<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE STUDENT LOAN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO] STUDENT
LOAN
CORPORATION (SM)
99 Garnsey Road
Pittsford, New York 14534
April 3, 1997
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of The
Student Loan Corporation.
It will be held on Friday, May 9, 1997 at 11:00 a.m. at The Lodge at
Woodcliff, 199 Woodcliff Drive, Fairport, NY 14450.
We urge you to attend, if at all possible, since the Annual Meeting is an
excellent opportunity for you and your management to discuss your
corporation's progress in person. If you cannot attend in person, please vote
your preferences on the enclosed proxy card and return it promptly.
Sincerely,
/s/ Stephen C. Biklen
Stephen C. Biklen
President
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE:Friday, May 9, 1997
TIME:11:00 a.m.
PLACE:The Lodge at Woodcliff
199 Woodcliff Drive
Fairport, New York 14450
At the Annual Meeting, the following proposals are on the agenda for action
by the stockholders:
. TO ELECT TWO DIRECTORS TO HOLD OFFICE UNTIL THE ANNUAL MEETING IN THE
YEAR 2000, AND UNTIL THE ELECTION AND QUALIFICATION OF THEIR SUCCES-
SORS;
. TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDI-
TORS; AND
. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEET-
ING.
Please complete the proxy card and return it promptly in the enclosed enve-
lope. If you do decide to attend the meeting, you can withdraw your proxy and
vote in person at that time. Voting is by secret ballot. Stockholders of rec-
ord at the close of business (5:00 P.M., Eastern time) on March 31, 1997 are
entitled to one vote for each share held. A list of these stockholders will be
available for inspection for 10 days preceding the meeting at the office of
the Assistant Secretary of The Student Loan Corporation at 99 Garnsey Road,
Pittsford, New York 14534, and also will be available for inspection at the
meeting itself.
By order of the Board of Directors,
/s/ Stephen E. Dietz
Stephen E. Dietz
Secretary
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of The Student Loan
Corporation (the "Corporation"). These proxies will be voted at the Annual
Meeting of Stockholders of the Corporation on May 9, 1997. Stockholders of
record at the close of business (5:00 P.M., Eastern time) on March 31, 1997
are entitled to one vote for each share held. On that date there were
20,000,000 shares of the Corporation's common stock outstanding and eligible
to vote. This Proxy Statement and Form of Proxy are first being sent to
stockholders on April 3, 1997.
I. DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTOR
The Corporation has six directors. The term of office of two of the six
directors will expire at the Annual Meeting and, accordingly, two nominees
have been proposed for election as directors of the Corporation. The
affirmative vote of a plurality of the votes cast at the Annual Meeting by
stockholders entitled to vote thereon is required for the election of each
nominee as a director of the Corporation.
The following information with respect to each director is set forth below:
name, age, positions and offices held by the nominee or director of the
Corporation, principal occupation, certain other of the nominee's or
director's activities and term of office as director. Messrs. Gallant and
Levinson and Ms. Williamson are officers of Citicorp or its subsidiaries,
Citibank, N.A. or Citicorp Mortgage, Inc. Citicorp owns indirectly 80% of the
outstanding common stock of the Corporation.
STEPHEN C. BIKLEN, 54. Mr. Biklen has been the President and Chief Executive
Officer of the Corporation since 1992. He served as Business Manager of
Citibank's Student Loan Business from 1980 until that business was transferred
to the Corporation in 1992. Mr. Biklen joined Citibank in 1973 and held
financial positions in various businesses. Since 1989, Mr. Biklen has been a
member of the Board of Directors of Citibank (New York State). Mr. Biklen is
Chairman of the Consumer Bankers Association Education Funding Committee and
was a member of the Congressional Advisory Committee on Student Financial
Assistance from 1988 to 1996.
Mr. Biklen has been a director of the Corporation since November 1992. His
current term expires at the 1998 annual meeting. Mr. Biklen has announced that
he will retire as a director and officer of the Corporation effective February
1, 1998. His successor will be named at a later date.
CHRISTOPHER F. EDLEY, 69. Mr. Edley is the President Emeritus of The College
Fund/UNCF ("UNCF"), and from 1973 to 1991 served as President and Chief
Executive Officer of UNCF. Before joining UNCF, he served at The Ford
Foundation, where he was Program Officer-in-Charge of the Government and Law
Program. He is also a director of The Great Atlantic & Pacific Tea Company,
AMR Corporation and The Allstate Corporation.
Mr. Edley has been a director of the Corporation since April 1993. His current
term as director expires at the 1998 annual meeting.
PETER M. GALLANT, 53. Mr. Gallant joined Citibank in 1974 after 10 years in
the paper and printing business. His first 6 years at Citicorp were with the
World Corporation Group; 1980 to 1984 were with Treasury London, setting the
Customer Dealing business and then building the second version of Trestel, the
dealer trading system. 1984-1985 were spent at Midland Bank.
