<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
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:
-------------------------------------------------------------------------
(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:
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(5) Total fee paid:
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[_] 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:
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(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:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
Logo on Student Loan
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date:Thursday, May 18, 2000
Time:9:00 a.m., Eastern Time
Place:Westin Hotel
One Stamford Place
Stamford, CT 06902
203-967-2222
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
2003, and until the election and qualification of their successors;
[_] To ratify the selection of KPMG LLP as independent auditors; 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, 2000 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 750 Washington
Boulevard, 9th Floor, Stamford, Connecticut, and also will be available for
inspection at the meeting itself.
By order of the Board of Directors,
Signature of
Bill Beckmann
President and
Chief Executive Officer
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Student Loan Corporation (the
"Corporation"). These proxies will be voted at the Annual Meeting of
Stockholders of the Corporation on May 18, 2000. Stockholders of record at the
close of business (5:00 P.M., Eastern Time) on March 31, 2000 are entitled to
one vote for each share held. On that date there were 20 million shares of the
Corporation's common stock outstanding and eligible to vote. This Proxy
Statement and the accompanying proxy card are first being sent to stockholders
on or about April 14, 2000.
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 election
of each nominee requires the affirmative vote of a plurality of the votes cast
at the Annual Meeting.
The following information with respect to each director is set forth below:
name, age, positions and offices held, principal occupation, certain other of
the director's activities and term of office as director. Messrs. Gallant and
Levinson and Ms. Williamson are officers of Citigroup Inc. or its
subsidiaries. Citigroup owns indirectly 80% of the outstanding common stock of
the Corporation.
Bill Beckmann, 39. Mr. Beckmann has been the President of the Corporation
since October 1997 and its Chief Executive Officer since May 1998. Before
joining the Corporation, from 1984 to 1994, he held a number of jobs with
Citicorp subsidiaries, including managing strategic planning for the Citicorp
Card Products Group, managing finance for Citicorp's private label credit card
program and managing asset dispositions for a provider of real-time financial
information. From 1994 to 1997, Mr. Beckmann was a Vice President of
International Business Machines, most recently with responsibility for
developing IBM's Internet business.
Mr. Beckmann has been a director of the Corporation since October 1997. His
current term as director expires at the annual meeting in 2001.
Peter M. Gallant, 56. Mr. Gallant joined Citibank in 1974 after 10 years in
the paper and printing business. His first six years at Citicorp were with the
World Corporation Group; 1980 to 1984 were with Treasury London, setting up
the Customer Dealing business and then building the second version of Trestel,
the dealer trading system. 1984-1985 was 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 and Treasurer of Citigroup in October 1998.
Mr. Gallant has been a director of the Corporation since January 1996. His
current term as director expires at the annual meeting in 2002.
Glenda B. Glover, 47. Dr. Glover has been the Dean of the School of Business
of Jackson State University since 1994. From 1990 to 1994, she was the
Chairperson of the Department of Accounting and an Assistant Professor at
Howard University. Prior to joining Howard University, from 1985 to 1990, Dr.
Glover was the Chief Financial Officer and a Senior Vice President of Metters
Industries, Inc. From 1979 to 1984, she was the Project Manager for Tax
Administration and Coordinator of Investor Relations at Potomac Electric Power
Co. Dr. Glover founded the National Center for Enterprise Zone Research in
1987 and is currently the President of this non-profit economic development
corporation.
<PAGE>
Dr. Glover has been a director of the Corporation since May 1998. Her current
term as director expires at the annual meeting in 2001.
Evelyn E. Handler, 66. Evelyn Handler served as the Executive Director and CEO
of the California Academy of Sciences from 1994 to 1997. Prior to joining the
California Academy of Sciences, Dr. Handler served as a Research Fellow and as
an Associate of the Graduate School of Education at Harvard, and a Senior
Fellow at The Carnegie Foundation for the Advancement of Teaching. She served
as President of Brandeis University from 1983 to 1991, and as President of the
University of New Hampshire from 1980 to 1983. Previously, she was Dean of
Sciences and Mathematics and professor of biological sciences at Hunter
College.
A graduate of Hunter College, Dr. Handler earned her M.Sc. and her Ph.D.
degrees from New York University. She has written extensively on myelogenous
leukemia research. Dr. Handler is a Fellow of the American Association for the
Advancement of Science and a Fellow of the New York Academy of Sciences.
