409A of the Code.

To the extent that benefits are not grandfathered from the application of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
this Plan is intended to comply with Section 409A of the Code and shall be
construed and interpreted in accordance with such intent. The Plan may be
amended from time to time by the Board to effect required compliance under
Section 409A of the Code.

	 	4.	 	In all other respects the Plan remains unchanged.

 

 

         IN WITNESS WHEREOF, Fannie Mae has caused this instrument to be executed by its officer this
26th day of February, 2007.

	 	 	 	 	 
	 	FANNIE MAE

 	 
	 	By:  	/s/ Beth A. Wilkinson
 	 
	 	 	Beth Wilkinson 	 
	 	 	EVP, General Counsel & Secretaryexv10w21

 

Exhibit 10.21

FANNIE MAE ANNUAL INCENTIVE PLAN,

AS AMENDED AND RESTATED JANUARY 1, 2007

1. PURPOSE

The purpose of the Fannie Mae Annual Incentive Plan (the “Plan”) is to encourage greater focus on
performance among the Management Group of Fannie Mae by relating a significant portion of their
total compensation to the achievement of annual financial, strategic or operational objectives.

2. DEFINITIONS

	 	2.1.	 	“AWARD” means a cash bonus awarded pursuant to the Plan.
	 
	 	2.2.	 	“BOARD OF DIRECTORS” means the Board of Directors of the Company.
	 
	 	2.3.	 	“CAUSE” means, unless provided otherwise in an applicable employment agreement, that
Fannie Mae determines that the Participant has:

	 	(a)	 	materially harmed Fannie Mae by, in connection with the Participant’s
performance of the Participant’s duties for Fannie Mae, engaging in dishonest or
fraudulent actions or willful misconduct, or performing the Participant’s duties
in a grossly negligent manner, or
	 
	 	(b)	 	been convicted of, or pleaded nolo contendere with respect to, a
felony.

The Participant will not be deemed to have been terminated for Cause following an event
described in (a) above unless Fannie Mae has provided (i) reasonable notice to the
Participant setting forth Fannie Mae’s intention to terminate for Cause, (ii) where
remedial action is appropriate and feasible, a reasonable opportunity for such action,
(iii) an opportunity for the Participant, together with the Participant’s counsel, to
be heard before the Committee or its designee, and (iv) the Participant with a notice
of termination stating that the Participant was guilty of the conduct set forth in (a)
above and specifying the particulars thereof in detail. No act or failure to act by
the Participant will be considered “willful” unless it is done, or omitted to be done,
by the Participant in bad faith or without reasonable belief that the Participant’s
action or omission was in the best interests of Fannie Mae.

 

 

	 	2.4.	 	“COMMITTEE” means the Compensation Committee of the Board of Directors.
	 
	 	2.5.	 	“COMPANY” means Fannie Mae.
	 
	 	2.6.	 	“DISABILITY” means the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be expected
to result in the Participant’s death or which has lasted or can be expected to last for a
continuous period of not less than twelve months. The Plan Administrator may require such
proof of Disability as the Plan Administrator in its sole discretion deems appropriate and
the Plan Administrator’s good faith determination as to whether and when a Participant
terminates employment by reason of Disability is final and binding on all parties
concerned.
	 
	 	2.7.	 	“MANAGEMENT GROUP” means the group of employees of the Company holding positions at
or above the grade level equivalent to that of a director, or an equivalent title.
	 
	 	2.8.	 	“PARTICIPANT” means a member of the Management Group who has been designated as a
participant in the Plan.
	 
	 	2.9.	 	“PLAN ADMINISTRATOR” means, until such time as the President and CEO or the Committee
determines otherwise, the Company’s Vice President, Human Resources Management &
Operations.
	 
	 	2.10.	 	“PERFORMANCE GOAL” means one or more goals selected by the Company to measure
performance for a Plan Year. The Performance Goals may be expressed or measured at the
individual, function, department, division, region, business unit, or Company level or any
combination thereof.
	 
	 	2.11.	 	“PLAN” means the Fannie Mae Annual Incentive Plan.
	 
	 	2.12.	 	“PLAN YEAR” means the calendar year.
	 
	 	2.13.	 	“RETIREMENT” means termination of employment at age 55 or older with five years of
service with Fannie Mae or at age 65 or older (regardless of years of service with Fannie
Mae). Notwithstanding the foregoing, a termination that is a for “Cause” termination will
not be considered a Retirement for the purpose of this Plan.
	 
	 	2.14.	 	“TARGET AWARD” means the amount approved as a Participant’s Target Award for a Plan
Year.