In 1985, Mr. Gallant rejoined Citibank in New York in the Treasury Unit and
held a number of jobs, including managing Treasury Marketing, the financial
engineering piece of New York's treasury, and the funding books for North
America, Latin America and Citicorp. From 1987 to 1990 he was in the
Investment Bank in London, initially in charge of distribution in the
Eurosecurities businesses, then as Chief of Staff to the head of the
Investment Bank. Between 1991 and 1993 Mr. Gallant was responsible for the
Global Finance Europe balance sheet, as Regional Treasurer and then as Asset
Manager for Europe. Mr. Gallant was appointed Treasurer of Citicorp/Citibank,
N.A. in September 1993.
1
<PAGE>
Mr. Gallant was elected a director of the Corporation in January 1996. His
current term as director expires at the 1999 annual meeting.
EVELYN E. HANDLER, 63. Dr. Handler has been Executive Director of the
California Academy of Sciences since 1994. From 1991 to 1993, she was an
Associate in Education at Harvard University. Dr. Handler was a Senior Fellow
of the Carnegie Foundation for the Advancement of Teaching from 1990 to 1993.
She served as President of Brandeis University from 1983 to 1991 and President
of the University of New Hampshire from 1980 to 1983. Prior to joining the
University of New Hampshire, she was Dean of Sciences and Mathematics at
Hunter College of the City University of New York. Dr. Handler is also a
director of The New England Mutual Life Insurance Company.
Dr. Handler has been a director of the Corporation since April 1993. Her
current term as director expires at the 1997 annual meeting. Dr. Handler is a
nominee for election as director for a term that expires at the annual meeting
occurring in the year 2000.
CARL E. LEVINSON, 50. Mr. Levinson is Division Executive of Citicorp's
Consumer Assets Division. He has been Chairman of Citicorp Mortgage, Inc.
since August 1992. He joined Citicorp in 1973 as a manager of Funds Transfer
in the New York Operating Group. In 1975 he became head of Finance,
Administration and Operations for Citicorp Remittance Services and in 1979 was
appointed Business Manager for Citicorp Remittance Services, a global check
processing and cash management business. From 1982 to 1984, Mr. Levinson was
the Global Product Manager for Citicorp Travelers Checks. In June 1984, Mr.
Levinson moved into Citicorp Retail Services as Director of Business
Development and Commercial Credit. In September 1986 he was appointed
President and General Manager of Citicorp Retail Services, which offers
private label credit card programs to leading retailers. He was appointed
General Manager of Card Services in 1991 and spearheaded a corporate expense
task force during the first half of 1992 before assuming his current position.
Mr. Levinson has been a director of the Corporation since October 1994. His
current term as director expires at the 1997 annual meeting. Mr. Levinson is a
nominee for election as director for a term that expires at the annual meeting
occurring in the year 2000.
LAURA D. WILLIAMSON, 43. Ms. Williamson joined Citicorp in 1982 and has served
in a number of senior corporate finance and capital markets positions, serving
for four years as head of Citicorp's corporate finance staff responsible for
evaluation and execution of strategic acquisitions and divestitures. She is
currently head of Citicorp's Global Institutional Liquidity Business within
Citicorp Global Asset Management.
Ms. Williamson has been a director of the Corporation since November 1992. Her
term as director expires at the 1999 annual meeting.
2
<PAGE>
SHARE OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVES
The following directors and named executives and all current directors and
executive officers as a group own, as of February 9, 1997, the number of
shares of the Corporation's common stock set forth below. All owners have sole
voting power and investment power with respect to such shares. The current
directors and executive officers of the Corporation as a group beneficially
own less than 1% of the total shares outstanding.
<TABLE>
<CAPTION>
NAME SHARES
---- ------
<S> <C>
Stephen C. Biklen..................................................... 800
Gerald J. Bystrak..................................................... 150
John R. Coffin........................................................ None
Frederick J. Eckert................................................... 90
Christopher F. Edley.................................................. 1,000
Peter M. Gallant...................................................... None
Evelyn E. Handler..................................................... None
Carl E. Levinson...................................................... None
Michael S. Piemonte................................................... 3,000
Laura D. Williamson................................................... 1,500
All directors and executive officers as a group (12 persons).......... 8,840
</TABLE>
The following directors and named executives and all current directors and
executive officers as a group own, as of February 9, 1997, the number of
shares of Citicorp common stock set forth below. All owners have sole voting
power and investment power with respect to such shares. The current directors
and executive officers of the Corporation as a group beneficially own less
than 1% of the total shares outstanding of Citicorp.
<TABLE>
<CAPTION>
NAME SHARES(1)
---- ---------
<S> <C>
Stephen C. Biklen.................................................. 4,215
Gerald J. Bystrak.................................................. 198
John R. Coffin..................................................... 199
Frederick J. Eckert................................................ 2,426
Christopher F. Edley............................................... 0
Evelyn E. Handler.................................................. 0
Peter M. Gallant................................................... 158,722
Carl E. Levinson................................................... 63,362
Michael S. Piemonte................................................ 1,476
Laura D. Williamson................................................ 16,777
All directors and executive officers as a group (12 persons)....... 251,914
</TABLE>
(1) Includes the following shares of Citicorp common stock which the directors
and named executives have the right to acquire within 60 days of February
9, 1997 pursuant to Citicorp employee benefit plans: Mr. Gallant--130,000
shares; Mr. Levinson--62,518 shares; Ms. Williamson--13,700 shares; and
Mr. Piemonte--1,100 shares; and all current directors and executive
officers as a group--210,218 shares. Citicorp options were granted in
tandem prior to 1988; such options are exercisable for either book value
or market value shares (but only one of those alternatives), at the choice
of the optionee. The number of shares in respect of those options which
the directors and executive officers have the right to acquire within 60
days of February 9, 1997 is based on the option alternative which is
exercisable for the greatest number of shares of common stock.