Additionally, she was elected to the Board of Governors of the New York
Academy of Sciences in 1979. She holds honorary degrees from the University of
Pittsburgh, Rivier College and Hunter College.
Dr. Handler has been a director of the Corporation since April 1993. Her
current term as director expires at the Annual Meeting, and she is a nominee
for election for a term that expires at the annual meeting in 2003.
Carl E. Levinson, 53. Mr. Levinson is Division Executive of Citicorp's
Consumer Assets Division and has been Chairman of Citicorp Mortgage, Inc.
since August 1992. Mr. Levinson 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.
Mr. Levinson has been a director of the Corporation since October 1994. From
October 1997 to May 1998 he also served as the Corporation's Chief Executive
Officer. His current term as director expires at the Annual Meeting, and he is
a nominee for election for a term that expires at the annual meeting in 2003.
Laura D. Williamson, 46. 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 Institutional Sales and Strategic Marketing for the North
American Region of SSB CitiAsset Management.
Ms. Williamson has been a director of the Corporation since November 1992. Her
current term as director expires at the Annual Meeting in 2002.
2
<PAGE>
Share Ownership of Directors and Named Executives
The following directors, nominees and named executives and all current
directors and executive officers as a group own, as of March 10, 2000, 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>
Bill Beckmann......................................................... 6,000
John R. Coffin........................................................ None
Sallyann Colonna...................................................... None
Peter M. Gallant...................................................... None
Glenda B. Glover...................................................... None
Evelyn E. Handler..................................................... None
Carl E. Levinson...................................................... None
Sue F. Roberts........................................................ 400
Laura D. Williamson................................................... 1,500
Yiannis Zographakis................................................... 200
All directors and executive officers as a group (10 persons).......... 8,100
</TABLE>
Certain Other Share Owners
Citibank (New York State), 99 Garnsey Road, Pittsford, New York 14534, a
wholly-owned subsidiary of Citigroup, is the only person known by the
Corporation to own beneficially more than 5% of the Corporation's outstanding
common stock. Citibank (New York State) is the owner of 16 million shares,
comprising 80% of the Corporation's outstanding common stock.
Section 16(a) Beneficial Ownership Reporting Compliance
The Corporation believes that all of the reports required to be filed under
Section 16 of the Securities Exchange Act of 1934 for 1999 were filed on a
timely basis.
Classification of the Board
The Corporation's directors are divided into three classes. The directors of
each class serve for a term of three years, and therefore 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 2000 annual meeting, Mr. Beckmann and Dr. Glover serve for a
term expiring at the 2001 annual meeting, and Mr. Gallant and Ms. Williamson
serve for a term expiring at the 2002 Annual Meeting. Dr. Handler and Mr.
Levinson are nominated for election at the 2000 Annual Meeting as members of
the class to hold office until the third annual meeting following their
election. 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 five meetings of the Board during 1999. All directors attended
75% or more of the total Board and committee meetings held.
Board Committees
The Board has constituted an Audit Committee and a Compensation Committee.
The Board does not have a standing nominating committee; the entire Board
considers candidates for election to the Board and makes nominations. The
Audit Committee, which includes Dr. Glover and Dr. Handler, had four meetings
during 1999. The Compensation Committee, which includes Dr. Glover, Dr.
Handler and Ms. Williamson, had four meetings during 1999.
3
<PAGE>
The principal functions of the Audit Committee include recommending
independent auditors to be employed by the Corporation and conferring with
those 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 and evaluating information concerning such matters as competitive
compensation levels and employee benefit programs.
Board Compensation
In 1999 directors who were not employees of the Corporation or affiliated
companies received an annual fee of $20,000 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 $1,000 for attendance at each Board or
committee meeting. Directors who are employees of the Corporation or
affiliated companies do not receive any fees or additional compensation for
services as members of the Board or any committee. All directors are
reimbursed for travel and other related expenses.
EXECUTIVE OFFICERS
The executive officers of the Corporation as of March 31, 2000 are set forth
below. Officers serve at the pleasure of the Board.
