Fannie Mae 2004 Annual Report Download - page 239

Compensation Plan of 2003, the 1985 Employee Stock Purchase Plan and the payout of shares deferred upon the
settlement of awards made under the 1993 plan and a prior plan.
(2)
The weighted average exercise price is calculated for the outstanding options and does not take into account restricted
stock units, stock-based performance awards, deferred shares or the performance shares described in footnote (1).
(3)
This number of shares consists of 10,418,495 shares available under the 1985 Employee Stock Purchase Plan and
35,435,491 shares available under the Stock Compensation Plan of 2003 that may be issued as restricted stock, stock
bonuses, stock options, or in settlement of restricted stock units, performance share awards, stock appreciation rights or
other stock-based awards. No more than 1,820,369 of the shares issuable under the Stock Compensation Plan of 2003
may be issued as restricted stock or restricted stock units vesting in full in fewer than three years, performance shares
with a performance period of less than one year, or bonus shares subject to similar vesting provisions or performance
periods.
Stock Ownership
We encourage our directors, officers and employees to own our stock in order to align their interests with the
interests of stockholders. Our compensation programs are structured so that a significant portion of the
compensation paid to officers is in the form of common stock or rights to acquire common stock. Our
employees also have the opportunity to own Fannie Mae common stock through bonus stock opportunities and
our Employee Stock Ownership Program.
Stock Ownership Guidelines
In April 2003, the Board of Directors adopted formal stock ownership requirements for executive officers. In
November 2005, the Board also adopted stock ownership guidelines for non-management members of the
Board. These requirements and guidelines are contained in our Corporate Governance Guidelines.
Stock Ownership Guidelines for Non-Management Members of the Board:
• Each non-management director is expected to own Fannie Mae common stock with a value equal to at
least five times the director’s annual cash retainer (currently, five times $35,000, or $175,000).
• Each non-management director has three years from the time of election or appointment to reach the
expected ownership level, excluding trading blackout periods imposed by the company.
Stock Ownership Requirements for “Senior Executives”:
• Senior executives are officers holding positions at or above the level of Executive Vice President.
• Each Fannie Mae senior executive is required to hold shares of Fannie Mae common stock as a multiple
of the executive’s base salary, as follows:
Job Level Multiple of Base Salary
Chief Executive Officer five times
Executive Vice President two times
• Each senior executive has three years from the time of appointment to reach the expected ownership level.
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