Fannie Mae 2005 Annual Report Download - page 221

Transactions with 5% Shareholders
Citigroup Inc. (“Citigroup”) beneficially owned more than 5% of the outstanding shares of our common stock
as of December 31, 2006 and Barclays PLC and its affiliates (“Barclays”) beneficially owned more than 5% of
the outstanding shares of our common stock as of December 31, 2004. Since January 1, 2005, we have
engaged in securities and other financial instrument transactions in the ordinary course of business with
Citigroup and Barclays and their respective affiliates. We have extensive, multi-billion dollar relationships with
Citigroup and Barclays. Citigroup, Barclays, and/or their affiliates have at times engaged in some or all of the
following types of transactions: distributing our debt securities as dealers; committing to sell or buy mortgage-
related securities or mortgage loans as dealers; delivering mortgage loans to us for purchase by our mortgage
portfolio or for securitization into Fannie Mae MBS; issuing investments held in our liquid investment
portfolio; and acting as derivatives counterparties and counterparties who have been involved in other financial
instrument transactions with us. An affiliate of Citigroup has also provided strategic consulting services to us.
These transactions were on substantially the same terms as those prevailing at the time for comparable
transactions with unrelated third parties.
A majority of the assets in the Fannie Mae Retirement Plan are managed by Alliance Capital Management
L.P. and AllianceBernstein L.P. Alliance Capital and AllianceBernstein may have beneficially owned more
than 5% of the outstanding shares of our common stock as of December 31, 2006, through their management
of shares beneficially owned by AXA and its related entities. In addition, an affiliate of AXA has engaged in
financial instrument transactions with us. These transactions were on substantially the same terms as those
prevailing at the time for comparable transactions with unrelated third parties.
Transactions with The Duberstein Group
Kenneth Duberstein, a former director of Fannie Mae, is Chairman and Chief Executive Officer of The
Duberstein Group, Inc., an independent strategic planning and consulting company. The Duberstein Group
previously provided us consulting services related to legislative and regulatory issues, and associated matters.
We are entering into a new agreement with the Duberstein Group. They now provide us consulting services
related to industry and trade issues. During 2005 and 2006 the firm provided services on an annual fixed-fee
basis of $375,000. Under our new agreement, we will pay an annual fixed fee of $400,000. The firm has
provided services to us since 1991.
Employment Relationships
Barbara Spector, the sister of our Chief Business Officer, Mr. Levin, is a non-officer employee in our
Enterprise Systems Operations division. From January 1, 2005 through March 15, 2007, we paid or awarded
Ms. Spector approximately $312,000 in salary and cash bonuses, including amounts that she will receive in
full only if she remains employed by us until early 2010. For 2005 and 2006, she has also received an
aggregate of 374 shares of our common stock in the form of restricted stock that vests over four years.
Dividends are paid on restricted common stock at the same rate as dividends on unrestricted common stock.
She also receives benefits under our compensation and benefit plans that are generally available to our
employees, including our retirement plan and employee stock ownership plan. The Enterprise Systems
Operations division does not report, nor has it ever reported, to Mr. Levin.
Rebecca Senhauser, the wife of William Senhauser, our Chief Compliance Officer, is a Senior Vice President
in our Housing and Community Development division. From January 1, 2005 through March 15, 2007, we
paid or awarded Ms. Senhauser approximately $1,958,000 in salary and cash bonuses, including some amounts
that Ms. Senhauser will receive in full only if she remains employed by us until early 2010. For 2005 and
2006, she has also received an aggregate of 15,778 shares of our common stock in the form of restricted stock
that vests over three or four years. Ms. Senhauser also receives benefits under our compensation and benefit
plans that are generally available to our employees, including our retirement plan and our employee stock
ownership plan. As a member of senior management, she also receives benefits under our compensation and
benefit plans available to senior officers, including payment for tax and financial planning services, participa-
tion in the Supplemental Pension Plan and 2003 Supplemental Pension Plan, participation in the Performance
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