EXECUTIVE PENSION PLAN
OF THE FEDERAL NATIONAL MORTGAGE ASSOCIATION
Pursuant to
Section 20 of the Executive Pension Plan of The Federal
National Mortgage Association (the “Plan”), as
authorized by the Conservator of Fannie Mae (the Federal Housing
Finance Agency) and in accordance with the authority delegated to
the Vice President & Deputy General Counsel for Tax &
Benefits to approve amendments to benefit plans to the extent
necessary to comply with Internal Revenue Code Section 409A,
the Plan is hereby amended as follows, effective as of
January 1, 2009 or, as to any provision hereof required under
Section 409A to be effective January 1, 2008, as of
January 1, 2008, except as otherwise provided
herein:
1. Section 2
is hereby amended by adding the following definitions:
““Actuarial
Equivalent” means a benefit which is of equal value to a
benefit otherwise payable in a different form or commencing at a
different time under the Plan, based on the applicable mortality
tables and interest factors (or other reduction factors) set forth
in the Qualified Plan.
“Separation
from Service” means and correlative terms mean a
“separation from service” (as that term is defined at
Section 1.409A-1(h) of the Treasury Regulations) from the
Corporation and from all other corporations and trades or
businesses, if any, that would be treated as a single
“service recipient” with the Corporation under
Section 1.409A-1(h)(3) of the Treasury Regulations. Subject to
the applicable limitations under Section 409A of the Code
(“Section 409A”), any of the special elective
rules prescribed in Section 1.409A-1(h) of the Treasury Regulations
for purposes of determining whether a “separation from
service” has occurred may, but need not, elect in writing.
Any such written election shall be deemed part of the Plan.
Whenever appearing in the Plan, references to a “termination
of employment” and similar terms shall be construed to
require a Separation from Service.
“Specified
Employee” means an individual determined to be a specified
employee as defined in subsection (a)(2)(B)(i) of
Section 409A. Subject to the applicable limitations under
Section 409A, any of the special elective rules prescribed in
Section 1.409A-1(i) of the Treasury Regulations for purposes
of determining “specified employee” status may, but
need not, elect in writing. Any such written election shall be
deemed part of the Plan.”
2. The
definition of “Total Compensation” in Section 2 is
hereby amended and restated to read as follows:
““Total Compensation” means
the sum of annual base salary, including amounts deferred by the
Participant under the Federal National Mortgage Association
Optional Deferred Compensation Plan, and its successor plans, and
amounts which, pursuant to the election of the Participant, the
Corporation has contributed to any cash or deferred arrangement
qualified under Section 401(k) of the Code; plus:
(a) for
compensation earned prior to March 1, 2007, the
Participant’s other taxable compensation paid by the
Corporation with respect to the calendar year for which the
determination is made; provided, however, that such other taxable
compensation shall be allocated equally over the years in which it
is earned.
(b) for
compensation earned on or after March 1, 2007, the cash bonus
earned by the Participant under the Corporation’s Annual
Incentive Plan, or its successor with respect to the calendar year
for which the determination is made.
(c) Effective October 8, 2008,
retention bonus awards paid under the program established in
October 2008 and approved by the Conservator of Fannie Mae
(“Retention Bonus Awards”); provided, however,
that:
(i) Any
Retention Bonus Awards paid in December 2008, April 2009,
and November 2009 will be allocated (A) equally over the
12-month period commencing on January 1, 2008 and ending on
December 31, 2008 or (B) in the event the Participant
works fewer than the full 12-month period, over the actual number
of months worked during such 12-month period.
(ii) Any
Retention Bonus Awards paid in February 2010 will be allocated
equally (A) over the 12-month period commencing on
January 1, 2009 and ending on December 31, 2009 or
(B) in the event the Participant works fewer than the full
12-month period, over the actual number of months worked during
such 12-month period.
(iii) Amounts paid as severance in lieu of
Retention Bonus Awards are not Retention Bonus Awards and therefore
are not included in calculating Total Compensation for purposes of
the Plan.
Notwithstanding
paragraphs (a), (b) and (c) above, except as otherwise
provided in an employment agreement, the portion of Total
Compensation that is not annual base salary shall be limited in
each year to 50 percent of the Participant’s annual base
salary for such year.
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3.
Section 6 is hereby amended and restated in its entirety to
read as follows:
“6.
Normal Retirement Benefit
The normal
retirement benefit under the Plan of a Participant who Separates
from Service at age sixty (60) shall be payable in a form
specified in Section 11 commencing at the time specified in
Section 9 and shall be the Actuarial Equivalent of
(A) minus (B), calculated as of the date of the
Participant’s Separation from Service or the
Participant’s attainment of age fifty-five (55) if
later, where (A) is:
(1) in the case of
a Participant who first became a Participant in the Plan prior to
March 1, 2007, a 100% Contingent Annuity (as defined in
Section 11(b)(iv) below) with the Participant’s
Surviving Spouse commencing on the Participant’s 60th
birthday with annual payments equal to the Participant’s
vested Pension Goal; or
(2) in the case of
a Participant who first became a Participant in the Plan on or
after March 1, 2007, a single life annuity for the
Participant’s life commencing on the Participant’s 60th
birthday with annual payments equal to the Participant’s
vested Pension Goal; and
(B) is the sum of
the Actuarial Equivalents of each of the following benefit offset
amounts, in each case as determined by the Committee or its
delegate: (i) the annual amount of any benefit to which
Participant is then entitled to receive under the Qualified Plan
(including for this purpose the annual amount of any payment which
the Participant is then entitled to receive from the Corporation
pursuant to Section 4.1(g) of the Federal National Mortgage
Association Optional Deferred Compensation Plan or any successor
provision to said section of said plan), (ii) the annual
amount of any benefit not attributable to the Participant’s
own contributions which the Participant is then entitled to receive
under the Civil Service Retirement Act, solely to the extent such
benefits are attributable to periods of employment with the
Corporation, and (iii) for any Participant listed on the
attached Schedule A (if any), any benefits not attributable to
the Participant’s own contributions which the Participant is
then entitled to receive under the Plan listed next to such
Participant’s name on such Schedule A.”
4.
Section 7 is hereby amended and restated in its entirety to
read as follows:
“7. Early
Retirement Benefits
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A Participant
who Separates from Service prior to age 60 shall receive an early
retirement benefit under this Section 7. The amount of a
Participant’s annual early retirement benefit shall be
computed in the same manner as the Participant’s annual
normal retirement benefit, but shall be adjusted by reducing the
Pension Goal in which the Participant is vested by 1/12 of
2 percentage points for each full month by which the
commencement of payments precedes the Participant’s
attainment of age 60 (which for the avoidance of doubt means a
percentage reduction in the dollar amount of the benefit that would
otherwise have been paid). A Participant’s early retirement
benefit, if any, shall be payable in a form specified in
Section 11 commencing at the time specified in
Section 9.”
5.
Section 8 is hereby amended and restated in its entirety to
read as follows:
“8.
Deferred Retirement Benefit
There shall be no
actuarial increase or, except as provided in Section 5, other
adjustment of the Pension Goal of a Participant who remains in the
employ of the Corporation after attaining age 60. Instead, the
amount of the Participant’s deferred retirement benefit shall
be determined as though the Parti
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