Fannie Mae 2006 Annual Report Download - page 212

The following table quantifies the compensation that would have become payable to the named executives
under the severance program if their employment had terminated on December 29, 2006, given their
compensation as of that date and the closing price of our common stock on December 29, 2006 and assuming
we had received OFHEO’s approval. In the case of Ms. St. John, the table shows the benefits to which she
became entitled in connection with her retirement in December 2006. The amounts of cash severance shown
assume, where applicable, that the Board would have determined we achieved performance of our corporate
annual incentive plan goals at 110% of our target level, which was the level actually determined for 2006.
Potential Payments under 2005 to 2006 Severance Program as of December 29, 2006
Named Executive Cash Payment
(1)
Equity Award
(2)(3)
Medical and Dental Outplacement
(4)
Robert Blakely
(5)
. . . . . . . . . . . . . . . . . . . $2,058,500 — $15,158 $18,000
Robert Levin . . . . . . . . . . . . . . . . . . . . . . 3,465,937 $3,475,748 20,590 18,000
Peter Niculescu . . . . . . . . . . . . . . . . . . . . 2,011,452 1,890,994 20,590 18,000
Beth Wilkinson . . . . . . . . . . . . . . . . . . . . 1,662,856 494,956 20,968 18,000
Michael Williams . . . . . . . . . . . . . . . . . . . 2,747,567 2,590,929 20,590 18,000
Julie St. John
(6)
. . . . . . . . . . . . . . . . . . . . 1,883,193 1,920,246 1,743 18,000
(1)
Cash payments include severance payments, payments of annual cash incentive awards, and accelerated payments of
the cash portion of the long-term incentive awards for 2005 that would have otherwise been payable within 12 months
of an executive’s termination.
(2)
Reflects accelerated vesting of restricted stock and restricted stock units and performance shares under our
performance share program. No value is shown for options subject to accelerated vesting because the exercise price of
the options exceeded the closing price of our common stock on December 29, 2006.
(3)
The reported amounts include payments under our performance share program that normally would have been paid
subsequent to December 29, 2006 and to which the named executives would not have been entitled if they left in the
absence of the severance program. For more information regarding our performance share program, see “Compensation
Discussion and Analysis—What decisions have we made with regard to our Performance Share Program?”
(4)
The amounts shown assume the executive will find new employment within 6 months.
(5)
If Mr. Blakely had left Fannie Mae on December 29, 2006 under the severance program, he would also have been
eligible as a retiree to receive an additional cash payment of $1,656,270 under a long-term incentive award and
accelerated vesting of restricted stock units worth $4,252,977. These amounts are not shown in this table, but are set
forth in the “Potential Payments under our Stock Compensation Plans and 2005 Performance Year Cash Awards” table
below.
(6)
Based on her age and years of service, upon her departure from Fannie Mae Ms. St. John received an extension of the
exercise period of her options to the option expiration date under our stock compensation plans. She also was eligible
for our retiree medical benefits. Because these benefits are available to all full-time, salaried employees, amounts for
these benefits have not been included in the table above. The amount shown for Ms. St. John reflects our estimated
cost of subsidizing her dental plan premiums for 18 months.
Stock Compensation Plans, 2005 Performance Year Cash Awards and Annual Incentive Plan
Death, Disability and Retirement
Under our Stock Compensation Plan of 1993 and our Stock Compensation Plan of 2003, stock options,
restricted stock and restricted stock units held by our employees, including our named executives, fully vest
upon the employee’s death, disability, or retirement. On these terminations, or if an option holder leaves after
age 55 with at least 5 years of service, the option holder, or the holder’s estate in the case of death, can
exercise any stock options until the initial expiration date of the stock option, which is generally 10 years after
the date of grant. For these purposes, “retirement” generally means that the executive retires at or after age 60
with 5 years of service or age 65 (with no service requirement).
In early 2006, our named executives, other than Mr. Mudd, received a portion of their long-term incentive
awards for the 2005 performance year in the form of cash awards payable in four equal annual installments
beginning in 2007. Under the terms of the awards, these cash awards are subject to accelerated payment at the
same rate as restricted stock or restricted stock units and, accordingly, named executives would receive
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