FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE
SUPPLEMENTAL PENSION PLAN OF 2003
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<TYPE>EX-10.1
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<DESCRIPTION>SUPPLEMENTAL PENSION PLAN OF 2003
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<P align="right"><FONT size="2"><B>Exhibit&nbsp;10.1</B>
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<P align="center"><FONT size="2">FANNIE MAE<BR>
SUPPLEMENTAL PENSION PLAN OF 2003</FONT>

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<P align="center"><FONT size="2"><B><u>TABLE OF CONTENTS</u></B>
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ARTICLE I.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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<TR><TD>&nbsp;</TD></TR>
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&nbsp;&nbsp;&nbsp;&nbsp;PURPOSE
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">1.1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Establishment
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">1.2.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Purpose
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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    <TD valign="top"><FONT size="2">1.3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Compliance
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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<TR><TD>&nbsp;</TD></TR>
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ARTICLE II.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;DEFINITIONS
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Board&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.2.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Code&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">3</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Committee&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.4.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Corporation&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.5.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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&#147;Earnings&#148; has the meaning provided in the Retirement Plan
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.6.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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&#147;Effective Date&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.7.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;ERISA&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.8.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Executive&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.9.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Participant&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.10.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Plan&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.11.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Qualified Plan Benefit&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">4</FONT></TD>
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    <TD valign="top"><FONT size="2">2.12.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Retirement Plan&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">5</FONT></TD>
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    <TD valign="top"><FONT size="2">2.13.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Supplemental Pension Plan Benefit&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">5</FONT></TD>
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    <TD valign="top"><FONT size="2">2.14.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Unrestricted Benefit&#148;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">5</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
ARTICLE III.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;ELIGIBILITY AND PARTICIPATION
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">6</FONT></TD>
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    <TD valign="top"><FONT size="2">3.1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Eligibility
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">6</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.2.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Benefits
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">7</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Cost of Living Adjustments to Retirement Plan
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">7</FONT></TD>
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    <TD valign="top"><FONT size="2">3.4.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Timing and Form of Benefit Payments
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">7</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
ARTICLE IV.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;ADMINISTRATION
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">8</FONT></TD>
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    <TD valign="top"><FONT size="2">4.1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Administration
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">8</FONT></TD>
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    <TD valign="top"><FONT size="2">4.2.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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No Liability of Committee Members
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="right" valign="top"><FONT size="2">8</FONT></TD>
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    <TD valign="top"><FONT size="2">4.3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Claims Procedures
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">9</FONT></TD>
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ARTICLE V.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MISCELLANEOUS
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">9</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
General Creditor Status
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">9</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">5.2.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Change in Control or other Discontinuance
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">10</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Non-Alienation of Benefits
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">10</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">5.4.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Payments to Individuals other than Participants
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">10</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.5.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amendment or Termination
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">10</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.6.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Governing Law
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">11</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.7.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Taxes
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">11</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.8.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Other Plans
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">11</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">5.9.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Captions
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">12</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
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<P align="center"><FONT size="2">-ii-</FONT>
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<P align="center"><FONT size="2"><B>FANNIE MAE<BR>
SUPPLEMENTAL PENSION PLAN OF 2003</B>
</FONT>

<P align="center"><FONT size="2">ARTICLE I.
</FONT>

<P align="center"><FONT size="2">PURPOSE
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. <u>Establishment</u>. Fannie Mae (the &#147;Corporation&#148;) establishes this
Fannie Mae Supplemental Pension Plan of 2003 for the benefit of eligible
employees of the Corporation and their beneficiaries. This Plan became subject
to Part 1 of Subtitle B of Title I of ERISA for purposes of 29 CFR &#167;
2520.104-23 on the date of execution (August 4, 2003) but with retroactive
effect as hereinafter provided.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. <u>Purpose</u>. The Corporation intends by the adoption of this Plan to
advance its interests by enhancing retirement benefits for a select group of
the Corporation&#146;s managerial or highly compensated employees. The Plan
supplements benefits provided under the Corporation&#146;s Retirement Plan for
Employees Not Covered Under Civil Service Retirement Law and, in the case of
some participants, benefits provided under other supplemental plans.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. <u>Compliance</u>. This Plan is intended to be unfunded for purposes of the
Code and Title I of ERISA and to constitute a so-called &#147;top hat&#148; plan as
described in Sections&nbsp;201(2), 301(a)(3) and 401(a)(1) of ERISA, and shall be
construed accordingly.
</FONT>
<P align="center"><FONT size="2">ARTICLE II.
</FONT>

