Document:

exv10w4

 

EXHIBIT 10.4

[LOGO]

September 18, 1987

Mr. John Timothy Howard

Executive Vice President—Economics,

Strategic Planning, and Financial Analysis

Federal National Mortgage Association

3900 Wisconsin Avenue, N.W.

Washington, DC 20016

Dear Tim:

This will confirm our understanding that you are an employee-at-will of the
Federal National Mortgage Association (the “Corporation”) and hence the
Corporation shall have the right to terminate your employment at any time for
any reason in the sole discretion of the Corporation by not less than ten days
prior written notice to you. However, if such termination is other than for
“cause,” as defined herein, the Corporation shall continue your base salary for
a period of twelve months from the date of such termination. For this purpose,
a termination will be for cause if it is based upon reasonable evidence
presented in writing to you that you have materially breached your duties as an
officer of the Corporation by engaging in dishonest or fraudulent actions or
willful misconduct. If during such twelve-month period you become entitled to
and receive disability benefits under any disability payment plan paid for by
the Corporation, including disability insurance, the amount otherwise payable
by the Corporation to you hereunder shall be reduced (but not below zero) by
the amount of any such disability benefits received by you, but only to the
extent such benefits are attributable to payments made by the Corporation.
Except as specifically noted below, the payments hereunder shall be in full
satisfaction of all and any rights you may have and the receipt thereof shall
constitute a general release to the Corporation.

 

 

Nothing herein shall adversely affect any rights you may have on the date of
termination under any employee benefit plan or executive compensation
arrangement maintained by the Corporation. Your coverage under the
Corporation’s life, medical, and long-term disability insurance plans shall be
continued until the end of the twelve-month period noted above or, if earlier,
until you are reemployed by a new employer that provides coverage for benefits.
If this conforms to your understanding of our agreement, please countersign
the duplicate copy of this letter and return it to me.

Sincerely,

/s/ David O. Maxwell

I agree with the terms of this letter.

	 	 	 
	/s/ John Timothy Howard

John Timothy Howard	 	
September 18, 1987

Date
	Executive Vice President—Economics,

Strategic Planning, and Financial

Analysisexv10w5

 

EXHIBIT 10.5

[LOGO]

June 19, 1990

Mr. Robert J. Levin

Executive Vice President—Marketing

Federal National Mortgage Association

3900 Wisconsin Avenue, N.W.

Washington, DC 20016

Dear Rob:

This will confirm our understanding that you are an employee-at-will of the
Federal National Mortgage Association (the “Corporation”) and hence the
Corporation shall have the right to terminate your employment at any time for
any reason in the sole discretion of the Corporation by not less than ten days
prior written notice to you. However, if such termination is other than for
“cause,” as defined herein, the Corporation shall continue your base salary for
a period of twelve months from the date of such termination. For this purpose,
a termination will be for cause if it is based upon reasonable evidence
presented in writing to you that you have materially breached your duties as an
officer of the Corporation by engaging in dishonest or fraudulent actions or
willful misconduct. If during such twelve-month period you become entitled to
and receive disability benefits under any disability payment plan paid for by
the Corporation, including disability insurance, the amount otherwise payable
by the Corporation to you hereunder shall be reduced (but not below zero) by
the amount of any such disability benefits received by you, but only to the
extent such benefits are attributable to payments made by the Corporation.
Except as specifically noted below, the payments hereunder shall be in full
satisfaction of all and any rights you may have and the receipt thereof shall
constitute a general release to the Corporation.

 

 

Nothing herein shall adversely affect any rights you may have on the date of
termination under any employee benefit plan of executive compensation
arrangement maintained by the Corporation. Your coverage under the
Corporation’s life, medical, and long-term disability insurance plans shall be
continued until the end of the twelve-month period noted above or, if earlier,
until you are employed by a new employer that provides coverage for benefits.
If this conforms to your understanding of our agreement, please countersign the
duplicate copy of this letter and return it to me.