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3. PARTICIPATION

     Members of the Management Group will be eligible to participate in the Plan. No employee will
have the right to be selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award. If due to hiring, promotion, or demotion, the Plan
Administrator determines that an employee who is a member of the Management Group (other than an
officer at the level of Senior Vice President or higher) should be eligible to participate in the
Plan for a Plan Year, or that a Participant should cease to be so eligible, in either case, after
the commencement of the Plan Year, then, the Plan Administrator will have the discretion to provide
that such individual will be eligible for a prorated Award, as and to the extent it may determine.
Determinations regarding proration for officers at the level of Senior Vice President and higher
will be made by the Committee, or by the Board of Directors, or by any other person or group
consistent with the Company’s delegation of authority structure.

4. AWARDS

          4.1. TARGET AWARDS. Target Awards will be proposed by management and approved by the
Committee from time to time in accordance with the Company’s then applicable Compensation
Philosophy and Approach.

          4.2. PERFORMANCE GOALS. For each Plan Year, Performance Goals will be established in
accordance with the Company’s then applicable Compensation Philosophy and Approach. Performance
Goals that are corporate goals will be proposed by management to the Committee, and such goals will
be recommended by the Committee to the Board for approval. Performance Goals that are business
unit goals will be established by the Committee or, if so delegated by the Committee, established
by another committee of the Board of Directors.

          Performance Goals that are corporate goals may be adjusted by the Committee as it deems
equitable in recognition of (i) extraordinary or non-recurring events experienced by the Company
during the calendar year, or by any other company whose performance is relevant to the
determination of the amount of any Award hereunder, (ii) changes in applicable accounting rules or
principles or changes in the Company’s or in any other such company’s methods of accounting during
the calendar year, or (iii) the occurrence of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, rights offering, or any other change
in the capital structure of the Company, or of any other such company. Performance Goals that are
established by a committee of the Board of Directors may be adjusted by that committee in a manner
consistent with the previous sentence.

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          4.3. POOLS. For each Plan Year, the Committee or the Board of Directors may establish one or
more pools of a specified dollar amount from which Awards will be paid for one or more designated
groups of employees.

          4.4. DETERMINATION OF AWARDS. The Committee will determine the achievement of Performance
Goals that are corporate goals, and the achievement of Performance Goals that are business unit
goals will be determined by the appropriate committee of the Board of Directors. The actual Award
payable to a Participant will be determined by the Board, an appropriate Committee of the Board, or
management in accordance with the Company’s delegation of authority structure based on (i) the
Participant’s Target Award, (ii) the extent to which the Performance Goals have been achieved, and
(iii) individual performance, as well as any other criteria determined by the Company to be
relevant.

          4.5. PAYMENT OF AWARDS. Awards will be paid as soon as practicable after the close of the Plan
Year for which they are made. Except as otherwise provided in Section 5 or in an applicable
employment agreement with the Company, it is a condition precedent to the payment of any Award that
the Participant be employed in active status through the date the Award is paid (or credited in the
case of a Participant who has elected to defer payment of the Award pursuant to the terms of an
applicable Fannie Mae deferred compensation plan).

5. TERMINATION OF EMPLOYMENT

          5.1. DEATH OR DISABILITY. If a Participant’s active status as an employee with the Company
terminates due to death or Disability and the Participant has been actively employed at least one
month during the Plan Year, the Participant or his or her beneficiary, as the case may be, will be
paid a prorated Award for such year as soon as practicable after the end of such Plan Year.

          5.2. CAUSE. If a Participant’s employment with the Company is terminated for Cause, the right
to the payment of an Award in respect of a Plan Year and all other rights under this Plan will be
forfeited, and no Award will be made hereunder to or in respect of such Participant.

          5.3. RETIREMENT. If (i) a Participant’s employment with the Company terminates due to
Retirement, (ii) the Participant has been actively employed at least one month during the Plan
Year, and (iii) the Plan Administrator determines that it is appropriate, then the Participant will
be paid a prorated Award for such year as soon as practicable after the end of such Plan Year.
Notwithstanding the foregoing, determinations regarding proration for officers at the level of
Senior Vice President and higher will be made in a manner consistent with the Company’s delegation of
authority structure.

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          5.4. SEVERANCE ARRANGEMENT. If a Participant’s employment with the Company terminates and the
Participant is a party to a severance arrangement with the Company that specifically addresses the
payment of the Award, the Participant’s Award will be paid in accordance with the severance
arrangement.

