Fannie Mae 2009 Annual Report Download - page 242

the transaction is undertaken in the ordinary course or pursuant to a contractual obligation or customary
employment arrangement in existence at the time the senior preferred stock purchase agreement was entered
into.
We require our directors and executive officers, not less than annually, to describe to us any situation
involving a transaction with us in which a director or executive officer could potentially have a personal
interest that would require disclosure under Item 404 of Regulation S-K.
TRANSACTIONS WITH RELATED PERSONS
Transactions with Treasury
Treasury beneficially owns more than 5% of the outstanding shares of our common stock by virtue of the
warrant we issued to Treasury on September 7, 2008. The warrant entitles Treasury to purchase shares of our
common stock equal to 79.9% of our outstanding common stock on a fully diluted basis on the date of
exercise, for an exercise price of $0.00001 per share, and is exercisable in whole or in part at any time on or
before September 7, 2028. We describe below transactions we entered into with Treasury in 2009.
Treasury Senior Preferred Stock Purchase Agreement
We issued the warrant to Treasury pursuant to the terms of the senior preferred stock purchase agreement we
entered into with Treasury on September 7, 2008. Under the senior preferred stock purchase agreement, we
also issued to Treasury one million shares of senior preferred stock. We issued the warrant and the senior
preferred stock as an initial commitment fee in consideration of Treasury’s commitment to provide up to
$100 billion in funds to us under the terms and conditions set forth in the senior preferred stock purchase
agreement. On May 6, 2009, Treasury amended the senior preferred stock purchase agreement to increase its
funding commitment to $200 billion and to revise some of the covenants in the agreement. Treasury further
amended the senior preferred stock purchase agreement on December 24, 2009 in order to further increase its
funding commitment to the greater of (a) $200 billion or (b) $200 billion plus the cumulative amount of our
net worth deficit as of the end of any and each calendar quarter in 2010, 2011 and 2012, less any positive net
worth as of December 31, 2012, as well as to make some other revisions to the agreement. See our current
report on Form 8-K filed with the SEC on December 30, 2009 for a more detailed description of Treasury’s
December 2009 amendment to the senior preferred stock purchase agreement. We have received an aggregate
of $59.9 billion from Treasury under the senior preferred stock purchase agreement, and in February 2010, the
Acting Director of FHFA submitted a request on behalf of Fannie Mae to Treasury for an additional
$15.3 billion from Treasury under the senior preferred purchase stock agreement. See “Business—
Conservatorship and Treasury Agreements—Treasury Agreements” for more information about the senior
preferred stock purchase agreement.
Treasury Credit Facility
On September 19, 2008, we entered into the Treasury credit facility under which we were allowed to request
loans from Treasury until December 31, 2009. The Treasury credit facility terminated on December 31, 2009
in accordance with its terms. We did not request any loans or borrow any amounts under the Treasury credit
facility prior to its termination on December 31, 2009.
Treasury GSE MBS Purchase Program
On September 7, 2008, Treasury announced the GSE mortgage-backed securities purchase program under
which Treasury conducted open market purchases of mortgage-backed securities issued by us and Freddie Mac
during 2008 and 2009. This program ended on December 31, 2009, which was the expiration date of
Treasury’s authority to purchase these mortgage-backed securities under the Housing and Economic Recovery
Act of 2008. Through December 31, 2009, Treasury purchased approximately $226 billion in Fannie Mae and
Freddie Mac mortgage-backed securities pursuant to this program.
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