Sincerely,

/s/ David O. Maxwell

I agree with the terms of this letter.

	 	 	 
	/s/ Robert J. Levin

Robert J. Levin	 	
June 19, 1990

Date
	Executive Vice President—

Marketingexv10w6

 

EXHIBIT 10.6

[LOGO]

October 21, 1998

Mr. Adolfo Marzol

Executive Vice President and

Chief Credit Officer

Fannie Mae

3900 Wisconsin Avenue, N.W.

Washington, DC 20016

Dear Adolfo:

This will confirm our understanding that you are an employee-at-will of Fannie
Mae (the “Corporation”) and hence the Corporation shall have the right to
terminate your employment at any time for any reason in the sole discretion of
the Corporation by not less than ten days prior written notice to you.
However, if such termination is other than for “cause,” as defined herein, the
Corporation shall continue your base salary for a period of twelve months from
the date of such termination. For this purpose, a termination will be for
cause if it is based upon reasonable evidence presented in writing to you that
you have materially breached your duties as an officer of the Corporation by
engaging in dishonest or fraudulent actions or willful misconduct. If during
such twelve-month period you become entitled to and receive disability benefits
under any disability payment plan paid for by the Corporation, including
disability insurance, the amount otherwise payable by the Corporation to you
hereunder shall be reduced (but not below zero) by the amount of any such
disability benefits received by you, but only to the extent such benefits are
attributable to payments made by the Corporation. Except as specifically noted
below, the payments hereunder shall be in full satisfaction of all and any
rights you may have and the receipt thereof shall constitute a general release
to the Corporation.

 

 

Nothing herein shall adversely affect any rights you may have on the date of
termination under any employee benefit plan or executive compensation
arrangement maintained by the Corporation. Your coverage under the
Corporation’s life, medical, and long-term disability insurance plans shall be
continued until the end of the twelve-month period noted above or, if earlier,
until you are reemployed by a new employer that provides coverage for benefits.

If this conforms to your understanding of our agreement, please countersign the
duplicate copy of this letter and return it to Thomas R. Nides, Senior Vice
President of Human Resources.

Sincerely,

/s/ James A. Johnson

I agree with the terms of this letter.

	 	 	 
	/s/ Adolfo Marzol

Adolfo Marzol	 	
October 24, 1998

Date
	Executive Vice President and

Chief Credit Officerexv10w7

 

EXHIBIT 10.7

INDEMNIFICATION AGREEMENT dated as of                     , 2003 between

FEDERAL NATIONAL MORTGAGE ASSOCIATION

(“Fannie Mae”), and                     (“Indemnitee”)

               WHEREAS, the Board of Directors has determined that the inability to
attract and retain qualified persons as directors and officers is detrimental
to the best interests of Fannie Mae’s stockholders and that Fannie Mae should
act to assure such persons that there will be adequate certainty of protection
through insurance and indemnification against risks of claims and actions
against them arising out of their service to and activities on behalf of Fannie
Mae; and

               WHEREAS, Fannie Mae has adopted provisions in its By-laws providing for
indemnification of its officers and directors to the fullest extent permitted
by applicable law, and Fannie Mae wishes to clarify and enhance the rights and
obligations of Fannie Mae and Indemnitee with respect to indemnification; and

               WHEREAS, Fannie Mae has elected to follow the corporate governance
practices and procedures of the Delaware General Corporation Law, as the same
may be amended from time to time; and

               WHEREAS, in order to induce and encourage highly experienced and capable
persons such as Indemnitee to serve and continue to serve as directors and
officers of Fannie Mae and in any other capacity with respect to Fannie Mae,
and to otherwise promote the desirable end that such persons will resist what
they consider unjustified lawsuits and claims made against them in connection
with the good faith performance of their duties to Fannie Mae, with the
knowledge that certain costs, judgments, penalties, fines, liabilities and
expenses incurred by them in their defense of such litigation are to be borne
by Fannie Mae and they will receive the maximum protection against such risks
and liabilities as may be afforded by law, the Board of Directors of Fannie Mae
has determined that the following Agreement is reasonable and prudent to
promote and ensure the best interests of Fannie Mae and its stockholders; and