<TABLE>
<CAPTION>
Name Age Position and Office Held
- ---- --- ------------------------
<S> <C> <C>
Bill Beckmann 39 President and Chief Executive Officer
John R. Coffin 51 Vice President and General Counsel
Sallyann Colonna 40 Vice President and Director of Marketing
Sue Fowler Roberts 49 Senior Vice President and Director of Sales
Yiannis Zographakis 37 Vice President, Chief Financial Officer and Treasurer
</TABLE>
Mr. Coffin joined the Corporation in 1994. He joined Citicorp in 1983 and,
prior to joining the Corporation, held various positions with Citibank (South
Dakota), N.A. and Citibank (New York State), including General Counsel and
Commercial Risk Manager.
Ms. Colonna joined the Corporation in August 1998. From 1995 until she
joined the Corporation, she was General Manager of Credit Card Services at
Ameritech Corp. From 1985 to 1995 she held various marketing and product
management positions with American Express Travel Related Services, which she
left as Vice President of Platinum and Card Services Marketing.
Ms. Roberts joined the Corporation in November 1998. Prior to joining the
Corporation, she was President and CEO of Education First Marketing, LLC, a
joint venture between Sallie Mae and Chase Manhattan Bank. From 1991 to March
1998, Ms. Roberts was a Vice President of Sallie Mae, most recently with
responsibility for Sales, East Region.
Mr. Zographakis joined the Corporation in March 1998. Prior to joining the
Corporation, he held various positions with Citibank, N.A., including Director
of Finance for the Consumer Assets Division and Financial Controller for
Citibank Consumer Finance. Mr. Zographakis joined Citibank in 1990.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Corporation has engaged and expects to continue to engage in a variety
of business arrangements with Citigroup and its affiliates. Management
believes that these agreements and transactions are on terms no less favorable
to the Corporation than those that could be obtained from unaffiliated third
parties.
4
<PAGE>
Citibank (New York State) has made available to the Corporation credit
facilities pursuant to which the Corporation may borrow up to $15 billion for
specified terms and at specified variable interest rates. At December 31,
1999, the Corporation's outstanding borrowings under these facilities were
approximately $10.5 billion. During 1999, the Corporation incurred
approximately $497.2 million in interest and fees to Citibank (New York State)
and its affiliates pursuant to these credit facilities.
Citicorp (a subsidiary of Citigroup which owns all of the stock of Citibank
(New York State), Citibank, N.A. and other banking corporations) has agreed
that neither Citicorp nor any of its majority-owned subsidiaries (other than
the Corporation) will engage in the business of originating guaranteed student
loans under the federal guaranteed student loan program or successor
legislation or certain "alternative" student loans (collectively, "covered
student loans"). The agreement will not prevent Citicorp or its subsidiaries
from acquiring any institution that is in the business of originating covered
student loans, provided that Citicorp or its subsidiaries 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
covered student loans. Currently, Citicorp and its subsidiaries (other than
the Corporation) do not hold or service any material amount of covered 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 covered 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. The agreement currently
runs through June 22, 2000. The parties currently have no plans to extend the
agreement after its expiration date.
Citigroup and its subsidiaries have licensed to the Corporation, for as long
as the Corporation remains a direct or indirect majority-owned subsidiary of
Citigroup, certain trade names and trademarks for use in the Corporation's
business. In addition, Citibank (New York State) and certain of its bank
affiliates currently allow the use of their mailing lists and provide other
marketing arrangements to the Corporation, and the Corporation allows the use
of its customer list by those affiliates during that period.
The Corporation and Citibank (New York State) have agreed that Citibank (New
York State) or its affiliates will perform certain other functions and
services for the Corporation. These services include data processing,
financial and regulatory reporting, financial systems, payroll and benefits
administration, telecommunications, audit, payment processing, legal affairs
and support staff. The Corporation incurred approximately $9.0 million for the
cost of those services provided by Citibank (New York State) and its
affiliates in 1999. In addition, under a restructuring plan announced in
December 1997, the Corporation has outsourced a substantial portion of its
operations to affiliates. The Corporation paid approximately $24.3 million
pursuant to these outsourcing arrangements in 1999.
Citibank (New York State) provides the Corporation's office facility and
furniture in Pittsford, New York under a lease agreement that, during 1999,
provided for annual payments of approximately $1.3 million, which included the
Corporation's allocable share of utilities, security and cafeteria expenses.