CERTAIN OTHER SHARE OWNERS
Citibank (New York State), 99 Garnsey Road, Pittsford, New York 14534, a
wholly-owned subsidiary of Citicorp, is the only person known by the
Corporation to own beneficially more than 5% of the Corporation's
3
<PAGE>
outstanding common stock. Citibank (New York State) is the owner of 16,000,000
shares of the Corporation's common stock, comprising 80% of the Corporation's
outstanding common stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on its review of the reports furnished to the Corporation for 1996
pursuant to Section 16 of the Securities Exchange Act of 1934 (the "Exchange
Act"), the Corporation believes that all of the reports required to be filed
under Section 16 were filed on a timely basis, except that a Form 4 timely
filed by Frederick Eckert with respect to one transaction in December 1996
inadvertently misstated the number of shares involved by 10 shares. An amended
Form 4 was filed promptly by Mr. Eckert.
CLASSIFICATION OF THE BOARD
The Corporation's Certificate of Incorporation provides that the directors
are divided into three classes, so that each director serves for a term ending
on the date of the annual meeting of stockholders in the year in which the
term of the applicable class of which such director is a member expires. The
directors of each class serve three years, with the terms of office of each
class of directors expiring in successive years. The stockholders of the
Corporation generally will elect one-third of the directors at each annual
meeting. Of the current members, Dr. Handler and Mr. Levinson serve for a term
expiring at the 1997 annual meeting, Mr. Bicklen and Mr. Edley serve for a
term expiring at the 1998 annual meeting, and Mr. Gallant and Ms. Williamson
serve for a term expiring at the 1999 annual meeting. Dr. Handler and Mr.
Levinson are nominated for election at the 1997 annual meeting as members of
the class which will hold office until the third annual meeting following such
election and until the election and qualification of their successors. If any
nominee is unable to serve out his or her term, the Board may appoint a
successor to fill the unexpired portion.
BOARD MEETING DATA
There were 4 meetings of the Board during 1996. All directors attended 75%
or more of the total Board and committee meetings held except that Carl
Levinson and Laura Williamson each attended 50% of the total Board meetings
and Laura Williamson attended 50% of the total Audit Committee meetings.
BOARD COMMITTEES
The Board has constituted an Audit Committee and a Compensation Committee.
The Board does not have a standing Nominating Committee. The Audit Committee,
which is comprised of Mr. Edley, Dr. Handler and Ms. Williamson, had four
meetings during 1996. The Compensation Committee, which is comprised of
Mr. Edley and Dr. Handler, had four meetings during 1996.
The principal functions of the Audit Committee include recommending
independent auditors to be employed by the Corporation and conferring with
such auditors; considering the adequacy of internal financial controls and the
results of fiscal policies and financial management of the Corporation; and
recommending to the Board policies and procedures for dealing with potential
conflicts of interest.
The principal functions of the Compensation Committee are reviewing and
recommending compensation for all executive officers of the Corporation,
evaluating annually individual and corporate performance, evaluating
information provided to the Corporation by independent third parties
concerning such matters as competitive compensation levels and employee
benefit programs and administering the Corporation's stock option plan.
BOARD COMPENSATION
Directors of the Corporation who are employees of the Corporation or of
Citicorp or one of its subsidiaries do not receive any fees or additional
compensation for services as members of the Board or any committee
4
<PAGE>
thereof. In 1996 Directors who were not employees of the Corporation or of
Citicorp or one of its subsidiaries received an annual fee of $15,000 for
service on the Board, an annual fee of $5,000 for service as Chairman of the
Audit Committee or the Compensation Committee and a fee of $500 for attendance
at each Board or committee meeting. Effective January 1, 1997 the annual fee
has been increased to $20,000 for service on the Board and the fee for
attending a Board or committee meeting has increased to $1,000. All directors
are reimbursed for travel and other related expenses incurred in attending
meetings of the Board or committees thereof.
EXECUTIVE OFFICERS
The executive officers of the Corporation and their ages and positions with
the Corporation as of March 31, 1997 are set forth below. Officers serve at
the pleasure of the Board.
<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICE HELD
- ---- --- ------------------------
<S> <C> <C>
Stephen C. Biklen 54 President and Chief Executive Officer
Gerald J. Bystrak 50 Vice President and Director of Operations
John R. Coffin 48 Vice President and General Counsel
Frederick J.
Eckert 52 Vice President and Director of Sales
Marianne L. Kerry 41 Vice President and Director of Marketing and Development
Michael S. Pie-
monte 40 Vice President, Treasurer and Chief Financial Officer
Greg C. Siembor 37 Vice President and Controller
</TABLE>
The present principal occupations and five-year employment history of each
of the above executive officers (except Mr. Biklen's which is set forth on
page 1) is set forth below:
Mr. Bystrak has been Vice President and Director of Operations since 1990.