<P align="center"><FONT size="2">DEFINITIONS
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When used herein, the following terms shall have the following meanings:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. &#147;Board&#148; means the Board of Directors of the Corporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. &#147;Code&#148; means the Internal Revenue Code of 1986, as from time to time
amended and in effect.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. &#147;Committee&#148; means the Benefit Plans Committee of the Corporation or
any successor committee.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. &#147;Corporation&#148; means Fannie Mae.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. &#147;Earnings&#148; has the meaning provided in the Retirement Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. &#147;Effective Date&#148; means the date specified in Section&nbsp;1.1.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. &#147;ERISA&#148; means the Employee Retirement Income Security Act of 1974,
as from time to time amended and in effect.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. &#147;Executive&#148; means, except as hereinafter provided, any regular
employee of the Corporation who was an officer or officer equivalent (as
determined by the Committee) of the Corporation prior to January&nbsp;1, 2003 and is
still employed by the Corporation (whether or not in an officer or officer
equivalent position) on January&nbsp;1, 2003 and any other regular employee of the
Corporation who is or becomes an officer or officer equivalent of the
Corporation (including for this purpose a Chief or Managing Director of the
eBusiness division of the Corporation) on or after January&nbsp;1, 2003. The
Committee shall have discretion to determine &#147;regular employee&#148; and officer or
officer equivalent status for purposes of this Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. &#147;Participant&#148; means any Executive of the Corporation who is (or
following retirement or other termination would be) entitled to receive a
benefit under this Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. &#147;Plan&#148; means this Fannie Mae Supplemental Pension Plan of 2003.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11. &#147;Qualified Plan Benefit&#148; means the monthly normal, early, deferred,
vested, disability or preretirement survivor annuity benefit, as the case may
be, payable with respect to a Participant under the Retirement Plan.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. &#147;Retirement Plan&#148; means the Federal National Mortgage Association
Retirement Plan for Employees Not Covered Under Civil Service Retirement Law,
as from time to time amended and in effect.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. &#147;Supplemental Pension Plan Benefit&#148; means the monthly benefit
payable to a Participant under the Federal National Mortgage Association
Supplemental Pension Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14. &#147;Unrestricted Benefit&#148; means the monthly normal, early, deferred,
vested, disability or preretirement survivor annuity benefit, as the case may
be, that would be payable to a Participant under the Retirement Plan if: (a)
the terms of the Retirement Plan included solely to comply with Sections
401(a)(17) and 415 of the Code were disregarded; and (b)&nbsp;Earnings (determined
without regard to the terms of the Retirement Plan included solely to comply
with Section&nbsp;401(a)(17) of the Code) were increased by the amount of any bonus
under the Annual Incentive Plan earned by the Participant while such
Participant was an Executive, even if prior to the Effective Date, subject,
however, to the following additional rules:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="6%"></TD>
        <TD width="2%"></TD>
        <TD width="2%"></TD>
        <TD width="90%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">(i)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">The amount of the Annual Incentive Plan bonus
taken into account for purposes of calculating a
Participant&#146;s Unrestricted Benefit shall not exceed 50% of
the Participant&#146;s Earnings for the calendar year for which
such bonus was earned.</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">(ii)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">The amount of the Annual Incentive Plan bonus
taken into account for any calendar year (as limited pursuant
to clause (i)&nbsp;above) shall be treated as having been earned
in equal monthly installments over the course of such year
(taking into account all</FONT></TD>
</TR>

</TABLE>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="6%"></TD>
        <TD width="2%"></TD>
        <TD width="2%"></TD>
        <TD width="90%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">months of employment for the Corporation, whether or not as
an Executive, but disregarding periods prior to
commencement of employment or following termination of
employment) for purposes of determining, under Section
2.14(b) above, (A)&nbsp;the portion of such bonus added to
Earnings for any month, and (B)&nbsp;whether such bonus was
earned by the Participant while an Executive.</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">(iii)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">If a Participant is not an Executive for a
full calendar year, the Earnings taken into account in
applying the 50% limitation under clause (i)&nbsp;above shall be
the Participant&#146;s Earnings for those full months during which
he or she was an Executive.</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2">ARTICLE III.
</FONT>