The agreement expires in December 2000.
In order to comply with applicable banking laws, loans made under the
Corporation's CitiAssist program are originated by Citibank (New York State)
and serviced by the Corporation. Expenses incurred by the Corporation in
underwriting, disbursing and servicing CitiAssist loans for Citibank (New York
State) are reflected in a service fee charged to Citibank (New York State)
pursuant to an intercompany agreement. During 1999, Citibank (New York State)
paid the Corporation approximately $3.6 million in fees in connection with the
agreement. CitiAssist loans are purchased by the Corporation at a premium
shortly after the final disbursement is made. As of December 31, 1999, the
Corporation's CitiAssist loan portfolio totaled $365.7 million, including
premiums paid.
5
<PAGE>
The Corporation is included in various income tax or franchise tax returns
of groups including Citibank (New York State) and other affiliated companies.
The Corporation and Citibank (New York State) have entered into an agreement
providing for allocations of various tax payments. 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 specified transactions
related to the establishment of the Corporation in 1992. During 1999, the
Corporation paid approximately $44.3 million to Citibank (New York State)
pursuant to this agreement.
COMPENSATION
Employees of the Corporation participate in the compensation plans of
Citigroup and its affiliates. Generally, compensation for the Corporation's
executive officers consists of salary and an annual cash incentive award (both
of which are paid directly by the Corporation), as well as a retirement plan,
a savings incentive plan, a stock purchase plan, a medical plan and other
benefit plans available to employees of Citigroup affiliates generally, in
which executive officers also participate. The Corporation reimburses
Citigroup for all costs incurred in connection with its employees'
participation in Citigroup benefit plans. Certain officers and other employees
of the Corporation have also received options to purchase Citigroup stock.
The following tables, among other things, salaries and bonuses paid during
the last three years, options granted in 1999 and aggregate option exercises
in 1999 for the named executive officers.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------------------------------------------------
Number of
Restricted Securities
Name and Principal Stock Underlying Options All Other
Position Year Salary Bonus(/1/) Awards(/2/) Granted(/3/) Compensation(/4/)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bill Beckmann, 1999 $253,125 $288,792 $36,208 -0- $-0-
President and Chief 1998 252,604 250,000 -0- 10,500 15,078
Executive Officer(/5/) 1997 41,667 200,000 -0- 37,500 1,250
John R. Coffin, 1999 135,000 19,281 2,719 187 -0-
Vice President and
General 1998 124,667 18,000 -0- -0- 8,560
Counsel 1997 122,167 15,000 -0- -0- 8,230
Sallyann Colonna, 1999 160,000 43,780 6,241 -0- -0-
Senior Vice President 1998 160,000 45,000 -0- 6,000 -0-
and Director of
Marketing(/6/)
Sue F. Roberts, 1999 185,000 252,516 12,483 -0- -0-
Vice President and 1998 185,000 100,000 -0- 7,500 -0-
Director of
Sales(/7/)
Yiannis Zographakis, 1999 127,000 125,000 -0- 209 -0-
Vice President, 1998 107,556 85,000 -0- 4,500 -0-
Treasurer and 1997 94,002 60,000 -0- 7,500 -0-
Chief Financial
Officer(/8/)
</TABLE>
(1) Bonus awards were made in 2000 based on 1999 performance.
(2) Restricted stock awards represent the value of Citigroup common stock
(except in Mr. Coffin's case, discounted 25% from market value to reflect
restrictions on transfer and the possibility of forfeiture) granted under
the Citigroup capital accumulation program ("CAP"). Under CAP, a recipient
may not transfer restricted stock for three years after the award. If the
recipient is still employed by a Citigroup subsidiary at the end of three
years, the restricted stock becomes fully vested and freely transferable.
From the date of the award, the recipient can vote the restricted stock
and receives full dividends.
(3) Options for 1999 were granted in June 1999, options for 1998 were granted
in November 1998, and options for 1997 were granted in January 1998. All
options indicated in the table above are options to purchase the common
stock of Citigroup, and the numbers of shares underlying options have been
adjusted for (i) the 2.5-to-1 exchange ratio applicable to Citicorp shares
in the 1998 Citicorp-Travelers Group merger and (ii) a 3-for-2 stock split
effected by Citigroup in 1999.
