Fannie Mae 2008 Annual Report Download - page 358

40 million. Including the effects of cancellations, we have awarded 12,815,705 shares under this plan since
inception. The shares awarded under the 2003 Plan may be authorized and unissued shares, treasury shares or
shares purchased on the open market.
Stock-Based Compensation Programs
Nonqualified Stock Options
Under the 2003 Plan, we may grant stock options to eligible employees and non-management members of the
Board of Directors. Generally, employees and non-management directors cannot exercise their options until at
least one year subsequent to the grant date, and they expire ten years from the date of grant. Typically, options
vest 25% per year beginning on the first anniversary of the date of grant. The exercise price of each option is
equal to the fair market value of our common stock on the date we grant the option.
The following table displays nonqualified stock option information for the years ended and as of
December 31, 2008, 2007 and 2006.
2008 2007 2006
For the Year Ended
December 31,
(Dollars in millions)
Cash proceeds from exercise of options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $35 $22
Compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9 21
2008 2007 2006
As of December 31,
(Dollars in millions)
Unrecognized compensation cost related to unvested options . . . . . . . . . . . . . $— $ — $ 9
Expected weighed average life of unvested options . . . . . . . . . . . . . . . . . . . . — 0.1 years 0.7 years
The following table displays nonqualified stock option activity for 2008, 2007 and 2006.
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Fair
Value at
Grant Date Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Fair
Value at
Grant Date Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Fair
Value at
Grant Date
2008 2007 2006
For the Year Ended December 31,
(Shares in thousands)
Beginning balance, January 1 ........ 17,031 $71.90 $23.49 19,749 $70.44 $22.97 21,964 $68.93 $22.39
Granted ...................... —— — —— — —— —
Exercised ..................... — — — (999) 51.17 15.95 (1,172) 39.71 11.68
Forfeited and/or expired ........... (4,738) 71.19 23.13 (1,719) 67.27 21.79 (1,043) 73.10 23.58
Ending balance, December 31 ....... 12,293 $72.12 $23.62 17,031 $71.90 $23.49 19,749 $70.44 $22.97
Options exercisable, December 31 ..... 12,291 $72.12 $23.62 16,726 $71.79 $23.54 18,305 $70.18 $23.19
Options vested or expected to vest as of
December 31
(1)
................ 12,293 $72.12 $23.62 17,030 $71.90 $23.50 19,720 $70.44 $22.98
(1)
Includes vested shares and nonvested shares after an estimated forfeiture rate is applied.
F-80
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)