From 1986 until 1990, Mr. Bystrak served as Director of Finance and Credit of
the Citibank Student Loan Business. Mr. Bystrak joined Citibank in 1974.
Mr. Coffin joined the Corporation in 1994 and was appointed as Vice
President and General Counsel in March 1995. Mr. Coffin joined Citicorp in
1983 and, since 1986, has held various positions with Citibank (New York
State), including General Counsel and Commercial Risk Manager. Mr. Coffin is
currently Secretary of Citibank (New York State).
Mr. Eckert joined the Citibank Student Loan Business in 1986 as Vice
President. In 1989 Mr. Eckert assumed responsibility for sales. Prior to
joining Citibank's Student Loan Business, he served in sales and marketing
positions with Xerox Corporation.
Ms. Kerry has been Vice President and Director of Research and Development
since February 1992 and Director of Marketing and Development as of July 1996.
Ms. Kerry joined the Citibank Student Loan Business in 1985 as a Management
Associate. Ms. Kerry became Service Quality Director in 1988 and remained in
that position until February 1992.
Mr. Piemonte joined the Corporation as Chief Financial Officer in February
1993. Prior to joining the Corporation, Mr. Piemonte was Controller and Vice
President of Mortgage-Backed Securities at the Federal Agricultural Mortgage
Corporation in Washington, D.C. from 1989 to 1993.
Mr. Siembor has been Vice President and Controller since May 1989. Mr.
Siembor joined Citibank in 1984 and held accounting positions in Citibank's
retail bank. Mr. Siembor joined the Citibank Student Loan Business in 1987 as
Manager of Financial Analysis.
5
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Corporation has engaged and expects to continue to engage in a variety
of business relationships with Citicorp and certain of its affiliates. Such
relationships are conducted pursuant to a number of agreements and
transactions initially entered into when the Corporation's operations were
conducted by Citibank (New York State). Management believes that such
agreements and transactions are on terms no less favorable to the Corporation
than those which could be obtained from unaffiliated third parties. It is the
intention of the Corporation that such agreements and the transactions
provided for therein be conducted on an arm's-length basis and, taken as a
whole, accommodate the parties' interests in a manner that is fair to each of
the parties.
Citibank (New York State) has made available to the Corporation credit
facilities pursuant to which the Corporation may borrow up to $6.4 billion for
specified terms and at specified variable interest rates. At December 31,
1996, the Corporation's outstanding borrowings under these facilities were
approximately $5.5 billion. In addition, Citicorp Securities, Inc. acts as co-
managing agent (with J.P. Morgan Securities Inc. and Union Bank of
Switzerland) and Citibank, N.A. acts as administrative agent for a $500
million revolving credit facility provided to the Corporation by a syndicate
of banks. The Corporation has not borrowed under this facility, which is being
used as a backstop source of liquidity for the Corporation's commercial paper
program. Citicorp Securities, Inc. and Citibank, N.A. are subsidiaries of
Citicorp. During 1996, the Corporation incurred approximately $304 million in
interest and fees to Citibank (New York State) and its affiliates pursuant to
these credit facilities. The Corporation believes that the terms of these
facilities are no less favorable to the Corporation than those which could be
obtained from unaffiliated parties. Citicorp Securities, Inc. also acts as a
dealer for the Corporation's commercial paper program, for which it receives
customary fees.
Citicorp has agreed that neither Citicorp nor any of its majority-owned
subsidiaries (other than the Corporation and its subsidiaries) will engage in
the business of originating guaranteed student loans under the federal
guaranteed student loan program ("Guaranteed Student Loans") or successor
legislation until December 22, 1999. The agreement will not prevent Citicorp
or its affiliates from acquiring any institution that is in the business of
originating Guaranteed Student Loans, provided that Citicorp or its affiliates
must cease or dispose of the business within a specified period.
The agreement does not restrict Citicorp and its affiliates from acquiring,
holding or servicing guaranteed student loans. Currently, Citicorp and its
subsidiaries (other than the Corporation) do not hold or service any material
amount of Guaranteed Student Loans, and have no plans to engage in such
business to any significant extent. In addition, the agreement contains no
restrictions on any lending activity, other than originating Guaranteed
Student Loans, by Citicorp and its affiliates. Citibank (New York State) and
other bank subsidiaries of Citicorp are in the business of making personal
loans, including loans specifically for the purpose of funding education costs
and loans the proceeds of which may be used for those purposes.
The agreement also restricts the Corporation from engaging in certain
business activities that would compete with other affiliates of Citicorp. The
Corporation does not believe that the agreement imposes any material
restrictions on its current or planned operations.
Citicorp has licensed to the Corporation, for as long as the Corporation
remains a direct or indirect majority-owned subsidiary of Citicorp, certain
trade names and trademarks for use in the Corporation's business. In addition,
Citibank (New York State) and certain of its bank affiliates have agreed for a
period which expires December 31, 1999 to allow the use of their mailing lists
and provide other marketing arrangements to the Corporation, and the
Corporation will allow the use of its customer list by Citibank (New York
State) and its affiliates during that period.