(4) Cash compensation is earned pursuant to the Citicorp Savings Incentive
Plan. Any amounts in excess of contribution limits established by the
Internal Revenue Service were paid in cash to the named executive officer.
(5) Mr. Beckmann's employment with the Corporation commenced in October 1997;
he was appointed Chief Executive Officer in May 1998. Mr. Beckmann's
annual salary rate for 1997 was $250,000. Mr. Beckmann received a sign-on
bonus for 1997 of $200,000.
(6) Ms. Colonna joined the Corporation in 1998, and her 1998 bonus includes a
$25,000 sign-on bonus.
(7) Ms. Roberts joined the Corporation in 1998, and her 1999 bonus includes a
$115,000 sign-on bonus.
(8) Mr. Zographakis's employment with the Corporation commenced in March 1998.
Before March 1998, Mr. Zographakis was employed by an affiliate of the
Corporation and his compensation was paid by that affiliate. As a resident
non-citizen, Mr. Zographakis also receives equalization income; this
additional income is not material for purposes of this proxy statement.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Individual Grants
- -------------------------------------------------------------------------------
Percent of
Total Options
Number of Granted to
Securities Corporation
Underlying Employees in Exercise Grant Date
Options Fiscal Price Expiration Present
Name Granted(/1/) Year(/2/) ($/share) Date Value(/3/)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Bill Beckmann -0- -0- N.A. N.A. N.A.
John R. Coffin 187 1.4% $46.0625 June 30, 2009 $5,428
Sallyann Colonna -0- -0- N.A. N.A. N.A.
Sue Fowler
Roberts -0- -0- N.A. N.A. N.A.
Yiannis
Zographakis 209 1.6% $46.0625 June 30, 2009 $4,856
- -------------------------------------------------------------------------------
</TABLE>
(1) The 1999 options are options to purchase the common stock of Citigroup,
and were granted to all employees of the Corporation meeting specified
criteria, including minimum term of service and maximum annual
compensation. The options have a term of ten years vesting on the fifth
anniversary of the date of grant.
(2) No individual listed above had more than 0.1% of the total options granted
to all employees of Citigroup and its subsidiaries. The Student Loan
Corporation's employees received approximately 12,700 options for 1999.
(3) The "Grant Date Present Value" numbers set forth in the table above were
derived by application of a variation of the Black-Scholes option pricing
model. The following assumptions were used in employing such model:
. stock price volatility was calculated by using the weekly closing price
of the Citigroup's Common Stock on the NYSE Composite Transactions for
the one-year period prior to the grant date of each option;
. the risk-free interest rate for each option grant was the interpolated
market yield on the date of grant on a Treasury bond with a term
identical to the subject estimated option life, as reported by the
Federal Reserve;
. the dividend yield (based upon the actual annual dividend rate during
1999) was assumed to be constant over the life of the option; and
. exercise of the option was deemed to occur five years after the date of
grant.
The potential value of options granted depends entirely upon a long-term
increase in the market price of Citigroup's common stock; if the stock price
does not increase, the options would be worthless.
AGGREGATED CITIGROUP 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(/1/) at Fiscal Year-End(/1/)
On Value ------------------------- -------------------------
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bill
Beckmann -0- -0- 2,100 45,900 $51,144 $1,086,633
John R.
Coffin -0- -0- -0- 187 -0- $ 1,800
Sallyann
Colonna -0- -0- 1,200 4,800 $29,225 $ 116,900
Sue F.
Roberts -0- -0- 1,500 6,000 $36,531 $ 146,125
Yiannis
Zographakis -0- -0- 900 15,060 $21,919 $ 364,469
- -----------------------------------------------------------------------------------
</TABLE>
(1) Shares and options to purchase shares of Citicorp were automatically
converted into shares and options to purchase shares, respectively, of
Citigroup on October 8, 1998, at the ratio of 2.5 Citigroup shares for
each Citicorp share. On May 28, 1999, Citigroup completed a 3-for-2 split
of its shares. The value of Citigroup options reflected in the table is
the market value of common stock on December 31, 1999 minus the related
exercise price. The market value of Citigroup's common stock on the New
York Stock Exchange composite tape as of December 31, 1999 was $55.6875
per share.