               WHEREAS, Fannie Mae desires to have Indemnitee continue to serve as a
director or officer of Fannie Mae and in such other capacity with respect to
Fannie Mae as Fannie Mae may request, as the case may be, free from undue
concern for unpredictable, inappropriate or unreasonable legal risks and
personal liabilities by reason of Indemnitee acting in good faith in the
performance of Indemnitee’s duty to Fannie Mae; and Indemnitee desires to
continue so to serve Fannie Mae, provided, and on the express condition, that
he or she is furnished with the indemnity set forth hereinafter;

 

 

               Now, therefore, in consideration of Indemnitee’s continued service as a
director or officer of Fannie Mae, the parties hereto agree as follows:

               1.     Service by Indemnitee. Indemnitee will serve and/or continue to serve
as a director or officer of Fannie Mae faithfully and to the best of
Indemnitee’s ability so long as Indemnitee is duly elected or appointed and
until such time as Indemnitee is removed as permitted by law or tenders a
resignation in writing.

               2.     Indemnification. Fannie Mae shall indemnify Indemnitee to the fullest
extent permitted by the Delaware General Corporation law in effect on the date
hereof or as such law may from time to time be amended (but, in the case of any
such amendment, only to the extent that such amendment permits Fannie Mae to
provide broader indemnification rights than said law permitted Fannie Mae to
provide prior to such amendment). Without diminishing the scope of the
indemnification provided by this Section, the rights of indemnification of
Indemnitee provided hereunder shall include but shall not be limited to those
rights hereinafter set forth, except that no indemnification shall be paid to
Indemnitee:

		
	 	(a)     to the extent expressly prohibited by Delaware law or the By-laws of
Fannie Mae;
	 
	 	(b)     for which payment is actually made to Indemnitee under a valid and
collectible insurance policy or under a valid and enforceable indemnity
clause, by-law or agreement of Fannie Mae or any other company or
organization on whose board Indemnitee serves at the request of Fannie
Mae, except in respect of any indemnity exceeding the payment under such
insurance, clause, by-law or agreement;
	 
	 	(c)     in connection with an action, suit or proceeding, or part thereof
(including claims and counterclaims) initiated by Indemnitee, except a
judicial proceeding or arbitration pursuant to Section 10 to enforce
rights under this Agreement, unless the action, suit or proceeding (or
part thereof) was authorized by the Board of Directors of Fannie Mae;
	 
	 	(d)     with respect to any action, suit or proceeding brought by or on
behalf of Fannie Mae against Indemnitee that is authorized by the Board
of Directors of Fannie Mae, except as provided in Sections 4, 5 and 6
below.

               3.     Action or Proceedings Other than an Action by or in the Right of Fannie
Mae. Except as limited by Section 2 above, Indemnitee shall be entitled to the
indemnification rights provided in this Section if Indemnitee is a party or is
threatened to be made a party to any Proceeding (other than an action by or in
the name of Fannie Mae) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of Fannie Mae, or is or was serving at the
request of Fannie Mae as a director, officer, employee or agent or fiduciary of
any other entity (including, but not limited to, another corporation,
partnership, joint venture or trust); or by reason of anything done or not done
by Indemnitee in any such capacity. Pursuant to this Section, Indemnitee shall
be indemnified against all costs, judgments, penalties, fines, liabilities,
amounts paid in settlement by or on behalf of Indemnitee, and Expenses (defined
below) actually and reasonably incurred by Indemnitee in connection with such
Proceeding, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests

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of Fannie Mae, and with respect to any criminal Proceeding, had no
reasonable cause to believe his or her conduct was unlawful.

