EXHIBIT 10. 7
ELECTIVE DEFERRED COMPENSATION PLAN II
Effective January 1, 2005
Establishment and Purpose
1.1 Establishment . Reference is made to the Federal National Mortgage Association Elective Deferred
Compensation Plan (the “EDC I”), which, on November 15, 2004, was divided into two plans: the legacy EDC I
and this Fannie Mae Elective Deferred Compensation Plan II (the “Plan”). The EDC I was frozen as to new
deferrals (other than, for the avoidance of doubt, notional earnings on prior deferrals) as of December 31, 2004
and thereafter governs only amounts deferred prior to December 31, 2004 and not materially modified after
October 4, 2004, plus notional earnings thereon (“grandfathered benefits”). A Participant’s grandfathered
benefits under the EDC I are intended to be grandfathered for purposes of Section 409A and therefore exempt
from Section 409A. The Plan is intended to comply with the requirements of Section 409A, including the
transition relief provisions thereunder, and shall be construed consistent with that intent. Deferrals made after
December 31, 2004 shall be made under the Plan and the rights and obligations of the Company, such
Participants and their beneficiaries shall be determined under the Plan.
A Participant will receive a rate of return on his or her deferrals based on the Participant’s choice among
several hypothetical investment funds. The terms and conditions of the Plan are set forth herein.
1.2 Purpose . The purpose of the Plan is to attract and retain certain individuals of outstanding competence as
employees or as members of the Board of Directors of the Company or both by permitting such individuals to
elect to defer a portion of their compensation from the Company to a later date or event.
When used herein the following terms shall have the following meanings:
2.1 “Administrator” shall mean the Committee or, solely under the conditions set forth in Section 6.1, the