8
<PAGE>
Retirement plans
Employees of the Corporation are currently covered by the Citigroup Pension
Plan (the "Qualified Plan"), a qualified pension plan in which employees of
other affiliated corporations also participate. This plan provides different
benefit formulas for different portions of the covered population. Employees
become eligible to participate in the plan after one year of service, and
benefits generally vest after five years of service. The normal form of
benefit is a joint and survivor annuity (payable over the life of the
participant and spouse) for married participants, and a single life annuity
(payable for the participant's life only) for single participants. Other forms
of payment are also available.
In addition, there are nonqualified programs to provide for retirement
benefits in respect of covered compensation in excess of the Internal Revenue
Code compensation limit ($160,000 for 1999), or in respect of benefits accrued
in excess of the Internal Revenue Code benefit limit ($130,000 for 1999).
Effective January 1, 2000, the Qualified Plan was amended to provide a cash
balance benefit formula (the "Citibuilder cash balance formula") to the
majority of employees of the Corporation participating in the Qualified Plan.
Participants who were employees of the Corporation and other Citicorp
affiliates before October 1998, and who, as of December 31, 1999, were at
least 45 years of age, had at least five years of service, and had age and
years of service totaling at least 60, are considered to be "grandfathered"
and will continue to accrue benefits under the prior formula for employees of
the Corporation and other Citicorp affiliates. The benefits payable at
retirement to "grandfathered" employees are based on a specified percentage of
the average of covered compensation for the five highest paid years of the
last ten years of employment, reduced by an estimated social security benefit.
The Citibuilder cash balance benefit is expressed in the form of a
hypothetical account balance. Benefit credits accrue annually at a rate
between 2% and 7%; the rate increases with age and service. Interest credits
are applied annually to the prior year's balance; these credits are based on
the yield on 30-year Treasury bonds. Although the normal form of the benefit
is an annuity, the hypothetical account balance is also payable as a single
lump sum.
Mr. Coffin is a "grandfathered" participant; his benefits are determined
under the prior Citicorp formula. The other named executives of the
Corporation are covered under the Citibuilder cash balance formula beginning
January 1, 2000.
The estimated annual benefit provided in total by all plans described above,
expressed in the form of a single life annuity, is as follows:
<TABLE>
<CAPTION>
Years of
Service through Estimated annual
Executive 1999 benefit
--------- --------------- ----------------
<S> <C> <C>
Mr. Beckmann 13 $185,766
Mr. Coffin 16 72,251
Ms. Colonna 1 49,649
Ms. Roberts 1 30,892
Mr. Zographakis 9 83,467
</TABLE>
These estimates are based on the following assumptions: (i) the benefits are
determined as of age 65, (ii) covered compensation for each covered executive
remains constant at 1999 levels, (iii) regulatory limits on compensation and
benefits and the Social Security wage base remain constant at 1999 levels,
(iv) the interest crediting rate for cash balance benefits for 1999 (5.5%)
remains constant and (v) the interest rate used to convert hypothetical
account balances to annual annuities for 1999 (5.5%) remains constant.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Corporation's Board of Directors is
responsible for reviewing and recommending compensation for all executive
officers of the Corporation. The Committee, which met four times during 1999,
consists of three directors who are not employees of the Corporation. The
Committee annually evaluates individual and corporate performance.
9
<PAGE>
The Corporation is 80% owned by Citibank (New York State), a subsidiary of
Citigroup. Accordingly, Citigroup management plays an important role in
determining not only compensation for the Chief Executive Officer in
particular and all other employees generally but also financial and other
business goals of the Corporation. The Corporation's relationship with
Citigroup is an integral component of the Committee's determination of
compensation levels.
Mr. Beckmann's compensation for 1999 was initially recommended by the
Citigroup executive responsible for Citigroup's investment in the Corporation.
The Committee then reviewed the performance of Mr. Beckmann and the level of
compensation recommended by Citigroup management and determined the
appropriate compensation for approval by the Board. Compensation for executive
officers other than Mr. Beckmann was determined by the Committee based on
input from, and recommendations made by, Mr. Beckmann.