<P align="center"><FONT size="2">ELIGIBILITY AND PARTICIPATION
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. <u>Eligibility</u>. Subject to the following provisions of this Section
3.1, each Executive shall be a Participant unless the Committee determines that
his or her eligibility or continued eligibility to participate would jeopardize
this Plan&#146;s status as a &#147;top hat&#148; plan for purposes of Sections&nbsp;201(2),
301(a)(3) and 401(a)(1) of ERISA. If the Committee determines that any
Executive&#146;s eligibility or continued eligibility to participate in the Plan
would jeopardize the Plan&#146;s status as a &#147;top hat&#148; plan, it may exclude the
Executive from the Plan, including retroactively; <I>provided</I>, that if any such
action reduces or eliminates the Executive&#146;s then vested accrued benefit, if
any, under this Plan, the Corporation shall pay to the Executive the actuarial
present value of the amount of such reduction, as determined by the Committee
on the basis of such reasonable actuarial assumptions as it shall prescribe.
As a condition of initial and
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<P><FONT size="2">continued participation in this Plan, an eligible Executive must complete
and submit to the Committee such forms as may be required by the Committee,
including, but not limited to, authorization to withhold from other
compensation payable by the Corporation to the Executive any applicable taxes
resulting from participation in this Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. <u>Benefits</u>. A Participant who is receiving a Qualified Plan Benefit
shall receive a monthly benefit under this Plan equal to the Participant&#146;s
Unrestricted Benefit reduced (but not below zero) by the sum of (i)&nbsp;the
Participant&#146;s Qualified Plan Benefit; (ii)&nbsp;the Participant&#146;s Supplemental
Pension Plan Benefit, and (iii)&nbsp;the actuarial equivalent, as determined by the
Committee on the basis of such reasonable actuarial assumptions as it shall
prescribe, of the Participant&#146;s monthly benefits under the Executive Pension
Plan of the Federal National Mortgage Association. If there is an assignment
of any portion of the Participant&#146;s Qualified Plan Benefit pursuant to a
&#147;qualified domestic relations order&#148; (as defined in Section&nbsp;206(d)(3) of ERISA)
or if there is an assignment or purported assignment of any portion of any
benefit described in clauses (ii)&nbsp;or (iii)&nbsp;above, the offset described in
clause (i)&nbsp;above and/or the offsets described in clauses (ii)&nbsp;and (iii)&nbsp;above,
as applicable, shall be determined as if there had been no such assignment.
All reductions described in this Section&nbsp;3.2 shall be determined by the
Committee in its sole discretion.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. <u>Cost of Living Adjustments to Retirement Plan</u>. A cost of living
adjustment to Qualified Plan Benefits shall automatically adjust the amount of
benefits payable under this Plan, unless the Compensation Committee of the
Board or the Committee determines otherwise.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. <u>Timing and Form of Benefit Payments</u>. Benefits under this Plan
(including any survivor benefit) shall be paid in the same annuity form, with
the same
</FONT>
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<P><FONT size="2">commencement date and subject to the same suspensions or terminations, if
any, as the Participant&#146;s Qualified Plan Benefit, and any survivor benefit
portion of a Participant&#146;s benefit under this Plan shall be paid to the person
to whom the survivor portion of the Participant&#146;s Qualified Plan Benefit is
payable; <I>provided</I>, that in applying the provisions of this sentence, that
portion, if any, of the Qualified Plan Benefit that has been assigned to an
&#147;alternate payee&#148; (as that term is defined in Section&nbsp;206(d)(3) of ERISA) under
a &#147;qualified domestic relations order&#148; (as therein defined) shall be
disregarded. Notwithstanding the foregoing, if the Committee determines that a
Participant&#146;s or beneficiary&#146;s election of the form or timing of his or her
Qualified Plan Benefit, if applied to his or her benefit under this Plan, would
result in an unintended acceleration of income recognition for income tax
purposes to the Participant or beneficiary with respect to his or her benefit
under this Plan, the Committee may prescribe alternative form and timing rules
for the benefit payable under this Plan.
</FONT>
<P align="center"><FONT size="2">ARTICLE IV.</FONT>

<P align="center"><FONT size="2">ADMINISTRATION
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Administration</u>. This Plan shall be administered by the Committee.
The Committee shall have all discretionary power and authority necessary to
carry out the provisions of this Plan and to make all determinations hereunder,
including, without reservation, the discretionary authority to interpret the
provisions of this Plan and to make determinations as to eligibility and
benefits. The Committee may delegate to other persons such administrative
functions under the Plan as it determines.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. <u>No Liability of Committee Members</u>. No member of the Committee shall
be personally liable by reason of any contract or other instrument executed by
such member or on his or her behalf in his or her capacity as a member of the
Committee nor for any
</FONT>
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<P><FONT size="2">mistake of judgment made in good faith, and the Corporation shall
indemnify and hold harmless each employee, officer or director of the
Corporation to whom any duty or power relating to the administration or
interpretation of this Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with this Plan unless arising out of such individual&#146;s own fraud or bad faith;
provided, however, that approval of the Board shall be required for the payment
of any amount in settlement of a claim against the Committee or any member of
the Committee.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. <u>Claims Procedures</u>. The Committee shall prescribe, consistent with
the requirements of Section&nbsp;503 of ERISA, such procedures as it deems
appropriate for the processing of claims and the review of denied claims.
</FONT>
<P align="center"><FONT size="2">ARTICLE V.
</FONT>

