Fannie Mae 2004 Annual Report Download - page 64

the Compensation Committee of the Board of Directors determines achievement against the goals at the end of
such period, setting the amount of the award at that time. The performance shares are generally paid out over
a two- or three-year period. In January 2004, we paid out 87,329 and 224,926 shares of common stock to
senior management under our Performance Share Program for the three-year performance share cycles that
ended in 2001 and 2002, respectively. Additionally, we determined that senior management was entitled to
receive 662,780 shares of common stock under our Performance Share Program for the three-year performance
share cycle that ended in 2003, of which 366,428 shares were paid out in 2004, and the balance of which was
scheduled to be paid out in January 2005. Of the 678,683 aggregate shares of common stock that were paid
out in 2004 under our Performance Share Program, 444,281 shares of common stock were issued and
234,402 shares of common stock that otherwise would have been issued were withheld in lieu of requiring the
recipients to pay the withholding taxes due to us at the time of issuance. As previously announced, and in
connection with the restatement of our consolidated financial statements, because we did not have reliable
financial data for years within the award cycles, the Compensation Committee and the Board decided to
postpone the determination of the amount of the awards under the Performance Share Program for the three-
year performance share cycles that ended in 2004 and 2005, and to postpone payment of the second
installment of shares for the three-year performance share cycle that ended in 2003 (the first installment of
which was paid in January 2004). In the future, the Compensation Committee and the Board will review the
Performance Share Program and determine the appropriate approach for settling its obligations with respect to
the existing unpaid performance share cycles.
The securities we issue are “exempted securities” under the Securities Act and the Exchange Act to the same
extent as obligations of, or guaranteed as to principal and interest by, the United States. As a result, we do not
file registration statements with the SEC with respect to offerings of our securities.
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