6. ADMINISTRATION

          6.1. IN GENERAL. Except as otherwise provided in the Plan, the Board of Directors, Committee,
or Plan Administrator (or his or her designee) will have full and complete authority, in the
group’s or individual’s sole and absolute discretion, (i) to exercise all of the powers granted to
the group or individual under the Plan, (ii) to construe, interpret and implement the Plan and any
related document, (iii) to prescribe, amend and rescind rules relating to the Plan, (iv) to make
all determinations necessary or advisable in administering the Plan, and (v) to correct any defect,
supply any omission and reconcile any inconsistency in the Plan.

          6.2. DETERMINATIONS. The actions and determinations of the Board of Directors, Committee, the
Plan Administrator, or their designees on all matters relating to the Plan and any Awards,
including the authority to decide whether to pay or not pay an Award in case of a failure to
satisfy a condition precedent, will be final and conclusive. Such determinations need not be
uniform and may be made selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated.

          6.3. BENEFICIARIES. Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit
under the Plan is to be paid in case of his or her death before he or she receives any or all of
such benefit. Each such designation will revoke all prior designations by the same Participant,
will be in a form prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Plan Administrator or his or her designee during the Participant’s
lifetime. If a beneficiary designation has not been made, or the beneficiary was not properly
designated (in the sole discretion of the Plan Administrator), has died or cannot be found, all
payments after death will be paid to the Participant’s estate. In case of disputes over the proper
beneficiary, the Company reserves the right to make any or all payments to the Participant’s
estate.

7. MISCELLANEOUS

          7.1. NONASSIGNABILITY. No Award will be assignable or transferable (including pursuant to a
pledge or security interest) other than by will or by the laws of descent and distribution.

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          7.2. TAX WITHHOLDING. The Plan Administrator or its designee may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding by Fannie Mae of all
federal, state, local and other taxes required by law to be withheld from any Award.

          7.3. AMENDMENT OR TERMINATION. The Board of Directors 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 to the
Committee’s administration, management, and interpretation of the Plan; provided, that, any such
amendment does not significantly affect the cost to the Company of maintaining the Plan. However,
no amendment, suspension, or termination of the Plan will be permitted if it would materially and
adversely affect the right of any Participant, without his or her written consent, to earn or
receive an Award for a particular year once such year has commenced.

          7.4. OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan will be deemed in any way to
limit, restrict or require the Company from making or to make any award or payment to any person
under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

          7.5. PAYMENTS TO OTHER PERSONS. If payments are legally required to be made to any person
other than the person to whom any amount is payable under the Plan, such payments will be made
accordingly. Any such payment will be a complete discharge of the liability of the Company under
the Plan.

          7.6. UNFUNDED PLAN. Nothing in this Plan will require the Company to place assets in a trust
or other entity to which contributions are made or otherwise to segregate any assets for the
purpose of satisfying any obligations under the Plan. Participants will have no rights under the
Plan other than as unsecured general creditors of the Company.

          7.7. NO LIABILITY. No member of the Board, the Committee, or any director, officer or employee
of Fannie Mae will be liable, responsible or accountable in damages or otherwise for any
determination made or other action taken or any failure to act by such person in connection with
the administration of the Plan, so long as such person is not determined by a final adjudication to
be guilty of willful misconduct with respect to such determination, action or failure to act.

          7.8. NO RIGHT OF EMPLOYMENT. Nothing in this Plan will be construed as creating any contract
of employment or conferring upon any employee or Participant any right to continue in the employ or
other service of the

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Company or limit in any way the right of the Company to change such person’s compensation or other
benefits or to terminate the employment or other service of such person with or without Cause.

          7.9. SECTION HEADINGS. The section headings contained herein are for convenience only, and in
the event of any conflict, the text of the Plan, rather than the section headings, will control.

          7.10. GOVERNING LAW/CONSTRUCTION/SEVERABILITY.

               (a) Choice of Law. The Plan, the Awards, all documents evidencing Awards, and all other
related documents will be governed by, and construed in accordance with the laws of the District of
Columbia, without reference to its principles of conflicts of law.

               (b) Severability. If any provision will be held by a court of competent jurisdiction to be
invalid and unenforceable, the remaining provisions of the Plan will continue in effect.

          7.11. SECTION 409A. Unless payment, if any, is deferred under a separate program or
arrangement of the Company, Awards under the Plan are intended to be exempt from the rules of
Section 409A of the U.S. Internal Revenue Code of 1986, as amended, as short-term deferrals and
will be construed accordingly.

          7.12. EFFECTIVE DATE. The Plan, as amended and restated, will be effective as of January 1,
2007.

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