The Corporation and Citibank (New York State) have agreed that Citibank (New
York State) or its affiliates will continue to perform for the Corporation
certain functions and services previously provided by them. These services
consist primarily of financial and regulatory reporting, financial systems,
data processing, payroll and benefits administration, telecommunications,
audit, payment processing, legal affairs and support staff. The
6
<PAGE>
Corporation incurred approximately $4.5 million for the cost of those services
provided by Citibank (New York State) and its affiliates in 1996.
Citibank (New York State) provides the Corporation's office facility and
furniture in Pittsford under an agreement that, during 1996, provided for
annual payments of approximately $2.4 million, which included the
Corporation's allocable share of utilities, security and cafeteria expenses.
The agreement expires in December 1997, with an option to renew for an
additional five-year term.
In order to comply with the provisions of the federal Higher Education Act
of 1965, as amended, all of the Corporation's Guaranteed Student Loans are
held, and all new Guaranteed Student Loans are originated, by the Corporation
through a trust established solely for the benefit of the Corporation (the
"Trust"). An institution qualifying as an eligible lender under the provisions
of the Act will act as trustee of the Trust. Citibank (New York State)
currently acts as trustee. As such, it has certain administrative and record-
keeping responsibilities, for which it is entitled to receive annual
compensation of $20,000 plus reimbursement of expenses. In addition, the
Corporation has agreed to indemnify Citibank (New York State) for certain
liabilities that may arise out of the trustee's performance of its duties. The
Corporation believes that the terms of the Trust, including the trustee's
compensation, are no less favorable than those that could be obtained from
unaffiliated parties.
The Corporation is included in the consolidated federal income tax return of
which Citibank (New York State) is a member for federal income tax purposes,
and is included in the consolidated, combined or unitary state/local income or
franchise tax returns of which Citibank (New York State) or certain of its
affiliates are members for certain state/local income or franchise tax
purposes. The Corporation and Citibank (New York State) have entered into an
agreement which provides that, for the period up to and including the last day
on which the Corporation is a member of such consolidated, combined or unitary
returns, or with respect to (i) (B) and (ii) (B) below, its activity is
included in such a return, (i) the Corporation will pay to Citibank (New York
State) (A) an amount equal to the federal, state and local taxes the
Corporation would have paid had it filed its federal, state and local income
or franchise tax returns on a separate company basis and (B) the amount, if
any, by which the tax liability of any unitary group (of which Citibank (New
York State) or any of its affiliates (other than the Corporation) are members)
is increased by virtue of the inclusion of the Corporation's activity in the
group's unitary return and (ii) Citibank (New York State) will pay to the
Corporation (A) an amount equal to the tax benefit of the actual tax loss of
the Corporation as if the Corporation filed a separate return and (B) the
amount, if any, by which the tax liability of any unitary group (of which
Citibank (New York State) or any of its affiliates (other than the
Corporation) are members) is reduced by virtue of the inclusion of the
Corporation's activity in the group's unitary return. The agreement also
provides that the Corporation will pay to Citibank (New York State) one-half
of the tax benefit derived by the Corporation as a result of payments by the
Corporation in exchange for the transfer of assets to the Corporation by
Citibank (New York State) and the execution of the noncompetition agreement.
During 1996, the Corporation paid approximately $71.6 million to Citibank (New
York State) pursuant to this agreement.
COMPENSATION
Employees of the Corporation continue to participate in the compensation
plans of Citicorp and its affiliates. The Corporation reimburses Citicorp for
all expenses incurred in connection with its employees' salaries and benefits.
These plans are designed to attract, retain and appropriately reward
individuals for their short- and long-term contributions to Citicorp and its
businesses. Generally, compensation for the Corporation's executive officers
consists of salary, an annual cash incentive award and stock options, as well
as a retirement plan, a savings incentive plan, a stock purchase plan, a
medical plan and other benefit plans available to employees generally, in
which executive officers also participate.
The tables on pages 8 through 10 set forth a profile of the Corporation's
executive compensation and show, among other things, salaries and bonuses paid
during the last three years, options granted in 1996 and aggregate option
exercises in 1996 for the Chief Executive Officer and each of the four other
most highly compensated executive officers.
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------
NUMBER OF
SECURITIES
NAME AND PRINCIPAL UNDERLYING OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS(/1/) GRANTED(/2/) COMPENSATION(/3/)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stephen C. Biklen, 1996 $217,000 $144,000 3,000 $13,020
President and Chief Ex-
ecutive Officer 1995 208,333 140,000 2,800 12,500
1994 196,000 135,000 6,000 11,796
Gerald J. Bystrak, 1996 142,633 60,000 1,500 8,558
Vice President and Di-
rector of 1995 132,983 45,000 1,500 7,939
Operations 1994 123,890 35,000 1,100 7,434
Frederick J. Eckert, 1996 136,193 32,000 -0- 8,172
Vice President and Di-
rector of 1995 130,800 34,000 500 7,848
Sales 1994 123,383 28,000 1,100 7,403
Michael S. Piemonte, 1996 159,583 40,000 1,000 9,575
Vice President, Trea-
surer and 1995 155,916 35,000 -0- 9,353
Chief Financial Officer 1994 146,667 34,000 1,100 7,400
John R. Coffin, 1996 117,116 22,000 -0- 7,030
Vice President and Gen-
eral Counsel 1995 112,000 20,000 -0- 6,720
1994(/4/) 22,292 -0- -0- 1,338
</TABLE>
(1) Bonus awards were made in 1997 based on 1996 performance.