<P align="center"><FONT size="2">MISCELLANEOUS
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. <u>General Creditor Status</u>. To the extent that any person acquires a
right to receive payments from the Corporation under this Plan, such right
shall be no greater than the right of an unsecured general creditor of the
Corporation, and such person shall have only the unsecured promise of the
Corporation that such payment shall be made. All payments to be made hereunder
shall be paid from the general funds of the Corporation, and no special or
separate fund shall be established, and no segregation of assets shall be made,
to assure payment of such amounts. Participants shall have no right, title or
interest in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. All such assets shall be the property
solely of the Corporation and shall be subject to the claims of the
Corporation&#146;s unsecured general creditors.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. <u>Change in Control or other Discontinuance</u>. The obligations of the
Corporation under this Plan shall be binding upon any successor corporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. <u>Non-Alienation of Benefits</u>. No Participant or other person entitled
to benefits under this Plan may alienate, anticipate, commute, sell, assign,
transfer, pledge, encumber or otherwise convey the right to receive any such
benefit, or any other rights under this Plan, nor shall any payments under this
Plan or rights thereto be subject to attachment, garnishment or execution, nor
shall they be transferable by operation of law in the event of bankruptcy or
insolvency or otherwise. Any attempt, whether voluntary or involuntary, to
effect any such action shall be null, void and of no effect. For the avoidance
of doubt, no &#147;alternate payee&#148; under a &#147;qualified domestic relations order&#148; (as
those terms are defined in Section&nbsp;206(d)(3) of ERISA) shall be eligible to
receive a benefit under this Plan, whether by purported assignment or
otherwise.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. <u>Payments to Individuals other than Participants</u>. If any individual
to whom any amount is payable under this Plan has been declared by a court of
law incompetent and unable to care for his or her affairs because of illness or
accident, or is a minor, or has died, then any payment due to such individual
or his or her estate (unless a prior claim therefor has been made by a duly
appointed legal representative), may, if the Committee so directs the
Corporation, be paid to his or her spouse, child, a relative or such other
person as the Committee determines. Any such payment shall be a complete
discharge of the liability of this Plan for such benefit and of the
Corporation&#146;s liability with respect thereto.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. <u>Amendment or Termination</u>. The Compensation Committee of the Board,
with prospective or retroactive effect, may amend, suspend or terminate this
Plan or any
</FONT>
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<P><FONT size="2">portion thereof at any time. The Compensation Committee of the Board
delegates to the Committee the authority to adopt amendments that may be
necessary or appropriate to facilitate the administration, management and
interpretation of this Plan or to conform this Plan thereto, provided that such
amendment by the Committee does not significantly affect the cost to the
Corporation of maintaining the Plan. However, no amendment, suspension or
termination of the Plan shall, without the consent of a Participant, impair or
adversely affect the Participant&#146;s vested benefits accrued under the Plan as of
the date of such action (determined as if that Participant then employed had
terminated his or her employment as of the date of such amendment, suspension
or termination).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. <u>Governing Law</u>. This Plan and all rights hereunder shall be governed
by and construed in accordance with the laws of the District of Columbia except
to the extent such laws are preempted by ERISA or other federal law.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. <u>Taxes</u>. All payments under this Plan shall be subject to reduction
and shall be reduced by the amount of applicable tax withholdings. If any tax
becomes due with respect to an accrued benefit under this Plan prior to
payment, the Corporation may make such arrangements, including withholding from
other compensation and/or a reduction of benefits hereunder, as the Committee
deems appropriate to satisfy any withholding obligation of the Corporation with
respect thereto. The Corporation does not represent or guarantee that any
particular federal, state or local, income, payroll, personal property or other
tax consequences will result from participation in this Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8. <u>Other Plans</u>. Benefits payable under this Plan shall not be deemed
salary or other compensation to the Participant for the purpose of computing
benefits to which he or she may be entitled under any other plan or arrangement
of the Corporation.
</FONT>
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<P><FONT size="2">Notwithstanding any provision of this Plan to the contrary, no benefit (or
portion of a benefit) shall be payable as a result of participation in this
Plan to the extent a benefit is payable to or on behalf of such Participant
under a plan, program or agreement with purposes similar to those of this Plan
and the payment of the benefit (or portion of such benefit) under this Plan
would provide a benefit to or on behalf of the Participant which duplicates the
benefit payable under such other plan, program or agreement.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9. <u>Captions</u>. The captions preceding the Sections of this Plan have been
inserted solely as a matter of convenience and in no way define or limit the
scope or intent of any provision of this Plan.
</FONT>

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