Fannie Mae 2006 Annual Report Download - page 197

What is our compensation recoupment policy?
Under our May 23, 2006 consent order with OFHEO, we have agreed that any new employment contracts
with named executives will include an escrow of certain payments if OFHEO or any other agency has
communicated allegations of misconduct concerning the named executive’s official duties at Fannie Mae and
OFHEO has directed Fannie Mae to escrow such funds. In addition, we have agreed to include appropriate
provisions in new employment agreements to address terminations for cause and recovery of compensation
paid to executives where there are proven allegations of misconduct. All future employment agreements with
named executives will contain these provisions.
What written agreements do we have with our named executives that provide for continued employment?
On November 15, 2005, we entered into an employment agreement with Mr. Mudd, effective June 1, 2005
when he was appointed our president and chief executive officer. We entered into a letter agreement with
Mr. Levin, dated June 19, 1990, that provides for severance in connection with a termination without “cause.”
The severance benefits provided under these agreements are described below under “Potential Payments Upon
Termination or Change-in-Control.”
Report of the Compensation Committee of the Board of Directors:
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
included in this Form 10-K with management and, based on the review and discussions, the Compensation
Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be
included in this Form 10-K.
Compensation Committee:
Bridget A. Macaskill, Chair
Stephen B. Ashley
Dennis R. Beresford (committee member from May 2006 to July 2007)
Louis J. Freeh (committee member since May 2007)
Brenda J. Gaines
Greg C. Smith
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