               4.     Indemnity in Proceedings by or in the Name of Fannie Mae. Except as
limited by Section 2 above, Indemnitee shall be entitled to the indemnification
rights provided in this Section if Indemnitee was or is a party or is
threatened to be made a party to any Proceeding brought by or in the name of
Fannie Mae to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director, officer, employee or agent or fiduciary of
Fannie Mae, or by reason of anything done or not done by Indemnitee in any such
capacity. Pursuant to this Section, Indemnitee shall be indemnified against
all costs, judgments, penalties, fines, liabilities, amounts paid in settlement
by or on behalf of Indemnitee, and Expenses actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of Fannie Mae; provided, however, that no such indemnification
shall be made in respect of any claim, issue, or matter as to which Delaware
law expressly prohibits such indemnification by reason of any adjudication of
liability of Indemnitee to Fannie Mae, unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is entitled to indemnification for such costs, judgments, penalties,
fines, liabilities and Expenses as such court shall deem proper.

               5.     Indemnification for Costs, Charges and Expenses of Successful Party.
Notwithstanding the limitations of Section 2(d), 3 and 4 above, to the extent
that Indemnitee has been successful, on the merits or otherwise, in whole or in
part, in defense of any action, suit or proceeding (including an action, suit
or proceeding brought by or on behalf of Fannie Mae) or in defense of any
claim, issue or matter therein, including, without limitation, the dismissal of
any action without prejudice, or if it is ultimately determined that Indemnitee
is otherwise entitled to be indemnified against Expenses, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred in connection
therewith.

               6.     Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by Fannie Mae for some or a portion of the
costs, judgments, penalties, fines, liabilities or Expenses actually and
reasonably incurred in connection with any action, suit or proceeding
(including an action, suit or proceeding brought by or on behalf of Fannie
Mae), but not, however, for all of the total amount thereof, Fannie Mae shall
nevertheless indemnify Indemnitee for the portion of such costs, judgments,
penalties, fines, liabilities and Expenses actually and reasonably incurred to
which Indemnitee is entitled.

               7.     Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the maximum extent permitted by applicable law,
Indemnitee shall be entitled to indemnification against all Expenses actually
and reasonably incurred or suffered by Indemnitee or on Indemnitee’s behalf if
Indemnitee appears as a witness or otherwise incurs legal expenses as a result
of or related to Indemnitee’s service as a director or officer of Fannie Mae,
in any threatened, pending or completed legal, administrative, investigative or
other proceeding or matter to which Indemnitee neither is, nor is threatened to
be made, a party.

3

 

               8.     Determination of Entitlement to Indemnification. Upon written request
by Indemnitee for indemnification pursuant to Sections 3, 4, 5, 6 or 7 the
entitlement of Indemnitee to indemnification, to the extent not provided
pursuant to the terms of this Agreement, shall be determined by the following
person or persons who shall be empowered to make such determination: (a) the
Board of Directors of Fannie Mae by a majority vote of Disinterested Directors
(defined below), whether or not such majority constitutes a quorum; (b) a
committee of Disinterested Directors designated by a majority vote of such
directors, whether or not such majority constitutes a quorum; (c) if there are
no Disinterested Directors, or if the Disinterested Directors so direct, by
Independent Counsel (defined below) in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee; or (d) the
stockholders of Fannie Mae. Such Independent Counsel shall be selected by the
Board of Directors and approved by Indemnitee. Upon failure of the Board so to
select such Independent Counsel or upon failure of Indemnitee so to approve,
such Independent Counsel shall be selected upon application to a court of
competent jurisdiction. Such determination of entitlement to indemnification
shall be made not later than 30 calendar days after receipt by Fannie Mae of a
written request for indemnification. Such request shall include documentation
or information which is necessary for such determination and which is
reasonably available to Indemnitee. Any Expenses incurred by Indemnitee in
connection with a request for indemnification or payment of Expenses hereunder,
under any other agreement, any provision of Fannie Mae’s By-laws or any
directors’ and officers’ liability insurance, shall be borne by Fannie Mae.
Fannie Mae hereby indemnifies Indemnitee for any such Expense and agrees to
hold Indemnitee harmless therefrom irrespective of the outcome of the
determination of Indemnitee’s entitlement to indemnification. If the person
making such determination shall determine that Indemnitee is entitled to
indemnification as to part (but not all) of the application for
indemnification, such person shall reasonably prorate such partial
indemnification among the claims, issues or matters at issue at the time of the
determination.