(2) Options for 1996 were granted in January 1997, options for 1995 were
granted in January 1996 and options for 1994 were granted in June 1994.
All options given to the named executives indicated in the table above are
options to purchase the common stock of Citicorp.
(3) Cash compensation earned pursuant to the Citicorp Savings Incentive Plan.
Any amounts in excess of contribution limits established by the Internal
Revenue Service are paid in cash to the named executive officer.
(4) Mr. Coffin's employment with The Student Loan Corporation commenced on
October 17, 1994.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR(/1/)
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(/4/)
- -------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(/2/) FISCAL YEAR ($/SHARE) DATE 5% 10%
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen C.
Biklen 3,000 (3) $110.50 1/21/07 $208,479 $528,326
Gerald J.
Bystrak 1,500 (3) 110.50 1/21/07 104,239 264,163
Frederick J.
Eckert -0- N/A N/A N/A N/A N/A
Michael S.
Piemonte 1,000 (3) 110.50 1/21/07 69,493 176,109
John R.
Coffin -0- N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------
</TABLE>
(1) Options for 1996 were granted in January 1997. The 1996 options are
options to purchase the common stock of Citicorp.
(2) Options in respect of Citicorp common stock granted to the named executive
officers for 1996 have a term of ten years and vest on the third
anniversary of the date of grant to the extent of 50% of such options and
on the fourth anniversary of the grant date to the extent of the balance.
(3) Each of Messrs. Biklen, Bystrak and Piemonte was granted fewer than 0.1%
of the total options granted to Citicorp employees in 1996. The options
granted to Messrs. Biklen, Bystrak and Eckert represent 18.75%, 9.375% and
6.25% respectively, of the total Citicorp options granted to employees of
The Student Loan Corporation in 1996.
(4) Amounts for the named executive officers shown in these columns have been
derived by multiplying the exercise price by the annual appreciation rate
shown (compounded for the term of the options), multiplying the result by
the number of shares covered by the options, and subtracting the aggregate
exercise price of the options. The dollar amounts set forth under this
heading are the result of calculations at the 5% and 10% rates set by the
Securities and Exchange Commission and therefore are not intended to
forecast possible future appreciation, if any, of the stock price of
Citicorp.
AGGREGATED STUDENT LOAN CORPORATION OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
ACQUIRED END AT FISCAL YEAR-END(/1/)
ON VALUE ------------------------- -------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen
C.
Biklen -0- $-0- -0- 25,000 $-0- $528,125
Gerald J.
Bystrak -0- -0- -0- 6,000 -0- 126,750
Frederick
J.
Eckert -0- -0- -0- 6,000 -0- 126,750
Michael
S.
Piemonte -0- -0- -0- 6,000 -0- 126,750
John R.
Coffin -0- -0- -0- -0- N/A N/A
- --------------------------------------------------------------------------------
</TABLE>
(1) Based on the market value of the Corporation's common stock on the New
York Stock Exchange composite tape at close of business on December 31,
1996 which was $37.25 per share.
9
<PAGE>
AGGREGATED CITICORP OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE END(/3/) AT FISCAL YEAR-END(/3/)
EXERCISE(/1-----------------------------------------------------------------------------/) REALIZED(/2/)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen C. Biklen 4,713 $172,248.75 -0- 5,800 $ -0- $102,900
Gerald J. Bystrak 550 22,412.50 -0- 3,000 -0- 55,125
Frederick J. Eckert 1,500 94,125.00 1,100 500 69,850 18,375
Michael S. Piemonte 750 27,750.00 1,100 1,000 69,850 -0-
John R. Coffin -0- -0- 1,000 -0- 75,250 -0-
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes all exercises during 1996.
(2) The value realized equals the market value of Citicorp common stock
acquired on the date of exercise minus the exercise price.
(3) The value of those options reflected in the table is the market value of
common stock on December 31, 1996 minus the related exercise price. The
market value of Citicorp's common stock on the New York Stock Exchange
composite tape as of December 31, 1996 was $103.00 per share.
Citicorp also provides compensation to the employees of the Corporation in
the form of a benefit under the Retirement Plan. The following table sets
forth the estimated annual retirement benefits as of December 31, 1996, as
provided by the Retirement Plan and supplemental non-qualified pension plans,
payable upon retirement to employees in specified remuneration and years-of-
service classifications. Amounts include estimated Social Security benefits
which would be deducted in calculating benefits payable under the Retirement
Plan. The estimated amounts are based on the assumption that payments under
the Retirement Plan will commence upon retirement at age 65.
PENSION PLAN TABLE(/1/)
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
YEARS OF SERVICE
------------------------------------------
REMUNERATION 15 20 25 30 35
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$100,000............................ $30,000 $ 40,000 $ 50,000 $ 60,000 $ 63,750
130,000............................ 39,000 52,000 65,000 78,000 82,875
160,000............................ 48,000 64,000 80,000 96,000 102,000
190,000............................ 57,000 76,000 95,000 114,000 121,125
220,000............................ 66,000 88,000 110,000 132,000 140,250
250,000............................ 75,000 100,000 125,000 150,000 159,375
- --------------------------------------------------------------------------------
</TABLE>
(1) This table reflects a straight life annuity benefit.