Compensation for the Corporation's executive officers consists of salaries
and annual cash incentive awards. In addition, all employees of the
Corporation are eligible to participate in certain of the compensation plans
of Citigroup and its affiliates, including a savings incentive plan, a stock
purchase plan and a retirement plan. The Corporation reimburses Citigroup for
the cost of its employees' participation in Citigroup'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. Beckmann 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 the 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
Citigroup 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 Citigroup stock when determining whether
to grant options to purchase the Corporation's stock. Although no grants under
Citigroup's stock option plan were made to officers of the Corporation for
1999, after consultation with management of the Corporation and with the other
members of the Corporation's Board of Directors, the Committee determined not
to recommend the grant of any options to purchase the Corporation's stock for
1999.
By the Compensation Committee
Glenda B. Glover, Chairman
Evelyn E. Handler
Laura D. Williamson
10
<PAGE>
STOCK PRICE PERFORMANCE
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE STUDENT LOAN CORPORATION,
THE S&P 500 AND SLM HOLDING
<TABLE>
<CAPTION>
1995(/1/) 1996(/1/) 1997(/1/) 1998(/1/) 1999(/1/)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
The Student Loan
Corporation............ $100 $110 $148 $136 $159
S&P 500................. $100 $123 $164 $210 $255
SLM Holding............. $100 $144 $218 $267 $238
</TABLE>
- --------
(1)The dollar amounts set forth under this column are based on the closing
prices on December 31 in each of the respective years.
II. STOCKHOLDER APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board believes it appropriate to submit for action by the stockholders
its selection of KPMG LLP, certified public accountants, as auditors of the
Corporation for the year 2000. 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 Citigroup. KPMG has served as
the independent auditor for the Corporation since it commenced operations in
1992, for Citibank, N.A. since 1964, for Citicorp since it commenced
operations in 1968 and for Travelers Group Inc. (which in 1998 merged with
Citicorp to form Citigroup) and its predecessors since 1969.
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.
The Board of Directors recommends a vote FOR this proposal.
OTHER MATTERS
The Corporation will bear the cost of solicitation of proxies. Proxies may
be solicited by mail, personal interview or telephone. Directors, officers and
regular employees of the Corporation may solicit proxies 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.
11
<PAGE>
Only stockholders of record at the close of business (5:00 P.M., Eastern
Time) on March 31, 2000 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 Corporation. If no directions are given, proxies
will be voted for the election of directors and for the approval of the
selection of independent auditors. On these matters, abstentions and broker
non-votes are not considered votes cast.
Citibank (New York State), a wholly-owned subsidiary of Citigroup, 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 the
ratification of the Corporation's independent auditors. Because of the voting
power of Citibank (New York State), the nominees are assured election and the
ratification of independent auditors is assured passage.
Copies of the Corporation's Annual Report to Stockholders and Form 10-K may
be obtained without charge by writing to the Corporation at 750 Washington
Boulevard, Stamford, Connecticut 06901, Attention: Investor Relations, or by
telephone request to (203) 975-6292.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR INCLUSION IN THE STUDENT LOAN
CORPORATION'S 2001 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
2001 Proxy Statement through the close of business on December 5, 2000.
By order of the Board of Directors,
David S. Smith
Assistant Secretary
12
<PAGE>
2000 PROXY THE STUDENT LOAN CORPORATION
Annual Meeting of Stockholders--May 18, 2000, 9:00 A.M. (Eastern Time),
Westin Hotel, One Stamford Place
Stamford, Connecticut 06902 203-967-2222
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 Bill Beckmann, Carl E. Levinson and Yiannis
Zographakis, 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, 2000 at the Annual Meeting of Stockholders of The
Student Loan Corporation to be held on May 18, 2000 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.
This Proxy is Solicited on Behalf of the Board of Directors
<PAGE>
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
[ ] [ ] [ ]
*To withhold authority to vote for any individual mark this box AND write that
nominee's name on the line provided on the reverse side of this card.
Unless you otherwise indicate, this proxy will be voted "FOR" the election of
directors and "FOR" the proposal on Independent Auditors.
This Proxy is Solicited on Behalf
of the Board of Directors
Please Sign Here exactly as your name(s)
appear(s) to the left.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
When signing as attorney, executor, administrator, trustee or guardian, please
give full title.
