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MAXWELL RELINQUISHES RIGHTS TO $5.5 MILLION FINAL RETIREMENT PAYMENT; FANNIE MAE WILL GIVE MONEY TO LOW-INCOME HOUSING

MAXWELL RELINQUISHES RIGHTS TO $5.5 MILLION FINAL RETIREMENT PAYMENT;
 FANNIE MAE WILL GIVE MONEY TO LOW-INCOME HOUSING
 WASHINGTON, Jan. 21 /PRNewswire/ -- The Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) has been notified by its former chairman and chief executive officer, David O. Maxwell, that he has voluntarily relinquished his right to a final retirement payment of $5.5 million provided under his contract with the company. Following a meeting today of its board of directors, the company announced that the entire amount will be contributed through the Fannie Mae Foundation to housing for low-income families.
 Maxwell's contract called for a final retirement payment to be made this month if the corporation met specific performance targets as measured in a three-year cycle from 1989 through 1991. Fannie Mae disclosed this obligation in its 1991 proxy statement released last spring.
 In a letter to Fannie Mae chairman and chief executive officer, James A. Johnson, Maxwell said he is taking this action because he believes any continued controversy over his retirement compensation could harm Fannie Mae and the millions of Americans it serves.
 In a statement, Johnson said: "David Maxwell managed the most successful turnaround of a major financial company in U.S. history. He and his management team took a company that was losing $1 million every business day in 1981 and turned it into a company making $4 million every business day when he retired in 1991. In that decade, more than 7 million American families financed homes through Fannie Mae. David Maxwell's generous act once again shows his dedication to Fannie Mae and the people it serves."
 Fannie Mae also announced that Maxwell will receive this month 34,975 shares after withholding 14,635 shares for taxes, due Maxwell under the company's deferred compensation performance share plan covering senior officers. These shares are tied to a grant of shares made in 1988 and the performance of the company during the 1989-91 period. This award was disclosed in the company's proxy statements since 1989.
 Under the performance share plan which began in 1982, any participant who retires after serving more than 18 months of a three- year cycle is entitled to receive a pro-rata portion of the shares originally allocated to him or her, if the performance goals were achieved. Since Maxwell served as chairman and chief executive officer of the company for 25 months of the 36 months from 1989-91 and the performance goals for the period were exceeded, he earned a pro-rata portion of the shares allocated to him in 1988. This is the last cycle in which Maxwell is entitled to participate.
 The Fannie Mae Foundation will distribute the $5.5 million as one or more charitable grants. The focus of the distribution will be on providing housing affordability opportunities for lower-income Americans.
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company and the nation's largest investor in home mortgages.
 -0- 1/21/92
 /NOTE: Copies of Maxwell/Johnson correspondence are available upon request. In accordance with Fannie Mae's standard practice, information on the awards and compensation to current officers will be fully disclosed, along with other executive compensation data, when the company's proxy statement is released this spring./
 /CONTACT: David Jeffers of the Federal National Mortgage Association, 202-752-5962/
 (FNM) CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU:


DC -- DC014 -- 1842 01/21/92 12:29 EST
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Date:Jan 21, 1992
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