The years of credited service under the Retirement Plan as of December 31,
1996 for Messrs. Biklen, Bystrak, Eckert, Piemonte and Coffin were
approximately 23, 23, 11, 4 and 14 years, respectively. Covered compensation
under the Retirement Plan and the supplemental non-qualified pension plans is
the participant's base salary and, with respect to the individuals named in
the Summary Compensation Table, does not differ substantially (by more than
10%) from the salary compensation set forth therein. The benefit payable at
retirement is based on a specified percentage of the average of covered
compensation for the five highest-paid years of the last ten years of
employment. Messrs. Biklen, Bystrak, Eckert , Piemonte and Coffin will be
credited with 35, 35, 24, 28 and 31 years of service, respectively, upon
normal retirement at age 65. Mr. Biklen has announced that he will retire as a
director and officer of the Corporation effective February 1, 1998.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Corporation's Board of Directors (the
"Committee") is responsible for reviewing and recommending compensation for
all executive officers of the Corporation. The Committee, which met four times
during 1996, consists of two directors who are not employees of the
Corporation or Citicorp and who are not eligible to participate in any of the
Corporation's or Citicorp's compensation programs. The Committee annually
evaluates individual and corporate performance.
10
<PAGE>
The Corporation is 80% owned by Citibank (New York State), a subsidiary of
Citicorp. Accordingly, Citicorp management plays an important role in
determining not only compensation for Mr. Biklen in particular and all other
employees generally but also financial and other business goals of the
Corporation. The Corporation's relationship with Citicorp is an integral
component of the Committee's determination of compensation levels.
Mr. Biklen's compensation is initially recommended by the Citicorp executive
responsible for Citicorp's investment in the Corporation. The Committee then
reviews the performance of Mr. Biklen and the level of compensation
recommended by Citicorp management and determines the appropriate compensation
for approval by the Board. Compensation for executive officers other than Mr.
Biklen is determined by the Committee based on input from, and recommendations
made by, Mr. Biklen.
Compensation for the Corporation's executive officers consists of salaries
and annual cash incentive awards. The Committee is also authorized to grant
awards under the Corporation's Stock Incentive Plan. In addition, all
employees of the Corporation are eligible to participate in certain of the
compensation plans of Citicorp and its affiliates, including Citicorp's
Savings Incentive Plan, Stock Purchase Plan and Retirement Plan. The
Corporation reimburses Citicorp for expenses incurred in connection with
compensation and benefits provided under Citicorp's plans.
Total annual compensation of executive officers is based on individual and
corporate performance. While corporate performance measures are considered in
setting compensation levels, no specific quantitative formula is used in
making compensation decisions or recommendations.
Salaries for Mr. Biklen and other executive officers are established at
levels considered appropriate in light of the duties and scope of
responsibilities of each officer's position. Salaries are reviewed
periodically and adjusted as warranted to reflect competitive pay levels.
Annual cash incentive awards for Mr. Biklen and other executive officers are
based on an assessment of individual performance and corporate results in
attaining or exceeding a set of targets agreed on by the management of the
Corporation and Citicorp and approved by the Committee.
Incentive awards, including stock option grants, vary based on assessments
of each executive officer's individual contributions as well as corporate
performance. The Committee reviews options granted to executive officers of
the Corporation to purchase shares of Citicorp stock when determining whether
or not to grant to executive officers options to purchase the Corporation's
stock. Certain executive officers of the Corporation received Citicorp stock
options for 1996. In light of these grants, after consultation with management
of the Corporation and with the other members of the Corporation's Board of
Directors, the Committee determined not to grant any options to purchase the
Corporation's stock for 1996.
By the Compensation Committee
Christopher F. Edley, Chairman
Evelyn E. Handler
11
<PAGE>
STOCK PRICE PERFORMANCE
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
THE STUDENT LOAN CORPORATION, THE S&P 500 AND
THE STUDENT LOAN MARKETING ASSOCIATION
[A LINEAR GRAPH DEPICTING THE FOLLOWING TABLE APPEARS IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
1992(/1/) 1993(/2/) 1994(/2/) 1995(/2/) 1996(/2/)
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Student Loan Corpora-
tion...................... $100 $102 $ 99 $184 $207
S&P 500.................... $100 $110 $111 $149 $189
Student Loan Marketing As-
sociation................. $100 $ 70 $ 53 $108 $158
</TABLE>
(1) The Student Loan Corporation has been a public company listed on the New
York Stock Exchange since December 17, 1992. The measurement period begins
on December 17, 1992, and the dollar amounts set forth under this column
are based on the closing prices on that date.
(2) The dollar amounts set forth under this column are based on the closing
prices on December 31, 1993, 1994, 1995 and 1996, respectively.
II. STOCKHOLDER APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board believes it appropriate to submit for action by the stockholders
its selection of KPMG Peat Marwick LLP ("KPMG"), certified public accountants,
as auditors of the Corporation for the year 1997. The appointment of this firm
is proposed by the Board based, in part, on KPMG's review of and familiarity
with the Corporation's business as part of its audit of Citicorp. KPMG has
served as the independent auditor for the Corporation since it commenced
operations in 1992, for Citibank since 1964 and for Citicorp since it commenced
operations in 1968.