               9.     Presumptions and Effect of Certain Proceedings. The Secretary of
Fannie Mae shall, promptly upon receipt of Indemnitee’s request for
indemnification, advise in writing the Board of Directors or such other person
or persons empowered to make the determination as provided in Section 8 that
Indemnitee has made such request for indemnification. Upon making such request
for indemnification, Indemnitee shall be presumed to be entitled to
indemnification hereunder and Fannie Mae shall have the burden of proof in
making any determination contrary to such presumption. If the person or
persons so empowered to make such determination shall have failed to make the
requested determination with respect to indemnification within 30 calendar days
after receipt by Fannie Mae of such request, a requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be absolutely entitled to such indemnification, absent actual and
material fraud in the request for indemnification. The termination of any
Proceeding described in Sections 3 or 4 by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (a) create a presumption that Indemnitee did not act in good faith and
in a manner which Indemnitee reasonably believed to be in or not opposed to the
best interests of Fannie Mae, or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful; or (b) otherwise adversely affect the rights of Indemnitee to
indemnification except as may be provided herein.

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               10.     Remedies of Indemnitee in Cases of Determination not to Indemnify or
to Pay Expenses. In the event that a determination is made that Indemnitee is
not entitled to indemnification hereunder or if payment has not been timely
made following a determination of entitlement to indemnification pursuant to
Sections 8 and 9, or if Expenses are not paid pursuant to Section 15,
Indemnitee shall be entitled to final adjudication in a court of competent
jurisdiction of entitlement to such indemnification or payment. Alternatively,
Indemnitee at Indemnitee’s option may seek an award in an arbitration to be
conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association, such award to be made within sixty days following the
filing of the demand for arbitration. Fannie Mae shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration or any other claim.
The determination in any such judicial proceeding or arbitration shall be made
de novo and Indemnitee shall not be prejudiced by reason of a determination (if
so made) pursuant to Sections 8 or 9 that Indemnitee is not entitled to
indemnification. If a determination is made or deemed to have been made
pursuant to the terms of Section 8 or 9 that Indemnitee is entitled to
indemnification, Fannie Mae shall be bound by such determination and is
precluded from asserting that such determination has not been made or that the
procedure by which such determination was made is not valid, binding and
enforceable. Fannie Mae further agrees to stipulate in any such court or
before any such arbitrator that Fannie Mae is bound by all the provisions of
this Agreement and is precluded from making any assertions to the contrary. If
the court or arbitrator shall determine that Indemnitee is entitled to any
indemnification or payment of Expenses hereunder, Fannie Mae shall pay all
Expenses actually and reasonably incurred by Indemnitee in connection with such
adjudication or award in arbitration (including, but not limited to, any
appellate Proceedings).

               11.     Other Rights to Indemnification. Indemnification and payment of
Expenses provided by this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may now or in the future be entitled under any
provision of the By-laws or other organizational documents of Fannie Mae, vote
of stockholders or Disinterested Directors, provision of law, agreement or
otherwise.

               12.     Expenses to Enforce Agreement. In the event that Indemnitee is
subject to or intervenes in any Proceeding in which the validity or
enforceability of this Agreement is at issue or seeks an adjudication or award
in arbitration to enforce Indemnitee’s rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole or in
part in such action, shall be entitled to recover from Fannie Mae and shall be
indemnified by Fannie Mae against any actual Expenses incurred by Indemnitee.

               13.     Continuation of Indemnity. All agreements and obligations of Fannie
Mae contained herein shall continue during the period Indemnitee is a director,
officer, employee or agent of Fannie Mae or is serving at the request of Fannie
Mae as a director, officer, employee or agent or fiduciary of any other entity
(including, but not limited to, another corporation, partnership, joint venture
or trust) of Fannie Mae and shall continue thereafter with respect to any
possible claims based on the fact that Indemnitee was a director, officer
employee or agent of Fannie Mae or was serving at the request of Fannie Mae as
a director, officer, employee or agent or fiduciary of any other entity
(including, but not limited to, another corporation, partnership, joint venture
or trust). This Agreement shall be binding upon all successors and assigns of
Fannie Mae (including any transferee of all or substantially all of its assets
and any

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successor by merger or operation of law) and shall inure to the benefit of
the heirs, personal representatives and estate of Indemnitee.

               14.     Notification and Defense of Claim. Promptly after receipt by
Indemnitee of notice of any Proceeding, Indemnitee will, if a claim in respect
thereof is to be made against Fannie Mae under this Agreement, notify Fannie
Mae in writing of the commencement thereof; but the omission so to notify
Fannie Mae will not relieve it from any liability that it may have to
Indemnitee. Notwithstanding any other provision of this Agreement, with
respect to any such Proceeding of which Indemnitee notifies Fannie Mae:

		
	 	(a)     Fannie Mae shall be entitled to participate therein at its own
expense; and
	 
	 	(b)     Except as otherwise provided in this Section 14(b), to the extent
that it may wish, Fannie Mae, jointly with any other indemnifying party
similarly notified, shall be entitled to assume the defense thereof, with
counsel satisfactory to Indemnitee. After notice from Fannie Mae to
Indemnitee of its election so to assume the defense thereof, Fannie Mae
shall not be liable to Indemnitee under this Agreement for any expenses
of counsel subsequently incurred by Indemnitee in connection with the
defense thereof except as otherwise provided below. Indemnitee shall
have the right to employ Indemnitee’s own counsel in such Proceeding, but
the fees and expenses of such counsel incurred after notice from Fannie
Mae of its assumption of the defense thereof shall be at the expense of
Indemnitee unless (i) the employment of counsel by Indemnitee has been
authorized by Fannie Mae, (ii) Indemnitee shall have reasonably concluded
that there may be a conflict of interest between Fannie Mae and
Indemnitee in the conduct of the defense of such action or (iii) Fannie
Mae shall not within 60 calendar days of receipt of notice from
Indemnitee in fact have employed counsel to assume the defense of the
action, in each of which cases the fees and expenses of Indemnitee’s
counsel shall be at the expense of Fannie Mae. Fannie Mae shall not be
entitled to assume the defense of any Proceeding brought by or on behalf
of Fannie Mae or as to which Indemnitee shall have made the conclusion
provided for in (ii) above; and
	 
	 	(c)     If Fannie Mae has assumed the defense of a Proceeding, Fannie Mae
shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without Fannie
Mae’s written consent. Fannie Mae shall not settle any Proceeding in any
manner that would impose any penalty or limitation on or disclosure
obligation with respect to Indemnitee without Indemnitee’s written
consent. Neither Fannie Mae nor Indemnitee will unreasonably withhold
its consent to any proposed settlement.

               15.     Payment of Expenses. All Expenses incurred by Indemnitee in advance
of the final disposition of any Proceeding shall be paid by Fannie Mae at the
request of Indemnitee, each such payment to be made within twenty calendar days
after the receipt by Fannie Mae of a statement or statements from Indemnitee
requesting such payment or payments from time to time. Indemnitee’s
entitlement to such Expenses shall include those incurred in connection with
any Proceeding by Indemnitee seeking a judgment in court or an adjudication or
award in arbitration pursuant to this Agreement (including the enforcement of
this provision). Such statement or statements shall reasonably evidence the
expenses and costs incurred by Indemnitee

6

 

in connection therewith and shall include or be accompanied by an
undertaking, in substantially the form attached as Exhibit 2, by or on behalf
of Indemnitee to reimburse such amount if it is finally determined, after all
appeals by a court of competent jurisdiction that Indemnitee is not entitled to
be indemnified against such Expenses by Fannie Mae as provided by this
Agreement or otherwise. Indemnitee’s undertaking to reimburse any such amounts
is not required to be secured.