Representatives of KPMG are expected to be present at the Annual Meeting with
the opportunity to make a statement and to be available to respond to questions
regarding these or any other appropriate matters.
Adoption of this proposal requires the affirmative vote of the holders of a
majority of the votes cast at the meeting by the stockholders entitled to vote
thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Corporation. Proxies
may be solicited by mail, personal interview or telephone. Directors, officers
and regular employees of the Corporation may solicit proxies
12
<PAGE>
by such methods without additional compensation. Banks, brokerage houses and
other institutions, nominees and fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorizations for the
execution of proxy cards and will, upon request, be reimbursed for reasonable
expenses incurred. Employees of Georgeson & Co. Inc. will also solicit proxies
at a fee of approximately $5,000 plus out-of-pocket expenses.
As of the date of this Proxy Statement, the Corporation does not intend to
present and has not been informed that any other person intends to present any
business not specified in this Proxy Statement for action at the meeting. If
any other matters come before the meeting, proxies will be voted on such
matters in accordance with the judgment of the person or persons authorized to
vote the proxies.
Only stockholders of record at the close of business (5:00 P.M., Eastern
time) on March 31, 1997, will be entitled to notice of and to vote at the
meeting. Stockholders are urged to sign the enclosed proxy card, solicited on
behalf of the Corporation's Board, and to return it promptly in the enclosed
envelope. Proxies will be voted in accordance with stockholders' directions.
Signing the proxy card does not affect a stockholder's right to vote in person
at the meeting, and the proxy may be revoked prior to its exercise by
appropriate notice to the undersigned. If no directions are given, proxies
will be voted for the election of directors and for the approval of the
selection of independent auditors. Citibank (New York State), a wholly-owned
subsidiary of Citicorp, which exercises sole voting power over a majority of
the outstanding shares of common stock, has advised the Corporation that it
intends to vote all such shares in favor of the election of the nominees named
herein and for the ratification of the Corporation's independent auditors.
Because of the voting power of Citibank (New York State), those nominees are
assured election and the ratification of independent auditors is assured
passage. On any of these matters, abstentions and broker non-votes are not
considered votes cast.
Copies of the Corporation's Annual Report to Stockholders and its Form 10-K
may be obtained without charge by writing to the Corporation at 99 Garnsey
Road, Pittsford, New York 14534, Attention: Investor Relations, or by
telephone request to (716) 248-7187.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR INCLUSION IN THE STUDENT LOAN
CORPORATION'S 1998 PROXY STATEMENT
In accordance with Rule 14a-8 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, the Corporation will
accept proposals of stockholders for possible inclusion in the Corporation's
1998 Proxy Statement through the close of business on December 5, 1997.
By order of the Board of Directors,
/s/ Stephen E. Dietz
Stephen E. Dietz
Secretary
13
<PAGE>
LOGO
1997 PROXY THE STUDENT LOAN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS--MAY 9, 1997, 11:00 A.M. (EASTERN TIME),
THE LODGE AT WOODCLIFF, 199 WOODCLIFF DRIVE, FAIRPORT, NEW YORK
INSTRUCTIONS--TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
EVELYN E. HANDLER, CARL E. LEVINSON
STOCK IS NOT TO BE VOTED FOR THE FOLLOWING NOMINEE(S) FOR DIRECTOR:
--------------------------------------------------
The undersigned appoints Stephen C. Biklen, Marianne L. Kerry and Michael S.
Piemonte, or any of them, proxies, each having power to substitute another
person to vote all the stock of The Student Loan Corporation held of record by
the undersigned on March 31, 1997 at the Annual Meeting of Stockholders of The
Student Loan Corporation to be held on May 9, 1997 and at any adjournment
thereof. The proxies have authority to vote such stock, as indicated on the
reverse side hereof, (1) to elect directors and (2) to ratify the selection of
Independent Auditors. The proxies are further authorized to vote such stock
upon any other business that may properly come before the meeting or any
adjournment thereof.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO BE VOTED.
UNLESS YOU OTHERWISE INDICATE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS AND "FOR" THE PROPOSAL ON INDEPENDENT AUDITORS.
Please date and sign this proxy on the reverse side and return it promptly
whether or not you expect to attend the meeting. You may, nevertheless, vote in
person if you do attend. We thank you for your interest.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<PAGE>
LOGO
PROPOSALS OF THE BOARD OF DIRECTORS
THE DIRECTORS RECOMMEND A VOTE FOR
I.Election of Directors
FOR
WITHHOLD*
ABSTAIN
II.Ratification of Independent Auditors
FOR
AGAINST
ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF
*To withhold authority to vote for THE BOARD OF DIRECTORS
any individual mark this box AND
write that nominee's name on the
line provided on the reverse side
of this card.
PLEASE SIGN HERE exactly as your
name(s) appear(s) to the
left.
--------------------------------------
Unless you otherwise indicate, this --------------------------------------
proxy will be voted "FOR" the Dated:
election of directors and "FOR" the --------------------------------------
proposal on Independent Auditors.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title.