               16.     Separability; Prior Indemnification Agreements. If any provision or
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, all portions of any paragraphs of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not by
themselves invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby, and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent of the parties that Fannie Mae
provide protection to Indemnitee to the fullest enforceable extent. This
Agreement shall supersede and replace any prior indemnification agreements
entered into by and between Fannie Mae and Indemnitee and any such prior
agreements shall be terminated upon execution of this Agreement.

               17.     Headings; References; Pronouns. The headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
References herein to section numbers are to sections of this Agreement. All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as appropriate.

               18.     Definitions. For purposes of this Agreement:

		
	 	(a)     “Disinterested Director” means a director of Fannie Mae who is not or
was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.
	 
	 	(b)     “Expenses” includes, without limitation, expenses incurred in
connection with the defense or settlement of any and all investigations,
judicial or administrative proceedings or appeals, attorneys’ fees,
witness fees and expenses, fees and expenses of accountants and other
advisors, retainers and disbursements and advances thereon, the premium,
security for, and other costs relating to any bond (including cost bonds,
appraisal bonds or their equivalents), and any expenses of establishing a
right to indemnification under Sections 8, 10 and 12 above but shall not
include the amount of judgments, fines or penalties actually levied
against Indemnitee.
	 
	 	(c)     “Independent Counsel” means a law firm or a member of a law firm that
neither is presently nor in the past five years has been retained to
represent: (i) Fannie Mae or Indemnitee in any matter material to either
such party, or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the

7

 

		
	 	foregoing, the term “Independent Counsel” shall not include any person
who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either
Fannie Mae or Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement.
	 
	 	(d)     “Proceeding” includes any threatened, pending or completed
investigation (other than internal investigations of the conduct of
Fannie Mae employees), action, suit or other proceeding, whether brought
in the name of Fannie Mae or otherwise, against Indemnitee, for which
indemnification is not prohibited under Sections 2(a)-(c) above and
whether of a civil, criminal, administrative or investigative nature,
including, but not limited to, actions, suits or proceedings in which
Indemnitee may be or may have been involved as a party or otherwise, by
reason of the fact that Indemnitee is or was a director, officer,
employee or agent of Fannie Mae, or is or was serving, at the request of
Fannie Mae, as a director, officer, employee or agent or fiduciary of any
other entity, including, but not limited to, another corporation,
partnership, joint venture or trust, or by reason of anything done or not
done by Indemnitee in any such capacity, whether or not Indemnitee is
serving in such capacity at the time any liability or expense is incurred
for which indemnification or reimbursement can be provided under this
Agreement.

               19.     Other Provisions.

		
	 	(a)     This Agreement shall be interpreted and enforced in accordance with
the laws of Delaware.
	 
	 	(b)     This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is sought
needs to be produced as evidence of the existence of this Agreement.
	 
	 	(c)     This agreement shall not be deemed an employment contract between
Fannie Mae and any Indemnitee who is an officer of Fannie Mae, and, if
Indemnitee is an officer of Fannie Mae, Indemnitee specifically
acknowledges that Indemnitee may be discharged at any time for any
reason, with or without cause, and with or without severance
compensation, except as may be otherwise provided in a separate written
contract between Indemnitee and Fannie Mae.
	 
	 	(d)     Upon a payment to Indemnitee under this Agreement, Fannie Mae shall
be subrogated to the extent of such payment to all of the rights of
Indemnitee to recover against any person for such liability, and
Indemnitee shall execute all documents and instruments required and shall
take such other actions as may be necessary to secure such rights,
including the execution of such documents as may be necessary for Fannie
Mae to bring suit to enforce such rights.
	 
	 	(e)     No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both parties hereto. No waiver of
any of the provisions of

8

 

		
	 	this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

9

 

               IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.

	 	 	 
	 	
FEDERAL NATIONAL MORTGAGE ASSOCIATION
	 	 	 
	 	By	 
	 	 	

Chairman of the Board

and Chief Executive Officer
	 	 	 
	 	

 
  Indemnitee

10

 

EXHIBIT 1

THE FOLLOWING IS PROVIDED FOR
INFORMATIONAL PURPOSES ONLY
AND DOES NOT CONSTITUTE LEGAL ADVICE

Delaware General Corporation Law

Title 8, § 145 (December 2002)

		
	 	§ 145. Indemnification of officers, directors, employees and agents;
insurance.
	 
	 	(a) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right
of the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding
if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe the person’s conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person’s conduct was unlawful.
	 
	 	(b) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure
a judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys’ fees)
actually and reasonably incurred by the person in connection with the
defense or settlement of such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.

 

 

		
	 	(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by such person in connection therewith.
	 
	 	(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper
in the circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director
or officer at the time of such determination, (1) by a majority vote of
the directors who are not parties to such action, suit or proceeding,
even though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.
	 
	 	(e) Expenses (including attorneys’ fees) incurred by an officer or
director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys’ fees)
incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the corporation
deems appropriate.
	 
	 	(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person’s official capacity and as to
action in another capacity while holding such office.
	 
	 	(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such
person in any such capacity, or arising out of such person’s status as
such, whether or not the corporation would have the power to indemnify
such person against such liability under this section.
	 
	 	(h) For purposes of this section, references to “the corporation” shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and

12

 

		
	 	employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation
as such person would have with respect to such constituent corporation if
its separate existence had continued.
	 
	 	(i) For purposes of this section, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any
excise taxes assessed on a person with respect to any employee benefit
plan; and references to “serving at the request of the corporation” shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner “not opposed to the best
interests of the corporation” as referred to in this section.
	 
	 	(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
	 
	 	(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court
of Chancery may summarily determine a corporation’s obligation to advance
expenses (including attorneys’ fees).
	 
	 	HISTORY: 8 Del. C. 1953, § 145; 56 Del. Laws, c. 50; 56 Del. Laws, c.
186, § 6; 57 Del. Laws, c. 421, § 2; 59 Del. Laws, c. 437, § 7; 63 Del.
Laws, c. 25, § 1; 64 Del. Laws, c. 112, § 7; 65 Del. Laws, c. 289, §§
3-6; 67 Del. Laws, c. 376, § 3; 69 Del. Laws, c. 261, §§ 1, 2; 70 Del.
Laws, c. 186, § 1; 71 Del. Laws, c. 120, §§ 3-11.

13

 

EXHIBIT 2

UNDERTAKING TO REPAY INDEMNIFICATION EXPENSES

     I                                        , agree to reimburse
Federal National Mortgage Association (“Fannie Mae”) for all expenses paid to
me by Fannie Mae for my defense in any civil or criminal action, suit, or
proceeding, in the event, and to the extent that it shall ultimately be
determined that I am not entitled to be indemnified by Fannie Mae for such
expenses.

	 	 	 
	 	Signature	

	 	 	
 
	 
	 	Typed Name	
 
	 	 	

	 
	 	 	 
	 
	 	Office	
 
	 	 	

     DISTRICT OF COLUMBIA ) ss:

Before me                      , on this day personally appeared          ,
known to me to be the person whose name is subscribed to
the foregoing instrument, and who, after being duly sworn, stated that the
contents of said instrument is to the best of his/her knowledge and belief true
and correct and who acknowledged that he/she executed the same for the purpose
and consideration therein expressed.

GIVEN under my hand and official seal at Washington, D.C., this         day of              ,
200    .

	 	 
	 	

Notary Public

My commission expires:

14

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